UPDATE 3-Obama takes aim at brokers’ fees on U.S. retirement accounts

U.S. brokers and financial advisers would face new constraints under a plan President Barack Obama put forward on Monday to reduce conflicts of interest and “hidden fees” that cost Americans billions of dollars in retirement savings every year. In proposing the rules, Obama said he sought to protect Americans from being steered into costly retirement investments that produced high commissions for brokers but low returns for investors preparing for retirement. Democrats and Republicans are trying to position themselves as champions of the middle class in the run-up to the November 2016 presidential election. Retired seniors are an important voting bloc. More on Reuters [...]

Appeals court decision may speed new payout to Madoff victims

Victims of Bernard Madoff’s massive fraud are not entitled to inflation or interest adjustments on their claims, a federal appeals court ruled on Friday, in a decision that could speed the return of more than $1 billion to the swindler’s former customers. Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, said he will seek permission from a federal bankruptcy judge to distribute that sum, on top of $7.2 billion paid out so far, as soon as possible. Picard has kept the additional money in reserve because of litigation over whether former customers deserved “time-based” damages on claims arising from Madoff’s Ponzi scheme that was uncovered in 2008. More on Reuters [...]

NIAP Update - February 20th, 2015

A joint statement by Angela Shaw Kogutt (Stanford Victims Coalition) and Ron Stein (NIAP), and Co-Directors of the Investor Protection Alliance regarding Letter of Commitment and Support from Scott Garrett, Chairman and Carolyn Maloney

Dear Madoff, McGinn-Smith, and Stanford Investors,

As we approach the 6th anniversary of the Stanford and Madoff insolvencies (and 5th year of the McGinn-Smith), we want to provide you with an important update on the legislative relief we’ve jointly spearheaded in the House and the Senate since the [...]

Court: No Inflation Pay on Recovered Funds of Madoff Victims

A federal appeals court says thousands of victims of Bernard Madoff’s multibillion-dollar fraud are not entitled to interest or inflation when they get a share of recovered funds. The Securities and Exchange Commission said publicly in 2009 and again before a bankruptcy judge that Madoff’s victims should get an inflation adjustment. On Friday, the 2nd U.S. Circuit Court of Appeals in Manhattan said that was inconsistent with the SEC’s position in other cases. More on ABC News [...]

Mixed ruling for fraud victims

A federal judge this week granted a request by the U.S. Securities and Exchange Commission to use the seized assets of imprisoned former Albany brokers David L. Smith and Timothy M. McGinn to repay victims in what the government said was a years-long fraud scheme. But in his decision, U.S. District Chief Judge Gary L. Sharpe rejected the SEC’s request for $124 million, saying that the agency did not adequately document that amount as the total investors lost. Sharpe criticized the SEC for its “haphazard filing” in which he said it gave inconsistent estimates for the losses of hundreds of former investors at the brokerage. In the SEC’s legal brief, which the judge said contained typographical errors, the agency put investor losses at more than $80 million, but then said the losses were “approximately $100 million.” More in the Times Union [...]

The Media Is the Message, When the Subject Is Investor Protection

In my last blog, Wall Street Finally Blinks in Fiduciary Standoff, I suggested that “Until now the securities industry has done a masterful job of deflecting initiatives to force its member firms to act in the best interests of their clients. It’s just possible that this time—ironically, due to its own efforts—it really might be different.” Teresa Vollenweider responded with the following post: “I certainly hope so, and I am willing to fight tooth and nail to make it so. Finally, yes, finally, the fact that Wall Street and its so-called advisers/advisors (who are nothing more than product peddlers) have been ripping off the retail investors and small [retirement] plans (business owners and employees) for years is finally seeing the light of day via the mainstream media…” More on ThinkAdvisor [...]

$355.8M more going to Madoff scam victims

NEW YORK – A new distribution of funds recovered from Bernard Madoff’s business interests is sending $355.8 million more to victims of the Ponzi scheme mastermind’s investment fraud. The latest repayment flow began Friday, and marked the fifth distribution by Irving Picard, the court trustee appointed to search for assets tied to the scam and use the funds to reimburse thousands of average investors, charities, celebrities and others who lost as much as $20 billion in the fraud. More on USA Today [...]

Payout to Madoff victims tops $7.2B

The trustee liquidating Bernard Madoff’s firm on Monday said he is distributing another $355.8 million to the swindler’s victims, bringing the total payout to more than $7.2 billion. Irving Picard, the trustee, said the payout began on Feb. 6, and covers claims by fraud victims with 1,077 accounts at the former Bernard L. Madoff Investment Securities. Claimants will receive between $431 to $67.1 million. More on CNBC [...]

DOL fiduciary rule stalls again as brokerage industry makes last-minute push against it

A Department of Labor proposal that would impose a fiduciary standard on retirement advisers appears to have stalled yet again as the financial industry makes one more, eleventh-hour bid to try to change it before it is released publicly. For a couple of weeks, participants in the hotly contested debate over the rule have been waiting for the DOL to send it to the Office of Management and Budget for analysis. On its regulatory agenda, DOL had indicated that it would act on the rule last month. More on Investment News [...]

Chamber Cautions DOL Fiduciary Rule May Not Promote Investor Protection, Choice

The U.S. Chamber of Commerce said Thursday it is concerned a fiduciary rule being developed for advisors to retirement plans such as 401(k)s and IRAs may not promote the twin objectives of investor protection and investor choice. “We are troubled by the possibility of a rule with an overly broad application … a rigid one-size-fits-all regulatory approach that will make it harder to serve current investors, particularly in small accounts,” Chamber Center for Capital Markets Competitiveness President David Hirschmann said in a letter to Labor Department Secretary Thomas Perez. More in Financial Advisor [...]