Monday, February 18, 2008
SEC Charges, Settles, $24 Million Insider Trading Case
The SEC annouunced the filling and settlement of insider trading charges against four Hong Kong residents for illegal tipping and trading in the securities of Dow Jones & Company, Inc. ("Dow Jones") in the weeks before the public disclosure on May 1, 2007 of an unsolicited $60 per share acquisition offer for Dow Jones (the "Offer") by News Corporation. The alleged tip originated with David Li Kwok Po ("David Li"), who served on the Dow Jones board of directors. David Li is the Chairman and Chief Executive Officer of the Bank of East Asia and a member of Hong Kong's Legislative Counsel and Executive Committee.
Wednesday, February 13, 2008
US customs agents Examine and Copy Data From Laptops
According to a number of reports, US Customs officials are searching computers of US citizens coming into the country from trips abroad, and making copies of data on those computers.
The warrantless wiretaps were bad enough, and an affront to our constitutional rights. But the government claimed that they were only listening and reading communications with suspected terrorists. Then we found that they were listening and reading communications from virtually everyone.
But the justification was that they were checking on communications by terrorists. When they seize the contents of my laptop, without any probable cause or warrant, is it because they think there is a terrorist inside?
What about the Fourth Amendment? More to the point with laptops, what about the attorney client privilege?
And the truly amazing point - the Government will not comment on what it is looking for, who it shares the data it copies with, or if and when it destroys it.
Truly scary stuff.
The warrantless wiretaps were bad enough, and an affront to our constitutional rights. But the government claimed that they were only listening and reading communications with suspected terrorists. Then we found that they were listening and reading communications from virtually everyone.
But the justification was that they were checking on communications by terrorists. When they seize the contents of my laptop, without any probable cause or warrant, is it because they think there is a terrorist inside?
What about the Fourth Amendment? More to the point with laptops, what about the attorney client privilege?
And the truly amazing point - the Government will not comment on what it is looking for, who it shares the data it copies with, or if and when it destroys it.
Truly scary stuff.
Monday, February 11, 2008
SEC To Require RIAs to Use Online Brochures
An investment advisor's ADV Part II "Brochure" has always been something of a waste of time. Advisors spend time preparing it to give to investors, and investors undoubtedly never read the document, which is long, detailed and quite honestly, boring.
Years ago the SEC considered requiring advisors to put their brochures online, and apparently now they are moving forward with that plan. We will have to see what the actual rule is, but an HTML document, with a table of contents that links to the detail sections of the brochure, might actually get investors to read parts of the documents, and should help advisors distinguish themselves from other advisors.
It will be interesting to see how this plays out. A huge number of SEC registered advisors are hedge fund managers - because of the debacle over registration. The hedge funds are prohibited by regulation from advertising, and therefore do not have web sites. Now the SEC is going to require their advisors to put the brochure online, presumably accessible to the world.
So, this online brochure, for the hedge fund manager with one client (his hedge fund) who never de-registered, is going to put online information about this fees, his investment strategy, and related information, all of which will relate to his fund, and all of which may be considered advertising.
We will have to wait and see the proposed rule to figure all of this out, but sometimes not using the Internet is the best course of action. Just because we can, doesn't mean we should.
The original article is at the WSJ - SEC Dusts Off Online Plan For Brochures of Advisers - WSJ.com (Sub Required)
Years ago the SEC considered requiring advisors to put their brochures online, and apparently now they are moving forward with that plan. We will have to see what the actual rule is, but an HTML document, with a table of contents that links to the detail sections of the brochure, might actually get investors to read parts of the documents, and should help advisors distinguish themselves from other advisors.
It will be interesting to see how this plays out. A huge number of SEC registered advisors are hedge fund managers - because of the debacle over registration. The hedge funds are prohibited by regulation from advertising, and therefore do not have web sites. Now the SEC is going to require their advisors to put the brochure online, presumably accessible to the world.
So, this online brochure, for the hedge fund manager with one client (his hedge fund) who never de-registered, is going to put online information about this fees, his investment strategy, and related information, all of which will relate to his fund, and all of which may be considered advertising.
We will have to wait and see the proposed rule to figure all of this out, but sometimes not using the Internet is the best course of action. Just because we can, doesn't mean we should.
The original article is at the WSJ - SEC Dusts Off Online Plan For Brochures of Advisers - WSJ.com (Sub Required)
Thursday, February 7, 2008
FINRA Conducts CMO Sweeps
What might be another case of too little, too late, FINRA has finally gotten around to conducting examinations in the mortgage backed securities area.
While these products have been around for years, and have always been confusing and almost mystical to the average investor, some firms have been using them for years without incident. Of course, in our current situation, these investments are now a problem, and FINRA is conducting sweeps.
According to press reports, FINRA is focusing on three particular types of CMOs: principal-only, interest-only and inverse floaters.
It remains to be seen whether this is a reaction to the subprime mess, or part of FINRA's senior citizen initiative. Either way, the focus comes after the start of the subprime collapse, not before.
But FINRA isn't the only one who is late to the game. In its tradition of closing the barn doors after the horses have escaped, the SEC announced 12 separate investigations after the subprime mess hit the press last summer.
While these products have been around for years, and have always been confusing and almost mystical to the average investor, some firms have been using them for years without incident. Of course, in our current situation, these investments are now a problem, and FINRA is conducting sweeps.
According to press reports, FINRA is focusing on three particular types of CMOs: principal-only, interest-only and inverse floaters.
It remains to be seen whether this is a reaction to the subprime mess, or part of FINRA's senior citizen initiative. Either way, the focus comes after the start of the subprime collapse, not before.
But FINRA isn't the only one who is late to the game. In its tradition of closing the barn doors after the horses have escaped, the SEC announced 12 separate investigations after the subprime mess hit the press last summer.
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