Articles Tagged with 2010

London-based research firm Fideres Partners LLP suggests that the process of pricing and selling new corporate bonds may be inaccurate. Corporate bonds’ price in the days after their issuance may hint to a systemic underpricing by major dealers, according to the Fideres report, published last week. The firm estimates that the underpricing of new debt may have cost U.S. companies as much as $18 billion in extra interest in bonds issued between 2010 and 2015 by pulling up their borrowing costs at a time when benchmark interest rates were at low levels. Companies have been racing to sell new bonds to take advantage of low interest rates. The banks who sell these bonds may underprice new bonds in order to make sure they end up in the portfolios of large buy and hold investors who are seen as more reliable. The concessions on new issues may also arise as investors and bankers need to be compensated for the extra risk of holding corporate credit as opposed to safer securities, such as government debt.

A Deutsche Bank AG unit will pay more than $4 million to settle allegations that it failed to properly report data on millions of options trades, according to the Financial Industry Regulatory Authority (FINRA). The alleged conduct happened between 2010 and 2015 and violated FINRA rules aimed at identifying holders of large options positions who may be trying to manipulate the market or violate other industry rules. NASDAQ and the International Securities Exchange also took part in the investigation. The bank allegedly made enhancements to its reporting systems after hiring an independent consultant to review them.

The United States government is making sure regulatory agencies such as the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) are keeping pace with the US Equity markets, which are vastly and quickly changing due to the effects of technological innovation on market structure. Technology changes have always been first and foremost on regulators’ minds. During a senate banking hearing last week, the SEC relayed that it had stepped up its pace considerably in the way of technological innovation. Ever since May 6th, 2010, when trillions of dollars were quickly wiped out because of faulty algorithms, the market has changed significantly in order to rebound from algorithm-driven spoofing. Nowadays, according to numbers compiled by RBC Capital Markets and cited at the banking hearing, today’s fee schedules represent a highly fragmented market structure and many exchange business models are trying to counter some of the trends emphasized in that report.

When it comes to equities, there are many types of liquidity qualities in the stock market, depending on common trade flow metrics, including the needs of clients, the underlying securities and other variables, that when combined, result in the need for an equally high number of diverse trading choices for participants. Along with that, there are nearly 133 different order types across US market venues. These different trading needs of high and low-frequency trading operations brought about the growth of Alternative Trading Systems (ATS) and dark pools, yet got away from traditional systems such as National Market Systems (NMS). The SEC wants to test a ban for six months on eliminating rebates for a number of securities and participants, to study the effect it will have on the market.

During the Senate hearing last Thursday, under the committee on Banking, Housing and Urban Affairs, through its subcommittee on Securities, Insurance and Investments, a meeting titled “Regulatory Reforms to Improve Equity Market Structure” was held. The discussions covered topics such as defining Consolidated Audit Trail (CAT) market maker models, advisor misconduct and other areas of concern. The SEC also proposed a rule that would aim to amend the Securities Exchange Act of 1934, among other things.

Stoltmann Law Offices is investigating Darrell Duane Smith and Randy Less, who have both been charged with “willfully failing” to collect, truthfully account for a pay federal income, Social Security and Medicare taxes that were withheld from the wages of employees of Permeate Refining Inc., a business that made ethanol in Hopkinton. Less was the majority owner of the company, a general partner and the general manager of Permeate. Allegedly, from 2009 until 2010, he failed to pay $116,000 in withheld federal taxes. From 2011 to 2012, Less and Smith failed to pay $307,000 in withheld taxes.

Last week, the Financial Industry Regulatory Authority (FINRA) charged State Street Securities and 11 of its bank officers and directors for fraud. The Securities and Exchange Commission (SEC) also alleged pay-to-play violations on behalf of the brokerage firm. State Street will pay $12 million for the transgressions. Additionally, FINRA censured and fined BNP Paribas for deficiencies in its large open position reporting system and position limit and Citadel Securities on written supervisory procedure failures. The SEC charged State Street $12 million to settle charges that it conducted a pay-to-play scheme through its senior vice president and hired a lobbyist to win contracts to service Ohio pension funds.

The SEC also filed charges against 11 former executives and board members at Superior Bank in Birmingham, Alabama and its holding company. It is alleged that the bank and the holding company tried to conceal their loan losses as the bank was failing. Employees mislead investors and bank regulators by talking up the bank’s financial conditions, using straw borrowers, phony appraisals and insider deals. The bank also allegedly proposed, structured and documented nonrecourse joint venture agreements with defaulted borrowers and a now-deceased outside director of the bank that made their loans look current, even when they were not. Superior Bank overstated its net income in public filings by 99% for 2009 and 50% for 2010. The bank failed in 2011. The investigation is ongoing.

Alpha Fiduciary Inc. (AFI), an investment advisory firm, along with two of its officers, have been accused of misleading clients. The Securities and Exchange Commission (SEC) alleged that between 2010 and 2013, AFI misled clients by not disclosing that they were using hypothetical back-tested data to promote its Global Tactical Multi Asset Strategies (GTMACS). According to the SEC, “in one instance, the GTMAC’s Balanced model was shown to have a 163.7 percent return between 1999 and 2012. For this, AFI was fined $250,000. If you or anyone you know invested money with AFI, you may be able to recover your investment losses by calling our securities law firm to speak to an attorney for a free consultation. There is no obligation.

