Before You Invest Your Money http://before-you-invest.com This site monitors financial news articles that track corporate fraud and white collar crimes as they happen across the world. Fri, 03 Sep 2010 03:06:00 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 SEC Said to Probe Role of Canceled Orders in May 6 Flash Crash http://before-you-invest.com/sec-said-to-probe-role-of-canceled-orders-in-may-6-flash-crash/ http://before-you-invest.com/sec-said-to-probe-role-of-canceled-orders-in-may-6-flash-crash/#comments Fri, 03 Sep 2010 03:06:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-305522512061243931

(Bloomberg) -- The U.S. Securities and Exchange Commission is examining whether high-speed traders helped destabilize equity markets during the May 6 crash by repeatedly placing and canceling orders in an attempt to manipulate share prices, a person with direct knowledge of the inquiry said.

The strategy is among several practices being investigated by regulators, said the person, who declined to be identified because the probe isn’t public. The SEC is also looking into whether traders may have used a technique known as sub-penny quotations to artificially generate price movements, the person said. The inquiry was first reported by the Wall Street Journal.

Nanex LLC, a Winnetka, Illinois-based market-data provider, has presented regulators with data it says shows some traders may be trying to manipulate the market by overwhelming exchanges with information, slowing data feeds and creating trading opportunities. Andrei Kirilenko, a senior financial economist at the Commodity Futures Trading Commission, said July 14 his agency is taking Nanex’s research “very, very seriously.”

“It’s a concern for not only exchanges but for most trading firms themselves because at the end of the day it could overwhelm the various platforms that form our market structure,” said Sang Lee, co-founder and managing partner at research firm Aite Group LLC in Boston. Users of market data “want to make sure what they’re seeing is the true market, not something that’s artificially created,” he added.

Under Pressure

The SEC and CFTC are under pressure from lawmakers to show they have a grip on markets increasingly dominated by electronic trading. The SEC has mandated circuit breakers to curb stock volatility and is undertaking a “comprehensive review” of the May 6 sell-off that temporarily erased $862 billion from the value of U.S. equities in less than 20 minutes, Chairman Mary Schapiro said that month.

“A lot of systems at exchanges and brokers got bogged down with a lot of information” on May 6, slowing data feeds used by investors to place buy and sell orders, said Eric Hunsader, Nanex’s founder. His company provides market data to brokers, hedge funds and individuals.

Quotation volume on May 6 reached a record 1.1 billion messages, according to data from Jordan & Jordan, a New York- based provider of data services. Trading volume on U.S. stock exchanges that day was 19.3 billion shares, the highest since Oct. 10, 2008, according to data compiled by Bloomberg.

‘Just Noise’

Some firms may have deliberately caused delays in market data feeds to try to profit from the misinformation provided to other investors, Hunsader said. “A lot of the quote data was what we call quote stuffing, which was just noise,” he said. “They were orders with no intention of being executed because they were so far out of the market.”

Nanex provided data it had compiled about May 6 to “a room full of our enforcement, surveillance and economist staff, and staff from the Securities and Exchange Commission,” Kirilenko said July 14. He added that regulators were supplementing data from Nanex with information about the identities of trading firms. The July 8 meeting took place at the CFTC. A second meeting with the SEC occurred on July 19, Hunsader said.

SEC spokesman John Heine declined to comment.

‘Destroy’

“My understanding of Nanex’s allegation is that quote stuffing is not so much about putting orders in and pulling them back and trying to make the market go to a certain place,” said Jamie Selway, a managing director at broker Investment Technology Group Inc. in New York. “It’s more about an attempt to position yourself and then destroy the market by rendering it unusable with message traffic.”

He added: “Maybe it’s above my pay grade, but I struggle to see how it would be that beneficial to someone to blow up an exchange.”

Richard Gorelick, chief executive officer and co-founder of RGM Advisors LLC, an automated trading firm in Austin, said in an interview in New York that evidence of high cancellation rates “isn’t crop circles or Stonehenge.” He said that while his company doesn’t engage in quote stuffing, explanations may exist for why some firms submit large numbers of orders over the course of a couple seconds. If the intention was to manipulate markets, the firms should be prosecuted, he said.

Quotations in about half the companies traded on the New York Stock Exchange slowed down during the afternoon of May 6, according to Hunsader. “It looked like NYSE had the biggest problems” with data delays among exchanges, especially for the 30 stocks in the Dow Jones Industrial Average, he said. NYSE Euronext spokesman Ray Pellecchia declined to comment.

A Through L

As a result of the delays, NYSE’s bid in some stocks was higher than the offers to sell shares on other venues, resulting in what’s called a crossed market, Hunsader said.

“That’s a problem because it’s misinformation and causes a number of firms to shut down, so you lose liquidity,” he said. “It instilled more fear” in a market that was already volatile, he said.

A joint report by the SEC and CFTC on May 18 found that some firms reined in the liquidity they provided the markets on the afternoon of May 6. An updated account of the regulators’ findings about the plunge is scheduled for release this month.

Computer Overload

Exchanges, brokers and trading firms face the problem of computer overload caused by high volumes of quote data in a fast-paced electronic market, said Aite’s Lee. It’s important to ensure that firms aren’t engaged in a “widespread practice to intentionally cause problems” through cancelations, he said.

Some options exchanges charge firms when their ratio of cancelations to trades exceed a certain level. The computer capacity required to process options data is higher than what’s needed for equities. Stock markets don’t charge users for high rates of canceled trades.

“The fact that you essentially can consume exchange capacity for free -- that’s going to lead to some behavior that’s not all that useful,” Selway said. Policing cancelation rates is difficult, he added. “The reality is some cancels are done for good risk reasons and others are not,” he said.

SEC Said to Probe Role of Canceled Orders in May 6 Flash Crash is a post from: Before You Invest Your Money

]]>

(Bloomberg) — The U.S. Securities and Exchange Commission is examining whether high-speed traders helped destabilize equity markets during the May 6 crash by repeatedly placing and canceling orders in an attempt to manipulate share prices, a person with direct knowledge of the inquiry said.

