Posts belonging to Category Alternative Investments

Front-End Bonus Payments May Need To Be Disclosed


If your broker or financial adviser told you he was moving to another brokerage firm and asked you to move your account there, would you want to know if he was being paid thousands or millions of dollars to make the move?  The Financial Industry Regulatory Authority (FINRA) thinks so, and is proposing a new […]

Alternative Investments – Big Problems


According to financial advisers, do not be fooled by the recent market in stocks into believing that we are in for a continuing period of sustained low volatility.  Those advisers want you to expect lots of volatility and market corrections and to invest accordingly. In light of the foregoing, investors should adopt alternative investment strategies […]

Promissory Note Award Hits Broker-Dealer Hard


A Financial Industry Regulatory Authority (FINRA) Arbitration Panel has ordered MML Investors Services LLC to pay $1,137,923 to a California investor in connection with the sale of an unregistered security (a promissory note) issued by Diversity Lending Group, Inc. (“DLG”).  The award includes compensatory damages plus reimbursement for expert witness fees, deposition costs, and the […]

OppenheimerFunds Pays $35 Million to Settle Charges


OppenheimerFunds  Inc. has agreed to pay more than $35 million to settle SEC charges that it  made misleading statements about two of its mutual funds during the credit crisis in late 2008.  The payments include a penalty of $24 million, disgorgement of $9,879,706, and prejudgment interest of $1,487,190. According to the SEC, Oppenheimer used total […]

Alternative Investments – Are They All They Are Cracked Up To Be?


Rising interest rates may be death to traditional bonds and bond funds, but a number of alternative investment strategies allegedly designed to protect principal in a rising interest rate environment are springing up to take their place.  It remains to be seen whether they will provide ballast when bond prices fall. For decades, bond investors […]

CDOs Haunt UBS


Swiss banking giant UBS AG is reported to be engaged in settlement discussions with the U.S. Securities and Exchange Commission regarding its structuring and underwriting of an allegedly fraudulent mortgage bond deal.  The SEC has alleged that UBS defrauded clients that invested over $748 million in notes linked to a CDO known as ACA ABS […]

Hedge Fund Scams Harm Investors


Anastasios “Tommy” Belesis, owner of John Thomas Financial, a brokerage firm, and George R. Jarkesy Jr., a hedge fund manager, worked together to defraud investors in the John Thomas Bridge and Opportunity Fund LP I and John Thomas Bridge and Opportunity Fund LP II, according to a recently filed SEC complaint.  The funds reportedly invested […]

Regulators Focus on Complex Alternatives


The Financial Industry Regulatory Authority (FINRA), as well as the SEC and state regulators, have announced that they are concerned about broker/adviser sales practices involving alternative investments including variable annuities and equity-indexed annuities. They have the distribution of these complex products on their radar screens.  On January 11, 2013, FINRA sent a letter to its […]

Investors are Gorging on Junk Bonds


Prices of “junk” bonds keep rising as investors continue to buy the riskier debt.  Yields on junk bonds, which move inversely to bond prices, settled at a record low of 5.56% recently.  Demand for junk bonds is part of the yield-seeking behavior recommended by advisers to many fixed income investors, as they venture further out […]

Structured Products Pose Major Risks for Investors


Danger lies ahead for investors in structured products. Structured products were once used only by institutions and sophisticated investors that had the education, training and experience needed to fully understand these complex and opaque alternative investments.  Over the past several years, however, structured products have been sold to individual investors, who do not understand the […]