Traditionally, a “hedge” is a fence or other boundary that protects one’s property. When someone “hedges their bet,” they avoid committing themselves to one specific decision—by putting something else out as a possibility. And then, of course, a hedge is an asset someone holds to protect oneself against a financial…
The Securities and Exchange Commission (SEC) Commission issued a new bulletin educating investors about performance claims. And this new bulletin is a good reminder to analyze performance claims on two separate but equally significant bases: How is the performance calculated and presented? How reliable is the performance claim? How is…
With their varying portfolios, hedge funds are not obligated to complete some of the registration and reporting requirements that apply to other types of securities investments. But that doesn’t mean that hedge funds are exempt from any reporting. Instead, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading…
In May of this year, a New York City jury convicted a man known as “Mr. T” for running a boiler room operation that defrauded dozens of American and Canadian victims. Of course, the defendant was not the famed actor. Instead, it was another man, Robert Lenard Booth. But the…
Continuing to award bounties to those who step up to report securities fraud, the SEC has recently awarded $5 million to a whistleblower for offering information and assistance. This information eventually led to a successful enforcement action where the SEC collected fines, sanctions, and other funds from the company. The…
Private placements are a specialized kind of securities offering generally open only to accredited investors—for the most part, high net-worth individuals and licensed brokers. Given the investors’ sophisticated understanding of securities transactions, private placements are not subject to the same rigorous disclosure requirements as public offerings. Because of this lower…
In one of the largest bounties awarded to a single whistleblower, the SEC in conjunction with another federal agency awarded a total $37 million to a whistleblower for information that led to two successful enforcement actions. The SEC, along with another federal agency that was not named, as well as…
We often hear about accounting fraud when a big case hits the news. For example: Xerox falsified its financial records for five years, inflating its earnings by $1.5 billion; Lehman Brothers failed to disclose an accounting loophole that reported short-term loans as sales; and Haliburton improperly overbooked cost overruns. When…
It’s a well-known rule in “polite society.” One simply should not discuss money. And when it comes to asking someone to divulge their salary, Miss Manners has admonished, “It is unequivocally impolite to ask anyone how much money they make. Even if he really wants to know.” And so perhaps…
In our last post, we were talking about how scammers are unfortunately robbing investors with claims that they can purchase pre-initial public offerings (IPOs). And how the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA), the not-for-profit overseeing broker-dealers, both effectively warn that, if someone’s not already…