June 1, 2009

Auction-Rate Securities Probes Lead to More Enforcement Actions and Final Settlements with Investment Firms

Another state has filed an individual enforcement against brokerage and investment banking firm Stifel, Nicolaus, & Co. Inc. On May 7, Virginia’s State Corporation Commission's 's Division of Securities and Retail Franchising filed its civil lawsuit accusing the broker-dealer of making misrepresentations and false statements related to the sale of auction-rate securities, as well as failing to properly supervise its sales representatives that sold ARS to Virginia residents.

Just this March, Missouri Secretary of State Robin Carnahan had sued Stifel, Nicolaus, accusing the investment firm of making misrepresentations to over 100 ARS clients that were told that the securities were liquid, conservative investments. In May, Carnahan reached an agreement with two Bank of America Corp subsidiaries. Under the agreement, the bank would pay a $1.37 million fine and provide relief to numerous Missouri entities that bought $400 million in ARS.

Meantime, state officials are looking into whether TD Ameritrade Holding Corp., Charles Schwab Corp., and E*Trade Financial Corp also engaged in ARS-related violations. Broker-dealers that have reached preliminary settlements with federal and state regulators over their misrepresentation of ARS to clients include Citigroup Inc., Deutsche Bank AG, Credit Suisse Group, JP Morgan Chase & Co, Goldman Sachs Group Inc., Merrill Lynch & Co. Inc., Royal Bank of Canada, Morgan Stanley, Wachovia Corp, and UBS AG.

Per the agreements, settlement parties would repurchase up to $56 billion in illiquid ARS at par from charities, retail investors, and mid-sized and small businesses, as well as pay $522 million in penalties. The agreements with Bank of America, Wachovia, and Citigroup have been finalized.

Last month, the Financial Industry Regulatory Authority announced final settlements reached with NatCity Investments Inc. of Cleveland (a $300,000 fine), M & T Securities Inc. of Buffalo (a $200,000 fine), M & I Financial Advisors Inc. of Milwaukee (a $150,000 fine), and Janney Montgomery Scott LLC of Philadelphia (a $200,00 fine). FINRA also announced that SunTrust Investment Services Inc. and SunTrust Robinson Humphrey Inc. decided not to finalize their preliminary settlements. FINRA is still investigating both firms’ activities pertaining to ARS.

Related Web Resources:
Virginia sues Stifel, Nicolaus & Co. over auction rate securities, St Louis Business Journal, May 15, 2009

FINRA Announces Agreements with Four Additional Firms to Settle Auction Rate Securities Violations, FINRA, May 7, 2009

Carnahan Finalizes $400 Million Bank of America Auction Rate Securities Settlement, Missouri Secretary of State, May 14, 2009

Carnahan sues Stifel Nicolaus over auction rate securities, St Louis Business Journal, March 12, 2009

Continue reading "Auction-Rate Securities Probes Lead to More Enforcement Actions and Final Settlements with Investment Firms" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Auction-Rate Securities , Bank of America , Financial Firms , Stifel, Nicolaus, & Co. Inc.

Bookmark: Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Google.com Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at del.icio.us Digg Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Digg.com Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Spurl.net Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Simpy.com Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at NewsVine Blink this Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at blinklist.com Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Furl.net Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at reddit.com Fark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Fark.com Bookmark Auction-Rate%20Securities%20Probes%20Lead%20to%20More%20Enforcement%20Actions%20and%20Final%20Settlements%20with%20Investment%20Firms at Yahoo! MyWeb

March 5, 2009

Wells Fargo, Goldman Sachs, JP Morgan Chase, Citigroup, UBS Securities, Bank of America, Moody’s Investment Services, and Fitch Ratings are Among Defendants Sued On Behalf of Wells Fargo Certificate Investors for Alleged Securities Fraud Violations

The Boilermaker-Blacksmith National Pension Trust is suing a number of investment banks, credit rating agencies, and underwriters, including Wells Fargo, WFASC, Morgan Stanley & Co., Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Bear Stearns & Co., Countrywide Securities Corp., Deutsche Bank Securities Inc., JPMorgan Chase Inc., Bank of America Corp., Citigroup Global Markets Inc., McGraw-Hill Cos., Moody's Investor Services Inc., and Fitch Ratings Inc., over allegations that they made false statements in the prospectus and registration statement for certificates that were collateralized by Wells Fargo Bank, NA. The lawsuit, filed on behalf of thousands of investors that bought the certificates from Wells Fargo Asset Securities Corp., accuses the defendants of violating the 1933 Securities Act by engaging in these alleged actions.

