Morgan Stanley, Scottrade Settle Insufficient Supervisory Charges

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The Financial Industry Regulatory Authority said Monday that it fined Morgan Stanley Smith Barney LLC and Scottrade Inc. a combined $950,000 for insufficient supervisory systems to monitor the transmittal of customer funds to third-party accounts.

Morgan Stanley was fined $650,000 after Finra found that, from October 2008 to June 2013, three registered representatives in two different branch offices converted a total of about $500,000 from 13 customers by creating fraudulent wire transfer orders and branch checks from the customers’ accounts to third-party accounts. Supervisory failures allowed the conversions to go undetected, Finra said.

Scottrade, which was fined $300,000, didn’t obtain customer confirmations for third-party wire transfers of between $200,000 and $500,000 from October 2011 to October 2013, according to Finra. The agency alleged Scottrade processed transfers totaling about $880 million during that period.

Morgan Stanley, which has around 16,000 brokers and advisers, and Scottrade, which has around 2,000 registered brokers, agreed to the sanctions without admitting or denying the charges.

A spokesman for Scottrade, Whitney Ellis, said in a statement that the firm has resolved the issue after updating its procedures in 2013 and improving the notification process for third-party transfers.

A representative for Scottrade said clients now receive multiple notifications of pending wire transfers, and the appropriate supervisory procedures are in place.

Under ‘Reg A’, Firms Ready to Raise Up to $50 mil

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Brokerdealer.com profiles that some entrepreneurs and business owners say they’re preparing to raise up to $50 million in capital from investors, without facing the legal costs and financial reporting requirements of going public, taking advantage of Reg A that kicks in Friday.

The rules stem from the 2012 JOBS Act, which was established to help fledgling companies raise capital to expand and create jobs. As of Friday, the rules raise the cap on the amount of equity a business can issue privately, under what’s known as “Reg A” to $50 million, from $5 million.

Looking to take advantage of this new rule as well? Access the world’s largest database of broker-dealers click here.  Brokerdealer.com will set you up with an investment opportunity.

In addition, they do away with a requirement for businesses raising more than $20 million to pay separate fees and file paperwork to the federal Securities and Exchange Commission, as well as regulators in every state where investors purchase shares. The offerings are open to mom-and-pop investors.

To find out how some small firms are looking forward to this new rule, read this WSJ article. 

French BrokerDealers In Drivers Seat With Europcar IPO

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Brokerdealer.com profiles that Europcar, a French rental car company, said on Monday that it planned to sell 854.5 million euros, or about $963 million, in shares in an initial public offering in Paris this month.

Europcar said it hoped to price its shares between €11.50 and €15 and to begin unrestricted trading on the Euronext exchange on June 26. The company announced in May that it was seeking permission from regulators to pursue an I.P.O.

Looking to get in contact with a Brokerdealer? Access the world’s largest database of broker-dealers click here. 

Europcar expects to sell shares to institutional investors internationally and in France, and to retail investors in France. If there is sufficient interest, a minimum of 10 percent of the offering will be sold to retail investors, it said.

Deutsche Bank AG, Goldman Sachs Group Inc. and Societe Generale SA are among the banks managing the IPO.

To find out more, read this Bloomberg article. 

Goldman Gets Gritty: Silicon Valley-Style Scheme To Extend Online Consumer Loans

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The world’s most famous brokerdealer and investment bank is breaking from its long tradition of serving only the biggest with the most bucks and according to the NYT, is plotting to launch an online consumer lending business. 

Soon, Goldman will offer loans online to both consumers and to small businesses as it looks to tap into a marketplace worth nearly $850 billion. The new unit will offer the loans through a website or an app — functioning like a virtual bank in one of the oldest companies on Wall Street. Without the costs of bank branches and tellers, Goldman can lend the money at lower interest rates while still making a profit. The company hopes to be ready to make its first loans next year.

It’s a big change for Goldman’s business model — before, the only people who could obtain a loan from the bank were its high-net-worth clients.

Goldman can establish a consumer lending business now because it converted from being an investment bank into a bank holding company during the financial crisis.  It also allowed Goldman the opportunity to interact more directly with consumers.

Goldman Sachs did not comment when asked about their business plan explored by this New York Times’ story. 

Piper Nabs Lauded Investment Bankers After Stifel Deal

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Brokerdealer.com blog update profiles that Piper Jaffray Cos. has hired a few top investment bankers from a company recently sold to Stifel Financial Corp. Bloomberg reports that the Minneapolis-based investment bank hired two Boston bankers: Bob Hutchinson and Daryle DiLascia from Sterne Agee Group, the financial services firm that Stifel bought last week. 

To find brokerdealers like these from Piper, click here. BrokerDealer.com provides a global database of broker-dealers registered in the US as well as those performing brokerdealer services in upwards of 30 major countries throughout the world.

Stifel Chief Executive Officer Ron Kruszewski bought Sterne Agee to focus on businesses such as wealth management and bond trading. He struck a deal to sell Sterne Agee’s equities business to CRT Capital Group LLC.

So, the hiring of these bankers does not come to much a surprise after taking a look at the bigger picture. Bob Hutchinson–who received an MBA from Ohio State University’s Fisher College of Business and a bachelor’s from Boston College–will lead a group dedicated to financial clients including insurers. Daryle DiLascia–who earned his MBA from Boston College and bachelor’s from Syracuse University–is joining to oversee capital markets for the same industry.

This blog update is courtesy of the Bloomberg Business’ article, “Piper Adds Investment Bankers as Stifel Deal Displaces Talent”. To read more, click here.