Posts belonging to Category Smart Investing Tools

FINRA’s BrokerCheck Full Of Holes


FINRA’s system for revealing red flags about brokers may not disclose all the information that it is supposed to, according to a Wall Street Journal article by Jean Eaglesham and Rob Barry (March 7, 2014).  A report by FINRA’s BrokerCheck should include information about felony charges and convictions, personal bankruptcy petitions filed within 10 years, […]

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 […]

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 […]

Investment Policy Statements Are Important


A decided majority (61%) of financial advisers do not provide their clients with a written investment policy statements.  Such policy statements should, at a minimum, be based upon a number of suitability factors developed by the Financial Industry Regulatory Authority (FINRA). Those factors include, but are not limited to, the client’s age, other investments, financial […]

Be Careful When Considering Municipal Bonds


A recent Wall Street Journal column advises money managers not to put more client money in municipal bonds. The column sets forth a number of risks and problems that it urged money managers to consider before placing clients’ money in these investments. First, municipal bonds’ tax-exempt status may be in political jeopardy (“Morning Call: Advisers […]

The Games That Mutual Funds Play


OppenheimerFunds  Inc. has agreed to pay more than $35,000,000 to settle SEC charges that it  made misleading statements about two of its mutual funds during the credit crisis.  The payments include a penalty of $24,000,000, disgorgement of $9,879,706, and prejudgment interest of $1,487,190. According to the SEC, Oppenheimer used total return swaps (a type of […]

Financial Advisers Face Growing Risks from Aging Population


As the population ages and investors’ financial acumen decline, financial advisers will be forced to assume additional duties and responsibilities in order to avoid liability exposure. For example, Alzheimer’s disease will raise legal and ethical challenges for investment advisers over the next 40 years as the incidence of that dread disease is expected to nearly […]

Bond Warning Issued by FINRA


The Financial Industry Regulatory Authority (FINRA) has finally joined the crowd in warning investors about the risks of bonds and bond funds in the current environment. If FINRA is worried about bonds, the end may be near. FINRA may be late in warning investors about bond and bond fund risks say financial advisers, but investors […]