Did you lose money in Polo Road Associated Living LLC, Chestnut Independent Living LLC, Highlands Assisted Living LLC, Oklahoma Operating LLC, Cedala LLC or Arcadia Partners? Stoltmann Law Offices is investigating these companies along with Anthony J. Cantone, Christine L. Cantone and the securities brokerage firm they operate and own, Cantone Research Inc. The Financial Industry Regulatory Authority (FINRA) alleged that from 2010 until 2013, Anthony Cantone, Christine Cantone and their company misrepresented the risks of investing $8 million in “certificates of participation” and promissory notes of entities run by Christopher F. Brogdon. Many of the notes defaulted, resulting in losses for investors.

Allegedly, Christopher Brogdon sold certificates of participation and promissory notes through Brogdon Family LLC and Chelsea Investments LLC. Both were his companies. They sold investments in assisted living and nursing homes. Cantone Research allegedly sold many of the Brogdon investments. The Securities and Exchange Commission (SEC) brought a complaint against Christopher Brogdon and related entities, alleging fraud. Cantone Research did not adequately disclose that Brogdon was barred twice from the securities industry, was indicted for racketeering, theft and Medicaid fraud, and that many of his companies had filed for bankruptcy. Cantone promised investors 10% interest and a return of their principal investment. The promissory notes in question were issued for the following companies: Columbia Financial LLC, which offered notes in Polo Road Assisted Living LLC, Chestnut Financial LLC, which offered notes in Chestnut Independent Living LLC and Highlands Assisted Living LLC, Oklahoma Financial LLC, which offered notes in Oklahoma Operating LLC, Cedars Financial LLC, which offered notes in Cedala LLC and Cherokee Financial LLC, which offered notes in Arcadia Partners. Did you lose money with Anthony J. Cantone, Christine L. Cantone or Cantone Research Inc.? If so, please call our securities law firm as soon as possible. We help investors recover their losses by suing firms such as Cantone Research. The call is free with no obligation.

The Associated Press wrote an article today entitled “New Way to Bet on Oil Wipes out Billions in Investor Savings” in which a Stoltmann Law Offices customer, Karen Robinson, was featured. Robinson invested in oil, shale and energy investments at the urging of her broker, Tom Parks of Ameriprise Financial Services in Stephenville, Texas. Two years later, Robinson’s oil partnerships have plummeted in value and she has lost more than half of the $202,000 she invested.

In the past year alone, investors have lost $20 billion in publicly traded drilling partnerships (or $8 out of every $10 invested, according to a report prepared for the The Associated Press.) $37 billion in bond losses sold by the partnerships has also occurred since 2010. This comes after the plunge in the price of oil, coupled with the partnerships borrowing heavily and running big risks, even when the price of oil was higher one year ago. Oil and gas products have always been high-risk investments and are not for those investors who wanted to preserve capital. Many of these partnerships are classified as “junk” bonds, high-yield, high-risk securities, typically issued by a company seeking to raise capital quickly, because they are from volatile emerging markets or highly indebted U.S. companies. Subsequently, because of the high volatility, investors are pulling out of junk funds and emerging market bond funds, quickly, to the tune of $4 billion each.

Master limited partnerships, such as the energy partnerships, are types of limited partnerships that are publicly traded, with two types of partners. The limited partner is the person or group that provides the capital to the partnership and receives periodic income distributions from its cash flow, and the general partner receives compensation that is linked to the performance of the venture. They also avoid corporate taxes by passing off much of what they earn straight to their investors. But many energy stocks, BreitBurn included, tumbled by 85%, and cut payments to investors in half. As quoted by Andrew Stoltmann in the article: “It’s a little like a death spiral. When the bad news inevitably hits, they don’t have a cash cushion.”

Two Mexican foreign exchange traders, Eduardo and Gervasio Negrete, are suing Citigroup illegally marked up spot foreign currency orders without disclosing the markups. They are alleging the bank made $20 million on the transactions. Citibank allegedly added an undisclosed markup of one to three points per transaction. The bank also misrepresented trades and made undisclosed profits on trades that were executed between 2007 and 2010. If you invested money with Citibank, you may be able to recover some of your investment losses by calling our securities law firm at 312-332-4200. We sue firms such as Citibank in the Financial Industry Regulatory Authority (FINRA) arbitration process. The call is free with no obligation. We take cases on a contingency fee basis only so we only get paid if you recover money.

Stoltmann Law Offices is investigating Joseph Peter Canciglia, who entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). He was fined $10,000 and suspended from associating with any FINRA member firm for 45 days. Canciglia was associated with Janney Montgomery Scott. FINRA accused Canciglia of exercising discretion in customer accounts without the customer’s written authorization to place discretionary trades and without his member firm’s approval and acceptance of the accounts as discretionary. This took place from 2010 through 2013 on various occasions.

Joseph Peter Canciglia was registered with Prudential Securities Inc. in New York, New York from March 1999 until January 2002, Gruntal & Co. in New York from February 2002 until May 2002, Ryan Beck & Co in Fort Lee, New Jersey from April 2002 until July 2007 and Stifel, Nicolaus & Company in Hackensack, New Jersey from July 2007 until May 2014. He is currently registered with Janney Montgomery Scott in Hackensack and has been since May 2014.

If you invested money with Canciglia, please call our securities law office in Chicago, Illinois at 312-332-4200 for a free consultation with an attorney. We sue firms such as Janney Montgomery Scott for failing to supervise their representatives.

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