According to the securities fraud lawsuit, the defendants concealed from investors that Wells Fargo revised its underwriting practices in 2005 and became involved in high risk subprime mortgage lending. The complaint contends that WFASC and a number of defendants submitted to the Securities and Exchange Commision prospectus and registration statements representing that the mortgages were backed by certificates that were subject to specific underwriting guidelines for evaluating a borrower's creditworthiness. The plaintiffs contend that these prospectuses and registration statements were false because they neglected to reveal that the Wells Fargo-originated certificates were not in accordance with the credit, underwriting, and appraisal standards that Wells Fargo, per the companies, had supposedly used to approve mortgages.

The lawsuit also claims that because Wells Fargo decided to enter the subprime mortgage mortgage market in 2005, the investment bank had to take significant write-downs in 2008 because of its massive exposure to the subprime market and the WFASC certificates that these mortgages backed dropped significantly in value. The Boiler-Blaksmith fund reports that it lost about $5 million, which is more than half of what it invested.

Related Web Resources:
Read the Complaint

The Boilermakers National Funds

Continue reading "Wells Fargo, Goldman Sachs, JP Morgan Chase, Citigroup, UBS Securities, Bank of America, Moody’s Investment Services, and Fitch Ratings are Among Defendants Sued On Behalf of Wells Fargo Certificate Investors for Alleged Securities Fraud Violations" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Broker Fraud , Citigroup , Credit Ratings Agencies , Credit Suisse , Deutsche Bank , Financial Firms , Fitch , J P Morgan - Chase , Moody's , Morgan Stanley

Bookmark: Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Google.com Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at del.icio.us Digg Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Digg.com Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Spurl.net Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Simpy.com Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at NewsVine Blink this Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at blinklist.com Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Furl.net Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at reddit.com Fark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Fark.com Bookmark Wells%20Fargo%2C%20Goldman%20Sachs%2C%20JP%20Morgan%20Chase%2C%20Citigroup%2C%20UBS%20Securities%2C%20Bank%20of%20America%2C%20Moody%E2%80%99s%20Investment%20Services%2C%20and%20Fitch%20Ratings%20are%20Among%20Defendants%20Sued%20On%20Behalf%20of%20Wells%20Fargo%20Certificate%20Investors%20for%20Alleged%20Securities%20Fraud%20Violations at Yahoo! MyWeb

February 26, 2009

Bank of America, Citigroup, Goldman Sachs, and Wells Fargo Chief Executives Among Those Defending Bailout Fund Use

Earlier this month, the chief executives of the eight biggest banks in the United States, including Citigroup, Bank of America, Wells Fargo, and Goldman Sachs addressed the House Financial Services Committee in an attempt to persuade US lawmakers that billions of dollars in bailout funds were used as intended—to increase consumer and business lending and improve balance sheets. The banking heads also admitted to certain mistakes and promised that compensation in the future would be commensurate with performance.

Under the Capital Purchase Program, the federal government gave the banks $125 billion in cash infusions in November. Bank of America and Citigroup also received $20 billion each in Treasury investments.

At the session, some of the bank executives gave testimony regarding activities performed since they received the government’s financial assistance. For example, Kenneth Lewis, Bank of America’s chief executive, says that during 2008’s fourth quarter, the bank committed to $115 billion in new loans.

Vikram Pandit, Citigroup’s chief executive, said his bank had provided $75 billion in new loans for the fourth quarter. He also said that Citigroup had used $36.5 billion to expand personal loans, mortgages, and credit lines for businesses, families, and individuals, as well as to create secondary market liquidity. He said Citigroup had cancelled an order for a $50 million jet.

While the executives were contrite, Committee Chairman Barney Frank criticized them for giving executives bonuses, in addition to salaries. Lawmakers also asked the banks’ executives to stop home foreclosures until the Obama Administration can executive a $50 billion plan on mortgage modifications and other assistance for borrowers that are experiencing problems.

