Industry’s Largest Firm, LPL Financial, Hit With Huge Fine

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lplfinancial

Brokerdealer.com blog update profiles Finra hitting LPL Financial, the industry’s largest independent brokerdealer firm, with a huge fine. The firm reportedly failed to properly supervise sales of complex products, such as ETFs, variable annuities and non-traded REITs. In addition to paying a fine to Finra, LPL Financial will also have to pay a substantial amount of restitution to certain customers who purchased non-traditional ETFs, and may pay additional compensation to ETF purchasers following an additional review of its ETF systems and procedures. This update is courtesy of InvestmentNews’ article, “LPL Financial fined $11.7 million for ‘widespread supervisory failures‘”, with an excerpt from the article below.

The Financial Industry Regulatory Authority Inc. ordered LPL Financial to pay $11.7 million in fines and restitution for what it deemed “widespread supervisory failures” related to sales of complex products, according to a settlement letter released Wednesday.

From 2007 to as recently as April, LPL failed to properly supervise sales of certain investments, including certain exchange-traded funds, variable annuities and nontraded real estate investment trusts, and also failed to properly deliver more than 14 million trade confirmations to customers, according to Finra.

LPL, for example, did not have a system in place to monitor the length of time customers held securities in their accounts or to enforce limits on concentrations of those complex products in customer accounts, Finra said.

The systems that LPL had in place to review trading activity in customer accounts were plagued by “multiple deficiencies,” Finra said. The firm failed to generate proper anti-money laundering alerts, for instance, and did not deliver trade confirmations in 67,000 customer accounts, according to the settlement letter.

To continue reading about the industry’s largest independent broker-dealer firm’s huge fines from Finra, click here.

On The Menu This Week: Bojangles IPO Launches On Friday

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Bojangles

About a month ago, Brokerdealer.com’s blog update covered the southern comfort fast food chain based out of North Carolina, Bojangles, announcement that it would be going public with an IPO after 38 years. On Friday, May 8,2015, Bojangles will officially launch its IPO under the ticker BOJA on the NASDAQ. There are several other IPOs coming out on the menu this week ranging in a wide variety of industries, but Bojangles has set itself apart from the rest.

To learn what sets Bojangles apart from the rest continue reading below and then contact a brokerdealer to invest in this hot new IPO yourself. 

This brokerdealer.com blog update is courtesy of Benzinga’s article, “IPO Outlook: Down-Home Cookin’, Fast-Casual Bojangles’ Sizzles Investors“, with an excerpt below. 

To say it’s a jam-packed week for the IPO market is an understatement. With twelve IPOs scheduled – ranging from biotechs, REITs, MLPs and a hot restaurant – investors have quite a menu to choose from.

Southeastern restaurant chain Bojangles’ Restaurants, Inc. (NASDAQ: BOJA) plans to raise $122 million through 6.3 million shares expecting to price between $15 and $17 on Friday.

Bojangles’ will trade on the NASDAQ under the ticker BOJA.

It’s Bo Time

Charlotte, North Carolina-based Bojangles’ joins the other fast-casual restaurants that recently tapped the public markets due to both consumer and investor strong enthusiasm.

The company started in 1977 with a menu centered on “chicken ‘n biscuits” and since has remained relatively unchanged. To put it in context, Bojangles’s is the chicken joint to the Southern realm eateries what Shake Shack Inc SHAK 1.52% is to the burger space in metropolitan areas.

What Makes The ‘Bo Difference’

The company has what it calls the “Bo Difference,” allowing it to grow profits and create a loyal customer base. Its self-described high quality, tasty Southern food is characterized by breakfast biscuits, never frozen bone-in fried chicken, dirty rice, sandwiches, wraps, unique fixin’s, legendary iced tea and its Bo Smart menu.

Bojangles’ five meal offerings include breakfast, lunch, snack, dinner and after dinner. Its decision to serve breakfast all day, every day, gives it an edge over its competitors that typically serve breakfast for a limited time or start service with lunch. This edge has paid off as Bojangles’ says in its S-1 that it generates 38 percent of its revenue from 11 a.m. to closing (typically 11 p.m.), or $650,000 on average just from breakfast alone.

To continue reading about this sizzling southern IPO, click here.

 

Overstock Looking Into Brokerdealers Only Bitcoin-Style Exchange

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Utah Software Engineer Mints Physical Bitcoins

Brokerdealer.com blog update profiles the continued intergration of the popular cyrpto currency, Bitcoin, as Overstock has revealed plans that it may issue up to $500 million in stock through blockchain-style technology, such as bitcoin.

Bitcoin is a form of currency that is tied directly to the Internet and is the world’s first free market, decentralized global currency. It is operated through an open-source software so there is no central control unlike the US dollar or Euro. Similarly to gold, only 21,000,000 Bitcoins will ever be created so the value of the Bitcoin continues to rise as time goes on. Bitcoins can be exchanged for goods and services as well as currencies such as the US dollar and the Euro. As long as people trust that Bitcoin has value, people will continue to invest in it.