The strategy is among several practices being investigated by regulators, said the person, who declined to be identified because the probe isn’t public. The SEC is also looking into whether traders may have used a technique known as sub-penny quotations to artificially generate price movements, the person said. The inquiry was first reported by the Wall Street Journal.

Nanex LLC, a Winnetka, Illinois-based market-data provider, has presented regulators with data it says shows some traders may be trying to manipulate the market by overwhelming exchanges with information, slowing data feeds and making trading opportunities. Andrei Kirilenko, a senior financial economist at the Commodity Futures Trading Commission, said July 14 his agency is taking Nanex’s research “very, very seriously.”

“It’s a concern for not only exchanges but for most trading firms themselves because at the end of the day it could overwhelm the various platforms that form our market structure,” said Sang Lee, co-founder and managing partner at research firm Aite Group LLC in Boston. Users of market data “want to make sure what they’re seeing is the right market, not something that’s artificially made,” he added.

Under Pressure

The SEC and CFTC are under pressure from lawmakers to show they have a grip on markets increasingly dominated by electronic trading. The SEC has mandated circuit breakers to curb stock volatility and is undertaking a “comprehensive review” of the May 6 sell-off that temporarily erased $862 billion from the value of U.S. equities in less than 20 minutes, Chairman Mary Schapiro said that month.

“A lot of systems at exchanges and brokers got bogged down with a lot of information” on May 6, slowing data feeds used by investors to place buy and sell orders, said Eric Hunsader, Nanex’s founder. His company provides market data to brokers, hedge funds and individuals.

Quotation volume on May 6 reached a record 1.1 billion messages, according to data from Jordan & Jordan, a New York- based provider of data services. Trading volume on U.S. stock exchanges that day was 19.3 billion shares, the highest since Oct. 10, 2008, according to data compiled by Bloomberg.

‘Just Noise’

Some firms may have deliberately caused delays in market data feeds to try to profit from the misinformation provided to other investors, Hunsader said. “A lot of the quote data was what we call quote stuffing, which was just noise,” he said. “They were orders with no intention of being executed because they were so far out of the market.”

Nanex provided data it had compiled about May 6 to “a room full of our enforcement, surveillance and economist staff, and staff from the Securities and Exchange Commission,” Kirilenko said July 14. He added that regulators were supplementing data from Nanex with information about the identities of trading firms. The July 8 meeting took place at the CFTC. A second meeting with the SEC occurred on July 19, Hunsader said.

SEC spokesman John Heine declined to comment.

‘Ruin’

“My understanding of Nanex’s allegation is that quote stuffing is not so much about putting orders in and pulling them back and trying to make the market go to a certain place,” said Jamie Selway, a managing director at broker Investment Technology Group Inc. in New York. “It’s more about an attempt to position yourself and then ruin the market by rendering it unusable with message traffic.”

He added: “Maybe it’s above my pay grade, but I struggle to see how it would be that beneficial to someone to blow up an exchange.”

Richard Gorelick, chief executive officer and co-founder of RGM Advisors LLC, an automated trading firm in Austin, said in an interview in New York that evidence of high cancellation rates “isn’t crop circles or Stonehenge.” He said that while his company doesn’t engage in quote stuffing, explanations may exist for why some firms submit large numbers of orders over the course of a couple seconds. If the intention was to manipulate markets, the firms should be prosecuted, he said.

Quotations in about half the companies traded on the New York Stock Exchange slowed down during the afternoon of May 6, according to Hunsader. “It looked like NYSE had the largest problems” with data delays among exchanges, especially for the 30 stocks in the Dow Jones Industrial Average, he said. NYSE Euronext spokesman Ray Pellecchia declined to comment.

A Through L

As a result of the delays, NYSE’s bid in some stocks was higher than the offers to sell shares on other venues, resulting in what’s called a crossed market, Hunsader said.

“That’s a problem because it’s misinformation and causes a number of firms to shut down, so you lose liquidity,” he said. “It instilled more dread” in a market that was already volatile, he said.

A joint report by the SEC and CFTC on May 18 found that some firms reined in the liquidity they provided the markets on the afternoon of May 6. An updated account of the regulators’ findings about the plunge is scheduled for release this month.

Computer Overload

Exchanges, brokers and trading firms face the problem of computer overload caused by high volumes of quote data in a quick-paced electronic market, said Aite’s Lee. It’s vital to ensure that firms aren’t engaged in a “widespread practice to intentionally cause problems” through cancelations, he said.

Some options exchanges charge firms when their ratio of cancelations to trades exceed a certain level. The computer capacity required to process options data is higher than what’s needed for equities. Stock markets don’t charge users for high rates of canceled trades.

“The fact that you essentially can consume exchange capacity for free — that’s going to lead to some behavior that’s not all that useful,” Selway said. Policing cancelation rates is hard, he added. “The reality is some cancels are done for excellent risk reasons and others are not,” he said.

SEC Said to Probe Role of Canceled Orders in May 6 Flash Crash is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/sec-said-to-probe-role-of-canceled-orders-in-may-6-flash-crash/feed/ 0 Wednesday’s Economic Calendar – Sept 1, 2010 http://before-you-invest.com/wednesdays-economic-calendar-sept-1-2010/ http://before-you-invest.com/wednesdays-economic-calendar-sept-1-2010/#comments Wed, 01 Sep 2010 12:16:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-663429442518774813 Auto Sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:00 FCIC Hearing: Too Big To Fail
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:10 Fed Conference: REO & Vacant Properties
10:30 EIA Petroleum Inventories
1:40 PM Fed's Fisher: "Perspectives on the Current Economic Climate"

Wednesday’s Economic Calendar – Sept 1, 2010 is a post from: Before You Invest Your Money

]]> Auto Sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:00 FCIC Hearing: Too Huge To Fail
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:10 Fed Conference: REO & Vacant Properties
10:30 EIA Petroleum Inventories
1:40 PM Fed’s Fisher: “Perspectives on the Current Economic Climate”

Wednesday’s Economic Calendar – Sept 1, 2010 is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/wednesdays-economic-calendar-sept-1-2010/feed/ 0 Montana Files Against Securities America for Medical Capital Blow Up http://before-you-invest.com/montana-files-against-securities-america-for-medical-capital-blow-up/ http://before-you-invest.com/montana-files-against-securities-america-for-medical-capital-blow-up/#comments Thu, 26 Aug 2010 15:59:00 +0000 Before You Invest tag:blogger.com,1999:blog-706213494996385248.post-6930000914501952165
The office of the state auditor for the Commissioner of Securities and Insurance in Montana alleged in an Aug. 5 order that Securities America and some of its executives, including Chief Executive James Nagengast, "withheld material information regarding the heightened risks" of promissory notes it sold that were issued by Medical Capital Holdings Inc. Omaha, Neb.-based Securities America is a unit of Ameriprise Financial Inc. (AMP).

