Securities (Wall Street)
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Date Fairness.com Resource Read it at: Aug 21, 2016 To Crack Down on Securities Fraud, States Reward Whistle-Blowers
QUOTE: In the aftermath of the financial crisis, a growing army of confidential informants — better known as whistle-blowers — has helped federal securities regulators identify and prosecute wrongdoers. Now the same thing is happening at the state level...
New York Times May 30, 2016 MetLife Suit Raises Questions of Extent of Corporate Liability
QUOTE: some others who lost their money are suing MetLife, claiming that the insurer ignored or failed to notice signs that agents and brokers were peddling Mr. Friedman’s financing program to retirees and others....MetLife has argued in court documents that it “had no relationship with D.L.G.” and that it “did not sell, or materially assist in the sale” of the D.L.G. financing program. Neither was it legally obligated to supervise the broker who made the sale to Ms. Ramirez, MetLife said, because he was a contractor and licensed through another, unaffiliated broker-dealer, even though he was authorized to sell MetLife insurance products.
New York Times Aug 27, 2014 Put More Resources Toward Regulation
QUOTE: the Department of Justice shifted gears in 2003 to leverage resources by offering cooperating companies non–prosecution deals. While corporate fines have skyrocketed, only a handful of financial institutions have pled guilty to criminal behavior.
New York Times Mar 09, 2014 After Big Bet, Hedge Fund Pulls the Levers of Power: Staking $1 Billion That Herbalife Will Fail, Then Lobbying to Bring It Down
QUOTE: a small hint of Mr. Ackman’s extraordinary attempt to leverage the corridors of power — in Washington, state capitols and city halls — for his hedge fund’s profit after taking a $1 billion financial position called a short, a bet that will pay off only if Herbalife’s stock drops. Corporate money is forever finding new ways to influence government. But Mr. Ackman’s campaign to take this fight “to the end of the earth,” using every weapon in the arsenal that Washington offers in an attempt to bring ruin to one company, is a novel one, fusing the financial markets with the political system.
New York Times Nov 16, 2013 Who Has Your Back? Hard to Tell
QUOTE: what’s really on trial here is the role played in the settlement by Bank of New York Mellon, the trustee charged with protecting all investors in these securities. Trustees for asset-backed securities have a duty to ensure that the companies administering them, known as servicers, do right by the investors who own them. But testimony in the case, known as an Article 77 proceeding, indicates that during months of settlement talks, Bank of New York Mellon did not do all it could to ensure that all investors holding the Countrywide securities got the best deal possible from Bank of America.
New York Times Jul 29, 2013 A City Invokes Seizure Laws to Save Homes
QUOTE: Scarcely touched by the nation’s housing recovery and tired of waiting for federal help, Richmond is about to become the first city in the nation to try eminent domain as a way to stop foreclosures. The results will be closely watched by both Wall Street banks, which have vigorously opposed the use of eminent domain to buy mortgages and reduce homeowner debt, and a host of cities across the country that are considering emulating Richmond.
New York Times May 31, 2013 Hunch About Bloomberg Brought Rivals Together (Dealbook)
QUOTE: Goldman Sachs and JPMorgan Chase are usually bitter rivals, competing for lucrative banking and trading business. But one day in April, the Wall Street titans found common ground: frustration with the Bloomberg news and financial data empire....they believed that Bloomberg reporters were using the company’s data terminals to monitor Wall Street sources — the executives at the banks that were spending thousands of dollars a year to use the data-rich machines.
New York Times Mar 15, 2013 JPMorgan Executives Face Withering Questions at Senate Hearing
QUOTE: ...[Senator] Levin and a handful of colleagues questioned current and former executives about the bank’s risk management, oversight policies and pricing methods. The lawmakers took aim at JPMorgan for misleading investors and regulators about the disastrous bet, building off a scathing, 300-page Congressional report...
New York Times Mar 02, 2013 Selling the Home Brand: A Look Inside an Elite JPMorgan Unit
QUOTE: To bolster sales, said the advisers, many of whom spoke on the condition of anonymity because they feared retribution, JPMorgan largely pushes its own bank-branded investments, which include a mix of mutual funds. While the practice can be legal, competitors have moved away from such investments after facing perceived conflicts. The concern is that, driven by fees, banks will push their own products over lower-cost options with stronger returns.
