Federal regulators are proposing new risk retention rules geared toward reducing risky low mortgage lending. The ‘skin in the game” rule was articulated in the Dodd-Frank Consumer Protection Act, which mandates credit risk sharing and for mortgage-backed securities (MBS) sponsors and those of other asset classes to align their interests…
The Financial Industry Regulatory Authority is ordering UBS Financial Services to pay $8.25 million in restitution and a $2.5 million fine for misleading investors about Lehman Brothers principal protected notes (PPNs). The SRO says that the financial firm presented the investments in a way that caused clients to think that…
The Senate’s Permanent Subcommittee on Investigations says that because Goldman Sachs Group Inc. bet billions against the subprime mortgage market it profited from the financial crisis. The panel’s findings come following a two-year bipartisan probe and were released in a 639-page report on Wednesday. The subcommittee released documents and emails…
In what is being called the largest award that a major Wall Street broker-dealer has been ordered to pay individual investors, the Financial Industry Regulatory Authority has ordered Citigroup to pay $54.1 million to investors Suzanne Barlyn and Randall Smith over investment losses they sustained on high risk municipal bond…
Industrial Enterprises of America Inc. (IEAM) is accusing Baker & McKenzie, LLP and former partner Martin Weisberg of securities fraud. The $600 million lawsuit, filed in US Bankruptcy Court, accuses the defendants of setting up a legal structure that allowed for an illegal pump-and-dump scheme and causing the company to…
The Financial Industry Regulatory Authority is fining UBS Financial Services, Inc. $2.5 million and ordering it to pay $8.25 million in restitution for allegedly misleading investors about the “principal protection” feature of 100% Principal-Protection Notes. Lehman Brothers Holdings Inc. issued the PPNs Holdings Inc. before it filed for bankruptcy in…
A district court judge has dismissed the Texas securities fraud case against MetroPCS Communications Inc. (PCS). The telecom services provider is accused of putting out false or misleading statements about its 2009 earnings guidance, which was issued in November 2008 and reaffirmed for the duration of the class period. The…
Florida’s Office of Financial Regulation’s securities director Frank Widman says Congress should ignore calls for a new SRO to help the Securities and Exchange Commission oversee any investment advisers. Widmann spoke last month at the North American Securities Administrators Association’s public policy conference in DC. Widmann, who previously served as…
Financial Industry Regulatory Authority CEO and Chairman Richard Ketchum says that if the SRO is chosen to regulate investment advisers, it will tailor its oversight to that industry. At a compliance conference run by the Financial Market Association and the Securities Industry last month, Ketchum said that advisers’ concerns that…
According to the Congressional Budget Office, between 2010 and 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act will lower the federal deficit by $3.2 billion as it takes in more money than what will go toward enforcement and implementation. CBO Director Douglas Elmendorf released the cost projection at…