The broker-dealer was the placement agent for the sale of Medical Capital Holdings' promissory notes to Montana investors from 2006 through 2008, and was responsible for the sale of 37% of the total notes from the issuer nationwide since 2003, amounting to $697 million, the regulator said in its legal action.

The broker has requested an administrative hearing on the matter, and the Montana regulator is preparing to set up a scheduling meeting with it, a spokeswoman for the commissioner's office said in an interview Tuesday. Such matters are usually resolved very quickly in the state, she said.

In January, William Galvin, Secretary of the Commonwealth of Massachusetts, charged Securities America with improper sales of Medical Capital notes. His office alleged the brokers' representatives failed to disclose risks to customers.

Several broker-dealers have had to shut their doors due to their sales of private-placement securities, which are stocks, bonds or other instruments issued by a corporation to investors outside the public markets.

Montana Files Against Securities America for Medical Capital Blow Up is a post from: Before You Invest Your Money

]]> A Montana regulator has filed a stop and desist order against broker-dealer Securities America related to its sales of private placements.

The office of the state auditor for the Commissioner of Securities and Insurance in Montana alleged in an Aug. 5 order that Securities America and some of its executives, including Chief Executive James Nagengast, “withheld material information regarding the heightened risks” of promissory notes it sold that were issued by Medical Capital Holdings Inc. Omaha, Neb.-based Securities America is a unit of Ameriprise Financial Inc. (AMP).

The broker-dealer was the placement agent for the sale of Medical Capital Holdings’ promissory notes to Montana investors from 2006 through 2008, and was responsible for the sale of 37% of the total notes from the issuer nationwide since 2003, amounting to $697 million, the regulator said in its legal action.

The broker has requested an administrative hearing on the matter, and the Montana regulator is preparing to set up a scheduling meeting with it, a spokeswoman for the commissioner’s office said in an interview Tuesday. Such matters are usually resolved very quickly in the state, she said.

In January, William Galvin, Secretary of the Commonwealth of Massachusetts, charged Securities America with improper sales of Medical Capital notes. His office alleged the brokers’ representatives failed to tell risks to customers.

Several broker-dealers have had to shut their doors due to their sales of private-placement securities, which are stocks, bonds or other instruments issued by a corporation to investors outside the public markets.

Montana Files Against Securities America for Medical Capital Blow Up is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/montana-files-against-securities-america-for-medical-capital-blow-up/feed/ 0 Santander Analyst Accused of Insider Trading in Potash Takeover Bid http://before-you-invest.com/santander-analyst-accused-of-insider-trading-in-potash-takeover-bid/ http://before-you-invest.com/santander-analyst-accused-of-insider-trading-in-potash-takeover-bid/#comments Wed, 25 Aug 2010 15:53:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-331809096286981981 (Bloomberg) -- A Banco Santander SA analyst and an accomplice illegally reaped almost $1.1 million with insider trades before BHP Billiton Ltd.’s $39 billion takeover bid for Potash Corp. of Saskatchewan Inc., U.S. regulators said.

Juan Jose Fernandez Garcia, 35, and Luis Martin Caro Sanchez, 36, used accounts at the same U.S. brokerage to buy more than $61,000 in Potash stock options days before BHP’s offer became public Aug. 17, the Securities and Exchange Commission said in documents filed Aug. 20 in federal court in Illinois. Fernandez Garcia heads the bank’s European equity derivatives research, according to the agency’s complaint.

The men “tried to move offshore highly suspicious trading profits made just a few days before,” said Daniel Hawke, who leads a group at the SEC that polices market abuse, in a statement yesterday. “We will act swiftly and decisively to deny wrongdoers the profits of their illegal activity.”

Santander provisionally suspended Fernandez Garcia while inquiries continue, the bank said in a statement sent by e-mail.

“The bank has acted at all times following the appropriate procedures,” Santander said. “We are awaiting the results of both our internal and the supervisors’ investigations, with whom the bank will cooperate.”

The SEC said it doesn’t know of lawyers representing the defendants. An e-mail to Fernandez Garcia was answered with an automated reply saying he will be out of office until Sept. 9. A phone number for Caro Sanchez couldn’t immediately be found.

BHP Advisers

Santander is one of five banks advising BHP on its bid for Potash Corp., along with JPMorgan Securities Inc., TD Securities Inc., Barclays Capital, BNP Paribas SA and Royal Bank of Scotland Group Plc.

The insider trading case is a matter for Santander, not BHP, Marius Kloppers, chief executive officer of the world’s biggest mining company, told reporters in London today.

“Clearly it is an issue where more press about something is not useful in a bid” situation like this, Kloppers said. “I would preferred not to have had the press.”

Potash shares jumped 28 percent on the day the Saskatoon, Saskatchewan-based company said it had rejected a takeover offer from BHP, the world’s largest mining company. Melbourne-based BHP took its $130-a-share cash bid directly to Potash investors.

SEC Complaint

In its complaint, the SEC asserted that the two defendants had “material, nonpublic information” about BHP’s proposal, without specifying how they obtained it. A judge temporarily froze their accounts, according to the agency’s statement.

From Aug. 12 to Aug. 16, Fernandez Garcia purchased a total of 282 call options for about $13,700, the SEC said in the complaint. He sold them on Aug. 17 for a profit of about $576,000. Caro Sanchez bought $48,000 of call options, making a profit of $497,000, according to the complaint.

