UBS will pay $12M over naked shorts
dcubberley, 27 October 2011
UBS AG, Switzerland’s biggest bank, will pay $12 million to resolve Financial Industry Regulatory Authority claims that a brokerage unit allowed millions of short-sale orders to be placed without reasonable grounds to believe that the securities could be delivered. Continue reading “Article: UBS will pay $12M over naked shorts”
UBS comes up short; fined $12 million by Finra for ‘systemic supervisory failure’
Finextra, 26 October 2011
The Financial Industry Regulatory Authority (Finra) has fined UBS Securities $12 million for failing to properly supervise short sales of securities.
The Swiss bank’s US brokerage unit violated Regulation SHO, which requires a broker-dealer to have reasonable grounds to believe that the security could be borrowed and available for delivery before accepting or effecting a short sale order, says Finra.
The rules require firms to obtain and document this “locate” information before the short sale occurs to help cut the number of potential failures to deliver.
Continue reading “Article: UBS comes up short; fined $12 million by Finra for ‘systemic supervisory failure’”
UBS fined in U.S. over improper short sales
Jonathan Stempel, 25 October 2011
In the largest penalty of its type, Swiss bank UBS AG was fined $12 million by a U.S. brokerage regulator over its “systemic” failure to properly handle millions of short-sale orders.
The Financial Industry Regulatory Authority said violations by the bank’s UBS Securities LLC broker-dealer unit caused the orders to be mismarked or filled without reasonable grounds to believe the underlying securities could be located.
In short sales, investors sell securities they do not own, hoping the prices will fall so they can repurchase the securities later at the lower price, repay the lender and pocket the difference as profit. Regulators fear that abuses can distort markets, and accelerate declines in share prices. Continue reading “Article: UBS fined in U.S. over improper short sales”
FINRA v UBS
24 October 2011
As set forth below, the Firm failed to comply with certain requirements of Reg SHO, FINRA Rules, NASD Rules and federal securities laws during the period covering, in whole or in part, January 3, 2005 through March 2010, with several violations continuing through December 31, 2010 (the “Relevant Period”), The Firm’s violations existed for various periods of time throughout the Relevant Period and are summarized below.
PDF (26 pages): FINRA v UBS
ETFs and the Present Danger to Capital Formation
Prepared Testimony by Harold Bradley and Robert E. Litan
Before the United States Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investments
ETFs have increasingly distorted the role of equities
markets in capital formation, while posing systemic risks from potential
Continue reading “Testimony: Kauffman Foundation on ETFs Danger to Capital Formation”
Why I Respectfully Disagree With David Einhorn About Green Mountain Coffee Roasters
SeekingAlpha, 19 October 2011
Shares of coffee giant Green Mountain (NASDAQ:GMCR) were slammed on Monday after hedge fund investor David Einhorn said that the stock should be shorted. I respectfully disagree with Mr. Einhorn and others that are against the stock.
Paywall Access to Full Article
SEC under Schapiro struggles to turn around amid political, financial head winds
David S. Hilzenrath
Washington Post, 7 October 2011
Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.
She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.
Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.
Read full article.