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HomeARS Update April 2013: The Nightmare Continues
Posted by Larry Doyle on April 25th, 2013 8:43 AM |
Five plus years after the meltdown of the largest fraud ever perpetrated on Wall Street, and the nightmare that defines the world of auction-rate securities goes on.
While Wall Street, Washington, and the media would very much like to leave the pain encompassing the ARS market largely in the rear view mirror, for many individuals who still hold on to the hope that they may ultimately get repaid in full from these widely distributed “cash-surrogate” instruments, the pain and anxiety remain front and center.
I continue to hear regularly from many individual ARS holders.
Not that anybody needs further reason to know that individual investors on Wall Street are at an enormous disadvantage in the face of captured and corrupted regulators and institutions that possess more information, but a recent piece of data I unearthed while working on my upcoming book (think I might be able to get Mary Schapiro to come to a book signing and autograph some copies!!??) speaks volumes to this point. (more…)
Calling All Auction-Rate Holders: OPEN FORUM
Posted by Larry Doyle on January 17th, 2013 8:57 AM |
We are now less than one month away from the five year anniversary of what I believe is the greatest fraud ever perpetrated on Wall Street. Regular readers know I am referencing the ARS (auction-rate securities) tragic debacle. I have been remiss in not addressing this situation for more than a few months and apologize for that.
Some past holders may wonder, “Is the ARS pain ongoing?” Indeed it is. Tens of billions of ARS remain outstanding. Some individuals and institutions still trapped in the painful ARS predicament may wonder if anybody even still cares about their plight. We do. Not only investors, but ARS issuers as well were ensnared by the Wall Street ARS trap and continue to experience very real pain in the process.
I broach this topic once again thanks to a reader who shared the following story about a communications firm entangled in the ARS mess the other day: (more…)
Those Uncle Sam Failed, Violated, and Left Behind
Posted by Larry Doyle on April 3rd, 2012 8:31 AM |
They are going to forget about me.
I have heard that line and iterations thereof from too many of our fellow citizens. Uncle Sam in the personage of Ben Bernanke, Tim Geithner, Henry Paulson, Mary Schapiro, John Boehner, Nancy Pelosi, Barack Obama and many others can talk about the actions they have taken and will take to save our economy and our nation; however, in the midst of their supposed efforts they have failed, violated, and left behind tens of thousands of our fellow citizens in their wake.
Of whom and to what do I refer? (more…)
Oppenheimer’s Al Loewenthal: Better to Remain Silent and Be Thought a Fool…
Posted by Larry Doyle on March 15th, 2012 8:06 AM |
Reactions I heard to the Jerry Maguire type bombshell launched by former Goldman exec Greg Smith ran the gamut yesterday.
There are those who questioned Mr. Smith’s sanity at committing career suicide. Others appreciated his airing of dirty laundry and “come to Jesus” expose. I personally believe if Mr. Smith wanted to lash out at those at Goldman who created the culture he came to detest, he may have been more laser like in his approach.
The hand grenade he launched into the Goldman camp was the equivalent of friendly fire and also hit plenty of very good people who work very hard to make an honest living everyday. I know very honest and very good people in the firm.
I welcome being the harshest critic of those who deserve to be called out. (more…)
ARS Investor Seeks Help for ‘Theft by Any Other Name’
Posted by Larry Doyle on August 15th, 2011 6:00 AM |
The twists and turns in the ongoing saga of the auction-rate securities nightmare are replete with some of the most gut-wrenching personal stories I have experienced.
Regulators like to trumpet the progress made on cleaning up the ARS mess over the years.
Let’s hold the applause for these regulators because a full three and a half years have passed and approximately $100 billion remains frozen in those ARS which were pitched as cash surrogate, money market equivalent securities.
Over and above the cash, little attention is paid by the media or others to elevate and expose the personal nightmares of those individuals and businesses which continue to hold these frozen ARS. (more…)
Calling All Auction-Rate Securities Holders: “A Break for 8 Banks” or Did the Fed Violate Your Property Rights?
Posted by Larry Doyle on April 14th, 2011 5:48 PM |
New information would seem to implicate the Federal Reserve for violating the property rights of tens of thousands of investors holding auction-rate securities. Could this be true? Let’s navigate.
I have been writing about the nightmare known as auction-rate securities since mid-January 2009. I often pause to reflect on ARS holders whom I have ‘met’ here at Sense on Cents but whom I will never truly know. I think of how their lives have been forever changed and negatively impacted from having been entangled in this ARS web. The pain shared in so many stories is very real.