“Global corporate clients would expect compliance structures to be in place to prevent this sort of thing,” said Peter Hahn, who lectures on corporate finance at the Cass Business School in London. “Santander has been a bank that has been widely admired for its focus on retail-led commercial lending.”

Santander, which relies on retail banking business from Spain to Brazil and the U.K. for more than 70 percent of profit, has been building up its wholesale banking business.

Adolfo Lagos, head of Santander’s global banking and markets unit, said in a December interview he planned to hire 200 bankers after taking business from rivals hurt by the financial crisis. Santander ranks 14th among top the global financial advisers this year with $83.6 billion of business volume, according to data compiled by Bloomberg.


Juan Jose Fernandez Garcia's profile on linkedin
http://es.linkedin.com/pub/juan-jose-fernandez-garcia/7/2a/a20

Equity Derivatives Research at Santander Bank

Current
Equity Derivatives Research at Santander Bank (Treasury)

Past
  • Equity Derivatives and Delta 1 research at Santander Investment
  • Quant Strategist Analyst at grupo ahorro corporacion
  • Quantitative Derivatives Analyst (Equity, Fixed Income, Money Markets) at Grupo Ahorro Corporacion

Education
  • Universidad Carlos III de Madrid
  • Universidad Rey Juan Carlos
  • CFA Institute

Juan Jose Fernandez Garcia’s Summary

Head of European Equity Derivatives Research at Banco Santander.

Publication of ED research based on IBEX 35 and Euro Stoxx 50 stocks; conducting ongoing & innovative research of options & volatility related themes; Reports published and available upon request.

Some examples of my research are published at: http://www.cboe.com/Institutional/reports.aspx

Regularly interacting with clients for supporting the marketing activities and work with traders & sales specialists for the marketing activities of the firm with regards to the research published;

Santander Analyst Accused of Insider Trading in Potash Takeover Bid is a post from: Before You Invest Your Money

]]> (Bloomberg) — A Banco Santander SA analyst and an accomplice illegally reaped nearly $1.1 million with insider trades before BHP Billiton Ltd.’s $39 billion takeover bid for Potash Corp. of Saskatchewan Inc., U.S. regulators said.

Juan Jose Fernandez Garcia, 35, and Luis Martin Caro Sanchez, 36, used accounts at the same U.S. brokerage to buy more than $61,000 in Potash stock options days before BHP’s offer became public Aug. 17, the Securities and Exchange Commission said in documents filed Aug. 20 in federal court in Illinois. Fernandez Garcia heads the bank’s European equity derivatives research, according to the agency’s complaint.

The men “tried to go offshore highly suspicious trading profits made just a few days before,” said Daniel Hawke, who leads a group at the SEC that polices market abuse, in a statement yesterday. “We will act swiftly and decisively to deny wrongdoers the profits of their illegal activity.”

Santander provisionally suspended Fernandez Garcia while inquiries continue, the bank said in a statement sent by e-mail.

“The bank has acted at all times following the appropriate procedures,” Santander said. “We are awaiting the results of both our internal and the supervisors’ investigations, with whom the bank will cooperate.”

The SEC said it doesn’t know of lawyers representing the defendants. An e-mail to Fernandez Garcia was answered with an automated answer saying he will be out of office until Sept. 9. A phone number for Caro Sanchez couldn’t immediately be found.

BHP Advisers

Santander is one of five banks advising BHP on its bid for Potash Corp., along with JPMorgan Securities Inc., TD Securities Inc., Barclays Capital, BNP Paribas SA and Royal Bank of Scotland Group Plc.

The insider trading case is a matter for Santander, not BHP, Marius Kloppers, chief executive officer of the world’s largest mining company, told reporters in London today.

“Clearly it is an issue where more press about something is not useful in a bid” situation like this, Kloppers said. “I would preferred not to have had the press.”

Potash shares jumped 28 percent on the day the Saskatoon, Saskatchewan-based company said it had rejected a takeover offer from BHP, the world’s largest mining company. Melbourne-based BHP took its $130-a-share cash bid directly to Potash investors.

SEC Complaint

In its complaint, the SEC asserted that the two defendants had “material, nonpublic information” about BHP’s proposal, without specifying how they obtained it. A judge temporarily froze their accounts, according to the agency’s statement.

From Aug. 12 to Aug. 16, Fernandez Garcia bought a total of 282 call options for about $13,700, the SEC said in the complaint. He sold them on Aug. 17 for a profit of about $576,000. Caro Sanchez bought $48,000 of call options, making a profit of $497,000, according to the complaint.

“Global corporate clients would expect compliance structures to be in place to prevent this sort of thing,” said Peter Hahn, who lectures on corporate finance at the Cass Business School in London. “Santander has been a bank that has been widely admired for its focus on retail-led commercial lending.”

Santander, which relies on retail banking business from Spain to Brazil and the U.K. for more than 70 percent of profit, has been building up its wholesale banking business.

Adolfo Lagos, head of Santander’s global banking and markets unit, said in a December interview he plotted to hire 200 bankers after taking business from rivals hurt by the financial crisis. Santander ranks 14th among top the global financial advisers this year with $83.6 billion of business volume, according to data compiled by Bloomberg.

Juan Jose Fernandez Garcia’s profile on linkedin
http://es.linkedin.com/pub/juan-jose-fernandez-garcia/7/2a/a20

Equity Derivatives Research at Santander Bank

Current
Equity Derivatives Research at Santander Bank (Treasury)

Past
  • Equity Derivatives and Delta 1 research at Santander Investment
  • Quant Strategist Analyst at grupo ahorro corporacion
  • Quantitative Derivatives Analyst (Equity, Fixed Income, Money Markets) at Grupo Ahorro Corporacion

Education
  • Universidad Carlos III de Madrid
  • Universidad Rey Juan Carlos
  • CFA Institute

Juan Jose Fernandez Garcia’s Summary

Head of European Equity Derivatives Research at Banco Santander.

Publication of ED research based on IBEX 35 and Euro Stoxx 50 stocks; conducting ongoing & innovative research of options & volatility related themes; Reports published and available upon request.

