Cha Ching, Cha Ching! Money Doesn’t Grow on Trees but Uninformed Closed-End Fund Investors May Incorrectly Think So.

By Christopher Pugh, Fall 2014 Student Intern

money treeMany people looking to add income to their investment portfolio are considering closed-end funds. Purported benefits of closed-end funds include distribution rates higher than the income from mutual funds or stocks. But be aware: distribution rates are not the same as total returns. Importantly, investors should always ask two questions. Where the distributed income comes from? And how will that income effect my taxes? Continue reading

Wells Fargo Advisors Slapped with $5M Penalty for Failure to Maintain Controls

By Christopher Pugh, Fall 2014 Student Intern

controlAccording to a news release from the SEC, Wells Fargo Advisors admitted that an employee accessed and used a customer’s nonpublic information to engage in insider trading and will pay a $5 million penalty.  The SEC charged Wells Fargo with a failure to maintain controls, that is, they did not keep the customer’s nonpublic information confidential. Continue reading

Update on NASAA Focus on Senior Investor Issues

By Patricia Uceda, Fall 2014 Graduate Research Assistant

seniors2Yesterday, we told you about NASAA’s newly formed Committee on Senior Issues and Diminished Capacity. NASAA also recently announced the formation of an advisory council which will provide guidance to the Committee. The advisory council will consist of a panel of experts from diverse backgrounds including government, business, senior advocacy organizations, academic, medical practitioners, and lawyers. The council and committee will work together to tackle the wide range of issues facing senior investors as well as security regulators. Continue reading

SEC and NASAA Focus on Senior Investors

By Patricia Uceda, Fall 2014 Graduate Research Assistant

seniorsSEC Commissioner Luis A. Aguilar recently made a public statement regarding the need to focus on protecting senior investors who are being increasingly targeted by investment fraudsters. One in five Americans aged 65 or older have already been victimized by financial fraud. Even more alarming, 84% of experts specializing in investment fraud and financial exploitation of senior citizens agree that the problem of fraud targeting the elderly is only getting worse. Continue reading

Wednesday’s Word: Stock

By Kori Eskridge, Fall 2014 Student Intern

wall streetStock is a common phrase in everyday investing, although many people do not know much about what stock actually is. When investing in stock, you are actually buying small pieces of ownership in a company. As a partial owner, you are eligible to receive money back on your investment through the receipt of dividends or capital gains. Dividends are portions of profit that are paid back to investors from the company when the company is profitable. Capital gains earn a return when you trade a stock for a higher price than you paid for it. Continue reading

Are You Putting Your Trust (and Your Money) in a Money Manager or Dishonest Bilker?

By Kori Eskridge, Fall 2014 Intern

think On September 8, the SEC charged a Minneapolis-based hedge fund manager Steven R. Markusen and his investment firm with bilking investors out of more than $1 million dollars. The advisory firm was facing shrinking management fees due to the hedge fund’s poor performance. As a remedy, Markusen took investors’ funds to reimburse the advisory firm for fake research expenses. Adding insult to injury, much of the money ended up in Markusen’s personal checking account and was used to fund a lavish lifestyle including country club dues, boarding school tuition and a luxury car.   Continue reading