John Stumpf, Wells Fargo's chief executive, said that his bank could hold off on foreclosing on loans in which it is the investor or owner. Pandit said Citigroup could support a moratorium for borrowers that live on properties facing foreclosure. Lewis said Bank of America could place a moratorium on home foreclosure for two or three weeks.

Related Web Resources:
Foreclosures halt by Bank of America, Citigroup, JPMorgan, Wells Fargo, UB-News.com, February 14, 2009

Fed Urges Banks to Put Bailout Funds Into Loans, Not Dividends, Bloomberg.com, February 24, 2009

Continue reading "Bank of America, Citigroup, Goldman Sachs, and Wells Fargo Chief Executives Among Those Defending Bailout Fund Use" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Citigroup , Financial Firms , Goldman Sachs , Wells Fargo

Bookmark: Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Google.com Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at del.icio.us Digg Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Digg.com Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Spurl.net Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Simpy.com Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at NewsVine Blink this Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at blinklist.com Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Furl.net Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at reddit.com Fark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Fark.com Bookmark Bank%20of%20America%2C%20Citigroup%2C%20Goldman%20Sachs%2C%20and%20Wells%20Fargo%20Chief%20Executives%20Among%20Those%20Defending%20Bailout%20Fund%20Use at Yahoo! MyWeb

December 5, 2008

Merrill Lynch NY Branch Manager is No Longer with the Firm

Merrill Lynch & Co. is confirming that Branch Manager Joseph Mattia no longer works for the investment firm’s global wealth-management group. Mattia supervised 200 financial advisors in Merrill Lynch’s 5th Avenue office.

A spokesperson for Merrill Lynch refused to provide details. CNN reports that Mattia left the firm. Investment News, however, says that Mattia was escorted from the building on Monday. Industry insiders say there are a number reasons why a branch manager might be let go. Personnel problems and compliance issues are just two reasons.

Also on Monday, Merrill Lynch severed ties with Rosalie H. Fields, an adviser who also worked at the New York branch. Fields was one of 900 female brokers that filed a class action lawsuit against Merrill Lynch accusing the firm of gender discrimination. A settlement was reached with almost all of the plaintiffs.

Meantime, Bank of America, Corp. is still expected to acquire Merrill Lynch during the first quarter. Merrill Lynch is one of the bigger investment firms that took huge financial hits because of the credit crunch. Today, several hundred people showed up at a meeting at Merrill Lynch’s New York offices to vote on the merger between Bank of America and Merrill Lynch.

Bank of America shareholders also got together today to ratify the $50 billion acquisition. Because of Bank of America’s falling share price, however, the value of the deal has dropped by $30.3 billion since September and is now worth $19.7 billion.

Related Web Resources:
Heads roll in Merrill’s main branch, Investment News, December 2, 2008

Merrill Lynch NY Branch Manager Leaves Firm, CNN, December 2, 2008

Tears And Anger At Merrill Lynch's Final Meeting, CNN, December 5, 2008

Continue reading "Merrill Lynch NY Branch Manager is No Longer with the Firm" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Financial Firms , Merrill Lynch

Bookmark: Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Google.com Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at del.icio.us Digg Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Digg.com Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Spurl.net Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Simpy.com Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at NewsVine Blink this Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at blinklist.com Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Furl.net Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at reddit.com Fark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Fark.com Bookmark Merrill%20Lynch%20NY%20Branch%20Manager%20is%20No%20Longer%20with%20the%20Firm at Yahoo! MyWeb

November 19, 2008

NASAA Says Investors with Frozen Auction-Rate Securities Should Ask Investment Firms About Buyback Opportunities

The North American Securities Administrators Association is reminding investors to ask the investment firms that sold them any now-frozen auction-rate securities about repurchase opportunities. Following the ARS market collapse, securities regulators in 12 US states joined together to form a multi-state Task Force dedicated to finding out whether Wall Street investment firms had misled investors when persuading them to invest in the ARS market.

As part of their settlement agreements reached with the firms in question, 11 major Wall Street investment banks have said they will buy back over $51 billion in ARS from charities, retail investors, and small companies. However, these repurchase offers may not be available indefinitely.

