The SIPA

  Brokers Beware   With each passing year retired Americans have felt the squeeze of the artificially lowered interest rates that have been crippling this country without so much as a whimper from AARP and its lobbyist friends.  Years ago, many Americans would work their whole life and save up a couple hundred thousand and […]

If you recall, In January we released a story tracking Berkshire Hathaway to Goldman Sachs and other powerful Wall Street names Click here to read and suggested that the Wizard of Omaha may not be as clairvoyant to market and economic trends as he has indicated. I even received some scathing e-mails from readers who were aghast that I would even suggest that Berkshire would trade on inside information. A few short weeks later we learned that the CEO of Berkshire was trading on inside information:

Given the fact that our highly regulated brokerage industry caused the collapse of the free markets and our economy, I don’t think we are in a position to ask that others fall under our regulation. I’m not sure we should be worrying about more Madoff scams when in fact FINRA dropped the ball on both Madoff and Sanford as well as a dozen others.

The decision by the Trustee is puzzling on so many levels I almost do not know where to begin so In keeping with my theme from my speech last week to Broker Dealers at the Financial Services Exchange meeting in Atlanta: Follow the money!

I could not understand what sort of Business savvy former and current regulators would bring to a board. They obviously do not know marketing nor food coloring techniques that appeal to 5 year olds eating macaroni and cheese so why the mutual attraction ? As always just ask one simple question: How is Goldman Sachs involved in this?

There are so many people that I would like to thank for being a part of my life but it would be impossible to list them all here wouldn’t it? On second thought, maybe its time to live for NOW and not worry about time so in no particular order I just want to thank the following people for being an important part of my life in 2010 and hopefully in the years to come…

Mark Madoff, the troubled son of Ponzi master Bernie Madoff was found dead over the weekend from an apparent suicide. In other news, Frank Pantangeli slit his wrists while in prison just hours before he was scheduled to testify against Michael Corleone, apparently he was distressed that his brother was flying back to Sicily. In Brooklyn, Frankie Carbone accidentally locked himself in a frozen compartment of a meat truck and froze to death and Jimmy “Two Times” was the victim of a robbery on a deserted street.

Once again Good ol Goldman Sachs is in the news for all the wrong reasons. Maybe its time to lay the hammer down at Goldman? Of course not, why would you bother regulating them when everyone makes so much money off their illegal schemes...tune in and learn How this is not new and how it will continue for generations.

Am I the only one noticing that almost all economic data coming out of our Government is not only false and misleading but is often times wrong? More importantly , most of the Financial press out there seems to roll over and not even question numbers that are either flat out wrong or are more propaganda then reality. Take today’s jobless claims for instance. The Associate Press reported: “New unemployment claims fall to lowest in 2 months

As I read the SEC press release on Friday charging Goldman with fraud I couldn’t help but laugh and wonder if they contacted Mario Puzo and asked for advice on how to get the swirling controversy around them to subside. The fraud charges are comical at best due to the fact that one person from Goldman was named in the SEC indictment.

Rants and raves from the SIPA C & C music factory had a whole generation of people uttering these now famous words back in the 1990’s. As we review some of the changes that are occurring right before our eyes with the financial system, its apparent that there is more confusion then ever before instead […]

Perhaps congress can get together and grant the Fed the right to control interest rates while they are at it? Maybe Congress could give the SEC the power to curb or eliminate things like naked short selling, buying mutual funds yesterday with today’s news and cracking down on illegal ponzi schemes?

mediocre stockbroker duped Wall Street titan Merrill Lynch into believing he was a portfolio powerhouse -- deserving of a $780,000 loan his first day on the job -- then used the dough to buy a Ferrari and split, prosecutors said yesterday.

Has there ever been and administration as crossed and confused as this one? The Bush administration was consistently Pro business and in many respects Consistently poor!. However, the Bush administration made clear its intent to allow free markets to prevail no matter what and even if Oil hit $500 per barrel, a free market system was better then Government intervention. The Obama administration however is trying to be all things to all people.

The new Obama administration promised change and change was delivered all right. Trillions of dollars were borrowed from China in an effort to get the economy and more important the jobs created. One year later and the administration is learning the hard way what all of us in the Brokerage world already know: The Government does not create lasting jobs, the private sector does.

Now that the figures are finally released I would like to take a moment and remind everyone that members of the original dissident group known as the Financial Industry Association (FIA) were called liars because they claimed that the merger could pay to members much more then the mere $35,000 that the NASD was offering in exchange for giving up their voting rights. In fact, the former head of NASD even said in a podcast to all members that “It just isn’t true what members of the FIA are saying”.

Previously, we here at The SIPA have questioned the investment losses of FINRA and wondered out loud if they may have invested in Madoff….well we could be about to find out.  A lawsuit has been filed against FINRA by a member firm that alleges conflict of interest as well as demands the books of FINRA […]

On Monday August 3rd the SEC announced it was bringing charges against Bank America for fraudulently representing to shareholders that bonuses would NOT be paid to Executives of Merrill Lynch and then disbursing over 5 BILLION in bonuses simultaneously with the approval. Incredibly, BOA announced later that day that they had agreed to terms with the SEC and would pay a 33 million dollar fine to settle all charges.

SMALL FIRM SIPC TAX! How the Government is taxing small businesses Recently sticker shock had eyes popping out of their head all across America as Firm owners received their SIPC bill. For nearly 14 years the SIPC insurance cost of a brokerage firm was $150.00 flat fee paid annually. That changed dramatically for firms in […]

Sweeping The Scene Clean of Madoff’s Victim’s Blood Bernie Madoff plead guilty to 11 counts of fraud yesterday in Manhattan. While acknowledging that we are not Crime Scene investigators in New York, Vegas or Miami, the SIPA is shocked at the apparent cover up in the whole Madoff mess.  Although I’m no genius, I do consider myself […]

How To Insult The American Public With A Smile On Your Face Today the SEC Chairman Christopher proclaimed that “ The SEC Failed to Investigate and Probe Madoff”.  (Click here to read story). While this might sound to some of you as a small act of contrition and public acknowledgement of his agency’s failings, this […]

Why Madoff will not be an isolated case Over a year ago we questioned whether there was sufficient regulation of the Hedge Fund industry (click here to read).  In light of the Madoff Meltdown the important question brokers must be asking themselves now is not IF more regulation is necessary, but should one remove one’s clients’ […]

In several articles earlier this year, we broached the unthinkable: that the End Of FINRA was potentially at hand. Since then, we have seen much in the way of de-facto re-organization, with the Bulge Bracket firms – such as they still exist – coming under direct control of the Treasury. Ironically, what this means is […]

Today is a very sad day on Wall Street. Lehman Brothers (LEH) has declared Bankruptcy and Merrill Lynch ( MER) has been bailed out in a fire sale to Bank of America. Two of the most well known names in Wall Street history have flamed out within a matter of moments and American investors have been shaken to their core. How could this all happen so quickly and how in the world did these two titans of Wall Street get into this mess to begin with

The Demise of Wall Street's elite firms could reshape Regulation. The sudden and shocking demise of the Wall Street elite has left an industry in shambles and the American investor in jitters. The collapse of the largest names on Wall Street is being felt all across the world and has caused the Political landscape to suddenly pay more attention to the Economy and less attention to Governor Palin's "my space page". President Bush cancelled his fund raising campaign drive and Barrack Obama is already running commercials blaming the Republicans, while lost in all this is John McCain's suggestion that "Chairman Cox should be fired for betraying the public trust and falling asleep at the wheel"