The Financial Industry Regulatory Authority (FINRA) conjures thoughts of jack-booted cops looking to “perp-walk” those who take advantage investors. Yet, FINRA is just the new name of the National Association of Securities Dealers. The NASD was, and FINRA is, a non-profit organization of all securities dealers, with a structure similar…
Merrill Lynch & Co. has publicly opened the door to what many believe could be an even larger problem to the credit markets than the widely publicized sub-prime mortgage debacle – the little understood and sledom discussed “swaps” market. Perhaps the world’s most high-profile financial firm, Merrill – itself a…
Massachusetts Secretary of the Commonwealth William Galvin is subpoenaing Merrill Lynch, Pierce, Fenner, & Smith Inc., UBS Securities, and Bank of America Investments because it wants information about the companies’ involvement in selling auction-rate market securities to retail investors. The companies are all registered Massachusetts broker dealers. Galvin issued the…
After weeks in limbo, some holding auction rate securities may gain some insight about their fate this weekend as UBS reports it will be “pricing” ARS securities in its customers’ accounts. Brokerage firms and other financial institutions sold many ARS securities as comparable to money market funds, commercial paper and…
The U.S. District Court for the Eastern District of Michigan has concluded that Mouayad Shammami, an investor that is accusing brokerage firm Broad Street Securities Inc. of fraudulently inducing him to change his investment goals, must arbitrate this dispute rather than pursue the matter through the courts. In 2004, Shammami…
REIT Manager W.P. Carey & Co has reached a $30M settlement agreement with the SEC over antifraud charges. According to the SEC, W.P. Carey, its ex-CFO John J. Park, and its former chief accounting officer Claude Fernandez paid $10 million in undisclosed compensation to a brokerage firm that sold real…
Following JP Morgan Chase & Co’s acquisition of Bear Stearns Companies Inc., JP Morgan Chase Chief Financial Officer Michael Cavanagh says the firm is reserving as much as $6 billion for “transaction-related costs,” including possible litigation. Class action lawsuits could come from investors regarding corporate disclosure, as well as from…
Some closed end funds which issued preferred shares in the auction rate market suggest they might obtain liquidity in Auction Rate Preferred Securities (ARPs) using leverage and Variable Rate Demand Preferred Securities. Such statements may give hope to those holding ARPs, yet we believe that these solutions unlikely create the…
In a note to investors, Wachovia Securities Analyst Doug Sipkin commented on the state of the leading Wall Street securities firms in light of the worsening global credit crisis. Sipkin blamed the “The failure of Bear Stearns” on a “management issue” rather than a “market issue.” JP Morgan Chase &…
14 regional bond dealers have founded Regional Bond Dealers Association (RBDA). The purpose of the association is to tackle issues that are important to U.S. regional, fixed-income securities dealer. Issues to be examined include revising the tax code and matters affecting auction-rate securities. Founding members are: • Wells Fargo Brokerage…