I have also often thought that somebody or some institution within our government sacrificed the welfare (cash, mental, physical, emotional) of so many tens of thousands of individual ARS holders in order to help our large financial institutions. I shared that opinion in the midst of an interview with PBS last week. (The PBS documentary addressing the ARS travesty should run this summer.)
Today we learn that the Federal Reserve intervened in the midst of an SEC investigation of the ARS scandal in mid-2008 and ‘slowed the horses.’ (more…)
How Did FINRA Know the ARS Market Was Failing Well Before 2007?
Posted by Larry Doyle on December 1st, 2010 10:24 PM |
If you knew a market were starting to fail, would you step in and purchase that asset?
If that market were failing, but simultaneously being propped up by underwriters, do you believe regulators should protect you?
If that market were failing and a regulator charged with protecting you actually dumped some of those failing assets from its own portfolio, how would you feel?
If you owned some of these securities, do you think you might be protected by the regulator? The government?
Let’s reenter the world of auction rate securities and continue to bang the drum for those investors in America who have been so badly mistreated by the financial industry, the regulators charged with protecting them, and our government.
Although I have written voluminously on the auction-rate securities market, I was never fully aware of when auctions started to fail. Until now. (more…)
Calling All Auction-Rate Securities Holders
Posted by Larry Doyle on November 15th, 2010 7:15 AM |
Information is everything!!
A nation of laws will prosper if and only if the adjudication of disputes is handled in a truly robust fashion. This adjudication process should theoretically lead to the drafting and implementation of new legislation if and when necessary. While industry insiders will often lobby to influence this process both in the courts and in our legislative bodies, America needs real statesmen and true heroes who will champion worthy causes and pursue total truth, real transparency, and unbridled integrity.
The media can play a large role in highlighting and exposing injustices if it cares to perform its duties. Regrettably during our economic crisis of the last few years, the media has often largely shown itself to be as much part of the problem as part of the solution. Why do I write on this topic today? For the very simple reason that tens of thousands of our fellow Americans have largely been disowned and disenfranchised by our nation. Really? Unaccustomed hyperbole, LD? I think not. Let’s navigate further.
I have been an ardent supporter of all those in our nation today who continue to be stuck holding auction-rate securities. These people number in the many tens of thousands and their holdings run upwards of $140 BILLION. Ponder that for a second. How is it that with numbers of this magnitude, the hue and cry of the accompanying injustice is not ringing loudly across our nation. It should. (more…)
Future Financial Regulation: Not a Question of Sufficiency, But of Transparency and Integrity
Posted by Larry Doyle on May 18th, 2009 12:38 PM |
Will our future regulatory structure of the financial industry allow capitalism to thrive? Will the political wizards in Washington prioritize personal agendas and expediency over unquestioned transparency and integrity? I believe we are at a critical regulatory crossroads not seen since financial regulations implemented in the Securities Act of 1933.
Do the powers that be both in Washington and Wall Street understand the magnitude of responsibilities and obligations involved in this process? Initial returns are decidedly mixed. The debate by those intimately involved in the regulatory oversight is typically framed as a question of sufficiency. That is, does the industry have enough regulation or not?
The media often frame the debate in political terms between laissez-faire proponents and those favoring increased government intervention. Both camps are missing the bigger picture, because both camps are feeding from the same trough. Allow me to expound.
The critical regulatory question facing our markets is not of sufficiency but is one of transparency. Regrettably, both ends of the regulatory spectrum do not want to address this glaring shortcoming because it exposes the very nature of the incestuous relationship between Wall Street and Washington.
The mainstream media, to a large extent, is dependent on both Wall Street and Washington for their financial well being so they do not press or pursue the need for total regulatory transparency. Fortunately, Sense on Cents and other leading financial websites are not under this restriction.
Let’s dig deeper and review where regulatory developments stand currently. As the Financial Times reports, U.S. Poised For Finance Regulation Shake-Up:
Congress will next month start the biggest regulatory overhaul of the US financial system in decades, bringing into the open a frantic lobbying effort between banks, regulators and policymakers on what it contains and who pays for it.
The House financial services committee, chaired by Democrat Barney Frank, will hold hearings early in June into reforms outlined by Timothy Geithner, Treasury secretary, say people familiar with the timetable.
Regrettably, before the debate even begins the premise of sufficiency versus transparency is accepted without question. Well, Sense on Cents is questioning the lack of transparency and resulting integrity of the process, which by its very nature strongly influences the outcome. Allow me to be more specific. Much as the Parliament in the U.K. is being rocked by a current scandal over expenses submitted by legislators, I strongly exhort those who truly care about capitalism, free market principles, and our democracy to address the very nature of the relationship betwen the banks, regulators, and policymakers. (more…)
