Joint SEC and FINRA Press Release: Structured Products
(Jun 2011)
The SEC and FINRA Issue Joint Press Release on Structured Products
The Security and Exchange Commission (SEC) issued a press release today jointly with the Financial Industry Regulatory Authority (FINRA) dealing with structured products with "principal protection" - so called "principal protected notes." This press release announced that an investor alert had been issued to educate and warn investors about the substantial risks associated with investing in structured products.
FINRA's...
FINRA Press Release: Non-Traded REITs
(May 2011)
FINRA Charges David Lerner & Associates Over Sale of Non-traded Apple REITs
The Financial Industry Regulatory Authority (FINRA) issued a press release yesterday in which it announced that it had
"filed a complaint against David Lerner & Associates, Inc. (DLA), of Syosset, NY, charging the firm with soliciting investors to purchase shares in Apple REIT Ten, a non-traded $2 billion Real Estate Investment Trust (REIT), without conducting a reasonable investigation to determine whether...
FINRA Press Release: Subprime Securitizations
(May 2011)
FINRA Fines Credit Suisse Securities $4.5 Million and Merrill Lynch $3 Million for Misrepresentations Related to Subprime Securitizations
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has fined Credit Suisse Securities (USA) LLC $4.5 million, and Merrill Lynch $3 million for misrepresenting delinquency data and inadequate supervision in connection with the issuance of residential subprime mortgage securitizations...
FINRA Investor Alert: Stock-Based Loan Programs
(May 2011)
Stock-Based Loan Programs: What Investors Need to Know
The Financial Industry Regulatory Authority (FINRA) published an Investor Alert on the risks and rewards of non-recourse stock-based loans, loans which are given to borrowers who pledge fully paid securities as collateral to the lenders. This collateral is the only recourse the lenders have with which to reclaim the loans from the borrowers. The lender holds the securities during the period of the loan and returns them - with profits...
SEC Press Release: Assigned Credit Ratings
(May 2011)
SEC Seeks Public Comment to Assist in Study on Assigned Credit Ratings
The Securities and Exchange Commission (SEC) issued a press release today announcing that it had requested
for public comment on the feasibility of a system in which a public or private utility or a self-regulatory organization would assign a nationally recognized statistical rating organization (NRSRO) to determine credit ratings for structured finance products.
The SEC's effort is mandated by the Dodd-Frank...
SLCG Research: Oppenheimer Champion Income Fund
(May 2011)
SLCG released today 'Oppenheimer Champion Income Fund'.
Oppenheimer's Champion Income Fund (the Fund) was an open-end mutual fund that invested in high-yield bonds. It lost 80% in the second half of 2008, the highest loss for a mutual fund in Morningstar's high-yield bond fund category.
In this paper, we look at the portfolio management rules and decisions of the Fund in the context of what was happening in the markets. Leverage using debt to fund further investments was prohibited by...
SEC Press Release: Fraudulent Bidding Practices
(May 2011)
SEC Charges UBS with Fraudulent Bidding Practices Involving Investment of Municipal Bond Proceeds
The Securities and Exchange Commission (SEC) issued a press release today announcing that it had
"charged UBS Financial Services Inc. (UBS) with fraudulently rigging at least 100 municipal bond reinvestment transactions in 36 states and generating millions of dollars in ill-gotten gains. To settle the SEC's charges, UBS has agreed to pay $47.2 million that will be returned to the...
FINRA Press Release: Auction Rate Securities
(Apr 2011)
FINRA Fines Jefferies $1.5 Million for Failing to Disclose Additional Compensation Paid and Conflicts in Sale of Auction Rate Securities
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has fined Jefferies & Company, Inc. $1.5 million for failing to disclose additional compensation received and conflicts in connection with the sale of auction rate securities (ARS). FINRA also ordered Jefferies to repay $425,000 in fees and...
FINRA Press Release: Private Placements
(Apr 2011)
FINRA Sanctions Two Firms and Seven Individuals for Selling Private Placements Without Conducting a Reasonable Investigation
The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that
"it has sanctioned two firms and seven individuals for selling interests in private placements without conducting a reasonable investigation. The companies whose securities were sold in these private placements were unrelated to the firms and individuals FINRA...