NASAA President Fred Joseph says the best way to avail of any redemption offers is to contact the investment firms as soon as possible. So far, 11 firms have agreed in principle to buy back over $50 billion in ARS. NASAA says additional repurchase opportunities are expected to become available in the coming months.

Investment Firms with ARS Hotlines:

Bank of America 1-866-638-4183
Deutsche Bank 1-866-926-1437
Citi 1-866-720-4802
JP Morgan 1-866-450-8470
Goldman Sachs 1-888-350-2857
Merrill Lynch 1-888-706-1381
UBS 1-800-253-1974
Morgan Stanley 1-800-566-2273
Wachovia 1-866-283-794

Meantime, more investigations are under way into the sales practices of US firms that marketed and sold auction-rate securities to investors. Unfortunately, many investors who were told ARS were liquid investments are now dealing with frozen securities and cannot access their funds.

If you invested in the auction-rate securities industry and your ARS became frozen during the market’s collapse, you may be the victim of securities fraud.


Related Web Resources:
State Securities Regulators Remind Auction Rate Securities Investors to Contact Firms About Buyback Offers, NASAA, November 17, 2008

Small firms caught in ARS buyback vise, November 16, 2008

Continue reading "NASAA Says Investors with Frozen Auction-Rate Securities Should Ask Investment Firms About Buyback Opportunities" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Auction-Rate Securities , Bank of America , Citigroup , Deutsche Bank , Financial Firms , Goldman Sachs , J P Morgan - Chase , Merrill Lynch , Morgan Stanley , NASAA , UBS , Wachovia

Bookmark: Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Google.com Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at del.icio.us Digg NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Digg.com Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Spurl.net Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Simpy.com Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at NewsVine Blink this NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at blinklist.com Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Furl.net Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at reddit.com Fark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Fark.com Bookmark NASAA%20Says%20Investors%20with%20Frozen%20Auction-Rate%20Securities%20Should%20Ask%20Investment%20Firms%20About%20Buyback%20Opportunities at Yahoo! MyWeb

August 19, 2008

Bank of America Did Not Warn Small Investors About Auction-Rate Securities Crisis

Documents reveal that Bank of America told the state of California as early as late last year that there were problems brewing with the auction-rate securities market. The country’s largest retail banking firm, however, failed to warn smaller investors about potential trouble and continued selling the investments without providing any warning to these clients.

In its presentation to the California’s treasurer last year, Bank of America warned the state of a “significant dislocation” in the auction-rate securities market, as well as a drop in demand for the bonds. It also informed the State that corporate clients had engaged in "significant year-end selling" of the investments. The Boston Globe obtained a copy of Bank of America’s presentation to California, as well as the presentation of other investment banks.

Bank of America is the eighth-biggest issuer of auction-rate securities. It is one of the few brokerage firms that has yet to announce a settlement with state regulators related to the collapse.

The retail banking firm told The Boston Globe that its presentation to the state of California did not talk about the liquidity issues that would end up being at the center of the auction-rate securities collapse earlier this year. Upon closer scrutiny, however, Bank of America's presentation appears to indicate the possibility of the market shutting down.

Prior to the market collapse, California had some $1.4 billion in outstanding auction-rate securities. Fortunately, the state’s treasurer paid attention to the warnings it received from Bank of America and other investment advisers. By May 23, it had refinanced all except for $100 million of its auction-rate bonds.


Related Web Resources:

Bank of America subpoenaed on auction-rate securities, derivatives, BizJournals.com, August 8, 2008

Investors sue Bank of America over auction rate securities, Bizjournals.com, July 18, 2008

Continue reading "Bank of America Did Not Warn Small Investors About Auction-Rate Securities Crisis" »

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America

Bookmark: Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Google.com Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at del.icio.us Digg Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Digg.com Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Spurl.net Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Simpy.com Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at NewsVine Blink this Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at blinklist.com Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Furl.net Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at reddit.com Fark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Fark.com Bookmark Bank%20of%20America%20Did%20Not%20Warn%20Small%20Investors%20About%20Auction-Rate%20Securities%20Crisis at Yahoo! MyWeb

April 1, 2008

UBS Securities, Bank of America, and Merrill Lynch Among Firms Subpoenaed In Massachusetts Auction-Rate Market Sales Probe

Massachusetts Secretary of the Commonwealth William Galvin is subpoenaing Merrill Lynch, Pierce, Fenner, & Smith Inc., UBS Securities, and Bank of America Investments because it wants information about the companies’ involvement in selling auction-rate market securities to retail investors. The companies are all registered Massachusetts broker dealers. Galvin issued the subpoenas on behalf of the Massachusetts Securities Division.

