The Financial Industry Regulatory Authority (FINRA), which regulates securities firms and whose mission is to protect investors and educate them about the basic principles of investing, was a reckless market speculator, according to Randall Smith’s September 25th article in the Wall Street Journal, “After 27% Fall, Finra Plays it Safe.”
Continue reading " Market Watchdog is a Market Speculator " »
On September 27th, the financial press reported that William “Bill” Winters, a chief executive of JP Morgan Chase’s investment banking division, had placed much of the blame for the worldwide economic crisis on “greedy bankers.” See “Financial News: Winters Hits Out At Greedy Bankers,” posted by Harry Wilson on www.efinancialnews.com. Two days later, Jamie Dimon, chairman and chief executive of JP Morgan Chase, announced that Mr. Winters is leaving the company and will be replaced by Jes Staley, as reported by the New York Times Deal Book article, “JP Morgan Shuffles Investment Bank Management,” dated September 29, 2009.
Prior to joining Page Perry in April 2009, Craig Jones represented victims of medical malpractice and other plaintiffs in significant tort litigation. Here is Jones’ response to an editorial that appeared in the September 29, 2009 Wall Street Journal titled “Why Medical Malpractice is Off Limits”:
Continue reading " Malpractice Reform - The Other Side of the Story " »
The Receiver for Medical Capital Holdings Inc. issued his Second Report on September 7, 2009. According to the Report the estimate for the amount of money raised through the six offerings is $1.778 billion with $268 million in administrative fees taken and a staggering $1.079 billion still due investors. On July 16, the SEC charged Medical Capital Holdings Inc. with fraud related to the sale of $77 million of private securities in the form of notes.
Senior regulators who turned a blind eye toward the fraud and systemic risk under their noses that brought the economy to the brink have been rewarded with even bigger jobs or are jockeying for increased responsibilities, according to well-known “Fair Game” columnist Gretchen Morgenson in her September 13th article in the New York Times, “But Who Is Watching the Regulators?” Despite the financial calamity, little has changed about how the financial markets operate and are supervised, says Morgenson. For example, she points out, the Federal Reserve Board, which did nothing as banks made reckless loans and over-leveraged themselves, wants to become the financial systems’ ultimate regulator. Moreover, our regulators have refused to produce complete documentation and accounts of their actions during the crisis, according to Edward J. Kane, Professor of Finance at Boston University. “Awarding increased power to those who failed in their oversight duties flies in the face of all notions of accountability,” says Morgenson. What is the basis for believing that regulators who dozed off during the credit bubble will be alert to the next bubble?
Continue reading " Where is the Accountability of our Financial Regulators? " »
There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
• The Dow Jones Industrial Average opened the week at 9820 and, on Monday, fell 41 points.
• On Tuesday, the Dow Jones Industrial Average rebounded 51 points.
• On Wednesday, the Dow Jones Industrial Average dropped 81 points.
• On Thursday, the Dow Jones Industrial Average fell another 41 points.
• On Friday, the Dow Jones Industrial Average lost 42 points and closed the week at 9665.
Continue reading " Page Perry's Market Monitor - September 25, 2009 " »
Wachovia Bank, JPMorgan and other major financial institutions have filed their second motion to dismiss a complaint brought against them by more than a dozen state and local governments alleging price-fixing and bid-rigging of municipal derivatives markets. This according to a recent article by Erin Fuchs in Law360 entitled “Banks Shoot To Kill Municipal Bond Antitrust MDL.” The MDL action, captioned In re: Municipal Derivatives Antitrust Litigation, case number 1:08-md-01950, is pending in the U. S. District Court for the Southern District of New York.
Eric Kolchinsky, a former Moody’s analyst who oversaw ratings given to the toxic debt that brought our financial system to its knees, is scheduled to testify before Congress today, according to yesterday’s Wall Street Journal article “Congress Takes On Credit Ratings,” by Serena Ng and Aaron Luccheti. His testimony will be taken before the House Committee on Oversight and Government Reform, chaired by Representative Edolphus Towns, who represents the 10th Congressional District of New York. Testimony will also be provided by an attorney representing Standard and Poors.
