Ex-Sterne Agee CEO Didn’t Know His Corporate Card Wasn’t Meant To Be Used On Boats, Trucks, Condos, Yachts, Etc

Posted on December 15, 2014 by admin

Brokerdealer.com Blog update courtesy of Dealbreaker.com and Birmingham Business Journal

For some brokerdealers, like James Holbrook, it is hard to play by the rules, luckily, there are many who do follow the rules.

Ex CEO James Holbrook

Sterne Agee Group Inc., one of the fastest-growing brokerages in the South, sued its former chief executive officer over claims he took his corporate credit card on a decade-long spending spree for fishing boats, a yacht, a vacation condominium and ownership in a luxury ski chalet. The complaint against James S. Holbrook Jr., ousted as CEO in May, follows revelations that he’s being investigated by the U.S. Justice Department over the claims… “Holbrook wasted SAG’s corporate assets and used them for his own personal benefit,” the Birmingham, Alabama-based brokerage said in the complaint. His conduct “was beyond how a reasonable person might act in his position,” according to the filing…

Holbrook, starting in 2003, used corporate assets to buy two fishing boats and a Chevrolet Suburban through an entity he formed called Birmingham Broward LLC, according to the complaint. Over the next few years, the executive used company resources in a similar manner to invest in the ski chalet in Deer Valley, Utah, and acquire an interest in Five Star Plantation LLC, a hunting club in Kellyton, Alabama, according to the complaint. The most recent purchase described in the complaint was in March, when Holbrook allegedly diverted company resources to buy a 68-foot (21-meter) luxury fishing yacht.

Holbrook’s lawyer continues to argue, “There is nothing newsworthy about this lawsuit. It simply rehashes the same baseless allegations that have been pending against Sterne Agee and Mr. Holbrook for almost two years and chronicled ad nauseum. In my opinion, Sterne Agee’s time and money would be better spent focused on its clients, employees and shareholders rather than on an attempt to intimidate Mr. Holbrook with these stale allegations. This filing demonstrates that anyone with a typewriter and a law degree can file a suit.”

FINRA makes it clear for Brokerdealers, Their Rules Aren’t Toys

Posted on December 12, 2014 by admin

Brokerdealer.com Blog update courtesy of Investment News.

FINRA, Financial Industry Regulatory Authority, fined 10 banks on Thursday for total of $43.5 million for promising positive analyst coverage after initial public offering.

Citigroup Inc. and Goldman Sachs Group Inc. were among 10 banks fined for failing to shield analysts from pressure to promote stocks a decade after a U.S. crackdown sought to end Wall Street conflicts of interest.

MW-BX587_toys_r_MG_20140326121052 The investment banks promised favorable research to Toys “R” Us Inc.
and its private-equity owners in 2010 to win roles in its initial public offering, the Financial Industry Regulatory Authority said Thursday in a statement. The regulator fined the firms a total of $43.5 million, faulting them for “implicitly or explicitly” making promises that their analysts would give positive coverage. Six of the 10 firms didn’t have adequate supervisory procedures to prevent the practice.

Citigroup, Goldman Sachs, Credit Suisse Group AG, Barclays Plc and JPMorgan Chase & Co. were fined $5 million each. Deutsche Bank AG, Bank of America Corp., Morgan Stanley and Wells Fargo & Co. will pay $4 million. Needham & Co. will pay $2.5 million. The firms didn’t admit or deny wrongdoing, according to FINRA.
“The firms’ rush to assure the issuer and its sponsors that research was in sync with the pitch being made by their investment bankers caused them to overstep the prohibitions against analyst solicitation and the promise of favorable research,” Brad Bennett, FINRA’s chief of enforcement, said in the statement.

FINRA said Thursday that Toys “R” Us and its owners demanded that analysts and bankers agree on valuation. For example, the owners told Barclays that they were interviewing analysts “after having been burned” on other deals in which they learned too late about analysts’ negative sentiments, according to FINRA.

Brokerdealer.com offers many databases full of brokerdealers who choose to abide by the rules of FINRA and you can find them here.

For the entire article from Investment News, click here.

BrokerDealers Crow About Crowdfunding

Posted on December 11, 2014 by admin

Crowdfunding Brokerdealer.com blog update courtesy of extract from the New York Times.

For most start-up businesses, money to finance the business is a key issue, in recent years, start-up businesses have been turning to crowdfunding.

Crowdfunding is raising money contributions from a large number of people, typically through the use of the Internet. Some of the more popular crowdfunding sites include GoFundMe and Kickstarter.

These kind of small businesses are the ones President Obama wanted to help in 2012 when he signed the Jumpstart Our Business Startups Act, better known as the JOBS Act. Part of the law, Title III, was intended to allow small businesses seeking capital to crowdfund, or raise money from virtually anyone, by selling stock and other securities over the Internet. “Start-ups and small business will now have access to a big, new pool of potential investors,” Mr. Obama said at the time. “For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.”

crowd-funding Congress directed the Securities and Exchange Commission to finalize the rules by December 2012, but the agency has yet to do so. As it reviews Title III of the JOBS Act, a debate has raged. Supporters say crowdfunding is an innovative way to finance new ideas. Others say the high risk associated with backing early-stage businesses is inappropriate for ordinary investors.