New York Times Feb 28, 2013 Breuer Reflects on Prosecutions That Were, and Weren’t
QUOTE: The 54-year-old prosecutor, with a Rolodex as thick as his Queens dialect, will leave the Justice Department on Friday, emboldened after mounting recent cases against banking giants. But Mr. Breuer, the department’s criminal division chief, also leaves somewhat bruised, having taken criticism for not throwing Wall Street executives behind bars after the financial crisis.
New York Times Feb 27, 2013 Why It’s Smart to Be Reckless on Wall Street
QUOTE: That asymmetry in pay (money for profits, flat for losses) is the engine behind many of Wall Street’s mistakes. It rewards short-term gains without regard to long-term consequences. The results? The over-reliance on excessive leverage, banks that are loaded with opaque financial products, and trading models that are flawed. Regulation is largely toothless if banks and their employees have the financial incentive to be reckless.
Scientific American Feb 10, 2013 Complex Investments Prove Risky as Savers Chase Bigger Payoff
QUOTE: Regulators across the country are confronting a wave of investor fraud that is saddling retirement savers with steep losses on complex products that until a few years ago were pitched only to the most sophisticated investors. The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates.
New York Times Feb 04, 2013 U.S. Accuses S. & P. of Fraud in Suit on Loan Bundles
QUOTE: The Justice Department filed civil fraud charges late on Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck....From September 2004 through October 2007, S.&P. "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings "were objective, independent, uninfluenced by any conflicts of interest," the suit said.
New York Times Jan 04, 2013 Secret and Lies of the Bailout:The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come
QUOTE: Not only did [the 2009 banking system bailout--Ed.] prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right? Wrong. It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences.
Rolling Stone Nov 03, 2012 One Safety Net That Needs to Shrink (Fair Game)
QUOTE: ...Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble.
New York Times Sep 13, 2012 Greed and Debt: The True Story of Mitt Romney and Bain Capital
QUOTE: the hypocrisy at the heart of Mitt Romney. Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a "turnaround specialist," a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm. But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back.... Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.
Rolling Stone Aug 01, 2012 Where the Money Lives
QUOTE: For all Mitt Romney’s touting of his business record, when it comes to his own money the Republican nominee is remarkably shy about disclosing numbers and investments. Nicholas Shaxson delves into the murky world of offshore finance, revealing loopholes that allow the very wealthy to skirt tax laws, and investigating just how much of Romney’s fortune (with $30 million in Bain Capital funds in the Cayman Islands alone?) looks pretty strange for a presidential candidate.
Vanity Fair Jul 21, 2012 Into the Bailout Buzz Saw (Fair Game)
QUOTE: Thus the collision course was set between Mr. Barofsky and a crew of complacent, bank-friendly Treasury officials. He soon discovered that the department’s natural stance of marching in lock step with the banks meant that he had to question its policies and programs repeatedly to ensure that taxpayers weren’t at risk for fraud and abuse.
New York Times Jul 14, 2012 Goldman Sachs and the $580 Million Black Hole
QUOTE: With Goldman Sachs on the job, the corporate takeover of Dragon Systems in an all-stock deal went terribly wrong. Goldman collected millions of dollars in fees — and the Bakers lost everything when Lernout & Hauspie was revealed to be a spectacular fraud.
New York Times Jul 06, 2012 A Fancy Financial Adviser Title Does Not Ensure High Standards
QUOTE: Investors can’t be blamed for failing to recognize the differences between a glorified salesman pushing a particular fund and a true investment adviser who is required to act in your best interest, but there are many.
New York Times May 24, 2012 Beware small investors: Facebook was just a warning
QUOTE: a bipartisan bill, innocuously named the JOBS Act, rolled back these and other investor protections for companies with less than $1 billion in revenue, deemed emerging growth companies. Once again, research analysts can communicate directly with management and if desired share favorable (or unfavorable) reports....Prior to Sarbanes-Oxley, researchers at Cornell and Dartmouth universities found that analysts affiliated with the underwriting bank issued buy ratings to prop up dropping stocks...
CNN (Cable News Network) May 06, 2012 Study Says Broker Rebates Cost Investors Billions
QUOTE: The rules governing Wall Street generally force stockbrokers to seek out the best prices for clients who pay them to buy and sell shares. In recent years, though, brokers have had another enticement that can pull them in a different direction: payments from stock exchanges in return for sending them business.
