Largest Bitcoin exchange files for bankrupcy protection
CEO bows in apology to Japanese customers; possible theft of 850,000 units
Credit: RSS for Investments
Jumat, 28 Februari 2014
Rabu, 26 Februari 2014
Stanford fraud suits allowed by Supreme Court
Stanford fraud suits allowed by Supreme Court
20,000 might seek damages against insurance brokers, law firms
R. Allen Stanford Bloomberg News
Victims of R. Allen Stanford's $7 billion Ponzi scheme can sue outside companies and law firms alleged to have played a role in the fraud, the U.S. Supreme Court has ruled, dealing a setback to the securities industry.
The court, voting 7-2, said the suits weren't barred by a 1998 federal law that limits the ability of investors to press litigation under plaintiff-friendly state laws.
Writing for the court, Justice Stephen Breyer said the law doesn't “interfere with state efforts to provide remedies for victims of ordinary state-law frauds.”
Advertisement
The two dissenting justices said the ruling would dilute investor protections under federal law and limit the Securities and Exchange Commission's authority. Mr. Breyer rejected that characterization, saying the federal government “will have the full scope of its usual powers to act.”
Under the 1998 law, known as the U.S. Securities Litigation Uniform Standards Act or SLUSA, investors can't invoke state law if the misrepresentation is made “in connection with the purchase or sale of a covered security.” Covered securities include publicly traded stocks and bonds.
Mr. Stanford sold certificates of deposit that he falsely said were backed by safe, liquid investments. The CDs themselves weren't covered by federal securities law, and the majority today said it wasn't enough that Mr. Stanford had promised to make investments that were covered.
Similar issues have arisen in suits stemming from Bernard Madoff's fraud.
FEDERAL PROTECTIONS
The Obama administration had argued that a ruling in favor of the Stanford investors might also undercut SEC authority to enforce securities law. The Securities Exchange Act uses similar “in connection with” language, using that phrase to help define the scope of the SEC's authority.
In dissent, Justice Anthony Kennedy said the ruling “narrows and constricts essential protection for our national securities markets, protection vital for their strength and integrity.” The result, he added, “will be a lessened confidence in the market.”
Mr. Breyer said Mr. Kennedy's characterization “would be news to Allen Stanford,” who is serving a 110-year prison sentence. A federal jury convicted him in 2012 on 13 charges, including four counts of wire fraud and five of mail fraud.
“Frauds like the one here — including this fraud itself — will continue to be within the reach of federal regulation,” Mr. Breyer said.
Justice Samuel Alito joined Mr. Kennedy in dissent. Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan were in the majority.
Investors often want to sue in state court because federal law prohibits punitive damages and requires higher levels of proof than many state laws. Federal law also bars the type of “aiding and abetting” suits the investors are seeking to press in the Stanford cases.
Angela Shaw, founder of the Stanford Victims Coalition, said in an e-mail that the decision will let about 20,000 people seek damages.
“Allen Stanford could not have carried out his Ponzi scheme without the substantial assistance of the parties that have been sued,” Ms. Shaw said.
INSURANCE BROKER
The defendants in the Stanford case include units of British insurance company Willis Group Holdings PLC. They are accused of writing letters that gave the investors reason to believe the CDs were backed by safe investments. The investors sued the units along with the administrator of a trust Mr. Stanford used in his scheme.
Investors are also suing two law firms, Proskauer Rose and Chadbourne & Parke, for allegedly lying to the SEC and helping Mr. Stanford evade regulatory oversight. The defendants deny wrongdoing. The lawsuits were filed under Louisiana and Texas state law.
Prosecutors said Mr. Stanford wasted investors' money on failing businesses, yachts and cricket tournaments and secretly borrowed as much as $2 billion from his bank. In a Ponzi scheme, money from the newest investors is used to fund the returns that have been promised to previous investors.
(Bloomberg News)
Continue Reading
Ex-Merrill adviser sentenced to 10 years in prison
A former Bank of America Merrill Lynch financial adviser was sentenced to 10 years in prison for running a Ponzi scheme that defrauded at least six investors of $2.7 million. Mason Braswell has the story.
SEC eyes movement of funds between brokerage, advisory accounts
Investment management unit chief says agency wants to be sure transitions are good for clients.
Adviser issues lack Madoff moment
What do adviser lobbyists do when their issues are out-of-sight and out-of-mind? Quietly educate lawmakers.