Continue reading " Moody's Whistleblower to Testify before Congress on Ratings Fraud " »
The New York Times recently reported that a Federal Judge rejected the proposed settlement between the SEC and Bank of America over the controversial bonuses paid out by the Bank. The settlement would have meant that the Bank paid a $33 million fine in exchange for neither admitting nor denying responsibility. Notably, Judge Jed Rakoff, United States District Judge for the Southern District of New York, unleashed a scathing attack on the SEC, saying, the settlement was a “contrivance designed to provide the SEC with the facade of enforcement.”
Continue reading " Judge Tells the SEC and Bank of America to Fight it out in Court " »
Regions Bank has agreed to pay $1 million to settle investment fraud charges brought by the Securities and Exchange Commission, according to a September 21 article by AP Legal Affairs writer Curt Anderson. On September 21, the SEC issued a Cease-and-Desist Order finding that Regions, the primary banking subsidiary of Regions Financial Corporation, was a cause of U.S. Pension Trust Corp.'s and U.S. College Trust Corp.'s (collectively, USPT) violations of federal securities laws.
Continue reading " Regions Bank's SEC Problems Grow " »
Federal judges are “throwing the book” at Wall Street fat cats who commit financial fraud, according to a September 8th article in Bloomberg.com by Cary O’Reilly and Linda Sandler entitled “Judges Punish Wall Street as Regulators Just Talk About
Reform.” Based on their rulings and comments, a growing number of federal judges are outraged with the culture of corruption on Wall Street that has brought our financial system to its knees, and disgusted with the apparent reluctance of regulators and Wall Street to institute meaningful reforms to prevent future disasters. With that in mind, and finding little in common with the defendants before them (most U.S. judges make less than a junior lawyer at a large law firm), these judges are taking matters into their own hands, issuing rulings that really send a message to those who might engage in similar misconduct.
There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
• The Dow Jones Industrial Average opened the week at 9605 and, on Monday, moved up 22 points.
• On Tuesday, the Dow Jones Industrial Average rose 57 points.
• On Wednesday, the Dow Jones Industrial Average soared 108 points.
• On Thursday, the Dow Jones Industrial Average dropped 8 points.
• On Friday, the Dow Jones Industrial Average rebounded 36 points and closed the week at 9820.
Continue reading " Page Perry's Market Monitor - September 18, 2009 " »
The Wall Street Journal recently reported on a federal district court decision that could pave the way for future lawsuits by investors against credit rating firms such as Moody's, Standard & Poors and Fitch, whose ratings of junk investments as investment grade have come under fire by Congress. The September 4th article by Nathan Koppel, Andrew Edwards and Chad Bray, entitled "Judge Limits Credit Firms' 1st-Amendment Defense," describes an Opinion and Order ("Order") issued by Judge Shira A. Scheindlin in a class action brought by two institutional investors, Abu Dhabi Commercial Bank, King County, Washington, against Moody's Investors Service, Inc. and its affiliates, and The McGraw Hill Companies, Inc. and its affiliates, including its wholly owned and controlled business division, Standard and Poors Ratings Services (collectivley, "the Rating Agency Defendants"), and others. The case is pending in the U.S. District Court for the Southern District of New York.
Continue reading " Court Ruling Paves Way for Legal Claims against Credit Ratings Firms " »
A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded market adjusted damages to a California resident as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded Victor Chang 100 percent of his market-adjusted damages of $74,745.00, plus an additional $13,500.00 designated as expert witness fees, plus $225.00 as reimbursement for the non-refundable portion of the initial filing fee, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).
Continue reading " Investor Wins Full Market Adjusted Damages in Schwab YieldPlus Case " »
A hedge fund has sued Swiss banking giant UBS in Connecticut state court for unloading risky collateralized debt obligations (CDOs) on the eve of the financial crisis without disclosing that the CDOs were about to be downgraded and would eventually become “toxic waste. “ So far the Connecticut court has allowed the case to proceed in order to give the plaintiffs an opportunity to prove their allegations and has required UBS to post a bond sufficient to cover a $35 million judgment in the event that it loses the case.
