Category Archives: Investment management

401(k) Plan Abuses Finally Coming to Light

I doubt that I’m unusual in being a finance type who has heard about 401 (k) abuses and bad practices for a very long time. So it’s gratifying to see the Financial Times that something is finally being done to try to curb this behavior. But that is hardly the full extent of what is rotten in retirement fund land.

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Whistleblower Describes How Private Equity Firms Flagrantly Violate SEC Broker-Dealer Requirements

Last week, Crain’s Business Daily and Fortune reported that a whistleblower has provided the SEC with evidence of massive, ongoing violations of securities laws, specifically, the Securities Exchange Act of 1934, by several unnamed private equity firms.

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Speculation About Whether the Fed Manipulates the Stock Market Becoming More Mainstream

Even during the pre-Lehman days of the financial crisis (yes, Virginia, there were three acute episodes before the Big One), blogs and professional investors in my various e-mail conversations would discuss the idea that the Fed had a “plunge protection team” which would intervene to stem market routs.

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David Dayen: Mysterious Study Backs Financial Adviser Thieves Who Want To Keep Bilking Small Investors

At the risk of self-promotion, allow me to point you in the direction of a piece by me running today in The New Republic. It’s about a proposed update to the Department of Labor’s fiduciary rule, and how the financial services industry, along with members of both parties, are working to stop it. An excerpt:

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Why You Should Not Trust the Financials of Private Equity Owned Companies

Yesterday, we discussed how a family private equity firm Swift River, which is owned in part by Tony James, Blackstone’s head of private equity business, purchased a software company called iLevel Solutions rom Blackstone itself.

Today, we are going to examine iLevel in greater detail. We will see that this company is built from the ground up as vehicle to convince PE investors and the SEC that Blackstone and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite

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Rajiv Sethi: Information, Beliefs, and Trading

Yves here. This is a terrific post, and I think readers who are in the unfortunate position of having to invest in the markets will relate to Sethi’s analysis (personally, I hate trading, I wish it were possible to be a long-term investor, but that’s become an awful lot like driving a Model T on a Nascar track). The use of Intrade data and discussing Obama v. Romney-biased speculators is both clever and makes the discussion accessible. And I must confess to being very attached to my “priors” and too willing to fight the tape!

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More Washington Sleaze: Lobbyist Tip Stoked Health Care Stock Jump

Yesterday, we featured an important article by Noam Scheiber on how Obama insiders cash out on their connections once they leave the fold. Today, in the Wall Street Journal, we read of the Congressional version in terms of how a tip by a lobbyist (and former Congressional aide) connected to an investment research firm led to a Congressional decision being leaked to investors before it was announced officially.

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The Damaging Links Between Food, Fuel and Finance: A Growing Threat to Food Security

By Timothy Wise, Director of the Research and Policy Program at the Global Development and Environment Institute, Tufts University. Cross posted from Triple Crisis

Just when you thought the unhealthy ties between food, fuel, and financial markets couldn’t get more perverse, we get the announcement that Vitol, the world’s largest independent oil trader, is entering the grain-trading business, hiring a team from Viterra, based in Toronto, to run the show. And lest we toss this off as just another corporate deal, Javier Blas in the Financial Times reminds us that Viterra has itself recently been bought by Glencore, perhaps the world’s greatest global commodity speculator.

What could go wrong?

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