Regrets of creator of collateralized mortgage obligation

September 7, 2018

Lew Ranieri regrets creating the CMO “‘I’m the guy who played a central role in this home thing and I regret it because…it got abused beyond everybody’s imagination, ‘” says Lewis Ranieri, creator of the collateralized mortgage obligation (CMO), according to the Wall Street Journal. Ranieri’s creation of the CMO was nifty financial engineering by a sophisticated Wall Street investment banker that revolutionized the home mortgage market. But the CMO ended up being a financial weapon of mass destruction that crashed the global economy in 2008. The CMO brought us the Great Recession, from which we are still recovering.

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orangutan

Our brains cause us to make bad investment decisions

August 24, 2018

We invest like Dr. McCoy, not like Mr. Spock. As investors, we make bad investment decisions because we are emotional, distractible, impatient, and inconsistent. But that is not our fault. There are things that developed in our primitive brains that do not help us when we have to make decisions about complex matters like investments. Knowing how our brains are hard-wired can help us to avoid the tragic mistakes that we so often make in investing.

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gate with private sign

Private placements – great for broker, not so much for investor

June 25, 2018

Private Placements – what are they? Private placements can be stocks, limited partnership interests, or other securities issued by companies that are not publicly traded. Private placements can be investments in things like a single apartment complex, a single oil well, a basket of properties or oil wells, or a biotech company. The companies issuing these securities do not have to comply with many federal securities laws such as publicly filing their quarterly and annual financial statements. They are not required to provide ongoing disclosures to investors like public companies are. You cannot sell these securities on exchanges like the NASDAQ or NYSE when you need money.

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SEC seal

Regulation Best Interest is really Regulation Status Quo

April 24, 2018

Regulation Best Interest ? Under the SEC’s proposed Regulation Best Interest, the SEC says a broker-dealer would be required to act in the best interests of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. This is the SEC’s plan to displace the Department of Labor’s uniform fiduciary standard for retirement accounts which was adopted after YEARS of analysis.

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Bernie Madoff

Madoff ponzi scheme victims to recover more

April 12, 2018

$504 million more to victims of Madoff ponzi scheme. Madoff ponzi scheme victims are to receive another $504 million from assets that government seized after the collapse of one of the largest frauds in history. Payments to victims could reach $4 billion. Much of these funds were recovered from Madoff’s family and friends, Madoff’s bank J.P. Morgan Chase, and from wealthy investors who had cashed out billions of what turned out to be fictitious profits.

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Martin Shkreli

Martin Shkreli investor to recover losses

April 11, 2018

Shkreli investor to recover losses. A NJ federal court ordered convicted fraudster Martin Shkreli to pay one defrauded hedge fund investor about $388,000 in restitution. 

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Nun with ruler

Wells Fargo shamed by Nuns

April 6, 2018

Wells Fargo shamed by Nuns. Wells Fargo has been taken to task for failing to publicly report on the root causes that led to a rash of ethical lapses in recent years by an investor group led by the Interfaith Center on Corporate Responsibility and including about 20 religious organizations as well as state officials from Rhode Island and Connecticut.

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Knight in armor on horse

State unfair deceptive trade practices – what you should know

April 5, 2018

The National Consumer Law Center has issued its report on the unfair deceptive trade practices laws in the 50 states and the District of Columbia. The report highlights the strengths and weaknesses of the Unfair and Deceptive Acts and Practices (UDAP) laws that prohibit deceptive and unfair practices in consumer transactions, such as sales of cars and other goods, loans, home improvements, and mortgage transactions.

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Cover of US Senate Committee on Aging Report Top Ten Elder Scams

Elder financial abuse is one of top 10 elder scams

March 21, 2018

Top 10 Elder Scams The US Senate Committee on Aging released its report of the top 10 elder scams reported by callers to the Committee’s hotline number. While this is not a scientific methodology, it does give us an idea of some of the scams that folks are reporting. Elder financial abuse makes the list. This is useful information for anyone with a phone, email address, bank account, brokerage account, credit card, … basically anyone.

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Wells Fargo stagecoach

Shocking news! Investigation of customer abuse by Wells Fargo broker/advisory unit

March 1, 2018

If you think that today’s Wells Fargo is different from the old Wells Fargo, think again. Emily Glaser of the WSJ reports that Wells Fargo’s brokerage/investment advisory practice — its Wealth Management Unit — is being investigated by DOJ for improper sales practices. Hard to believe, isn’t it?

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