New York Times Mar 14, 2012 Why I Am Leaving Goldman Sachs
QUOTE: the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
New York Times Dec 22, 2011 A Christmas Message From America's Rich
QUOTE: The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government....nobody even minds that they are rich. What makes people furious is that they have stopped being citizens.
Rolling Stone Nov 25, 2011 In Commodities World, Safe and Secure Sometimes Isn’t
QUOTE: regulators suspect that MF Global did not keep its clients’ money separate in its chaotic waning days, using some customers’ money, they believe, to meet its own obligations. And if the firm violated the rule requiring segregated accounts, investors say they are now concerned about the viability of commodities trading as it has been conducted in the United States for more than a century.
New York Times Sep 02, 2011 Federal Regulators Sue Big Banks Over Mortgages
QUOTE: A bruising legal fight pitting the country’s most powerful banks against the full force of the United States government began Friday, as federal regulators filed suits against 17 financial institutions that sold the mortgage giants Fannie Mae and Freddie Mac nearly $200 billion in mortgage-backed securities that later soured.
New York Times Jun 16, 2011 Who Is James Johnson?
QUOTE: Morgenson and Rosner write with barely suppressed rage, as if great crimes are being committed. But there are no crimes. This is how Washington works. Only two of the characters in this tale come off as egregiously immoral. Johnson made $100 million while supposedly helping the poor.
New York Times May 13, 2011 Why 401(k)’s Should Offer Index Funds (Your Money)
QUOTE: These 401(k) plans lack index funds even though their low expenses and breadth make them the very definition of cheap and risk-conscious. Instead, too many employees must choose among actively managed funds. Those investments tend to have higher costs, which eat away at returns.
New York Times Apr 23, 2011 A Crack in Wall Street’s Defenses
QUOTE: “Citigroup mismarketed this product to high-net-worth investors as an alternative to municipal bonds with a slightly higher return… Our clients never knowingly agreed to risk a significant loss of principal for a few extra points of interest.”
New York Times Apr 12, 2011 The Real Housewives of Wall Street
QUOTE: What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy... It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure.
Rolling Stone Feb 05, 2011 Stock-Hedging Lets Bankers Skirt Efforts to Overhaul Pay
QUOTE: But it turns out that executives have a way to get around those best-laid plans. Using complex investment transactions, they can limit the downside on their holdings, or even profit, as other shareholders are suffering.
New York Times Jan 11, 2011 Court weighs disclosures to stockholders
QUOTE: Stockholders said Matrixx had been warned about such a possibility since 1999, but even after lawsuits were filed the company had issued statements saying such allegations were "completely unfounded and misleading."...Matrixx said there was no attempt to deceive investors. The number of complaints about the product was "statistically insignificant"....
Washington Post Jan 06, 2011 Hackers find new way to cheat on Wall Street -- to everyone's peril
QUOTE: 'Side-channel' attack on high-frequency trading networks could net a hacker millions of dollars in just seconds -- and leave everyone else that much poorer
InfoWorld Dec 22, 2010 N.Y. Attorney General Cuomo sues Ernst & Young, alleging Lehman accounting fraud
QUOTE: The big accounting firm Ernst & Young helped Wall Street investment bank Lehman Brothers conceal its deteriorating financial condition before Lehman's historic collapse, New York Attorney General Andrew Cuomo charged...
Washington Post Dec 16, 2010 Wall Street Whitewash
QUOTE: The bipartisan Financial Crisis Inquiry Commission was established by law to “examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The hope was that it would be a modern version of the Pecora investigation of the 1930s, which documented Wall Street abuses and helped pave the way for financial reform. Instead, however, the commission has broken down along partisan lines, unable to agree on even the most basic points.
New York Times Dec 11, 2010 A Secretive Banking Elite Rules Trading in Derivatives
QUOTE: Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.
New York Times Dec 01, 2010 Steven Pearlstein on William Ackman and unfairness of short selling
QUOTE: Do "activist investors" still serve a useful social and economic purpose?....There's a big difference, however, between bringing vital new information to markets and scheming to turn a bet into a self-fulfilling prophecy by waging publicity campaigns against a company, filing complaints with regulators and warning analysts they could face lawsuits if they fail to cut another firm's credit rating.
