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( Symbol Guide )

 [ A ]

A Bond Swap Available Only to Big Players, Floyd Norris, The New York Times, December 18, 2002.  “In the summer of 1998, U S West, a Baby Bell phone company with a solid investment-grade rating, set a record by selling $1.5 billion in 30-year bonds to eager investors. It was the largest long-term bond issue in corporate history.  To people not swept up in the technology stock mania, the bonds looked like a safe investment with a good yield of 6.9 percent stretching out for 30 years. In the jargon of Wall Street, they were ideal investments for widows and orphans.” (Financial Firms | Corporate Governance)

A Wall Streeter Aims to Revive Handler of University Pensions, Tom Lauricella, The Wall Street Journal, April 24, 2006.  “On a summer day in 2002, shares of Affiliated Computer Services Inc. sank to their lowest level in a year. Oddly, that was good news for Chief Executive Jeffrey Rich.  His annual grant of stock options was dated that day, entitling him to buy stock at that price for years. Had they been dated a week later, when the stock was 27% higher, they'd have been far less rewarding. It was the same through much of Mr. Rich's tenure: In a striking pattern, all six of his stock-option grants from 1995 to 2002 were dated just before a rise in the stock price, often at the bottom of a steep drop.  Just lucky? A Wall Street Journal analysis suggests the odds of this happening by chance are extraordinarily remote -- around one in 300 billion. The odds of winning the multistate Powerball lottery with a $1 ticket are one in 146 million.”  (Financial Firms (TIAA-CREF))

 [ B ]

Banking's Not-So-Secret Weapon, Julie Creswell, Fortune, October 14, 2002.  “The smiles were frozen on the faces of everyone in the office, and an uneasy silence had set in. A visiting group of bankers from a small regional institution had just slipped up. "These guys had extended some credit to us and were expecting to get into a bond-underwriting deal, but we had changed our mind," recalls the chief financial officer of the energy company that was hosting the bankers. "They said to me, 'We don't extend credit to people we don't get capital markets business from.' I paused and said, 'Isn't that against the law?' Everyone kind of stopped. Then they quickly backtracked and said, 'No, what we're saying is, We don't call on people for capital markets business unless we're lending them money.' Everyone in the room started to laugh," says the CFO, who asked to remain anonymous. "You know-that uncomfortable sort of laugh."   (Financial Firms | Corporate Governance | Wall Street's Settlement)

 [ C ]

Citigroup Fined in U.K. For 'Dr. Evil' Bond Trades, European Business News, The Wall Street Journal, June 28, 2005.  “Britain's Financial Services Authority fined Citigroup £13.9 million ($25.4 million) for a series of controversial bond trades it made last August.  The regulator said Citigroup will pay a penalty of £4 million and relinquish profits from the trades of about £9.9 million.  The controversial trading strategy last year, dubbed "Dr. Evil" by the bank's traders, caused a temporary disruption to trading on electronic platforms run by MTS Group, a dramatic drop in prices and a withdrawal of quotes from the system by some market participants." (Financial Firms (Corporate Governance)) Seminar

Client Comes First?  On Wall Street, It Isn't Always So, Ann Davis, The Wall Street Journal, November 16, 2004.  “When a mutual-fund company asked brokerage firm Knight Securities to get it 600,000 shares of a fiber-optic stock, traders at Knight quickly swung into action.  A half-dozen traders -- figuring the big order would push up the price of the stock -- quickly began buying some for accounts that benefited their firm and themselves, according to testimony in a National Association of Securities Dealers arbitration.  The buying may have affected the price the client ultimately had to pay for the stock, JDS Uniphase, according to people familiar with the trading records. They say the traders in some cases sold their newly bought stock to the client, Oppenheimer Funds. According to testimony, it was sold to the client at a markup, a move that may have taken money out the pockets of mutual-fund shareholders.” (Financial Firms | Corporate Governance (Trading Ahead))

Critics Fear Bank 'Firewalls' Also May Have Some Cracks: Big Insurers, Fund Managers Say Barriers Between Lending, Trading Were Breached, Henny Sender, The Wall Street Journal, December 26, 2002.   “The so-called firewalls between different departments of Wall Street firms, constructed to prevent conflicts, are triggering a firestorm of criticism.” (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ D ]

