Court Okays 120 Days to Move Fee-based Brokerage Accounts 

Jun 27, 2007,

By John Churchill

Broker-dealers got the breathing room they hoped for on Monday with regards to complying with the recent court ruling that outlaws fee-based brokerage accounts. A federal court granted an SEC-requested 120 day stay, until October 1st, for firms to do away with their fee-based brokerage accounts per a federal court ruling on March 30th banning the accounts. (Read Registered Rep.’s May cover story about the pain of the new reality.)...

Sub-Prime Collapse Bombs Into Brokerage Industry; Indie Brokerage Can’t Meet Margin Calls 

Jun 22, 2007,

By John Churchill

The sub-prime lending meltdown could be spreading. It’s one thing for Bear Stearns to have to arrange a $3.2 billion bailout of one of its hedge funds, but, for the brokerage industry, the problem just hit closer to home. ...

New Name, New Agenda for NASD/NYSE Entity 

Jun 21, 2007,

By John Churchill

Mary Schapiro unveiled yesterday the new name it has selected for the new NASD/NYSE regulatory combo: SIRA, which stands for Securities Industry Regulatory Authority, but sounds a little bit more like some ugly winged creature out of Dungeons & Dragons. Taken together with the SIA’s recent merger-induced name change to SIFMA (which sounds more like an affliction) securities industry organizations are on an acronym-picking roll. Not....

Smith Barney Golden Handcuffs Hard to Crack 

Jun 21, 2007,

By Christina Mucciolo

A New Jersey Appellate Court ruled in favor of Smith Barney’s deferred compensation plan on June 15, reversing a lower court’s decision that said the firm’s Capital Appreciation Plan (CAP) violated New Jersey wage laws. The decision is another notch in Smith Barney’s belt, whose CAP plan has often been the target of broker lawsuits, though the firm rarely loses....

Fund Fees Sink to Lowest Level in 25 Years, but Why? 

Jun 20, 2007,

By Kevin Burke

Individual investors are paying less to own mutual fund shares, as fees and expenses have hit their lowest level in more than 25 years, according to research published Tuesday by the Investment Company Institute. In 2006, fund shareholders, on average, paid 107 basis points or 1.07 percent of assets in fees and expenses, including loads, which is four basis points lower than in 2005. Expense ratios on equity funds declined a combined 7 basis points during 2005 and 2006, the ICI says. If that rate of decline were to be sustained, stock fund investors would save roughly $4.6 billion a year....

Investment Banks Win Major Antitrust Victory 

Jun 19, 2007,

By Christina Mucciolo

The Supreme Court ruled in favor of 17 major investment banks today in an antitrust lawsuit filed by investors who claimed the banks manipulated the IPO market in the dot-com boom years between 1997 and 2000. According to Securities news law blog, SECLaw.com, in a seven to one vote, the court gave the banks “broad implied immunity from antitrust lawsuits, ruling that antitrust laws do not apply to the syndication and marketing techniques used in IPOs.”...

Wachovia Extends Olive Branch to A.G. Edwards Reps. Will They Accept? 

Jun 15, 2007,

By Kevin Burke

Just 15 days after it announced it was buying A.G. Edwards, Wachovia Securities has announced its retention package for A.G. Edwards reps. ...

Merrill Requests End to Discovery in Racial Discrimination Suit 

Jun 15, 2007,

By Halah Touryalai

Registered Rep. reported Thursday that a judge ruled in favor of Merrill Lynch, which had requested an end to the discovery phase in a racial discrimination suit filed against the firm. Merrill does not want to have to hand over any more new documents to plaintiffs lawyers. However, the magazine made an error: The judge in the case has referred the decision to a magistrate judge and a ruling has yet to be made....

Pilgrim Baxter’s Payback 

Jun 14, 2007,

By Kevin Burke

Justice tends to be far from swift when it comes to market-timing fraud. The Securities and Exchange Commission announced this week that it is returning ill-gotten gains to Pilgrim Baxter (investment advisor to the PBHG fund family) shareholders, three and half years after the fund company was engulfed in a trading scandal. Not only has it taken a long time, but investors are getting their money back in bits and pieces. ...

Hedge Wars 

Jun 14, 2007,

By Christina Mucciolo

What’s funnier than a hedge fund manager getting worked up over a garden hedge? Well, probably a lot of things. But in any case, James Chanos, head of short-selling hedge fund Kynikos Associates, is at war with his East Hampton neighbor Mark Spilker, managing director of Goldman Sachs, after the latter hired a work crew to tear down a hedge on Chanos’ property so he could widen his own path to the beach, according to an entry on the The New York Times’ financial news blog, DealBook. ...

Retirement Plan Participants Want Financial Planning 

Jun 12, 2007,

By Christina Mucciolo

The subject of workplace water-cooler conversations could become increasingly financial in nature. That’s because, when it comes to retirement planning, employees with 401(k)s and other defined contribution plans want more financial planning, and they aren’t getting it through their retirement plans, says Spectrum Group in a report released today called, “Financial Planning at the Workplace.”...

Wal-Mart offers online brokerage services 

Jun 11, 2007,

By Christina Mucciolo

To an almost comic degree, Wal-Mart has an insatiable appetite for expanding the reach of the products and services it offers, and now, behold, the behemoth has ventured on to your turf: financial advice. Meet Wal-Mart Easy Investing by Sharebuilder....