The division wants to determine whether the firms followed proper procedures in letting Massachusetts investors know of the possibilities that their investments could become illiquid. The state is also trying to determine what role big investment banks played in causing the auctions to fail and whether the investments sold to retail investors were suitable.

Many of the investors that bought auction market securities cannot get their money because the securities are frozen. Small business owners and individual investors have been especially hurt by the failures in the auction market because of the subprime mortgage collapse.

Galvin says he is not investigating why the securities are frozen but whether the investment firms were in compliance with their sales practices and in disclosing the necessary information to investors.

In February, Galvin subpoenaed Calamos Financial Services, Blackrock Financial Management, Pioneer Investment Management, Nuveen Asset Management, MFS Investment Management, John Hancock Advisers, Allianz Global Investors, Evergreen Investment Management, and Eaton Vance for information about the asset management companies’ dealings with closed-end funds following the auction failures in the auction-rate securities market.

The stockbroker fraud law firm of Shepherd Smith and Edwards is committed to helping investors recover losses brought about by securities fraud. Contact Shepherd Smith and Edwards today to request your free consultation.


Related Web Resources:

Galvin issues subpoenas in debt securities probe, Boston.com, March 28, 2008

Another Kick in the ARS, CFO.com, February 22, 2008

Massachusetts Securities Division

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Auction-Rate Securities , Bank of America , Merrill Lynch , UBS

Bookmark: Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Google.com Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at del.icio.us Digg UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Digg.com Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Spurl.net Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Simpy.com Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at NewsVine Blink this UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at blinklist.com Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Furl.net Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at reddit.com Fark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Fark.com Bookmark UBS%20Securities%2C%20Bank%20of%20America%2C%20and%20Merrill%20Lynch%20Among%20Firms%20Subpoenaed%20In%20Massachusetts%20Auction-Rate%20Market%20Sales%20Probe at Yahoo! MyWeb

January 24, 2008

Deutsche Bank Trust Company, Goldman Sachs Group, and Bank of America Corporation are Among the 21 Lenders Named in Cleveland, Ohio Lawsuit

The city of Cleveland, Ohio is suing 21 financial institutions for hundreds of millions of dollars in damages caused by subprime lending and securitization. The defendants named in the lawsuit are:

• Deutsche Bank Trust Company
• Ameriquest Mortgage Company
• Bank of America Corporation
• The Bear Stearns Companies
• Citigroup, Inc.
• Countrywide Financial Corp.
• Credit Suisse (USA)
• Fremont General Corporation
• GMAC-RFC
• Goldman Sachs Group
• Greenwich Capital Markets, Inc.
• HSBC Holdings, PLC
• Indymac Bancorp., Inc.
• J.P. Morgan Chase Co.
• Lehman Brothers Holdings, Inc.
• Merrill Lynch & Co., Inc.
• Morgan Stanley
• Novastar Financial Inc.
• Option One Mortgage Corporation
• Washington Mutual Inc.
• Wells Fargo & Co.

The city of Cleveland says that the defendants issued loans to people who would never have been able to pay them back and that the foreclosures were inevitable. The lawsuit says that not only did the financial institutions issue loans to ill-qualified borrowers, but they securitized the loans and used the profits to fund more subprime mortgages, make more money, and secure more borrowers.

In the past two years, Cleveland has experienced over 7,000 foreclosures. Entire city blocks have been vacated and violent crime and arson incidents have increased. 1,000 abandoned homes have been torn down. Cleveland is calling the “propagation of subprime mortgages… and the corresponding foreclosures... a public nuisance as defined by Ohio common law.

As a result, the city of Cleveland’s population was 444,000 last year—way down from its nearly one million residents in 1950. The decrease in population size has negatively affected the city’s budget.