Don't Expect Fed To Limit Banks' Bad Behavior, Steven Pearlstein, The Washington Post, March 17, 2004.  “How many financial scandals does a banking company have to be involved in before the Federal Reserve will finally conclude it isn't up to the task of taking control of yet another big bank?  We still don't know the answer to that question, given the Fed's boneheaded decision last week to approve Bank of America's purchase of FleetBoston, creating a behemoth with nearly $1 trillion in assets. In a single stroke, the Fed managed to reinforce its reputation as a patsy for the banking industry while undermining efforts of other regulators to get tough with corporate wrongdoers.  Yes, this is the same Bank of America that agreed this week to pay $375 million, and reduce fees by $80 million, to settle civil charges that it defrauded mutual fund investors by helping a big hedge fund engage in illegal trading."  (Financial Firms | Corporate Governance)

 [ E ]

Enron Had Complained About Fired Broker UBS Employee Issued Warning on Stock, Frank Ahrens, The Washington Post, Wednesday, March 27, 2002.  “UBS PaineWebber brokers around the country are allowed to give financial advice contrary to the firm's recommendations, Sutton said in his letter. After Wu's firing, however, a new policy was instituted in Houston stating that "financial advisors should, rather than give their personal opinion, refer their clients to any relevant [company] analyst's report."  (Financial Firms | Corporate Governance)

Enron- N.Y. Times Co. Deal Highlights Media's Dilemma, Howard Kurtz, The Washington Post, Thursday, July 18, 2002.  "When Enron collapsed amid spectacular scandal, the New York Times repeatedly assailed the company in editorials for its tangled finances.  Five years ago, it turns out, the New York Times Co. struck a "newsprint swap agreement" -- a financial deal in which no physical assets changed hands -- with the very same Houston energy company."  (Financial Firms | Corporate Governance)

Enron Weighs Suing Its Banks For Bad Advice They Provided:  Strategy to Settle All Litigation Deepens a Quagmire for Citigroup, J.P. Morgan, Mitchell Pacelle, The Wall Street Journal, May 28, 2003.  "The welter of claims and counterclaims swirling around Enron Corp. and its bankers is about to get even more complicated.  The Houston energy company, itself the target of a slew of investigations into alleged financial chicanery, is now considering bringing legal action against its own bankers for giving the company bad financial advice that helped lead to its downfall. The saber rattling is part of a new push under Enron's chief executive officer Stephen F. Cooper to settle all the litigation involving Enron and its bankers, shareholders and creditors.." (Financial Firms | Corporate Governance)

Executives See Rise In 'Tying' Loans To Other Fees, Jathon Sapsord, The Wall Street Journal, June 9, 2004.  "Corporate-finance officers say banks are increasingly squeezing lucrative fees out of them by conditioning loans on the purchase of other services, a new survey shows. It's a murky and sometimes-illegal practice that has corporate-finance officers clamoring for regulators to clamp down.  The survey, to be released today, shows that 96% of the corporate-finance executives at large companies who responded said they had been pressured by lenders to buy underwriting, merger advice and other services from a bank in exchange for loans. Nearly two thirds of the surveyed chief financial officers and treasurers at large companies -- those with revenue of $1 billion or more -- said a bank had denied credit or raised loan prices because the finance executives didn't buy other services. Almost half said such pressure had risen in the past year."  (Financial Firms | Corporate Governance (Tying Products))

 [ F ]

False Promise of Wall Street Reform, Michael Lewis, Bloomberg, Wednesday, June 12, 2002.  "But that is not the fatal flaw in Eliot Spitzer's attempt to punish Merrill Lynch and the other firms that peddled Internet propaganda. Spitzer has more or less proven that no one cares what actually happened; all that matters is what he can persuade investors happened; and he has persuaded them that they never believed anything but what Wall Street analysts made them believe."  (Financial Firms | Corporate Governance)