Wachovia Accelerates Hiring in Private Bank 

Jun 8, 2007,

By Christina Mucciolo

Under plans to expand its private banking presence, Wachovia Securities said on Thursday it would hire about 300 private bankers over the next three years, more than doubling its number of private banking relationship managers, according to a release....

CFP Board Approves Tighter Code of Ethics 

May 31, 2007

Today the Board of Directors of the Certified Financial Planning Board of Standards Inc. (CFP Board), which controls the CFP designation, approved a second round of revisions to its code of ethics that were proposed in March, essentially strengthening the duty of care CFP certificants must use with regards to their clients. ...

Wachovia Buys A.G. Edwards for $6.8 Billion, Creating New Rival to Merrill, Smith Barney 

May 31, 2007,

By Kevin Burke

Wachovia just launched itself into the big leagues. In a blockbuster deal this morning, Wachovia Corp. announced that it will acquire A.G. Edwards for roughly $6.8 billion in cash and stock to create a firm with $1.1 trillion in client assets under management and nearly 15,000 financial advisors. That puts Wachovia among the top three competitors in retail brokerage--in terms of both assets and advisors--and retail banking....

Smith Barney's Krawcheck to Smooth Out Comp. Plan 

May 29, 2007,

By Kevin Burke

Smith Barney’s top executive last week told the firm's army of more than 13,000 financial advisors that she will tweak the brokerage giant’s new compensation plan in an attempt to address their repeated complaints over its complexity and, in some cases, unfairness....

Spitzer Forms Panel to Clean up NY Regulation 

May 29, 2007,

By Kristen French

In his new role as New York governor, Eliot Spitzer is joining forces with those he used to terrorize—Wall Street chief executives—to modernize financial services regulation in the state, the Financial Times reports. Spitzer is forming a panel with the executives, as well as with lawyers, consumer groups and regulators to streamline regulations and make New York more competitive with London, without sacrificing investor protection. The committee will be chaired by Eric Dinallo, the New York insurance superintendent, and will seek to simplify regulation of insurance companies state-chartered banks and securities dealers. ...

Mother Merrill Reshuffles Management Team 

May 23, 2007,

By Kevin Burke

Merrill Lynch today announced a firm-wide reorganization that introduces a new reporting structure while silencing rumors that retail brokerage head Bob McCann may have been on his way out....

Sick Days 

May 22, 2007

Does Merrill Lynch have an employee attendance problem? Nah, Mother Merrill may have been too generous, is all. The firm recently announced a new sick-day protocol that, upon first blush, appears to be rather severe. Gawker.com, the pop-culture gossip blog for hip New York professionals, has posted what it describes as a bona fide internal memo sent by an employee that outlines Merrill’s “amended” policy on employee sick days. The amended policy was made affective on May 14....

Schwab Institutional President "Retires" 

May 21, 2007,

By Halah Touryalai

Deborah McWhinney, president of Schwab Institutional, retired this morning at the age of 52, something communicated to the firm’s advisors and employees via a trio of e-mails--first from Schwab chairman and CEO Charles “Chuck” Schwab, then from Deborah McWhinney herself, and finally, from Schwab COO Walt Bettinger....

Massachusetts Enforces Rules On Use of Senior Designations 

May 17, 2007,

By Halah Touryalai

This week Massachusetts fired a round in the new regulatory war waged by state securities regulators against the use of senior designations to commit senior fraud. The Massachusetts State Securities Division adopted the nation’s first regulation requiring advisors to advertise only accredited credentials, or credentials that can clearly demonstrate that they call for meaningful expertise, when offering financial advice to elderly clients....

“Merrill Lynch” Rule Dead, But SEC to Ask for Time 

May 14, 2007,

By John Churchill

The SEC isn’t going to fight the March 30 D.C. Court of Appeals ruling that vacated Rule 202, the broker/dealer exemption (a.k.a. the Merrill Lynch rule)—they’re just asking for a little mercy for firms that have to adjust. The securities industry still hopes that the SEC will somehow come up with a new plan to keep the fee-based brokerage account (or something like it) from coverage by the Investment Advisers Act of 1940, which mandates that to offer financial advice, you have to be a fiduciary....

NASD Chair Sees Better Oversight of New Products 

May 14, 2007,

By Kevin Burke

WASHINGTON, D.C. – Speaking at the 49th annual Investment Company Institute general membership meeting, NASD Chairman Mary Shapiro told mutual fund executives she sees better regulation of investment products as a result of the expected merger of the NYSE and NASD regulatory bodies. While this potentially is better news for investors, purveyors of mutual funds may find themselves in the crosshairs when bringing more nuanced products to market....

SEC Impostors on the Loose 

May 10, 2007,

By Kristen French

Crooks come in all shapes and sizes—even, apparently, in the guise of SEC examiners and staff. The SEC issued an alert Thursday to securities industry firms, warning them to keep an eye out for impostors—individuals pretending to work for the SEC. Not the most menacing of disguises, you might think. But on the other hand, regulatory fines and bars can hurt. ...

At Annual Confab, ICI Chairman Defends Mutual Funds’ Fees; Bogle Shakes His Head 

May 10, 2007,

By Kevin Burke

WASHINGTON, D.C. – Speaking at the Investment Company Institute’s general membership meeting here today, Chairman Martin Flanagan told attendees that legislators’ concerns over mutual fund fees, particularly in 401(k) plans, may be misplaced. Such remarks left Jack Bogle, the industry’s scold and founder of Vanguard, who was in the audience, shaking his head. ...