Securities and Exchange Commission Chairman Mary Jo White is poised to reveal what she believes is the best way for the agency to address the issue of raising investment-advice standards for brokers. “The commission has not made a decision whether to do something or what to do,” Ms. White said Monday at the Securities Industry and Financial Markets Association annual meeting in New York. “But in the short-term, there will be more clarity on that in terms of my own position.” Ms. White has not said whether she supports writing a rule or enhancing disclosures related to investment-advice standard of care. She has played her cards close to her vest in part because the controversial issue has divided the five-member commission. More on Investment News [...]
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Investors want more regulatory protection and are willing to pay higher brokerage costs to get it, a new Finra survey shows. On Thursday, the Financial Industry Regulatory Authority Inc., the industry-funded broker-dealer regulator, released a study showing that 92% of investors say it’s important to have a “cop on the beat” to protect them from malfeasance in the markets and that 74% support “additional regulatory protections.” More than half (56%) would favor enhanced regulation even if it resulted in “a minimal increase” in costs that brokerage firms pass on to investors. The rest of the study participants split between opposing additional regulation if it meant higher costs (22%) and having no opinion (22%). More on Investment News [...] When a couple that ran a Marietta, Georgia-based securities brokerage went bankrupt late last month, it caused a ripple effect. One of the people who expects to get soaked is Bruce Wilkerson, a former tackle for the Green Bay Packers who is trying to recoup about $650,000 from the couple and their firm, Resource Horizons Group LLC. Also likely to never see a dime are investors who were awarded $3.9 million by an arbitration panel in June, say some investors’ lawyers. The allegations in that case were similar to those in other cases against Resource Horizons and its owners: a broker at the firm ran a scam on the side and defrauded them. Resource Horizons and its owners failed to supervise the broker, the cases allege. The firm does not have enough cash on hand to pay the $3.9 million award, said its lawyer. More on Reuters [...] Pershing LLC isn’t liable for $80 million in investor losses stemming from Allen Stanford’s $7 billion Ponzi scheme, an arbitration panel has ruled. The 85 mostly older investors had invested their retirement savings in certificates of deposits offered through Stanford’s firm, but lost their investments when the Ponzi scheme—one of the largest in U.S. history—collapsed in 2009. The investors charged that Pershing, a unit of the Bank of New York Mellon Corp. which administers more than $1 trillion in assets, should have known Stanford’s business was a fraud, according to the arbitration claim filed with the Financial Industry Regulatory Authority. More in the Wall Street Journal [...] The Securities Investor Protection Corp. on Wednesday issued a warning about recent phishing scams targeted at brokerage clients. The SIPC, which is responsible for protecting investors from insolvent brokerages, said in a press release that phony organizations have begun posing online as consumer protection groups. More on The American Banker [...] Major U.S. stock exchanges have asked a federal judge to dismiss a lawsuit accusing them of costing ordinary investors billions of dollars by rigging markets to benefit high-frequency traders. Exchanges including Nasdaq, Intercontinental Exchange Inc’s New York Stock Exchange, Bats Global Markets and CHX Holdings Inc’s Chicago Stock Exchange said they deserve “absolute immunity” because they regulate themselves, and that only the U.S. Securities and Exchange Commission could review the plaintiffs’ claims. More on Reuters [...] WASHINGTON—A time lag that could give some investors early access to market-moving documents from the Securities and Exchange Commission has all but disappeared, according to an academic tracking the data. Delays between the time a private data feed publishes regulatory filings to the SEC and when the filings appear on the agency’s website have diminished since Wednesday afternoon, said Prof. Robert Jackson of Columbia Law School. The shift came after The Wall Street Journal reported Wednesday that some sophisticated investors were gaining access to documents ahead of others. The early look gave them a potential advantage over investors relying on the public website, according to findings by Mr. Jackson as well as a separate group of academics studying the same topic. More in the Wall Street Journal [...] The Financial Industry Regulatory Authority on Thursday named a long-time official, Richard Berry, as the new head of its securities arbitration unit. Berry will replace the head of FINRA’s arbitration unit, Linda Fienberg, who retires at the end of November after 18 years in her current job. He is presently the unit’s director of case administration, and will become the executive vice president and director of dispute resolution on Dec 1. His appointment was reported exclusively by Reuters earlier on Thursday. More on Reuters [...] We’re continuing to play around with some questions in the law of restitution, which is the subject of a new book I’ve written. Here’s another. A Ponzi schemer takes $10,000 of my money and $10,000 of yours. Then he is caught. We gave him our money in cash, and he kept it separate. My money has all been spent. Your money is still sitting in a briefcase (or envelope) on his desk. Do you get all of your money back, or do we share it? The older rule was that you took all of your money back. The schemer never got good title to it (his title was “voidable”); so until your money gets mixed with someone else’s so that it can’t be identified, you can always reclaim it. This isn’t a question of what’s fair to me. The money is yours, and did not stop being yours when you were tricked into handing it over. More in the Washington Post [...] |
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