The stockbroker law firm of Shepherd Smith and Edwards represents investors who have lost money due to the misconduct or negligent actions of broker-dealers and other financial institutions. Contact Shepherd Smith and Edwards today and one of our stockbroker fraud lawyers will be happy to offer you a free consultation.

Related Web Resources:

Cleveland Sues 21 Lenders Over Subprime Mortgages, Herald-Tribune, January 12, 2008

Read the Complaint (PDF)

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Ameriprise - Securities America , Bank of America , Credit Suisse , Deutsche Bank , Financial Firms , J P Morgan - Chase , Lehman Brothers , Merrill Lynch , Morgan Stanley , Wells Fargo

Bookmark: Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Google.com Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at del.icio.us Digg Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Digg.com Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Spurl.net Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Simpy.com Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at NewsVine Blink this Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at blinklist.com Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Furl.net Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at reddit.com Fark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Fark.com Bookmark Deutsche%20Bank%20Trust%20Company%2C%20Goldman%20Sachs%20Group%2C%20and%20Bank%20of%20America%20Corporation%20are%20Among%20the%2021%20Lenders%20Named%20in%20Cleveland%2C%20Ohio%20Lawsuit at Yahoo! MyWeb

October 9, 2007

Citigroup, Lehman Brothers, DeutscheBank and other Firms Fined for Failing to Deliver Trade Confirmations.

NYSE Regulation fined 14 of its member firms a total of $10.4 million in fines for failing to deliver trade confirmations to their clients and other violations.

Citigroup Global Markets received the heaviest fine of $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions. Lehman Brothers and DeutscheBank were each fined $1.25 million.

Other firms sanctioned included UBS Securities; Bear Stearns & Co.; Credit Suisse Securities (USA) LLC ; Banc of America Securities LLC; Goldman Sachs & Co.; JP Morgan Securities; Wachovia Capital Markets LLC; and Keefe, Bruyette & Woods Inc. Fines levied against these firms ranged from $375,000 to $800,000.

According to the New York Stock Exchange (NYSE) enforcement wing, the violations occurred between July 1, 2003 and Oct 31, 2004. These include failures to ensure delivery of prospectuses to customers who purchased securities and mutual funds, failure to deliver product descriptions to customers purchasing exchange traded funds and failure to establish and maintain appropriate supervisory procedures regarding such activities.

Each of the member firms also agreed to certify that its current policies and procedures are reasonably designed to ensure compliance with current federal securities laws and regulations regarding such requirements. This action was one of the final acts by the regulatory staff of the NYSE prior joining the Financial Industry Regulatory Authority (FINRA) which has taken over all former NASD and NYSE regulatory responsibilities.

Shepherd Smith and Edwards represents investors nationwide in claims against securities firms. We have represented investors in more than 1,000 securities cases. To learn whether we may be able to assist you with a claim contact us to arrange a free consultation with one of our attorneys.


Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Bear Stearns , Citigroup , Credit Suisse , Deutsche Bank , Goldman Sachs , J P Morgan - Chase , Stockbroker Regulation , UBS , Wachovia

Bookmark: Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Google.com Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at del.icio.us Digg Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Digg.com Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Spurl.net Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Simpy.com Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at NewsVine Blink this Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at blinklist.com Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Furl.net Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at reddit.com Fark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Fark.com Bookmark Citigroup%2C%20Lehman%20Brothers%2C%20DeutscheBank%20and%20other%20Firms%20Fined%20for%20Failing%20to%20Deliver%20Trade%20Confirmations.%20%20 at Yahoo! MyWeb

July 11, 2007

Schwab to Distribute $3.5 Billion to Its Shareholders by Buying Back Over 100 Million Shares

After sale if its U.S. Trust subsidiary to Bank of America for $3.3 billion, Charles Schwab Corporation has decided to distribute even more than the proceeds of that sale to its shareholders by buying back shares and paying a special dividend.

Under the plan, San Francisco-based Schwab will pay up to $22.50 per share for 84 million shares of its own stock -- 10 percent above the previous closing price. It will guarantee selling stockholders at least $19.50 per share, and also purchase up to 18 million additional shares from its founder. Charles Schwab will himslef receive over $400 million and will maintain his stake at its current level of 18%, which would be valued at over $4.5 billion.

