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Most brokers and advisers don’t guarantee your money back after a hack attack

The vast majority of brokerages and financial advisers don’t guarantee clients will be reimbursed for losses related to a cyber attack, a study by Wall Street’s federal regulator found — despite the fact that most said they “have been the subject of a cyber-related incident.” The Securities and Exchange Commission released details Tuesday from a study of cybersecurity practices at more than 100 broker-dealers and registered investment advisers. Just 15% of broker-dealers and 9% of advisers offer security guarantees to clients that would make them whole after cyber-related losses, the study found. At the same time, 88% of broker-dealers and 74% of advisers said they “have experienced cyber attacks directly or through one or more of their vendors.” More on MarketWatch [...]

February 5th, 2015 |

SEC Officials Say Agency Turned ‘Blind Eye’ to Oppenheimer

Two members of the U.S. Securities and Exchange Commission blasted the agency’s decision to spare Oppenheimer Holdings Inc. from additional sanctions related to a recent settlement, saying regulators were turning a “blind eye” to the investment bank’s pattern of misconduct. SEC Commissioners Luis Aguilar and Kara Stein, both Democrats, said they opposed a waiver of a penalty that would have barred Oppenheimer from raising money for private firms and hedge funds after the company admitted last week to improperly selling billions of shares of penny stocks. More on Bloomberg [...]

February 5th, 2015 |

S.&P.’s $1.37 Billion Reckoning Over Crisis-Era Misdeeds

Nearly a decade after credit rating agencies fed a subprime mortgage frenzy that imperiled the global economy, one of the industry’s biggest players now faces a costly reckoning. Standard & Poor’s, a rating agency accused of inflating its assessment of mortgage investments that spurred the 2008 financial crisis, said on Tuesday that it had agreed to pay $1.37 billion to settle wide-ranging civil charges from the Justice Department as well as 19 state attorneys general and the District of Columbia. S.&P. also signed a statement of facts that outlined its role in the mortgage crisis, but the ratings agency did not admit to wrongdoing, securing a major concession from the government.
The settlement, which does not require judicial approval, all but closes the book on one of the government’s signature Wall Street cases. The Justice Department sued S.&P. two years ago this week, setting in motion a wave of lawsuits from states across the country. More in the New York Times [...]

February 5th, 2015 |

BMO fights lawsuits seeking billions over customer's Ponzi scheme

Three and a half years after buying Marshall & Ilsley Corp., BMO Financial Group is fighting four federal lawsuits — one seeking a staggering $24 billion — stemming from M&I’s dealings with a profitable, but very corrupt, customer. The customer was a company owned by Tom Petters, a Minnesota man serving a50-year federal prison sentence in Leavenworth, Kan., for masterminding a $3.7 billion Ponzi scheme. That scam was thought to be the third-largest Ponzi in U.S. history. “Petters did not act alone,” charges the $24 billion suit filed by Florida investor groups that unwittingly financed some of Petters’ scam. More in the Journal-Sentinel [...]

February 5th, 2015 |
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