Federal Reserve Says Banks Can Continue Overdraft Plans, Alex Berenson, The New York Times, June 8, 2004.  "The Federal Reserve said yesterday that banks could continue controversial programs that consumer groups say function as high-cost loans used mainly by poor and middle-income people.  The programs enable, and in some cases encourage, customers with low balances to overdraw their checking accounts, allowing the banks to skirt credit laws and collect billions of dollars in fees. They are generally marketed as "overdraft privilege" or "bounce protection" and have grown very rapidly in the last five years, with at least 1,500 banks now offering them.  After studying the programs for more than a year, the Federal Reserve said in a statement that they should not be covered under truth-in-lending laws and did not propose any substantive restrictions on them. The Fed did propose some minor changes in the way the programs were marketed.”  (Financial Firms | Corporate Governance (Overdrafting))

Firms' Push to Enter Banking Wins Hill Support: Brokerages and Retailers Would Operate Without Fed Oversight; Greenspan Is Among Critics, Kathleen Day, The Washington Post, May 23, 2003.  "Merrill Lynch, Morgan Stanley, Wal-Mart, General Electric and other companies are gaining support in Congress for the right to set up a nationwide banking system that could compete with commercial banks but operate under looser federal rules.  Consumer groups, bankers, some lawmakers and Federal Reserve Board Chairman Alan Greenspan have sharply criticized the effort, saying it would create a second, parallel banking system that would result in unfair competition and more risk for the federal deposit insurance system and possibly taxpayers." (Financial Firms | Corporate Governance)

For Wall Street, Fines Are A Day's Pay, Dan Ackman, Forbes, April 29, 2003.  “At the press conference yesterday announcing the settlement with the major Wall Street banks, New York Attorney General Eliot Spitzer compared his work to that of President Theodore Roosevelt, and the U.S. Securities and Exchange Commission called the deal "historic." But there are reasons for skepticism.  First, the fines, while large in absolute terms, are tiny compared to the big banks' revenue. Merrill Lynch, for instance, will pay $200 million. But last year, the company reported revenue of $28 billion (down from $45 billion in 2000). That works out to $112 million a day, not counting weekends. So the total fine, only half of which is a penalty, represents 1.8 days of Merrill's revenue. Since the conduct Merrill and the others are accused of took place over at least four years, it's fair to say that Merrill is paying less than a day's pay for its transgression." (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ G ]

Gluttons At The Gate, Cover Story, Business Week, October 24, 2006.  “Three weeks after giant private-equity firm Thomas H. Lee Partners agreed to buy an 80% stake of Iowa Falls ethanol producer Hawkeye Holdings in May, Hawkeye filed registration papers with the Securities & Exchange Commission to go public. The buyout deal hadn't even closed yet, but Thomas H. Lee was already looking forward to an initial public offering expected to generate a huge profit on its $312 million investment. The firm didn't just cross its fingers and wait, however: It took $20 million from Hawkeye as an advisory fee for negotiating the buyout and a $1 million "management fee"--and will soon take about $6 million to meet its own tax obligations. All told, Thomas H. Lee will collect payments of around $27 million by yearend--despite Hawkeye's having earned just $1.5 million in the six months through June.”  (Financial Firms (Private Equity and Hedge Funds (History)))

Goldman Gave Hot IPO Shares To Top Executives of Its Clients, Randall Smith, The Wall Street Journal, October 3, 2002.  “Prominent executives at 21 U.S. companies personally received hot IPO shares from Goldman Sachs Group Inc., which pocketed lucrative investment-banking fees from those companies during the stock market's extraordinary rise in the late 1990s, according to congressional investigators.”  (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ H ]

History Lesson: "The More Things Change, the More They Stay the Same,"  Thomas G. Donlan, Barron’s, November 18, 2002.  “How long have investors known that there's a lot of funny business on Wall Street in the IPO market? What a question. It's like asking how long have we known that gravity holds us on the earth, or how long have we known that red sky at morning means sailor take warning. And how long have investors known that Wall Street research isn't the last word on the value of stocks? It's like asking how long have we known that all that glitters is not gold, or that the real value of diamonds can be judged only by an expert.”  (Financial Firms | Corporate Governance | IPOs)

