The U.K. bank Barclays PLC was handed a $12.2 million fine and will be required to pay up to $96 million to customers who were improperly sold two stock-and-bond funds, according to an article in the Wall Street Journal by Margot Patrick. The settlement arose out of an investigation by the U.K.’s Financial Services Authority. […]
With interest rates rising, many fixed-income investors are looking for alternatives to traditional bond funds. In her Wall Street Journal article, “Are ‘Alternative’ Bond Funds Safe?” Eleanor Laise makes it clear that they are not safe. Rather, she describes how they use complex “hedge-fund-like tactics,” such as derivatives, credit default swaps, interest rate bets, currency […]
Institutional investors and Barclays Capital have a message for those who think the sovereign debt crisis is over: It isn’t. Demand for such investments has plummeted just as the governments are ramping up supply. Barclays surveyed 582 institutional investors, 82% percent of whom said they expected either debt restructuring, default or a full-fledged euro-zone crisis, […]
Amid rising losses in mortgage-backed securities, institutional investors in mortgage securities are teaming up to recover their losses, according to Ruth Simon’s Wall Street Journal article, “Mortgage Losses Build Team Spirit.” Investigations by state regulators into the “mortgage mess” and growing awareness of their fiduciary duties to shareholders and retail investors is spurring the spike […]
Although many analysts do not think “the bond market” as a whole is in a “bubble,” most analysts do think that bonds are becoming more risky, especially treasuries and high yield corporate bonds or junk bonds, according to a number of recent articles in the financial press. These articles include “Bond Markets Get Riskier,” by […]
Charles Schwab’s Total Bond Market Fund is the subject of another class action lawsuit against Schwab, according to a September 12 article by Dan Jamieson of InvestmentNews called “Another lawsuit filed over Schwab bond fund. The lawsuit reportedly alleges that, as of May 31, 2007, Schwab misrepresented the fund to investors as tracking the Lehman […]
Both risk averse and yield-hungry investors who have created a bubble in the market for bonds ? including both US Treasuries and corporate junk bonds ? are in for a rude awakening if things do not go just right, according to an August 22, 2010 InvestmentNews article, “The dangers of the growing bond bubble.”
It is no surprise that retirees are often the targets of investment scams. But it is a surprise that the scammers are often empathy-challenged senior citizens themselves, and that is surprising. Attorneys and advocates for the elderly are reporting an increase in the number of elder scams perpetrated people their age, according to an article […]
A United States District Court judge has ruled that a class action may proceed against Citigroup and others for making an array of material misrepresentations and omissions in public offering materials associated with bonds purchased by the plaintiffs (Reuters, “Judge Rules Bondholders Can Pursue Citigroup Suit,” July 12, 2010).
CIT Group Inc., GMAC Inc., Prudential Financial Inc., and over a dozen other financial institutions sold their bonds to individual investors after being spurned by their sophisticated institutional counterparties, according to an article by Zeke Faux titled “CIT Debt Sold to Widows Has Fine Print Pimco Resists,” Bloomberg. CIT, a commercial lender, filed a Chapter […]
