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Posts Tagged ‘Bear Stearns’

How Bear Stearns Really Screwed Investors

Posted by Larry Doyle on November 12th, 2012 8:57 AM |

The Wall Street Journal reports this morning that JP Morgan will merely pay a fine for transgressions that occurred at Bear Stearns prior to the large money-center bank’s life-saving takeover of the former Wall Street broker.

With merely a fine to be paid, global investors and American taxpayers are once again left scratching their heads wondering if the transgressions involved happened without any sort of meaningful human involvement. I mean, how is that JP Morgan will pay a fine likely in the hundreds of millions of dollars and not one single individual is likely to face the music? More on that in a second. What today’s WSJ report and many other reports fail to identify is what really happened at Bear Stearns. Let’s navigate.

Investors got screwed by the actions at Bear Stearns in two ways:  (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…)

Sense on Cents Calls for Independent Investigation of FINRA

Posted by Larry Doyle on March 27th, 2010 4:51 PM |

PLEASE READ and ENDORSE THIS CALL for an INDEPENDENT INVESTIGATION. PLEASE SHARE. Thanks!! LD

I have publicly stated time and again that I believe the Wall Street self-regulatory organization, FINRA, did sit and likely still sits at the nexus of the Wall Street-Washington incest that has brought our nation’s economy to its knees.

Regrettably, we have had no Congressional inquiries into the failures at FINRA. Dare I say, we have had no public pressure from the media to drive a Congressional inquiry.

I am tremendously sickened by Congress not working for America’s citizens interests by investigating FINRA. Please recall that FINRA not only failed to protect investors, but there are strong allegations that FINRA itself participated in some of the greatest frauds on Wall Street via its own internal investment portfolio. Which frauds?

We know they dumped $647 million auction-rate securities in mid-2007 and likely front ran the ARS market while doing it. I unearthed the fact that FINRA owned these ARS in January 2009 when reading FINRA’s 2007 Annual Report. Meanwhile, $150 BILLION held by thousands of investors remains in frozen ARS investments.

There is an outstanding allegation that FINRA invested its own funds in Bernie Madoff. We know they failed to properly regulate and monitor Lehman, Bear Stears, and Merrill Lynch. How much more should Congress need to know?

FINRA needs to be introduced to the American public and investigated by Congress. FINRA has not even received direct focus or attention in Senator Dodd’s proposed Financial Regulatory Reform.

We can sit idly by and allow Wall Street and Congress to dictate to us or we can do something. I choose the latter. I want this post and this site to be the lightning rod to bring attention to how Wall Street’s self-regulation, embodied in FINRA, drove our economy into the ditch.

Please add your support by leaving a comment endorsing this investigation. I intend to keep a focus on this topic until FINRA’s failures are fully exposed and people are held to account. Get your friends and colleagues to do the same. If we can create a groundswell of support, I feel confident I can get some selected media friends to pick this up. From there, I welcome leading this march to Washington.

The American public and American investors deserve nothing else.

Any questions. Please do not hesitate to ask here or write me at senseoncents@aol.com.

Who’s with me?

FINRA must be independently investigated. America needs to learn how the Wall Street cop was not only asleep, but also in bed with the financial industry as Wall Street brought America to the brink of disaster.

LD

Wall Street Isn’t Capitalism!!

Posted by Larry Doyle on March 22nd, 2010 1:53 PM |

Is our nation trending away from the principles of capitalism which built the foundation upon which we rest? Another healthcare whine? Nope. I am talking about the once proud pillars of capitalism centered on lower Manhattan, otherwise known as Wall Street.

Let me simplify the debate. What is capitalism? Are you willing to accept the definitions provided by my Investing primer, Investopedia?

What Does Capitalism Mean?
An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.

What does the Financial Times have to say about our financial system this morning?   (more…)

To Wall Street, Washington, and World: “Fool Me Once…

Posted by Larry Doyle on March 11th, 2010 2:08 PM |

…shame on you, fool me twice, shame on me!!!

There are a handful of financial journalists who pull no punches in telling the absolute truth and in providing real transparency. Bloomberg’s Jonathan Weil holds a special spot in the Sense on Cents Hall of Fame for his determination in calling people and institutions on the carpet. From Wall Street to Washington to around the global financial landscape, Weil leaves no stone unturned in promoting integrity. His commentary today is superb. Please share it with friends. Weil writes, Greece Lifts a Page From Citigroup’s Playbook:

Is it too much to ask for the world’s titans of government and finance to speak credibly when they open their mouths? (more…)

FINRA Board to Address Allegations of Schapiro Misconduct

Posted by Larry Doyle on February 4th, 2010 11:40 AM |

Are the wagons circling around Mary Schapiro and her former FINRA colleagues?