How Corrupt Is Wall Street?, Marcia Vickers, Mike France, Emily Thornton, David Henry, Heather Timmons and Mike McNamee, BusinessWeek, May 7, 2002.  "The widening scandal has plunged Wall Street into crisis. The resulting furor is more thunderous than the one unleashed by Michael R. Milken's junk-bond schemes in the 1980s, the Prudential Securities limited-partnership debacle in the early '90s, or price-fixing on the NASDAQ later in the decade. In part, that's because many more individuals lost money in the recent market collapse than on earlier scandals."  (Financial Firms | Corporate Governance | Wall Street Settlement)

How Wall Street 'Sweeps' the Cash, Randall Smith, The Wall Street Journal, January 11, 2006.  “The phrase "cash sweep" may sound like a cleaning crew gathering loose change. But on Wall Street, the top brokerage firms are increasingly turning cash sweeps into gold.  The blue-chip securities firms are reaping bigger profits from a few simple changes to how investors' idle cash balances are treated. And most investors either don't notice or don't care that Wall Street's gains are coming at their expense as brokers turn around and reinvest the money for their own benefit at a higher rate.”  (Financial Firms (Cash Sweeps))

 [ I ]

In Wall Street We Trust, James Surowiecki, The New Yorker, May 20, 2003.  "Richard Coleman and his brothers had just sold a shopping mall in Asheville, N.C. Florida resident Peter Loftin had wrapped up the sale of a stake in the telecommunications company he had founded. And the Perez brothers were selling their stake in a health-care business started in McAllen, Texas.  What they all have in common, according to their lawyers: Accounting firm KPMG LLP approached them as they sold their businesses, or soon afterward, pitching a strategy for limiting, or even avoiding, taxes on their multimillion-dollar windfalls. While KPMG vouched for the strategy's soundness, the firm required them to sign confidentiality agreements and refused to allow independent reviews, the individuals contend. According to Mr. Loftin, two KPMG partners "pressured" him to buy into the "no lose" strategy, saying he needed to act quickly because there were only a few spots left." (Financial Firms | Market History)

Inside The Vault, Banks Are Doling Out Loans To Directors And Employees. Caveat Depositor -- And Investor, Jim McTague, Barron’s, July 5, 2004.  “Now that interest rates have begun climbing, investors in bank stocks need to keep a close eye on loan quality. Rising rates often expose questionable lending practices, some of them fatal. Over the past two decades, banks sank by the hundreds during periods of rising rates. Witness the S&L debacle of the 1980s, when 563 savings and loans failed and 333 others were forced to merge. That was followed by a commercial-bank debacle that claimed 286 banks in 1990 and 1991.  In examining those blowups, the General Accounting Office laid its finger on a common culprit: loans to insiders. The Congressional watchdog agency found that poorly underwritten loans to employees, directors and large shareholders were evident at 61% of the failed banks and were a major factor in 21% of them. The problem was that loans to bank insiders were based on less stringent credit standards than loans to others, and thus turned sour more quickly.  Still more troubling, the GAO found that bank regulators had not detected the extent of the insider loan problem until after the banks had failed.”  (Financial Firms | Corporate Governance)

Investors Get Shortchanged on Interest, Cathy Chu, The Wall Street Journal, February 17, 2005.  “The New York Stock Exchange yesterday issued a warning to brokerage houses who may be sweeping billions of dollars of their clients' cash into special accounts that pay lower interest rates than money-market funds.  The NYSE said brokerage houses sometimes fail to disclose prominently that these so-called cash-sweep accounts often are inferior to money-market funds. In a letter posted on its Web site and sent to about 300 brokerage houses, the exchange warned the industry that it could face new rules or possible enforcement actions if disclosure doesn't improve.” (Financial Firms | Corporate Governance)

 [ J ]

