The SEC in Action... err, Partial Action The media are now piling on the SEC and the Madoff failure, something that we highlighted last week. Reporting to the SEC We suppose that other investment advisors have made reports to the SEC.  We have done so on two occasions.  In both cases there was a slam-dunk violation of the '33 Act, a stock offering that was obviously fraudulent, not meeting the terms of the Act. The SEC does not respond to reports -- not at all.  There is not even an acknowledgment.  In one of our reports, the illegal fund was quickly closed down.  The reported losses were in the tens of thousands, but who knows how much it really was.  We have no idea whether our report was instrumental, but the timing suggested that it was.  The other guy continues to ...

Survey; U.S. began recession in April; Target 3Q Profit Down 24%; Merrill Lowers 2009 Brazil Growth to 2.9%; Hong Kong Officially in Recession; SEC Charges Cuban with Insider Trading; Lowe’s Revenue Climbs; October Industrial Output Rises

The U.S. economy entered recession in April and will last a total of 14 months, according to a survey of economists by the Federal Reserve Bank of Philadelphia. The survey also predicted that non-farm payrolls would contract by 222,400 jobs during the fourth quarter, Reuters reported. Target Corp. (TGT) saw its profit drop by 24% in the third quarter, as fewer shoppers showed up at the retailer. Though slightly better than the average forecast, it marked the fifth consecutive drop in quarterly profit, Reuters reported. Merrill Lynch lowered its 2009 growth estimate for Brazil from 3.1% to 2.9%. ...

If the new president looked a little, well, burdened on election night, chances are he’s aging a couple of years in the six-hour span between the release of unemployment figures this morning and his first news conference as president-elect this afternoon.

 

6.5% unemployment in October — worst since early Clintontime.  Worse still were the revisions of the August and September numbers.  And as Karl Denninger noticed, the number of unemployed plus the number of people working part-time who’d like to work full-time now tops 11%.  (And who knows what the real figure would turn out to be once John Williams applies Carter-era standards to the numbers.)

As I write, the president-elect is meeting with his “Transition Economic Advisory Board,” his temporary brain trust as it were.  The names on the panel are, well, interesting.  Some of the faces from I.O.U.S.A. are there.  But one has to wonder if

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Seton Securities Group has been shorting small-cap companies such as OpenCell BioMed, Inc. (OCBM.OB) and Tri-Star Holdings, Inc. (TSHL.PK). Today we attempted to speak directly to Seton Securities’ President regarding this issue, but he declined to provide any details of the SEC ongoing investigation of the shorting of stocks and wouldn’t comment on the possibility of the SEC requesting records or other information from his company or others that are continuing to short stocks.

He even declined to give his full name. However, he did say they have not heard from federal investigators and have “no comment” regarding the shorting of stocks.

In mid-September, the SEC announced that would be expanding their ongoing investigation into possible market manipulation. SEC Chairman Christopher Cox stated, “Investors have a right to know that the rule of law is being enforced and that our capital markets are not being manipulated. We are working together with our

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SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Seven: Executive Compensation - continued from Part Three of the SIBORAP report.

Every dollar paid to corporate executives, directors, and employees (in any form whatsoever) in excess of two million dollars would be matched by a ten-cent per share extra dividend to all shareholders and a 10%-of-annual-pay bonus to all employees.

All golden parachutes, separate “non-qualified” retirement plans, stock option and deferred compensation programs, and others that do not benefit all employees and shareholders will be unwound over a three to five year period. Any employee who receives …

SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Five: Brokerage Account Statements.

Investors have a right to brokerage account statements that: (1) help them monitor and manage their asset allocation, (2) report realized gains and losses for the year, (3) track both the cost of their holdings, and their net account deposits, and (4) emphasize the long-term, cyclical nature of the investment process.

Under SIBORAP, all brokerage firms would be required to maintain cost basis information on all holdings, and the ACATS system would be required to provide it in all transfer transactions. Mutual funds would be required …

SIBORAP includes these ten specific sections: (1) Product Transparency, (2) Regulation and Education, (3) Protection from Speculators (4) Control of Hedge Funds, (5) Brokerage Account Statements, (6) Retirement Account Investments, (7) Executive Compensation, (8) Corporate Financial Statements, (9) Taxation of Investment and Retirement Income, and (10) Transactional Greed and Fear Controls.

Section Two: Regulation and Education (continued from Part One of the SIBORAP report).

Security industry regulators will be charged with many responsibilities: (1) educating investors with respect to product content; (2) developing a “hierarchy-of-risk” tool that identifies the risks in all things sold to investors; and (3) preventing the spread of unregulated Internet based investment advice offered by persons of unknown qualifications.

Additionally, they will be responsible for:

(4) Preventing the development of multi-level, multi-leveraged, WMFDs; (5) requiring that all financial blogs include appropriate caveats that speak to the qualifications of …

We the securities investors of the United States, in order to form more transparent financial markets, establish effective regulations, defend against destructive speculation and manipulation, promote financial well-being, preserve working capital, and protect retirement income, do establish this Securities Investors Bill of Rights and Protections (SIBORAP).

These rights are intended to replace, amend and/or abolish all laws and regulations currently in conflict with SIBORAP, and are to be implemented by all parties to financial transactions.

Any institutional efforts to create and/or market securities and/or derivative products that do not comply with the spirit of SIBORAP will result in fines to corporate officers and directors, congressional oversight committee members, regulatory agency directors, and their financial or legal counsel.

All derivative investment products of any kind, any investment programs or specific recommendations promoted in any medium by non-professionals and professionals alike, SEC …

Hedge Fund TurmoilState of the Hedge Fund Industry(http://HedgeFundBlogger.com) An increasing number of hedge funds are telling customers they cannot have their money back just now (though not a new practice) as rising withdrawals on top of problems in getting collateral back from prime brokerages’ rehypothecations (such as most notably at Lehman Brothers), plus talk of the past year being especially bad for hedge funds’ performance – are all supposedly hitting retail and institutional confidence in hedge funds. Hedge fund performance at minus 10% is described as “shocking!”, but as many have done better than that as have done worse than that.There are at least 3 thousand relatively reputable hedge funds. They are not a homogeneous instrument or asset class that performs as one. When the stock market has fallen 25% and given the ...

Hedge Fund RegulationHedge Fund Regulation & Compliance NotesAs part of an effort to offer more diverse hedge fund resources on HedgeFundBlogger.com we are now publishing some regulatory, compliance and investment law related articles to the site. In the past we have published some articles related to hedge fund regulations, but we have not done so on a regular basis. We will now be publishing at least two articles a week on the topic.To begin with here are some regulation and law related posts from us in the past:SEC on Hedge Fund RegulationHedge Fund Performance Reporting RequirementsHedge Fund Fraud | SEC & Hedge Funds Fraud CaseFINRA Broker CheckInvestment ...