ALERT:

H.R.3482 New Co-sponsors– Congressman Michael Burgess [R-TX26] and Congresswoman Carol Shea-Porter [D-NH1} have signed onto support H.R. 3482 – Restoring Main Street Investor Protection and Confidence Act.

If your congressional representative has not yet signed on to H.R.3482 (click here for list of current co-sponsors), please call and write your representative urging they take action and sign on. Visit www.fixsipcnow.org to submit your letter on-line and for your representative’s contact information.

S.1725 New Co-sponsors – Senator Mark Pryor [D-AR] and Senator Bill Nelson [D-FL] have signed onto support S.1725 – Restoring Main Street Investor Protection and Confidence Act.

If your Senator have not yet signed on to S.1725 (click here for the list of current co-sponsors), please call and write your Senators urging they take action and sign on.

Click here to submit your letter on-line and for your Senator’s contact information.

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ALERT:

H.R. 3482 – Restoring Main Street Investor Protection and Confidence Act
New Co-Sponsor: Representative Christopher Smith [R-NJ4]. This brings the number of co-sponsors to date to 51. If your representative is currently not co-sponsoring H.R. 3482 (click here for a list of current co-sponsors), we urge you to visit www.fixsipcnow.org to write your representative, and follow up with a call to their office.

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Authorities in talks to tackle online Ponzi schemes

US regulatory and law-enforcement authorities are engaged in discussions about how to stop the worldwide spread of Internet pyramid schemes, following criminal indictments in Massachusetts against the owners of TelexFree Inc., who allegedly conducted a $1 billion global fraud. The talks involve creating a coalition of federal and state securities regulators, as well as law-enforcement agencies, who would in turn reach out to their counterparts abroad, according to two US officials with knowledge of the effort. The Department of Justice is among the parties participating in the process. More in the Boston Globe here.

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Madoff Trustee Seeks Another Shot at Litigation

The official who is winding down Bernard Madoff’s investment firm wants another opportunity to sue defendants that benefited from his Ponzi scheme after two major district court rulings “substantially altered the legal landscape.” Trustee Irving Picard said two rulings handed down by the U.S. District Court in Manhattan earlier this year changed the burdens he must meet to recover money from certain institutions that profited from Mr. Madoff’s fraud. So he is seeking another chance for himself and his team of lawyers. More in the Wall Street Journal here.

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Cassidy pushes for support of Stanford Ponzi scheme investors

Rep. Bill Cassidy (R-La.) urged the SEC on Friday to appeal an appellate judge’s decision that victims of the Stanford Ponzi scheme are ineligible for compensation from the Securities Investor Protection Corporation (SIPC). Allen Stanford is currently serving a 110-year prison sentence for defrauding investors of more than $5 billion in the scheme, CNBC reports. More on The Ripon Advance here.

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PwC must face $1 billion lawsuit over MF Global advice

A federal judge on Wednesday ordered PricewaterhouseCoopers to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the October 2011 bankruptcy of MF Global Holdings Ltd, a brokerage run by former New Jersey Governor Jon Corzine. U.S. District Judge Victor Marrero in Manhattan said PwC’s [PWC.UL] advice on “repurchase-to-maturity” transactions through which Corzine bought $6.3 billion of European sovereign debt affected how MF Global implemented its strategy and in turn contributed to its alleged losses. More on Reuters here.

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SEC adopts securitization, rating agency reforms

The U.S. Securities and Exchange Commission on Wednesday adopted tighter rules for asset-backed securities and credit rating agencies, tackling two issues at the core of the 2007-2009 financial crisis after years of delays. Banks will need to give far more transparency about ABS products under the new rules, and have to publicly disclose a raft of information about the thousands of car, home or other loans that underlie such securities. More on Reuters here.

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SEC Wants More Detail on Loans Backing Securities

WASHINGTON—U.S. regulators will take long-awaited steps to give investors more information about the quality of mortgages and other loans underpinning certain securities. The Securities and Exchange Commission is expected to complete rules Wednesday that would require banks and other firms to provide investors with more details about loans pooled into bonds known as asset-backed securities. The data will include borrowers’ credit scores and metrics to gauge levels of debt—information the SEC expects will aid investors in determining the health of certain loans and reduce reliance on credit ratings, according to people familiar with the matter. More in the Wall Street Journal here.

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MF Global Seeks Permission to Repay Creditors

MF Global Inc. wants court approval to pay $295 million owed to its creditors, now that it has paid back most of its customers. In a Tuesday filing with the U.S. Bankruptcy Court in Manhattan, trustee James W. Giddens said he wanted to distribute $295 million to creditors, who have waited nearly three years as all but a few individual brokerage and commodity customers received 100% of payments owed. The bulk of the money is earmarked for unsecured creditors, who would receive a first distribution of about 20% of what Mr. Giddens has agreed to pay. Holders of secured, administrative and priority claims that have been resolved will get 100% of their money all at once if the request is approved. More in the Wall Street Journal here.

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Judge Denies Claims by Investors in Retirement Accounts Tied to Madoff

Hundreds of people whose employers invested their retirement funds with Bernard Madoff cannot recover money from the liquidation of Mr. Madoff’s firm because they weren’t direct customers of the imprisoned Ponzi scheme operator, a bankruptcy judge has ruled.
The decision, by Judge Stuart Bernstein of the U.S. Bankruptcy Court in Manhattan on Friday, is the latest in a string of rulings denying claims put forward by investors in either retirement funds or so-called feeder funds that in turn invested with Mr. Madoff. More in the Wall Street Journal here.

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As federal regulators move slowly on equity crowdfunding, states adopt their own rules

With federal regulations for equity-based crowdfunding still unfinished more than two years after the practice was signed into law, numerous states are moving ahead with their own measures that allow residents to funnel small sums of money to local businesses. But the deals allowed by state-level crowdfunding are typically smaller in size and scope than those envisioned by the federal crowdfunding provisions, which entrepreneurs and economic development officials alike have heralded as a new mechanism for businesses to raise capital needed for expansion. More in the Washington Post here.

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What’s Next for the Fiduciary Standard?

While the industry awaits a decision by the SEC on whether it will move forward with a uniform fiduciary rule for brokers and advisors, fiduciary advocates will engage this month in a debate about the importance of the two fiduciary rulemakings being considered by the SEC and the Department of Labor, as well as what the industry’s role should be in shaping fiduciary standards. As Fiduciary September approached—and with only three months remaining until SEC Chairwoman Mary Jo White’s self-imposed deadline for the agency to make by year-end a “threshold decision” on whether and how to move forward on a fiduciary rulemaking—I reached out to top fiduciary thinkers to get their views on where the commission may be headed. More on ThinkAdvisor here.

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