Judge In Merrill Analyst Suit Critical Of Some Investors, Colleen Debaise, The Wall Street Journal, June 17, 2003.  “A federal judge appeared unsympathetic toward some investors who are suing Merrill Lynch & Co. over losses stemming from the dot-com meltdown, calling them "high-stakes speculators."  Dozens of investor lawsuits have been filed against Merrill, claiming Merrill's former star analyst Henry Blodget and others issued overly bullish research reports to win lucrative investment banking business and pump up their own salaries.  At a hearing Monday, U.S. District Judge Milton Pollack in Manhattan heard a request from Merrill to dismiss the litigation, filed in the wake of New York State Attorney General Eliot Spitzer's recent probe into analyst conflicts.”  (Financial Firms | Corporate Governance (Public and Investors))

 [ K ]

 [ L ]

Legal Loophole Inflates Profits in Student Loans, Greg Winters, The New York Times, September 22, 2004.  “The federal government is paying hundreds of millions of dollars in unnecessary subsidies to student loan companies even though the Bush administration has the authority to cut them off immediately, according to a report by the Government Accountability Office.  For the last two years, student loan companies have been taking vigorous advantage of a loophole in federal law to receive big subsidies that Congress tried to retire more than a decade ago. As lenders have stepped up the practice, billing the government for more than three times as much as they did just three years ago, the Education Department has maintained that there is little it can do to stop them soon.” (Financial Firms | Corporate Governance (Student Loans))

 [ M ]

Merrill Manager Offers Testimony About Tyco Deal, Collen Debaise, The Wall Street Journal, February 3, 2004.  “A senior vice president at Merrill Lynch & Co. testified that the firm received a lead role in a $2.1 billion bond offering for Tyco International Ltd. shortly after hiring Phua Young, a stock analyst favored by Tyco executives for his bullish coverage.  The suggestion of a "quid pro quo" was raised as jurors in the trial of Tyco's former top executives were shown an August 1999 e-mail message from Sam Chapin, the senior vice president, to Merrill's then-chairman David Komansky.  In the e-mail, Mr. Chapin wrote that then-Tyco Chief Executive L. Dennis Kozlowski "wanted to recognize the commitment that you and I had made to him to address our equity-research coverage of Tyco."  ((Financial Firms | Corporate Governance)

Merrill To Urge Dismissal Of 'Tainted Research' Lawsuits, Colleen Debaise, The Wall Street Journal, June 13, 2003.  "Lawyers for Merrill Lynch & Co. (MER) are expected to head to court Monday to urge a federal judge to dismiss dozens of investor lawsuits that claim the firm issued tainted research during the Internet bubble.  The eventual ruling, to be handed down by U.S. District Judge Milton Pollack in Manhattan, could shape the outcome of a slew of lawsuits in which investors blame Wall Street firms for their losses and seek damages of potentially hundreds of millions of dollars."   (Financial Firms | Corporate Governance)

Morgan Stanley Faces Fine, Randall Smith, The Wall Street Journal, June 27, 2007.  “Securities regulators plan to penalize Morgan Stanley $6.1 million for allegedly overcharging customers on $59 million in bond sales, in a case that shows how easily unwary investors can overpay for such securities.  The Wall Street firm allegedly overcharged customers of its retail brokerage unit in more than 2,800 separate bond sales from the firm's own inventory, according to people familiar with the case. The New York firm, which is expected to settle the charges without admitting or denying wrongdoing, declined to comment yesterday."  (Financial Firms | Bond Sales))  Seminars

 [ N ]

NASD Says Fund Family Paid Improper Fees., Riva D. Atlas, The New York Times, February 17, 2005.  “NASD has accused an affiliate of American Funds, the nation's third-largest mutual fund company, of directing $100 million in trading commissions to the brokerage firms that were top sellers of its funds.  The case is a rare blow for American Funds, whose funds have long been favorites of investors because of their low cost and strong performance. Indeed, its sales were bolstered last year as the mutual fund trading scandals dented the reputations of many of its largest competitors. American Funds, which is based in Los Angeles, manages $600 billion and was the third most popular family of funds last year, behind Vanguard and Fidelity, according to the Financial Research Corporation.” (Financial Firms | Corporate Governance)