The auction, which covers about 7 percent of Schwab's outstanding shares has already begun and is to be completed by July 31. In addition to $2.3 billion to buy the stock, in August Schwab will also pay $1.2 billion to shareholders through a $1 per share special dividend.

The U.S. Trust sale caused speculation that Schwab may buy one or more of its online competitors, such as E-Trade Financial Corp. or TD Ameritrade Holding Corp. Schwab repeatedly said it was not interested in any such takeover. Some of the speculation came from those wanting their shares in the other companies to be purchased. Two hedge funds publicly urged TD Ameritrade to seek a sale to E-Trade or Schwab.

Schwab’s chief financial officer said "We have conducted a thorough review of alternatives for deploying both the proceeds from the sale of U.S. Trust and our other available financial resources, and we believe this plan is an efficient means of achieving an appropriate level and mix of capital for Schwab."

Since Charles Schwab again assumed control of the firm three years ago, his shares and the other shareholders have tripled in value. The company lowered its commissions, stepped-up its "no-nonsense" investment advice and earned a record $1.2 billion last year.

Shepherd Smith and Edwards represents clients that are the victims of securities fraud. If you have lost money because of misconduct by someone in the securities industry, hiring an experienced law firm can increase the chances of recovering your losses. Contact Shepherd Smith and Edwards today.
.

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Broker-Dealers , Charles Schwab

Bookmark: Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Google.com Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at del.icio.us Digg Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Digg.com Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Spurl.net Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Simpy.com Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at NewsVine Blink this Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at blinklist.com Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Furl.net Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at reddit.com Fark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Fark.com Bookmark Schwab%20to%20Distribute%20%243.5%20Billion%20to%20Its%20Shareholders%20by%20Buying%20Back%20Over%20100%20Million%20Shares%20 at Yahoo! MyWeb

June 21, 2007

Merrill Lynch Seizes $400 Million of Assets from a Bear Stearns Managed 'Subprime' Hedge Fund for Failing to Meet Margin Calls

A hedge fund managed by Bear Stearns that takes both bullish and bearish positions in subprime loans has been hit heavily by conditions in that market. Some of the fund's assets were held at Merrill Lynch, on margin. When the equity in the fund dropped, Merrill issued margin calls.

The hedge fund reportedly began with about $600 million in investor capital, $40 million of that from Bear Stearns and its executives, then borrowed $6 billion from Wall Street lenders, including Merrill, Goldman Sachs, Bank of America and Deutsche Bank.

As the fund's assets lost market value, the Bear Stearns managers scrambled to sell hundreds of millions of dollars in assets to satisfy demands for cash and assets from creditors to stave off liquidation of the fund. The managers auctioned almost $4 billion in mortgage bonds, and attempted to present a 30-day plan to sell more assets, but was unable to persuade Merrill to refrain from seizing assets.

An auction was then held by Merrill to liquidate these assets and the fund's fate remains in peril. It the hedge fund is dissolved it would become the second blowup of hedge funds dealing in the high risk home loans, known as "subprime" mortgages. UBS AG shut down Dillon Read Capital Management after bad trades in subprime-mortgage loans led to a $124 million loss.

Wall Street is concerned that the asset liquidations could cause values on other subprime pools to spiral downward causing additional pressure to liquidate other simliar portfolios. Sub-prime mortgages react to market conditions different than high-quality and liquid mortgage-backed bonds, and are more akin to "junk" corporate bonds in fluctuation and liquidity.

Shepherd Smith and Edwards is a securities law firm which represents investors nationwide in claims against investment firms. To learn whether our firm can assist you or your firm, contact us to arrange a free confidential consultation with one of our attorneys.