Washington Post Nov 19, 2010 Dear S.E.C., Please Make Brokers Accountable to Customers
QUOTE: Many of these consumers don’t even realize that their brokers — who often call themselves financial advisers — aren’t held to the same standards as investment advisers, who are required to put their customers’ interests first. Sure, brokers must recommend “suitable” investments, but we all know that it’s a much weaker standard and leaves too much room for potential abuse — one that can line the pocket of the broker at the expense of the investor.
New York Times May 22, 2010 No criminal charges for executives in troubled AIG subsidiary
QUOTE: The Justice Department has closed its high-profile investigation into current and former executives of an American International Group subsidiary that was linked to the insurance giant's near collapse, sources familiar with the probe said Friday evening.
Washington Post May 21, 2010 SEC launches inquiry into market's 'flash crash'
QUOTE: The Securities and Exchange Commission is looking at whether key financial firms broke securities laws when they stopped buying and selling stocks during the "flash crash" on May 6, helping fuel the historic plunge in prices.
Washington Post May 21, 2010 Stocks plummet as Germany gets tough on financial speculators
QUOTE: A German crackdown on financial speculators threw global markets into a tailspin Thursday, sparking the largest losses on Wall Street in a year, infuriating other European powers as they try to stabilize the ailing euro and raising questions about the ability of world leaders to coordinate their efforts at financial reform.
Washington Post May 21, 2010 Reconciliation for 2 Financial Overhaul Bills
QUOTE: In three areas, consumer protection, restricting banks from using their own money to make bets in the market, and dealing with failing institutions that threaten the financial system, administration officials suggested that they were inclined to favor provisions in the Senate version over those of the House bill...
New York Times May 21, 2010 Suddenly, the Rating Agencies Don’t Look Untouchable
QUOTE: several major lawsuits against the rating agencies have survived the pretrial phase and might — emphasis on might — end with huge jury verdicts or expensive settlements. In addition, a newly emboldened Congress is on the verge of overhauling financial regulation and could rewrite the rules of the industry. For S.& P., Moody’s and Fitch,...
New York Times May 18, 2010 Clients Worried About Goldman’s Dueling Goals
QUOTE: Goldman’s bets against WaMu, wagers that took place even as it helped WaMu feed a housing frenzy that Goldman had already lost faith in, are examples of conflicting roles that trouble its critics and some former clients. While Goldman has legions of satisfied customers and maintains that it puts its clients first, it also sometimes appears to work against the interests of those same clients when opportunities to make trading profits off their financial troubles arise.
New York Times May 12, 2010 Prosecutors Ask if 8 Banks Duped Rating Agencies
QUOTE: The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.
New York Times May 10, 2010 Social networking raises legal, regulatory issues for businesses: Companies are finding...too valuable as sales-lead generation and marketing to block
QUOTE: many businesses are attempting to simply block all access to social networking sites for employees who would fall under regulatory scrutiny, such as broker-dealers and sales and marketing representatives, even though these employee are finding the sites invaluable.
InfoWorld May 07, 2010 The Trades of a Lifetime in 20 Minutes
QUOTE: sudden panic and recovery on Thursday that briefly knocked some stocks down to a penny or two a share....several large United States exchanges said that although their trading platforms functioned properly on Thursday, they were nonetheless canceling many trades made during the market’s Big Bounce.
New York Times Apr 23, 2010 Rating Agency Data Aided Wall Street in Mortgage Deals
QUOTE: One of the mysteries of the financial crisis is how mortgage investments that turned out to be so bad earned credit ratings that made them look so good. One answer is that Wall Street was given access to the formulas behind those magic ratings — and hired away some of the very people who had devised them.
New York Times Apr 17, 2010 SEC suspected R. Allen Stanford of Ponzi scheme 12 years earlier, report says
QUOTE: The Securities and Exchange Commission knew that Texas-based financier R. Allen Stanford was probably running a Ponzi scheme 12 years before it halted the fraud, potentially costing investors more than a billion dollars...The SEC's inspector general said that top officials in the agency's Fort Worth office favored pursuing as many simple cases as possible rather than taking on more challenging ones like that presented by Stanford.
Washington Post Apr 16, 2010 S.E.C. Accuses Goldman of Fraud in Housing Deal
QUOTE: Goldman Sachs, the Wall Street powerhouse, was accused of securities fraud in a civil lawsuit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly intended to fail.
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