NASD Settles Overcharge Claims, Aaron Lucchetti, The Wall Street Journal, June 30, 2004.  “Raymond J. Ruble, 59, was a Manhattan-based partner with Sidley Austin Brown & Wood, one of the nation's largest law firms. Described by fellow lawyers as modest and genial, Mr. Ruble was nonetheless known for his aggressive work on tax strategies for investors.  While abusive tax schemes have increasingly come under government scrutiny, shelters can often be very lucrative for their advisers and sellers, and Mr. Ruble was one of the biggest earners for the firm. He has been cited by the government as a leading promoter of abusive tax shelters.”  (Financial Firms | Corporate Governance (Tax Shelters))

New Probes Target IPO 'Spinning', Randall Smith, The Wall Street Journal, June 30, 2003.  “Two months after they agreed to pay $1.4 billion to settle research-conflict charges with regulators, Wall Street securities firms are facing an unexpected number of additional regulatory and financial threats stemming from alleged market-bubble abuses.  The latest: Three U.S. securities regulators including the National Association of Securities Dealers have launched a new leg of an investigation into "spinning" of initial public offerings of stock, or the allocation of hot IPOs to executives of Wall Street's potential investment-banking clients."  (Financial Firms | Corporate Governance | IPOs (Spinning))

No Margin of Safety, Christopher Whalen, Barron’s, March 7, 2005.  “Just What We Need: A New Basel Capital Accord. Inspired in part by the failure of Long Term Capital Management, the world's financial regulators are imposing a new capital-adequacy regime for the banks under their control. Unfortunately, the very models and assumptions that drove Long Term Capital Management to the financial heights and depths are built into the new regulatory scheme. It's a story that nicely illustrates how Wall Street has taught the world how to measure -- or rather how to fail to measure -- financial risk." (Financial Firms | Risk Management (Scholes and Merton (LTCM)))

 [ O ]

 [ P ]

Putting Sticker Prices on Corporate Bonds, Floyd Norris, The New York Times, June 27, 2003.  "As retail investors have turned to bonds, however, they have noticed that the bond market is nothing like the stock market when it comes to price transparency. You want to buy General Motors stock? Any broker can tell you the current quote, and yesterday afternoon the bid and asked prices were just 1 cent apart.  But the bond market is a dealer market, one in which just finding out where a bond is trading can be difficult. Yesterday, reports Tom Burnett, the research director for Wall Street Access, a brokerage firm, one dealer was offering a G.M. bond maturing in 2028 at 86.75 cents per dollar of face value, while another was asking 90 cents. The range can be much greater for junk bonds. A Charter Communications issue this week was offered by one dealer at 52.75 cents, and by another at 69.5 cents."  (Financial Firms | Corporate Governance | Fixed-Income Mis-pricings)

 [ Q ]

 [ R ]

Relationship Banking:  Trial Shows Merrill Had Courted Enron, George Scannell, The Wall Street Journal, October 18, 2004.  “Merrill Lynch executives often spend weeks if not months carefully scrutinizing investment deals before agreeing to invest the firm's money.  But it took Merrill less than 10 days in December 1999 to agree to plunk down $7 million to buy an interest in power-producing barges off Nigeria's coast -- despite oft-stated misgivings by Merrill executives. The reason: to please a potentially lucrative client, Enron Corp."  (Financial Firms | Corporate Governance)

Risky Business, Stanley O’Neal, The Wall Street Journal, April 24, 2003.  “Listening to some oracles in Washington and elsewhere these days, you'd think the corporate landscape was populated by a bunch of capitalist outlaws, out to get a buck however they can. Nothing could be further from the truth. Talking to other CEOs, both as colleagues and as clients, the common theme that emerges is their increasing aversion to any kind of risk.  In the atmosphere of cynicism and potential retribution that dominates the business landscape today, CEOs seem to want nothing more than a low profile. They are reluctant to undertake new and untested business initiatives, want no visible risk and are loathe to speak out on corporate governance matters. It's all very troubling: Risk-taking is essential to capitalism. Without it, the system can't function.”  (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ S ]