Some examples of my research are published at: http://www.cboe.com/Institutional/reports.aspx

Regularly interacting with clients for supporting the marketing activities and work with traders & sales specialists for the marketing activities of the firm with regards to the research published;

Santander Analyst Accused of Insider Trading in Potash Takeover Bid is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/santander-analyst-accused-of-insider-trading-in-potash-takeover-bid/feed/ 0 Reports Wed Aug 25 http://before-you-invest.com/reports-wed-aug-25/ http://before-you-invest.com/reports-wed-aug-25/#comments Wed, 25 Aug 2010 10:53:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-8149415016447353864 Aug 25 8:30 AM Durable Orders Jul - 3.2% 3.0% -1.2% -
Aug 25 8:30 AM Durable Goods -ex Transportation Jul - 0.5% 0.5% -0.9% -
Aug 25 10:00 AM New Home Sales Jul - 300K 334K 330K -
Aug 25 10:30 AM Crude Inventories

Reports Wed Aug 25 is a post from: Before You Invest Your Money

]]> Aug 25 8:30 AM Durable Orders Jul – 3.2% 3.0% -1.2% –
Aug 25 8:30 AM Durable Goods -ex Transportation Jul – 0.5% 0.5% -0.9% –
Aug 25 10:00 AM New Home Sales Jul – 300K 334K 330K –
Aug 25 10:30 AM Crude Inventories

Reports Wed Aug 25 is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/reports-wed-aug-25/feed/ 0 Reports this week http://before-you-invest.com/reports-this-week-24/ http://before-you-invest.com/reports-this-week-24/#comments Mon, 23 Aug 2010 10:59:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-3608350963493843591 MONDAY
Earnings: Before - Sanderson Farms ; After - Focus Media Holding
Other: 4-Week Bill Announcment, 3-Month Bill Auction, 6-Month Bill Auction

TUESDAY
Earnings: Before - Big Lots, Burger King, Medtronic, Trina Solar Limited, WPP PLC ; After - VeriFone Systems
Other: ICSC Goldman Store, Existing Home Sale 10:00am, 2-Yr Note Auction, Existing Home Sales, Charles Evans Speaks

WEDNESDAY
Earnings: Before - American Eagle, Toll Brothers During - BHP Billiton ; After - Guess?, Hain Celestial, JDS Uniphase Corp., TiVo
Other: Bank Reserve Settlement, Durable Goods Orders, New Home Sales, EIA Petroleum Status Report, 5-Yr. Note Auction, Crude Inventories

THURSDAY
Earnings: Before -Diageo, Patterson Companies, Royal Bank of Canada ; After - Aruba Networks, Bebe Stores, Micro Systems Inc., Novell Inc., Omnivision
Other: Initial Claims, Continuing Claims, EIA Natural Gas Report, 7-Yr Note Auction, Fed Balance Sheet, Money Supply

FRIDAY
Earnings: Before - Frontline, Tiffany & Co.
Other: GDP Second Estimate, Corporate Profits, U Michigan Consumer Sentiment

Reports this week is a post from: Before You Invest Your Money

]]> MONDAY
Earnings: Before – Sanderson Farms ; After – Focus Media Holding
Other: 4-Week Bill Announcment, 3-Month Bill Auction, 6-Month Bill Auction

TUESDAY
Earnings: Before – Huge Lots, Burger King, Medtronic, Trina Solar Limited, WPP PLC ; After – VeriFone Systems
Other: ICSC Goldman Store, Existing Home Sale 10:00am, 2-Yr Note Auction, Existing Home Sales, Charles Evans Speaks

WEDNESDAY
Earnings: Before – American Eagle, Toll Brothers During – BHP Billiton ; After – Guess?, Hain Celestial, JDS Uniphase Corp., TiVo
Other: Bank Reserve Settlement, Durable Goods Orders, New Home Sales, EIA Petroleum Status Report, 5-Yr. Note Auction, Crude Inventories

THURSDAY
Earnings: Before -Diageo, Patterson Companies, Royal Bank of Canada ; After – Aruba Networks, Bebe Stores, Micro Systems Inc., Novell Inc., Omnivision
Other: Initial Claims, Continuing Claims, EIA Natural Gas Report, 7-Yr Note Auction, Fed Balance Sheet, Money Supply

FRIDAY
Earnings: Before – Frontline, Tiffany & Co.
Other: GDP Second Estimate, Corporate Profits, U Michigan Consumer Sentiment

Reports this week is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/reports-this-week-24/feed/ 0 Former Lehman Brothers CEO may be charged by SEC http://before-you-invest.com/former-lehman-brothers-ceo-may-be-charged-by-sec/ http://before-you-invest.com/former-lehman-brothers-ceo-may-be-charged-by-sec/#comments Sat, 21 Aug 2010 18:55:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-2790679596035334562 Dick Fuld, former chief executive officer at Lehman Brothers, may be one of a number of senior figures from the bank potentially facing being charged by the Securities and Exchange Commission (SEC) over its collapse.
Former Lehman Brothers CEO may be charged by SEC, news report claims
Dick Fuld

According to Fox News, the CEO is thought to be one of many top representatives from the financial institution to have recently been engaged in recent meetings over the failure with the regulator.

Questions are believed to have surrounded the use of Repo 105, a banking practice which can be used to provide an artificial impression of the health of an institution’s balance sheet.

Other lines of enquiry are focusing on whether senior figures misled the markets about Lehman Brothers’ stability during the period leading up to its collapse in September 2008.

Joseph Gregory, former president and Erin Callan, ex-chief financial officer, are both reported to be among the executives who could be facing charges alongside Mr Fuld.

An SEC spokesman told City AM: “We cannot confirm or deny any ongoing investigations.”

Lehman Brothers filed for bankruptcy on September 15th 2008 at the height of the global credit crisis.

Former Lehman Brothers CEO may be charged by SEC is a post from: Before You Invest Your Money

]]> Dick Fuld, former chief executive officer at Lehman Brothers, may be one of a number of senior figures from the bank potentially facing being charged by the Securities and Exchange Commission (SEC) over its collapse.
Former Lehman Brothers CEO may be charged by SEC, news report claims
Dick Fuld

According to Fox News, the CEO is thought to be one of many top representatives from the financial institution to have recently been engaged in recent meetings over the failure with the regulator.