Credit: RSS for Investments
Fidelity, DoubleLine take different emerging-markets bond approach but have something in common
Fidelity, DoubleLine take different emerging-markets bond approach but have something in common
Managers use U.S. dollar-denominated bonds, avoid 2013's slide in developing-country currencies
Credit: RSS for Investments
Investors put rout behind them, sending $21 billion to stock ETFs
Investors put rout behind them, sending $21 billion to stock ETFs
Returning to the U.S equities after the worst selloff in seven months
Investors are returning to the U.S stock market after the worst selloff in seven months, adding almost 52 times more money to exchange-traded funds that own equities than bonds.
About $21 billion has been added to ETFs that buy and sell American shares in the past two weeks as stock prices recovered, according to data compiled by Bloomberg. The deposits compare with about $407 million sent to fixed income since Feb. 11.
“Equities still remain the more attractive assets class and head winds for bonds will continue,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. His firm oversees about $7 billion. “Consumer confidence is hanging in there pretty well. We see signs of broadening economic growth.”
Advertisement
(See why stock market bulls are still feeling the love.)
Money is flowing back to equities after expanding corporate earnings and a strengthening economy boosted confidence that the bull market will extend into a sixth year.
The money sent to stock ETFs marks a reversal from January, when investors withdrew almost $14 billion from equities and deposited $1 billion into fixed-income ETFs, data compiled by Bloomberg show. The S&P 500 slid 5.8% between Jan. 15 and Feb. 3, the worst retreat since June 2013.
STOCKS REBOUND
After sliding in six of the eight days ending Feb. 3 on concern that turmoil in emerging markets would curb global growth, the S&P 500 has rebounded 6.3%, including a four-day gain ending Feb. 11 that was the biggest advance in more than a year. That surge concluded with a 1.1% rally as Federal Reserve Chairman Janet Yellen pledged to maintain Ben S. Bernanke's policy of cutting bond purchases in measured steps.
The benchmark gauge has climbed 173% since falling to a 12-year low in March 2009, rising today as purchases of new homes unexpectedly climbed to the highest level in more than five years and retailers rallied. It's little changed this year after jumping 30% in 2013, the best annual gain in more than a decade.
“There was an initial scare about emerging markets, which by the way may still have more to play out, that reversed those flows,” Kevin Caron, a market strategist at Stifel Nicolaus & Co., which oversees $160 billion. “Investors reluctantly return to the market and many hope to catch up on a bull market that has passed them by.”
Equity ETFs attracted $3.9 billion Tuesday, compared with about $250 million for bond funds, data compiled by Bloomberg show. Last year, a record $139 billion flew to stocks while fixed income took in $10 billion, the data show.
Treasuries were little changed this month after returning 1.8% in January, according to the Bloomberg U.S. Treasury Index. Losses this month have stemmed in part from flows out of fixed-income and into equity funds.
Equity mutual funds attracted $5.9 billion in the week ended Feb. 19, compared with $2.9 billion for bond funds, the Investment Company Institute said in an statement Wednesday.
Strategists see further gains for U.S. equities while projecting losses in Treasuries. The S&P 500 will climb 6% to 1,956 from Tuesday's close, according to the average forecast from 21 strategists surveyed by Bloomberg.
The yield on the 10-year U.S. government bond will be 3.37% by year-end, according to a Bloomberg survey of economists, with the most recent forecasts given the heaviest weightings. The move would hand a 2.8% loss to an investor who purchases Wednesday, data compiled by Bloomberg show.
“Some rotation back into stocks is in order,” said Eric Teal, who helps oversee about $4 billion as the chief investment officer at First Citizens BancShares Inc. “Consumer confidence is picking back up with unemployment beginning to look better and no major global macro events on the immediate horizon. Sentiment looks strong and seems to be improving.”
(Bloomberg News)
Continue Reading
Mutual fund flows: Expect 2013's reversal of trends to continue
How much can the year's surprising mutual fund flows tell us? Leuthold Weeden Capital Management's Kristen Hendrickson takes a deep dive and provides insight into how the rest of the year could play out.
How much energy does the bull have left?
Many investors are questioning how much longer the bull market can run before it collapses from exhaustion. AllianceBernstein's Kurt Feurerman has an answer.
Why invest in North American energy, and why now?
As 2014 opens, the North American energy revolution continues to help our economy and provide compelling investment opportunities across the energy value chain.