Salomon Used IPOs to Lure Investments From Executives, Susanne Craig and Charles Gasparino, The Wall Street Journal, July 17, 2002.  "Salomon Smith Barney regularly doled out shares of hot IPOs to the personal brokerage accounts of chief executives in a bid to win investment-banking business, according to a lawsuit filed by a former Salomon Smith Barney broker whose job was to help allocate those shares."  (Financial Firms | Corporate Governance | Wall Street Settlement)

Salomon Used Special Accounts To 'Flip' CEOs' IPOs, Suit Says, Susanne Craign and Charles Gasp Arino, The Wall Street Journal, July 19, 2002.  "Wall Street firms bar small investors who receive IPO shares from quickly cashing them in. But Salomon Smith Barney, according to a former broker who is suing the firm, curried favor with corporate executives by directing hefty IPO allocations outside their personal accounts, allowing them to flip the shares for fast profits."  (Financial Firms | Corporate Governance | Wall Street Settlement)

S.E.C. Is Said to Examine Stock Pricing by Big Brokers, Jenny Anderson, The New York Times, November 8, 2004.  “The Securities and Exchange Commission is investigating about a dozen brokerage firms - including Morgan Stanley, Merrill Lynch, Ameritrade, Charles Schwab and E*Trade Financial - on suspicion that they failed to secure the best available price for stocks they were trading for their customers, according to people who have been briefed on the inquiry..” (Financial Firms | Corporate Governance:  Trading for Best Price (Internalization & Payment of Order Flow))

SEC Finds Retirement-Fund Issues, Deborah Solomon, The Wall Street Journal, May 16, 2002.  “A government examination of retirement-fund consulting uncovered significant conflicts of interest between consulting firms and the money managers they recommend to clients, according to people familiar with the matter.  A months-long study to be released today by the Securities and Exchange Commission is expected to confirm what regulators have long suspected: the existence of undisclosed financial ties between consultants and money-management firms that can influence the recommendations consultants make to their retirement-fund clients."  (Financial Firms | Corporate Governance)

SEC Probes Mutual-Fund Firms After Settlement in Kickback Case, Bridget O’Brian, The Wall Street Journal, October 26, 2006.  “The Securities and Exchange Commission has launched an investigation of 27 mutual-fund companies that the agency says have accepted kickbacks totaling hundreds of millions of dollars in recent years.  The investigation centers on alleged arrangements in which independent contractors agreed to pay rebates to mutual-fund companies in order to win lucrative contracts for jobs like producing shareholder reports and prospectuses. The probe stems from a $21.4 million settlement the SEC reached last month with Bisys Fund Services Inc., an administrative-services provider owned by Bisys Group Inc.”  (Financial Firms (Corporate Governance))

Senate Panel Is Expected to Review an Enron Deal, Kurt Eichenwald, The New York Times, December 7, 2002  “J. P. Morgan Chase engineered a complex transaction for Enron last year to allow the company to obtain hundreds of millions of dollars in tax deductions that normally would not have been permitted, people involved in the inquiry into the company's finances said yesterday.  The transaction — known internally at J. P. Morgan as Slapshot — was put together by the company's structured finance group. It involved entities in Nova Scotia, Quebec City and the United States and was intended to give Enron enormous financial benefits.”  (Financial Firms | Corporate Governance)

Serpent on the Rock:  Crime, Betrayal and the Terrible Secrets of Prudential Bache, Kurt Eichenwald, Business Week, August, 1996.  (Prologue:  Harper Business) “Rhoda Silverman eased her 1984 Chevy Suburban out of the driveway, starting her weekly two-mile trip to her elderly mother's condominium. Saturday had been their day for years, a time when they could chat over breakfast at Smitty's or Luby's Cafeteria. Sometimes, on special days, they even splurged for lunch at Red Lobster.?"  (Financial Firms | Corporate Governance | Limited Partnerships (Market History))

Street Crime: By The Numbers, Christopher Tkaczyk, Fortune, May 28, 2003.  “Are you aware of a current investigation associated with these Wall Street firms?"   (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ T ]