Questions are believed to have surrounded the use of Repo 105, a banking practice which can be used to provide an artificial impression of the health of an institution’s balance sheet.

Other lines of enquiry are focusing on whether senior figures misled the markets about Lehman Brothers’ stability during the period leading up to its collapse in September 2008.

Joseph Gregory, former president and Erin Callan, ex-chief financial officer, are both reported to be among the executives who could be facing charges alongside Mr Fuld.

An SEC spokesman told City AM: “We cannot confirm or deny any ongoing investigations.”

Lehman Brothers filed for bankruptcy on September 15th 2008 at the height of the global credit crisis.

Former Lehman Brothers CEO may be charged by SEC is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/former-lehman-brothers-ceo-may-be-charged-by-sec/feed/ 0 Blind Man’s Hindenburg Omen Points to Market Meltdown in late September 2010 http://before-you-invest.com/blind-mans-hindenburg-omen-points-to-market-meltdown-in-late-september-2010/ http://before-you-invest.com/blind-mans-hindenburg-omen-points-to-market-meltdown-in-late-september-2010/#comments Fri, 20 Aug 2010 13:21:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-945350471438721738


Jim Miekka, who lives in Florida much of the year, developed the investment indicator. Miekka, who is also an accomplished inventor and rifle marksman, is blind.


FAST FACTS

Hindenburg Omen

It's a technical formula derived by Jim Miekka involving the relationship between new highs and lows in stock prices that portends a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, when the German zeppelin Hindenburg was destroyed. The Omen's concept is that under normal market conditions, either many stocks may set new annual highs or annual lows, but not both at the same time. The simultaneous presence of many new highs and lows may signal trouble.

The Omen officially emerged last Thursday when 92 companies hit new 52-week highs, or 2.9 percent of all companies traded on the New York Stock Exchange. There were also 81 new lows, or 2.6 percent of the total. Each number of high and lows must exceed 2.5 percent for the Omen to occur, Miekka says.

Hindenburg Omen. It's not the catchy title of the latest bestselling thriller. But CNBC is abuzz with the phrase, the Wall Street Journal recently mentioned its ominous appearance, and stock market newsletters are stumbling over one another trying to explain the effect to long-jittery stock investors.

The Hindenburg Omen crunches technical factors that can portend a significant drop in the stock market.

It's also a financial tool developed in the 1990s by former physics teacher Jim Miekka, 50, who lives in Homosassa much of the year, publishes the stock market newsletter Sudbury Bull & Bear Report from St. Petersburg and, in his personal moments, is an accomplished inventor and rifle marksman.

Miekka is also blind. And his suddenly pertinent investment indicator is now predicting a market meltdown in latter September.

"I have already sold out of the market," said Miekka, an obvious believer in his Omen invention.

He's not alone. "Forget about Friday the 13th," the Wall Street Journal recently wrote. "Many on Wall Street took to whispering about an even scarier phenomenon — the Hindenburg Omen." The indicator is based on a series of relationships between the number of new stock highs and lows. If that's not technical enough, it includes the "McClellan Oscillator" (a measure of market fluctuation) turning negative.

Once part of the stock market's bin of obscure indicators, the Hindenburg Omen is now front and center, thanks to years of market turbulence and volatility and a renewed uneasiness that the global and U.S. economies are still struggling to emerge from the most serious downturn since the Great Depression.

Miekka spoke to me by phone from his home on 80 acres in Surry, Maine, where he spends three months each summer avoiding Florida's soupy heat, walking his land with his dog and, yes, practicing his rifle marksmanship.

(He has invented a rifle scope that can recognize special targets at 100 yards and that helps Miekka focus his shot by sound signals delivered to his headphones. He rarely misses, as he demonstrates online on YouTube's "Totally Blind Marksman.")

Speaking between radio interviews, Miekka seems pleased but hardly crazed by the Hindenburg Omen's mainstream notoriety. He agreed the buzz might be a marketing opportunity to expand his newsletter circulation of less than 100 readers. Already, he has asked his father in St. Petersburg to help him build the first website for his Sudbury Bull & Bear.

While the Hindenburg Omen has been behind every market crash since 1987, it's not foolproof. It has also popped up when no significant market downturns have taken place.

Miekka explains that markets can be tested daily for signs of the Omen. The more often it appears, he says, the more likely a "substantial downturn" is coming. But like any analytic tool created by market watchers, it is just an indicator and no guarantee of market behavior.

Miekka was blinded in 1986 in Massachusetts at age 26 by an explosion that also took two of his fingers. He began investing his own money and, unable to see charts and graphs, came up with his own ways of tracking market trends. He used the Omen to safeguard against the threat of big market downturns.

When he is in Florida, Miekka is active in an organization to help the blind become more self-sufficient. He chairs the board of a Citrus County group called Blind Americans Inc. that, among many goals, helps teach the blind how to build wooden kitchen cabinets to supplement their disability incomes.

Bob Krokker, who is blind and runs the organization, says he first met Miekka in 1995 during a canoe trip for the blind. "He's an amazing man," Krokker says of Miekka. "He's probably as intelligent as anyone in the world."

He's also fearless, it seems. Krokker recalls Miekka's decision early this year to walk from the Citrus County facility to St. Petersburg, aided only by guide dog Zoey, a Braille compass, a tape recorder with exact mileage recorded for the trip, a talking watch, a cell phone and a trailer hooked to his belt and pulled behind him. The 130-mile trip took two weeks. That's longer than expected because he did not walk on windy days when he could not hear the cars around him.

On Wednesday, Miekka said he was toying with a more ambitious walking tour: from his Maine home to St. Petersburg.

It's not the distance that's daunting. Says Miekka: "I'm concerned how I will stay in touch with what the stock market's doing."

If he goes, I'm guessing he will find a way.