Credit: RSS for Investments
Fidelity Charitable promotes Danforth to president
Fidelity Charitable promotes Danforth to president
Changing of the guard comes as Sarah Libbey moves to managing director role at Fidelity Investments
Feb 26, 2014 @ 12:42 pm (Updated 1:20 pm) EST
Credit: RSS for Investments
Bitcoin trouble, another coin bonanza and Tesla shines
Bitcoin trouble, another coin bonanza and Tesla shines
Credit Suisse dinged in Senate report, Macy's hit by sluggish sales
Feb 26, 2014 @ 7:54 am (Updated 8:29 am) EST
Today's guest chef: Mason Braswell
- Bitcoin's primary exchange vanished after its chief executive resigned amid reports of a massive theft. The losses at the Japan-based exchange have drawn attention from regulators. Japan authorities looking into closure of Mt. Gox bitcoin exchange
And here's the bright side of the Mt. Gox failure
- While some Bitcoin investors may have been out of luck, a California couple stumbled upon jars of rare and valuable coins buried in their back yard. Experts say it could be worth millions. California couple strikes gold after finding $10 million in rare coins
- Tesla shares jumped in the company's most recent “best day ever” as Morgan Stanley and Consumer Reports both published rave reviews. The electric car marker is now valued at more than half of General Motors. Keep gushing over Tesla's latest best day ever
- A scathing Senate report detailed how Credit Suisse helped wealthy Americans avoid paying taxes on an estimated $12 billion in assets. The report wasn't kind to the Justice Dept., either. Credit Suisse helped wealthy Americans cheat the IRS, Senate report says
- Shopper, wherefore art thou? Macy's became the latest retailer to report sluggish sales. Macy's profit rises despite low sales
Jeff Benjamin covers investment strategies in his award-winning column, Investment Insights, and also dives deep into the minds of leading portfolio managers in his regular column, Portfolio Manager Perspectives.
Continue Reading
Bitcoin: The future of money
Whether or not bitcoin ever rivals the dollar, the digital currency platform could be a springboard for future monetary innovations.
Short fall: Birinyi sees S&P 500 at 1,900 by July
U.S. stocks have too much momentum to make betting against the Standard & Poor's 500 index a winning strategy and the gauge will probably reach 1,900 next quarter, according to money manager Laszlo Birinyi.
A glimpse into the future of adviser technology
Looking for the future of adviser technology? Then look no further than the annual Consumer Electronics Show because most innovations in business technology trace their roots to innovations originally targeted towards consumers.
Advertisement
Advertisement
@IN Wire
Feb 26 08:08AM
It's good to settle MBS claims with JPMorgan,, Syncora pops 54% $JPM $SYCRF http://t.co/nSpfbntEfh
Most Watched Video
Video Spotlight
Upcoming Events
Tuesday, Mar 4 Conference: 2014 Retirement Income Summit
Webcast: Getting the most out of Social Security: The many uses of file & suspend
Monday, May 12 - Tuesday, May 13Conference: 2014 Retirement Income Summit
Generate. Sustain. Protect.
Credit: RSS for Investments
Selasa, 25 Februari 2014
Controversial analyst trades barbs with JPMorgan Chase execs over asset management unit
Mike Mayo, the analyst who sparred at JPMorgan Chase's 2013 investor day with chief executive Jamie Dimon, challenged the bank at Tuesday's event about the logic of holding an asset-management business.
Credit: RSS for Investments
Credit: RSS for Investments
El-Erian clashed with Gross before resigning from Pimco
Pacific Investment Management Co.'s Mohamed El-Erian clashed with co-founder Bill Gross before announcing last month that he's leaving the firm, the Wall Street Journal reported.
Credit: RSS for Investments
Credit: RSS for Investments
Senin, 24 Februari 2014
Bitcoin: The future of money
Bitcoin: The future of money
Digital currency platform could be springboard for future monetary innovations
Money need not be paper in the pocket. Money needs neither government nor regulatory approval. Money is more an adjective than a noun, a way to make trade easier, and holds no intrinsic value.
From the “electrum lumps of Lydia,” which passed from bag to bag (circa 650 BCE), shells, gold and specially inked paper have functioned as money. The latest innovation is the digital currency bitcoin. Critics howl that privately issued digital money could never replace the mighty U.S. dollar. But a quick tour through bitcoin's place in a theory of money offers investors a glimpse into the future and shows that, more than anything, the technology that underlies bitcoin can change the future of transactions.
SCROOGE AND MEDIA OF EXCHANGE
Advertisement
What counts as currency, if not the government stamp of approval? Three features distinguish those things that count as currencies: they trade easily, hold value and can be used to price a wide array of goods and services.
First, money is a liquid media of exchange. Nobody, except Scrooge, holds money for money's sake; we hold dollars, gold, or bitcoin because we plan to exchange such currency in the future for the other goods and services we desire. Throughout history, humans used the most marketable commodity available as money. Marketability arose from demand for use, divisibility without loss of value and transportability over large distances. In short, consumers prefer to exchange commodities that make trade easier.