Continue reading " Hedge Fund Sues UBS for Selling "Crap" and "Vomit" " »
When SEC officials appeared before Congress last January and February to answer questions about their handling of the Madoff Ponzi scheme, they rebuffed many questions posed by lawmakers on the ground that there was a pending investigation of the SEC by its inspector general. Now that Inspector General David Kotz has completed his investigation and issued a report on the matter, the SEC is full of regret, reports Paul Wiseman of USA Today in his September 3 article entitled “Inspector general’s report blasts SEC over Madoff.”
Continue reading " Inspector General Continues to Blast SEC " »
There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
• The Dow Jones Industrial Average opened the week at 9441 but, on Monday, the markets were closed for Labor Day.
• On Tuesday, the Dow Jones Industrial Average rose 56 points.
• On Wednesday, the Dow Jones Industrial Average rose 50 points.
• On Thursday, the Dow Jones Industrial Average jumped 80 points.
• On Friday, the Dow Jones Industrial Average dropped 22 points and closed the week at 9605.
Continue reading " Page Perry's Market Monitor - September 11, 2009 " »
A Nevada based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a Nevada couple as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded the Raymond and Elsie Kelly 100 percent of their net out of pocket losses of $74,430.77 plus interest at the rate of 3.25% per annum from July 8, 2008 through August 26, 2009, plus an additional $25,650.00 designated as attorney’s fees, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).
A California federal court has issued an order allowing a Schwab YieldPlus Fund lawsuit filed against Charles Schwab to proceed as class action. The Fund is also the subject of numerous FINRA arbitrations as well as this class action. The order, filed on August 21, 2009, certified three classes, consisting of two federal classes of investors with claims under Sections 11 and 12 of the Federal Securities Act, and a single class of California investors with an unfair competition claim alleging that the fund changed its investment policies regarding asset concentration without a required shareholder vote.
Eighteen months after the auction rate securities markets collapsed when Wall Street withdrew its support, companies like Bristol-Myers Squibb Co., Texas Instruments, Corning, and Teva Pharmaceuticals are still suffering from the Wall Street debacle. They have written down their auction rate securities by $4.8 billion, according to an August 28 article on Bloomberg.com by Duncan McNichol called "Wall Street Betrayal Seen in $4.8 Billion Company Debt Losses." The brokerage firms selling auction rate securities led their corporate clients to believe that auction rate securities were a lot like a money market funds while, at the same time, the they knew that auction rate securities faced grave problems and were being misrepresented as being safe and liquid. Similarly, many of the risks and problems in the auction rate securities markets went undisclosed to corporate buyers. Of 449 publicly trade companies holding $22 billion of auction rate securities, all but 45 have written down the value of their ARS holdings.
There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
• The Dow Jones Industrial Average opened the week at 9544 and, on Monday, fell 48 points.
• On Tuesday, the Dow Jones Industrial Average dropped 186 points.
• On Wednesday, the Dow Jones Industrial Average lost 30 points.
• On Thursday, the Dow Jones Industrial Average jumped 64 points.
• On Friday, the Dow Jones Industrial Average rose 97 points and closed the week at 9441.
Continue reading " Page Perry's Market Monitor - September 4, 2009 " »
One of the causes of the financial meltdown has reappeared, according to a recent MSNBC.com/AP article entitled “Wall Street’s new old idea: Mortgage securities.” The problem to be solved is what to do about the hundreds of billions of dollars of enigmatic, high-risk securitized mortgage pools that threatened (and some say still threaten) to bring down the global economy. The solution being developed by Wall Street is something called “resecuritization of real estate mortgage investment conduits” or “Re-REMIC” for short. If this remedy sounds a bit like “the hair of the dog that bit you,” it is.
Continue reading " More Toxic Structured Finance Securities are on the Way to Market " »
The Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) have all recently warned that leveraged exchange traded funds (ETFs) are very dangerous investments and not suitable for most retail investors. Moreover, the State of Massachusetts has announced an investigation into the sales practices of brokerage firms selling ETFs.
Continue reading " Concerns about Leveraged Exchange Traded Funds (ETFs) Increase " »