Brokerdealer.com’s database has many qualified brokerdealers who are prepared to help you navigate the world of Bitcoin and how you can use it to your advantage when it comes to investing. 

Overstock is an American online retailer headquartered in Cottonwood Heights, Utah. It initially sold surplus and returned merchandise on an online e-commerce marketplace but in recent years has expanded to sell new merchandise as well. 

This brokerdealer.com blog update is courtesy of Finextra News’ article, “Overstock looks to issue Bitcoin-style stocks” with an excerpt below.

Last year Overstock CEO Patrick Byrne hired developers and lawyers in an effort to create a platform – dubbed ‘Medici’ – that could use the core blockchain technology to create a cryptosecurity trading system, in which computer algorithms are used to trade virtual stocks issued by public companies.

The firm has now filed a prospectus related to the sale of securities with the Securities and Exchange Commission, adding: “We may decide to offer any of the securities described in this prospectus as digital securities, meaning the securities will be uncertificated securities, the ownership and transfer of which are recorded on a cryptographically-secured distributed ledger system using technology similar to (or the same as) the distributed ledger technology used for trading digital currencies.”

The prospectus says that these digital securities would not be traded on any existing exchange but on a specific system registered with the SEC as an ATS open only to subscribers that agree to trade exclusively through vetted broker dealers.

To continue reading about the brokerdealer-only Bitcoin exchange plan for Overstock, click here. Additional coverage on this story can also be found at MarketsMuse.com .

SEC Locks Retail Brokers Out Of Stock Market Reform Meeting

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Locksmith

Brokerdealer.com blog update profiles the SEC intentionally leaving retail brokers out of their upcoming meeting on stock market reforms. The group will meet four times a year and review old rules and advice the SEC on new regulation. Retail brokers are confused because the SEC has always made it a priority to protect retail investors so leaving retail brokers out of this advising group is raising questions.  This brokerdealer.com update is courtesy of Reuters’ John McCrank in his article, “SEC’s stock market reform club locks out retail brokers” with an excerpt below.

The U.S. Securities and Exchange Commission is convening a group of financial industry veterans for the first time next month to consider stock market reforms, but one group will be conspicuously absent: retail brokerages.

The SEC’s 17-member Market Structure Advisory Committee includes representatives of fund companies, an exchange, off-exchange trading venues, dealers, and academia, among others. The group, which meets four times a year, will review old rules, and advise the SEC on a range of new regulations designed to make sure the market is as stable and fair as possible.

Still, given that the SEC has said its main priority is to protect retail investors, the omission of retail brokers raises questions, because without their point of view the panel may recommend changes that favor institutional investors, analysts said. Retail investors place around 16 percent of all U.S. stock orders.

“There’s a missing gap of protecting retail order flow,” said Larry Tabb, chief executive of capital markets advisory firm TABB Group.

That gap was also noticed by committee member Joseph Ratterman, chairman of No. 2 U.S. exchange operator BATS Global Markets. He said he mentioned his concern to SEC Chair Mary Jo White shortly after the committee was announced and that she was supportive of him, along with committee member Jamil Nazarali, from market making firm Citadel Securities, formally representing retail interests.

To continue reading this article from Reuters, click here.

BrokerDealer Firm Focuses On Bitcoin

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A bitcoin sticker is seen in the window of the 'Vape Lab' cafe, where it is possible to both use and purchase the bitcoin currency, in London

Brokerdealer.com blog update profiles the continued interest in the bitcoin craze. While some bitcoin advocates prepare to launch an bitcoin ETF, another is preparing for a bitcoin IPO, and another is pushing New York City  accept them as payments for fines. Now, one New York- based firm, founded by a bitcoin advocate, is rebranding its brokerdealer division to specialize in digital currency trade, mainly bitcoins.  This brokerdeaeler blog update is courtesy of Reuters’ article, “Bitcoin-focused firm rebrands broker-dealer for digital currencies” with an excerpt below.

Digital Currency Group, a New York-based entity founded by bitcoin advocate Barry Silbert, rebranded its broker-dealer division of SecondMarket Inc specializing in trading virtual currencies including bitcoin, according to a press statement on Thursday.

The Trading Division of SecondMarket Inc is now called Genesis Trading and focuses solely on institutional clients such as hedge funds and alternative asset investors, it said.

The rebranded Genesis Trading has executed over $25 billion in the trading of specialized fixed income securities over the last two years, said Chief Executive Officer Brendan O’ Connor.

The division also carried out trades for more than 800,000 bitcoins worth over $300 million, making the company the bitcoin industry’s largest over-the-counter trading desk.

“Our goal is to become the partner of choice for large institutional buyers and sellers who are beginning to recognize the economic potential of digital currency,” said O’Connor.

To continue reading about this brokerdealer firm’s shift to bitcoin trading, click here