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Bear Stearns , Deutsche Bank , Goldman Sachs , Hedge Funds , Morgan Stanley

Bookmark: Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Google.com Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at del.icio.us Digg Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Digg.com Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Spurl.net Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Simpy.com Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at NewsVine Blink this Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at blinklist.com Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Furl.net Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at reddit.com Fark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Fark.com Bookmark Merrill%20Lynch%20Seizes%20%24400%20Million%20of%20Assets%20from%20a%20Bear%20Stearns%20Managed%20%27Subprime%27%20Hedge%20Fund%20for%20Failing%20to%20Meet%20Margin%20Calls at Yahoo! MyWeb

February 13, 2007

According to NASD, Banc of America Investment Services Inc. Agrees To Pay $3 Million For Failing To Comply With Anti-Money Laundering Requirements

Banc of America Investment Services (BAI) Inc. says that it will pay $3 million in disciplinary charges for its alleged violation of anti-money laundering (AM) requirements.

The NASD says that BAI failed to acquire customer information for a number of high-risk accounts. It is also accusing BAI of failing to communicate sufficiently with its parent bank to make sure that BAI’S independent SAR (suspicious activity report) filing obligations were fulfilled. In addition, the NASD says that BAI did not properly investigate or pursue certain red flags, especially when its own clearing company had made repeated requests for additional information pertaining to certain account holders.

The NASD claims that BAI did not get the mandated additional information from customers who had 34 accounts involving trust and private investment corporations that were affiliated with one family and domiciled in the Isle of Man. The offshore accounts, collectively containing assets worth $79 Million to $93 Million, participated in multimillion-dollar wire transfers internationally.

The NASD says that, under terrorist financing and anti-money laundering laws, firms are supposed to take the appropriate steps to address high risks related to customers and transactions. When the 34 accounts were opened in 2003, the NASD says that even though BAI had set up AML procedures for high-risk customer accounts, such as asking for additional information (i.e., the names of the beneficial owners) before conducting major transactions for the accounts, BAI did not ask for the names of the beneficial owners of the 34 accounts, nor did it restrict these accounts’ activities from August 2003 to October 2004. As a result, the NASD says that BAI let the accounts “engage in large wire transactions,” and did not obtain the names even after a BAI attorney, a BAI risk committee, and BAI’s clearing firm insisted that the names needed to be secured.

Individuals at BAI were overheard worrying that if they asked for the names of the beneficial owners, the account holders might move the accounts elsewhere. The NASD is accusing BAI of not having a proper compliance program set up to report suspicious transactions.

At Shepherd, Smith, and Edwards, our lawyers and legal staff collectively have over 100 years of experience working in securities regulation and the securities industry. A number of our attorneys have served as compliance directors and vice presidents of brokerage firms. Our law firm is dedicated to helping U.S. investors, as well as international investors, recover losses they have incurred because of the inappropriate or illegal actions of stockbrokers or their firms. Contact Shepherd, Smith, and Edwards today for your free consultation.

NASD Fines Firm $3M for AML Violations, CCH Wallstreet, February 1, 2007

NASD Fines Banc of America Investment Services, Inc. $3 Million for Failing to Comply With Anti-Money Laundering Rules in Connection With High Risk Accounts, NASD Press Room, January 29, 2007

Related Web Resources:

Banc of America Investment Services Inc.

Anti-Money Laundering Requirements (PDF)

Posted by Shepherd Smith & Edwards | | Email This Post

Posted In: Bank of America , Broker-Dealers

Bookmark: Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Google.com Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at del.icio.us Digg According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Digg.com Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Spurl.net Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Simpy.com Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at NewsVine Blink this According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at blinklist.com Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Furl.net Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at reddit.com Fark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Fark.com Bookmark According%20to%20NASD%2C%20Banc%20of%20America%20Investment%20Services%20Inc.%20Agrees%20To%20Pay%20%243%20Million%20For%20Failing%20To%20Comply%20With%20Anti-Money%20Laundering%20Requirements at Yahoo! MyWeb

Call for a Free Consultation
(800) 259-9010

Contact Us

The code above is for the protection of your information.

Browse

  • Topics
  • By Date
  • Search
Topics
By Date
Search

Subscribe

  • By RSS
  • By Email
By RSS
Subscribe to the blogs's ATOM feed Subscribe to the RSS feed
Add to your Google Home Page or Google Reader Add to your My Yahoo!
Add to your My MSN Add to your My AOL
Add to your My Feedster Add to your NewsGator
Add to your Bloglines Add to your News Burst
Add to your Rojo Add to your Pluck
By Email


Recent Entries

Legal Blogs