Blind Man’s Hindenburg Omen Points to Market Meltdown in late September 2010 is a post from: Before You Invest Your Money

]]>


Jim Miekka, who lives in Florida much of the year, developed the investment indicator. Miekka, who is also an accomplished inventor and rifle marksman, is blind.


QUICK FACTS

Hindenburg Omen

It’s a technical formula derived by Jim Miekka involving the relationship between new highs and lows in stock prices that portends a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, when the German zeppelin Hindenburg was ruined. The Omen’s concept is that under normal market conditions, either many stocks may set new annual highs or annual lows, but not both at the same time. The simultaneous presence of many new highs and lows may signal distress.

The Omen officially emerged last Thursday when 92 companies hit new 52-week highs, or 2.9 percent of all companies traded on the New York Stock Exchange. There were also 81 new lows, or 2.6 percent of the total. Each number of high and lows must exceed 2.5 percent for the Omen to occur, Miekka says.

Hindenburg Omen. It’s not the catchy title of the latest bestselling thriller. But CNBC is abuzz with the phrase, the Wall Street Journal recently mentioned its ominous appearance, and stock market newsletters are stumbling over one another trying to clarify the effect to long-jittery stock investors.

The Hindenburg Omen crunches technical factors that can portend a significant drop in the stock market.

It’s also a financial tool developed in the 1990s by former physics teacher Jim Miekka, 50, who lives in Homosassa much of the year, publishes the stock market newsletter Sudbury Bull & Bear Report from St. Petersburg and, in his personal moments, is an accomplished inventor and rifle marksman.

Miekka is also blind. And his suddenly pertinent investment indicator is now predicting a market meltdown in latter September.

“I have already sold out of the market,” said Miekka, an obvious believer in his Omen invention.

He’s not alone. “Forget about Friday the 13th,” the Wall Street Journal recently wrote. “Many on Wall Street took to whispering about an even scarier phenomenon — the Hindenburg Omen.” The indicator is based on a series of relationships between the number of new stock highs and lows. If that’s not technical enough, it includes the “McClellan Oscillator” (a measure of market fluctuation) turning negative.

Once part of the stock market’s bin of obscure indicators, the Hindenburg Omen is now front and center, thanks to years of market turbulence and volatility and a renewed uneasiness that the global and U.S. economies are still struggling to emerge from the most serious downturn since the Fantastic Depression.

Miekka spoke to me by phone from his home on 80 acres in Surry, Maine, where he spends three months each summer avoiding Florida’s soupy heat, walking his land with his dog and, yes, practicing his rifle marksmanship.

(He has invented a rifle scope that can recognize special targets at 100 yards and that helps Miekka focus his shot by sound signals delivered to his headphones. He rarely misses, as he demonstrates online on YouTube’s “Really Blind Marksman.”)

Speaking between radio interviews, Miekka seems pleased but hardly crazed by the Hindenburg Omen’s mainstream notoriety. He agreed the buzz might be a marketing opportunity to expand his newsletter circulation of less than 100 readers. Already, he has questioned his father in St. Petersburg to help him build the first website for his Sudbury Bull & Bear.

While the Hindenburg Omen has been behind every market crash since 1987, it’s not foolproof. It has also popped up when no significant market downturns have taken place.

Miekka clarifies that markets can be tested daily for signs of the Omen. The more often it appears, he says, the more likely a “substantial downturn” is coming. But like any analytic tool made by market watchers, it is just an indicator and no guarantee of market behavior.

Miekka was blinded in 1986 in Massachusetts at age 26 by an explosion that also took two of his fingers. He started investing his own money and, unable to see charts and graphs, came up with his own ways of tracking market trends. He used the Omen to safeguard against the threat of huge market downturns.

When he is in Florida, Miekka is active in an organization to help the blind become more self-sufficient. He chairs the board of a Citrus County group called Blind Americans Inc. that, among many goals, helps teach the blind how to build wooden kitchen cabinets to supplement their disability incomes.

Bob Krokker, who is blind and runs the organization, says he first met Miekka in 1995 during a canoe trip for the blind. “He’s an incredible man,” Krokker says of Miekka. “He’s probably as intelligent as anyone in the world.”

He’s also fearless, it seems. Krokker recalls Miekka’s choice early this year to walk from the Citrus County facility to St. Petersburg, aided only by guide dog Zoey, a Braille compass, a tape recorder with exact mileage recorded for the trip, a talking watch, a cell phone and a trailer hooked to his belt and pulled behind him. The 130-mile trip took two weeks. That’s longer than expected because he did not walk on windy days when he could not hear the cars around him.

On Wednesday, Miekka said he was toying with a more ambitious walking tour: from his Maine home to St. Petersburg.

It’s not the distance that’s daunting. Says Miekka: “I’m concerned how I will stay in touch with what the stock market’s doing.”

If he goes, I’m guessing he will find a way.

Blind Man’s Hindenburg Omen Points to Market Meltdown in late September 2010 is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/blind-mans-hindenburg-omen-points-to-market-meltdown-in-late-september-2010/feed/ 0 FINRA Fines HSBC For CMO Sales to Retail Customers http://before-you-invest.com/finra-fines-hsbc-for-cmo-sales-to-retail-customers/ http://before-you-invest.com/finra-fines-hsbc-for-cmo-sales-to-retail-customers/#comments Thu, 19 Aug 2010 20:34:00 +0000 Before You Invest tag:blogger.com,1999:blog-706213494996385248.post-2669988104815946999
FINRA's investigation found that HSBC recommended the sale of CMOs, including inverse floating rate CMOs, to its retail customers. As a result of HSBC not implementing an adequate supervisory system and procedures relating to the sale of inverse floating rate CMOs to retail customers, six of its brokers made 43 unsuitable sales of inverse floaters to retail customers who were unsophisticated investors and not suited for high-risk investments. In addition, HSBC's procedures required a supervisor's pre-approval of any sale in excess of $100,000; FINRA found that 25 of the 43 CMO sales were in amounts exceeding $100,000 and that in five of these instances, customers lost money in their inverse floating rate CMO investments. HSBC has paid these customers full restitution totaling $320,000.