Regular readers of Sense on Cents are familiar with the issues and concerns I have raised repeatedly with Wall Street’s self-regulator, FINRA. I continue to believe the issues embedded within this self-regulatory organization lie near the heart of what I deem the Wall Street-Washington nexus.

Perhaps America will learn more about these issues soon. Why? Next week, FINRA’s Board of Directors will address alleged wrongdoings by Ms. Schapiro et al. What are the issues?   (more…)

Bear Stearns: R.I.P

Posted by Larry Doyle on January 8th, 2010 12:09 PM |

As of today, Bear Stearns is no longer.

What? I bet you’re thinking Bear was taken over by JP Morgan in spring 2008 and ceased to exist when the takeover was approved a few months later. You’d be right. I am right also.  How so?

As with many mergers and takeovers, the name of the acquired firm continues to be utilized within certain divisions. That is exactly the case with Bear Stearns, as those two storied names continued to be utilized in the Private Client Services unit at JP Morgan. Until today. (more…)

My Thoughts on the Bear Stearns Hedge Fund Case

Posted by Larry Doyle on November 11th, 2009 10:26 AM |

Ralph Cioffi and Matthew Tannin

Ralph Cioffi and Matthew Tannin

Does yesterday’s verdict in the Bear Stearns hedge fund case establish a precedent that precludes likely guilty verdicts in other financial fraud cases? Let’s hope not.

I did not sit in on this trial, so I am not about to weigh in on the verdict. Consensus opinion from those who did sit in on the trial seems to agree that the prosecution presented a very weak case. Additionally, the prosecution was challenged from the standpoint of not being able to admit selected and seemingly incriminating e-mails as evidence.

The not guilty verdict in this specific case does not preclude Cioffi and Tannin from facing other charges. What was the key to this case? The Wall Street Journal sheds light on this case and verdict in writing, U.S. Loses Bear Fraud Case:

The acquittals are a setback for the U.S. attorney’s office in Brooklyn, N.Y., which along with several other offices is investigating Wall Street for possible criminal wrongdoing stemming from the credit crisis, including at Lehman Brothers Holdings Inc. and American International Group Inc. In Tuesday’s case, the question boiled down to this: Were the two men misleading investors, or simply putting a positive spin on sagging returns? (more…)

Mentoring Is Good Business

Posted by Larry Doyle on October 29th, 2009 12:33 PM |

I am humbled when other outlets ask for my opinion and thoughts on financial topics. To that end, I have provided a few guest commentaries for UK-based  eFinancial Careers.

On the heels of writing “Fatal Character Flaws Bring Down Wall Street Titans”, a representative of eFinancial Careers asked me to further expound on this topic. I welcomed the opportunity and wrote this guest commentary:

How is it that an individual with untold hundreds of millions of dollars in wealth could put himself in a position of risking it all?

Welcome to the world of Raj Rajaratnam, the owner of the hedge fund Galleon and the major kingpin arrested in the most recent insider trading scandal to rock Wall Street.

Why would Rajaratnam take such professional risks? (more…)

Fatal Character Flaws Bring Down Wall Street Titans

Posted by Larry Doyle on October 20th, 2009 8:49 AM |

Raj Rajaratnam

How is it that an individual with untold hundreds of millions of dollars in wealth could put himself in a position of risking it all?

Welcome to the world of Raj Rajaratnam, the owner of the hedge fund Galleon and the major kingpin arrested in the most recent insider trading scandal to rock Wall Street.

Who is Raj Rajaratnam and why would he take such professional risks? We learn about Rajaratnam from a London based financial site, Here Is The City:

He was born in Sri Lanka, attended S. Thomas’ Preparatory School, Kollupitiya, then moved to England to complete his schooling, and studied engineering at the University of Sussex. Rajaratnam earned an MBA from Wharton in 1983. He is married with three children.

Rajaratnam, a Tamil self-made billionaire hedge fund manager, is the 236th richest American according to Forbes (2009), with an estimated net worth of $1.8 billion.

The hedge fund manager started his career as an analyst at the investment banking boutique Needham & Co., where his focus was on electronics. In 1991, he became the President of the bank at the age of 34. At the company’s behest, he started a hedge fund, Needham Emerging Growth Partnership in March 1992, which he later bought and renamed ‘Galleon’.

Initially invested in technology stocks and healthcare companies, he says his best ideas come from frequent visits with companies and conversations with executives who invest in his fund.

He has made more than $20 million in charitable donations in the last five years. In September 2009, Rajaratnam pledged to donate $1m to help the Sri Lankan government with the rehabilitation of former LTTE combatants. He has also donated generously to clear land mines in the war-affected areas in Sri Lanka, and was also a contributor to various causes that promoted development in the Indian subcontinent and programs that benefited lower income South Asian youth in the New York area. (more…)






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