B-Ds’ Fiduciary Obligations Already There, Say Courts And Arbitrators
Financial Advisor Magazine
Tamar Frankel, School of Law
The Securities and Exchange Commission has not yet decided whether broker-dealers should be given a fiduciary responsibility…
Insider-trading scandal poses risks to KPMG’s reputation
Los Angeles Times
Tamar Frankel, School of Law
A former senior KPMG auditor’s leaks could threaten the reputation of one of the country’s biggest accounting firms, industry experts said…
Expert quote:
“They didn’t hide it. They didn’t tell half-lies. They didn’t sugar-coat it.”
Fund Directors Meet Fresh SEC Scrutiny
Barron’s (subscription required)
Tamar Frankel, School of Law
Life is changing for mutual-fund directors…
Expert quote:
“The directors, until now, were out of it.”
U.S. approves Nasdaq payback plan for Facebook IPO, UBS unhappy
Reuters
Tamar Frankel, School of Law
Regulators approved Nasdaq OMX Group’s $62 million compensation plan for firms that lost money in Facebook Inc’s glitch-ridden market debut, a victory for the exchange operator that also set the stage for potential lawsuits from firms seeking more…
Expert quote:
“If Nasdaq had to make whole all the brokers that lost money in the IPO, it might bankrupt the exchange, which could end up driving more trading onto less transparent venues, such as dark pools.”
Fund Directors Are Feeling the Heat
Wall Street Journal (subscription required)
Tamar Frankel, School of Law
They met 14 times in three months…
Expert quote:
“The directors, until now, were out of it.”
BofA Settlement Process ‘Seriously Flawed,’ Report Says
Bloomberg
Tamar Frankel, School of Law
Bank of America Corp.’s $8.5 billion mortgage-bond settlement was reached through a “seriously flawed” process, said an expert for American International Group Inc. (AIG), which has challenged the deal…
Expert quote:
“The process in which the settlement was negotiated and reached is seriously flawed, as the trustee acted in conflict of interest and failed to exercise due care.”
Author Cornwell Wins $50.9 Million Lawsuit against Financial Manager
Accounting Web
Tamar Frankel, School of Law
Best-selling mystery writer Patricia Cornwell won a $50.9 million judgment February 18 after a federal court jury in Boston unanimously found that her former accounting and business management firm, and a former principal in that firm, acted negligently and in breach of fiduciary duties in managing the finances of her and her partner, Dr. Staci Gruber…
Expert quote:
“Financial advisors should have no conflict of interest when giving advice. Focus on the clients.”
Analysis: Do arbitration pacts go against clients’ best interests?
Reuters
Tamar Frankel, School of Law
A state regulator is taking issue with arbitration agreements many registered investment advisers require their clients to sign when they open accounts, saying they conflict with a fundamental duty to serve their clients’ best interests…
Expert quote:
“Even if the practice is legal, it could raise questions among potential clients about the adviser’s integrity, in a relationship rooted in trust, not a contract. Asking a client to sign a waiver can undermine that trust early in a relationship.”
Legal scholar sees U.S. broker reform as no-nonsense measure
Reuters
Tamar Frankel, School of Law
Tamar Frankel knows it will be hard to shrink a sales-driven culture amongst securities brokers – an ethos that can force investors to become financial experts to safeguard their interests…
The Lure of Ponzi Schemes
Kiplinger’s Personal Finance
Tamar Frankel, School of Law
As swindles go, Ponzi schemes are about the most puzzling…
Expert quote:
“You see it at the roulette table, and you see it in victims of Ponzi schemes.”