"Firms must adequately train their brokers on all of the products that they are selling and must reasonably supervise them to ensure that every security recommended is suitable for the particular customer," said James S. Shorris, FINRA Executive Vice President and Acting Chief of Enforcement. "The losses incurred by HSBC's customers likely would have been avoided had the firm sufficiently trained its brokers on the suitability and risks of inverse floating rate CMOs and reasonably supervised their brokers to ensure that they were making suitable recommendations."

A CMO is a fixed income security that pools mortgages and issues tranches with various characteristics and risks. CMOs make principal payments throughout the life of the security with the maturity date being the last date by which all of the principal must be returned. The timing of the return of principal payments can vary depending on interest rate changes.

One of the more risky CMO tranches is the inverse floater, a type of tranche that pays an adjustable rate of interest that moves in the opposite direction from movements of an interest rate index, such as LIBOR. Since 1993, FINRA has advised firms that inverse floating rate CMOs "are only suitable for sophisticated investors with a high-risk profile."

FINRA Fines HSBC For CMO Sales to Retail Customers is a post from: Before You Invest Your Money

]]> The Financial Industry Regulatory Authority (FINRA) announced today that it has fined HSBC Securities (USA) Inc. $375,000 for recommending unsuitable sales of inverse floating rate Collateralized Mortgage Obligations (CMOs) to retail customers. HSBC failed to adequately supervise the suitability of the CMO sales and fully clarify the risks of an inverse floating rate or other risky CMO investment to its customers.

FINRA’s investigation found that HSBC recommended the sale of CMOs, including inverse floating rate CMOs, to its retail customers. As a result of HSBC not implementing an adequate supervisory system and procedures relating to the sale of inverse floating rate CMOs to retail customers, six of its brokers made 43 unsuitable sales of inverse floaters to retail customers who were unsophisticated investors and not suited for high-risk investments. In addition, HSBC’s procedures required a supervisor’s pre-approval of any sale in excess of $100,000; FINRA found that 25 of the 43 CMO sales were in amounts exceeding $100,000 and that in five of these instances, customers lost money in their inverse floating rate CMO investments. HSBC has paid these customers full restitution totaling $320,000.

“Firms must adequately train their brokers on all of the products that they are selling and must reasonably supervise them to ensure that every security recommended is suitable for the particular customer,” said James S. Shorris, FINRA Executive Vice President and Acting Chief of Enforcement. “The losses incurred by HSBC’s customers likely would have been avoided had the firm sufficiently trained its brokers on the suitability and risks of inverse floating rate CMOs and reasonably supervised their brokers to ensure that they were making suitable recommendations.”

A CMO is a fixed income security that pools mortgages and issues tranches with various characteristics and risks. CMOs make principal payments throughout the life of the security with the maturity date being the last date by which all of the principal must be returned. The timing of the return of principal payments can vary depending on interest rate changes.

One of the more risky CMO tranches is the inverse floater, a type of tranche that pays an adjustable rate of interest that moves in the opposite direction from movements of an interest rate index, such as LIBOR. Since 1993, FINRA has advised firms that inverse floating rate CMOs “are only suitable for sophisticated investors with a high-risk profile.”

FINRA Fines HSBC For CMO Sales to Retail Customers is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/finra-fines-hsbc-for-cmo-sales-to-retail-customers/feed/ 0 Former-IBM Executive Claims His Mistress Made Him Do It http://before-you-invest.com/former-ibm-executive-claims-his-mistress-made-him-do-it/ http://before-you-invest.com/former-ibm-executive-claims-his-mistress-made-him-do-it/#comments Thu, 19 Aug 2010 18:48:00 +0000 Before You Invest tag:blogger.com,1999:blog-7461018119073696961.post-2998218337118878033
Above: Danielle Chiesi

A former executive at IBM, who was once considered for the role of CEO, has claimed he was “played” by a mistress to provide details of data used to inform insider trades.

The legal team representing Robert Moffat submitted papers to a US court stating that his “intimate and personal relationship” with Danielle Chiesi, a trader at New Castle Funds, led to the tips being provided.

Mr Moffat pleaded guilty to charges of conspiracy and securities fraud earlier in the year as one of numerous persons involved in an alleged insider trading ring within the Galleon Group.

Ms Chiesi has pleaded not guilty as part of a different trial to Galleon Group co-founder Raj Rajaratnam, who has also filed a not-guilty plea.

Papers filed in the court by the Mr Moffat’s legal team, which were quoted by Bloomberg, said: “Ms. Chiesi was not the passive recipient of information from Mr Moffat. To the contrary, she manipulated or 'played' him to obtain information she could use to New Castle’s advantage.”

“Bob’s personal relationship with Ms. Chiesi unfortunately led him to lose sight of the principles that he had lived by.”

Mr Moffat is due to be sentenced on September 13th.

Former-IBM Executive Claims His Mistress Made Him Do It is a post from: Before You Invest Your Money

]]>
Above: Danielle Chiesi

A former executive at IBM, who was once considered for the role of CEO, has claimed he was “played” by a mistress to provide details of data used to inform insider trades.

The legal team representing Robert Moffat submitted papers to a US court stating that his “intimate and personal relationship” with Danielle Chiesi, a trader at New Castle Funds, led to the tips being provided.

Mr Moffat pleaded guilty to charges of conspiracy and securities fraud earlier in the year as one of numerous persons involved in an alleged insider trading ring within the Galleon Group.

Ms Chiesi has pleaded not guilty as part of a different trial to Galleon Group co-founder Raj Rajaratnam, who has also filed a not-guilty plea.

Papers filed in the court by the Mr Moffat’s legal team, which were quoted by Bloomberg, said: “Ms. Chiesi was not the passive recipient of information from Mr Moffat. To the contrary, she manipulated or ‘played’ him to obtain information she could use to New Castle’s advantage.”

“Bob’s personal relationship with Ms. Chiesi unfortunately led him to lose sight of the principles that he had lived by.”

Mr Moffat is due to be sentenced on September 13th.

Former-IBM Executive Claims His Mistress Made Him Do It is a post from: Before You Invest Your Money

]]> http://before-you-invest.com/former-ibm-executive-claims-his-mistress-made-him-do-it/feed/ 0