Expert Lawyer Says SEC Broken Windows Approach to Enforcement is Broken

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Brokerdealer.com blog update courtesy of extracted opinion piece published Dec 22 by Pensions & Investments Magazine and submitted by Andrew Stoltmann, a partner at Chicago-based Stoltmann Law Offices PC, who represents investors in securities litigation and FINRA arbitration claims.

brokenwindows1“..The Securities and Exchange Commission is unfortunately pursuing a fundamentally flawed strategy to police the capital markets and protect investors.

Last year, SEC Chairwoman Mary Jo White disclosed she intends on pursuing a “broken windows” strategy for securities enforcement. The SEC intends on prosecuting even minor violations of the federal securities laws in order to prevent wrongdoers from engaging in even more egregious conduct.

The theory is that when a window is broken and someone fixes it, it is a sign that disorder will not be tolerated. When a broken window is not fixed, it is a signal that no one cares, and so breaking more windows, and more serious crime, will follow. This approach is the one taken in the 1990s by New York City’s then-Mayor Rudy Giuliani and Police Commissioner Bill Bratton back when Ms. White was the U.S. attorney for the Southern District of New York, which includes Manhattan.

Unfortunately, the “broken windows” strategy championed by Ms. White is fundamentally flawed. By going after minor offenses, it artificially inflates the SEC’s enforcement actions and gives the appearance of being tough on bad actors. In reality, it is a mirage. Continue reading →

Find a Brokerdealer who is also Socially Responsible

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BrokerDealer.com blog update courtesy of extract from Investment News.

Socially responsible investors look to promote concepts and ideals that the investors feel strongly about. Generally, socially responsible investors accomplish this by investing in stocks that the investor believes best hold to important values to the investor; advocate for share holders in corporate decisions; and investing in communities and helping with community service activities.

Socially responsible investing is on the rise, and women advisers are leading the way in offering clients opportunities to invest in a personally meaSocially Responsible Investingningful way.

The wealth management industry as a whole is opening its eyes to potential business gains from the increasing client demand for investments with environmental and social impact. Nearly half of the 1,913 advisers surveyed said they’ve offered an SRI options to clients because the clients requested it.

Most financial professionals expect investor interest in SRI to trend upward, especially among young, affluent investors who strongly value sustainable investments and want to put their money where their values are.

“It’s clear that [socially] responsible investment strategies are now a client expectation that advisers need to be equipped to provide,” said First Affirmative senior vice president Betsy Moszeter. “We are encouraged to see that industry professionals are looking ahead, and understand that the views and concerns of Millennial investors will need to be addressed in coming years.”

Socially Responsible Investors will work hard to make the voices of their investors heard and invest in businesses and governments that make a positive impact in our country and around the world.

With the need for socially responsible investors on the rise, find a Brokerdealer that supports the values you care about most and will invest in companies and governments that hold the same values up high as you do and an brokerdealer that will advocate for you.  Brokerdealer.com provides several databases that offer many different socially responsible investors to work with.

Top BrokerDealer Swings For Celebs & Sports Stars’ Wallets: Morgan Stanley Push

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BrokerDealer.com blog update courtesy of extract from Investment News

tysonmikeboxingapmi-resize-600x3386-Pack Broker-Dealer Morgan Stanley, whose brokerage helps manage more than $2 trillion of client assets, started a new unit that focuses on professional athletes and entertainers. This new initiative could prove to be prime meat for Morgan’s investment bankers and high-net worth advisors, when considering the many instances in which celebs and sports stars have faltered in their investment strategies.

The division has 69 advisers and will add a few more within the next year, Drew Hawkins, head of the Global Sports & Entertainment group, said Thursday. Many of them already had been working with celebrities, and brokers took a three-day training program on how to cater to those clients, he said.

Other brokerdealers have carved out a niche in their local markets to serve celebs and athletes; a full listing of those BDs is available via brokerdealer.com

Athlete pay has surged in recent years, with Giancarlo Stanton, a Miami Marlins outfielder, poised to sign a $325 million contract over 13 years, a Major League Baseball record, according to CBSSports.com. Kevin Durant, the National Basketball League’s reigning most-valuable player, re-signed as a Nike Inc. endorser with a contract worth $300 million over 10 years, Bloomberg News reported in September.

“The size of these contracts and the amount these individuals are earning tends to increase on a daily basis,” Hawkins said. “Celebrities and entertainers and those connected with those industries in a lot of cases make a lot of money, but they also have a lot of unique circumstances.”

Morgan Stanley will provide customized loans to the individuals and their outside businesses, offer insurance against injuries or voice damage and give advice on philanthropic endeavors, Hawkins said. He declined to identify any of the firm’s celebrity clients.

Residential Real-Estate & Commercial Builder IPOs: BrokerDealers and Investors Balancing New Home Builders v. Single-Building

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BrokerDealer.com blog update profiles divergence between IPO opportunities for new home builders v. a new trend among commercial real estate developers raising capital in the initial public offering market for specific projects.

ipoAs best illustrated by 2 side-by-side articles in Nov 19 Wall Street Journal, broker-dealers and investment bankers are cautioning that the door on home builders wanting to good public is closing, as higher mortgage rates and tight mortgage-qualification standards continue to dampen the residential developer IPO space, not to mention in that home-builder stocks have slumped. Given the deluge in the overall U.S. IPO market, residential real estate developers are being pushed into the woodshed, at least for now. The full story on this topic is at the WSJ.

The better news for bankers and Issuers can be found in the nascent stage interest for “single-building” IPOs. Leading the pack is a New York start-up ETRE Financial LLC, which plans to bring this novel structure to the capital markets early next year. The building that will be floated is the State Street Financial Center, the Boston office tower owned by a venture led by Fortis Property Group.

According to reporting by WSJ staffers Eliot Brown and Robbie Whelan, the structure proposed by ETRE is somewhat complex, yet ETRE co-founder Jesse Stein states, “By providing investors with the opportunity to invest in a single asset, you’re actually increasing the opportunity to diversify.”

 

 

 

Biggest BrokerDealer Compliance Officer Charged In Insider Trading Case

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BrokerDealer.com blog update courtesy of reporting by InvestmentNews.

InvestmentNewsThe Securities and Exchange Commission announced Wednesday that it was taking enforcement action against a former compliance officer at brokerdealer Wells Fargo Advisors who allegedly altered a document before it was provided to the SEC during its investigation into a former broker’s insider trading.

The charges stem from the case of Waldyr Da Silva Prado Neto, whose alleged scheme made more than $2 million from insider trades in Burger King Holdings Inc. stock ahead of an acquisition announcement on Sept. 2, 2010. )

The SEC said that after it charged Mr. Prado in September 2012, Judy K. Wolf, who was responsible for identifying potentially suspicious trading activity at broker-dealer Wells Fargo Advisors, went back and revised a 2010 report to make it appear that she had performed a more thorough review of Mr. Prado.

Initially, she had closed the report into Mr. Prado’s Burger King trades with “no findings” and did not notify any superiors of potential red flags, the SEC said.

To gain greater insight to the global universe of brokerdealers, the BrokerDealer.com database provides information on thousands of brokerdealers throughout the world.

The SEC said in its action that Ms. Wolf should have reported multiple red flags that were noted, including that Mr. Prado and his customers represented the top four positions in Burger King Securities firmwide, he and his customers purchased the securities within 10 days of the announcement, made substantial profits and that he, his customers and the company acquiring Burger King were all Brazilian.

To continue reading this story, please visit InvestmentNews.com