Only accredited investors — those with annual income of more than $200,000 or $1 million in net worth not including their primary residence — are permitted to participate in crowdfunding deals. Under the proposed rules, which the S.E.C. introduced in October 2013, businesses could raise up to $1 million in a 12-month period without registering the offering with the agency.

“The goal is to democratize and improve finance,” said Representative Patrick T. McHenry, Republican of North Carolina, who worked on the House crowdfunding bill that was incorporated into the JOBS Act.

In writing its rules, the S.E.C. adopted strict requirements intended to minimize fraud and protect investors. Individuals who are not accredited investors, for instance, would face limits on how much they could invest. Businesses would be required to go through a registered broker or a new type of registered platform called a funding portal for their offerings. Businesses also would be required to submit audited financial statements. The rules are still under review and may change.

While the rules are still under review having a brokerdealer in your corner to help find smart investments to make whether it is in a small company or large corporation.

For the full story from the New York Times click here

The Holidays will Come Late for Some BrokerDealers this Year

Posted on December 10, 2014 by admin

BrokerDealer.com blog update courtesy of extract from Investment News

For employees at American Realty Capital, a nontraded real estate investment trust, were notified by email that their annual holiday would be postponed.

“As you know, we ordinarily throw our holiday party in January,” according to the email from Mr. Schorsch. “This year, however, we have decided to move the celebration to warmer times, likely May or June.”

“We have not yet decided on a venue for the event, but rest assured, as always, it will be memorable,” according to the email, a copy of which was obtained by InvestmentNews. “We will keep you advised of our plans as we get closer to the date.”

wall-st-xmas-tree The email was signed by Mr. Schorsch and his three partners at ARC: Bill Kahane, Mike Weil and Peter Budko.

Andrew Backman, a spokesman for ARC, said the email was accurate but declined to comment as to the specifics of why the holiday party was delayed.

Wall Street has a history of canceling holiday celebrations for fear of drawing criticism during stressful times.

Wall Street has a history of canceling holiday celebrations for fear of drawing criticism during stressful times. In an attempt to keep a low profile, The Goldman Sachs Group Inc. in 2009 told its employees it would not host a corporate Christmas party; the investment bank also prohibited its employees from funding their own parties.

ARC and RCS Capital Corp., the broker-dealer holding company of which Mr. Schorsch is executive chairman, have faced intense scrutiny since a related company, American Realty Capital Properties Inc., at the end of October revealed a $23 million accounting error over the first half of the year that was intentionally not corrected.

Most other BrokerDealers will be celebrating the holidays on Wall Street this season.

For the full story from Investment News click here

Broker-Dealer Burnishes Brand With Buyside-Focused Technology Solutions

Posted on December 9, 2014December 9, 2014 by admin

BrokerDealer.com blog update courtesy of extract from 09 December story published in Markets Media and reported by Steve Marlin.

Agency Broker WallachBeth Raises Tech Bar

WallachBeth Capital, a provider of institutional execution for buy-side investment managers, recently appointed quantitative trading veteran Matthew Rowley to the newly created role of chief technology officer, signaling the firm’s commitment to delivering customized services that address specific and often complex order-execution and related business-process needs.

The company’s founders, Michael Wallach and David Beth, “have a vision of the industry becoming even more technologically driven,” Rowley told Markets Media.

Matt Rowley, Wallachbeth Capital’s new chief technology officer

Rowley joined WallachBeth from Crédit Agricole Cheuvreux, where he was credited with helping the firm attain a leadership position in the global electronic brokerage space.

“My main focus had been more on the algorithmic side — slicing and dicing of orders,” said Rowley, who holds an advanced degree in applied statistics from Oxford University. “Something that’s been really interesting to me throughout my whole career is artificial intelligence. I’ve been working on and off trying to integrate that into various firms I’ve been at, in different products. But it’s only in recent years that some of the cutting-edge techniques are such that you can get near-human performance in some aspects.”

Rowley’s background includes senior executive roles for several of the financial industry’s leading firms. Prior to joining Cheuvreux, he was global head of advanced trading products at financial software provider Fidessa. He began his career as a quantitative analyst in the strategic risk management advisory group at First Chicago Corp.

WallachBeth’s Tools Hope to Educate

Rowley’s current focus is on developing “trader intelligence” tools that filter information programmatically and algorithmically and put the information in the hands of capable traders who make decisions. These decision tools can be for traders on the buy side or sell side, or portfolio managers. trading tech

“Market participants are making decisions by relying on the tools they have,” he said. “A trader may have Bloomberg or another market-data terminal, and they have order management systems that give an idea of historical reports, clients order and history. Oftentimes, that information is disparate, and as a human being, you can’t quite process everything. You have to query and follow a nonlinear path to get the information you need and ask yourself questions.”

WallachBeth aims to educate clients about exchange-traded funds and provides “a very unique execution model around that,” said Rowley. “We’re looking to expand that across different asset classes as a one-stop shop. The quantitative tools we’re building are important to that whole process.”

To read the entire story from MarketsMedia, please click here.