Tiny Transaction Is Big Focus Of Prosecutors in Enron Case, John R. Emshwiller and Ann Davis, The Wall Street Journal, November 10, 2003. “A huge, light-gray building, trimmed jauntily in blue, rises from the rolling, grassy fields on the far side of the runways at Indianapolis International Airport. From the approach road, the building seems active. But the parking lots are empty and, inside, the 12 elaborately equipped hangar bays are silent and dark. It is as if the owner of a lavishly furnished mansion had suddenly walked away, leaving everything in place.  That is what happened. United Airlines got $320 million in taxpayer money to build what is by all accounts the most technologically advanced aircraft maintenance center in America. But six months ago, the company walked away, leaving the city and state governments out all that money, and no new tenant in sight.  The shuttered maintenance center is a stark, and unusually vivid, reminder of the risk inherent in gambling public money on corporate ventures. Yet the city and state are stepping up subsidies to other companies that offer, as United once did, to bring high-paying jobs and sophisticated operations to Indiana. Many municipal and state governments are doing the same, escalating a bidding war for a shrunken pool of jobs in America despite the worst squeeze in years on their budgets.”  (Financial Firms | Corporate Governance)

 [ U ]

 [ V ]

Value Driven: Wall Street's Trust Fund Is Tapped Out Just When We Thought Wall Street Banks Had Come Clean . . . SURPRISE!, Geoffrey Colvin, Fortune, May 13, 2003.  "For just a moment, it was almost possible to believe again in stock research from the major Wall Street firms. But now? How deep a hole do those guys have to be in before they stop digging?  Seems to me investors have three choices. You can adopt the Warren Buffett principle and invest only in companies whose management you personally know and trust. That would limit most investors' options pretty severely. Or you can use research from an unconflicted source, with the hurdle for unconflictedness set extremely high. Or you can buy the entire market in the form of a Wilshire 5000 index fund and stop worrying about trusting anyone or anything except the growth of the U.S. economy. That's what Nobel Prize-winning finance wonks have been advising for decades. It's sounding better all the time."   (Financial Firms | Corporate Governance | Wall Street Settlement)

 [ W ]

Wall Street Cuts Yields on Investors' Cash, Jane J. Kim, The Wall Street Journal, August 31, 2005.  “In a development that hurts investors, brokerage firms are quietly moving their clients' cash from money-market mutual funds -- the traditional default option -- into lower-yielding bank accounts.  The shift, which is bolstering brokerage firm profits, means that investors with large cash balances could lose thousands of dollars or more in annual interest payments. These accounts are where brokerages typically park the proceeds from investor stock sales as well as dividends. Some investors also keep their portfolio's cash allocation in such accounts."  (Financial Firms | Corporate Governance)  Seminar

What's Good for Business, If No One Else, Gretchen Morgenson, The New York Times, June 5, 2005.  “William H. Donaldson’s abrupt exit last week as chairman of the Securities and Exchange Commission brought cheers from those who think that less regulation means more benefits for investors. They are eagerly embracing President Bush's nominee for the job, Representative Christopher Cox, a California Republican who is a big-business advocate.  While the deregulationistas get ready to rumble, a lawsuit brought by the S.E.C. against Citigroup - which was settled last Tuesday - reminds us why the very rules that are despised by business are in fact good for investors. Without admitting or denying wrongdoing, Citigroup agreed to pay $208 million to settle the case." (Financial Firms | Corporate Governance)

 [ X ]

 [ Y ]

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Symbol Guide

Academic Study,  Bearish Case, Bullish Case, "Debate," Federal Reserve

Investment Mine, Magazine Article Newspaper Article, Online Site, Research Report

Disclaimer and Fair-Use Notice Information for Latrobe Financial Management

Securities Offered Through LPL Financial

Member FINRA/SIPC

Please Note: Some of the links on this page lead to resources outside of this firm.  The presence of these links should not be taken as an endorsement by Latrobe Financial Management or LPL Financial of these sites or their content.  Please use discretion and common sense.  Please call with any questions.

No information provided on this site is intended to constitute an offer to sell or a solicitation of an offer to buy shares of any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under securities laws of such jurisdiction.  Registered Representatives of LPL Financial  whose identities and association are disclosed on this site may only do securities or transact business with persons who are residents of the following states: FL, IL, IN, KY, OH, VT.