Unlike present digital payment systems (e.g., Paypal), which require a third party to authenticate and track transactions, bitcoin is a direct, peer-to-peer exchange network: Bitcoin users can buy and sell among themselves, requiring no other intermediation.
Bitcoin is durable, divisible, portable and secure: a medium of exchange par excellence. The more that paired parties mutually consent to using a cheaper medium of exchange, the more liquid such a medium becomes. Even if bitcoin doesn't ultimately unseat the U.S. dollar, lower transaction costs give holders an incentive to use it.
WHAT MONEY MUST HOLD
The second feature of money is as a store of value. In other words, collective agreement on the fact that this “thing” will hold its value over time is a prerequisite for any “money.” On this point, governmental action bears directly on currency. If a political authority requires payment of taxes in a certain form of money, those under the regime typically prefer to transact in the publicly approved store of value. However, where public trust in official currencies erodes (Argentina, Zimbabwe, etc.), actors adopt other forms of currency, even if they are not officially accepted.
Take bitcoin, for example. No embargo or dictum forces those holders of bitcoin to continue holding the asset. Indeed, they do so only under the assumption that others value bitcoins enough to trade them for other goods and services.
'THAT'LL BE TWO BITCOINS, PLEASE'
Finally, to be a bona fide currency, a given commodity (or Internet good) must qualify as the unit of account: Actors in the economy will want to quote commodities in terms of the currency.
Today, the world uses U.S. dollars, not bitcoin, as the final unit of account for most international transactions. To move more seamlessly between less liquid currencies, banks typically perform international, cross-currency transactions in dollars. No matter the prices of the original and final currencies in the transaction (could be Peruvian sols and Polish zlotys), banks make dollar quotes to each other.
Final arrival for bitcoin would take the shape of brokers quoting the price of dollars in bitcoin — unlikely in the near future, but not impossible. After all, before World War I, international prices were quoted in British pounds. Don't be surprised if in the near future the inquiry arises at a local coffee shop, “Do you accept bitcoins?”
WHAT REALLY MATTERS?
Whether or not bitcoin gains wide acceptance, the virtual currency has important and ground-breaking technology embedded within it that could change the way humans transact. At its heart, bitcoin is less a currency and more a system for verifying person-to-person payments without the need for third-party verification.
Here's how it works. The bitcoin network consists of a publicly distributed ledger that documents ownership of all bitcoins in existence. The ledger is called a blockchain. A copy of this blockchain is publicly available on every computer in the bitcoin network. In the future, the ledger could be used for tracking ownership of anything: property, equity shares, royalties, etc. The ledger would leave a public trail of ownership, tracked in real-time and verified by a distributed network.
When someone sends a bitcoin to another as payment, the recipient broadcasts a message to the global network. Bitcoin miners verify that each transaction is the transfer of an actual bitcoin from one person to the other by checking their copy of the blockchain. Indeed, “miners” are not miners at all, but function instead as auditors.
Not just anyone can be a miner (verify transactions). Miners compete with each other by solving a complex mathematical equation to prove that they did the work to verify the transaction. In return for performing the verification task, they receive newly minted bitcoins as a transaction fee. The computing resources required to conduct verification become higher as the bitcoin network grows, slowing the growth in the supply of bitcoins and keeping them relatively scarce.
In the end, whether or not bitcoin becomes a currency that rivals the dollar may not matter. The technology behind it solves important problems faced by currency and payment systems. The bitcoin platform therefore could serve as a wonderful springboard for future monetary innovations.
Peter Beer is an economist at Payden & Rygel
Continue Reading
Will bitcoin bury the banks?
One tech guru says the value and promise of bitcoin can completely revolutionize the global economy and has the potential to bypass banks altogether.
Institutional investors moving more cash to diversified strategies
Friday's Breakfast with Benjamin featuring what big investors are doing with their cash. Plus: Bracing for an SEC exam, robo-adviser asset-gathering update, stocks to watch next week, and more ways to spend bitcoin.
Making a case for a virtual currency
It has been a rough couple of months for Bitcoins. In October, the U.S. government shut down the Silk Road website, where Bitcoins were being...
Bitcoin is soaring, but financial advisers are steering clear for now
Despite the Bitcoin hype, many advisers are steering clear of the online currency, which is unregulated by central banks and traded freely on the Internet.
Credit: RSS for Investments
Will bitcoin bury the banks?
Will bitcoin bury the banks?
One tech guru thinks so and says the promise of the digital currency can revolutionize the global economy
Credit: RSS for Investments
