In a breaking news, it would appear that one of the greatest cause for irritation among retail traders, notably that some big institutions used “flash” computer systems to front-run their client’s orders will be ended shortly, as the Securities and Exchange Commission voted unanimously to ban the practice, accused of allowing among others GS to pocket its enormous trading gains. More also here.
May 12 (Reuters) – U.S. federal investigators are probing whether Morgan Stanley (MS.N) misled investors about mortgage derivative products it helped create and sometimes bet against, the Wall Street Journal said, citing people familiar with the matter.
Morgan Stanley arranged and marketed to investors pools of bond-related investments called collateralized debt obligations (CDOs), and its trading desk at times placed bets that their value would fall, the Journal said, citing traders.
Federal investigators are examining whether Morgan Stanley made proper representations about its roles in the mortgage derivative deals, the newspaper said.
Two particular deals — named after U.S. Presidents James Buchanan and Andrew Jackson — were scanned by the investigators, the paper said, citing a person familiar with the matter.
Morgan Stanley helped design the deals and bet against them, but did not market them to clients, according to the paper.
Traders called them the “Dead Presidents” deals, the Journal said. The firm made money on those deals, but any profit was far overshadowed by the $9 billion the firm lost on bullish mortgage bets in 2007, the paper said
citing a person familiar with the matter.
Morgan Stanley helped design the deals and bet against them, but did not market them to clients, according to the paper.
Traders called them the “Dead Presidents” deals, the Journal said. The firm made money on those deals, but any profit was far overshadowed by the $9 billion the firm lost on bullish mortgage bets in 2007, the paper said.
“We have not been contacted by the Justice Department about the transactions being raised by The Wall Street Journal and we have no knowledge of a Justice Department investigation into these transactions,” Morgan Stanley spokesman Mark Lake told Reuters by telephone.
Spokespeople for the Manhattan Attorney’s office and the U.S. Securities and Exchange Commission (SEC) declined to comment to the Journal.
Updated at 11:17/12th May/Baroda/India
So why is Soros buying gold? Though he believes gold is the ultimate bubble, he had said before that he likes to ride bubbles. But unlike most investors, Soros usually knows when to get out.
From the WSJ:
LONDON—Investor George Soros doubled his bet on gold at the end of 2009 amid rising prices, a filing with the U.S. Securities and Exchange Commission showed.
The filing, made late Tuesday for the financial period ended Dec. 31, comes after Mr. Soros made comments during the World Economic Forum in Davos, Switzerland, in late January calling gold an asset bubble. He told media at the time that the low-interest-rate environment creates a condition for bubbles to develop and that gold is the ultimate bubble…..
The Securities and Exchange Commission accused a French medical doctor with illegally tipping off a hedge-fund manager about the results of a clinical trial conducted by Human Genome Sciences Inc., prompting the manager to dump roughly six million shares of the drug maker. The SEC alleged in the civil complaint Tuesday that Dr. Yves M. Benhamou gave the hedge-fund manager nonpublic information about negative developments in the trial of the drug Albuferon, used to treat Hepatitis C, including that one trial participant had died…Over a period of weeks prior to the announcement, the hedge-fund manager ordered the sale of all Human Genome Sciences stock held by six hedge funds he co-managed, a stake of roughly six million shares, the SEC said. [WSJ]
Apart from this………..we at www.anirudhsethireport.com think…more to be done.Just little more HARD WORK can bring out Biggest Scam in INDIA.
The Securities and Exchange Board of India (Sebi) today barred 197 foreign institutional investors and 342 sub-accounts operated by them from trading in the local stock markets after they failed to disclose their shareholding structures.
Entities controlled by Citigroup, Deutsche Bank, Standard Chartered Trustees (UK) Ltd, HSBC, Dresdner Bank, Credit Suisse Asset Management and JP Morgan Securities were some of the big names on the list.
Funds operated by Citicorp Trustee Company, ABN Amro Bank and Bank of New York have also been barred.
Sub-accounts of Aberdeen Asset and Abu Dhabi Investment Authority figure among the 342 non-compliant sub-accounts.
These entities — which account for less than 10 per cent of all foreign institutional investors registered with Sebi —cannot take fresh positions in the cash and derivatives markets but they can either retain their current positions or unwind them.
Back in April, the market regulator had directed all registered foreign institutional investors (FIIs) to furnish details about their holding structures by September 30.
Sebi had insisted on this requirement as it wanted to avoid round-tripping — a tax-dodging device by which money is taken out of the country and brought back through foreign entities.
Recently, Sebi chairman C.B. Bhave had said the market regulator would not extend the September 30 deadline.
Under Sebi rules, the FIIs should have at least 20 investors with none of them holding more than 49 per cent of the total shares in the fund. The market regulator issued this directive after it discovered that foreign investors had different structures like multi-class share entities.
Under this structure, an umbrella firm is first registered with the regulator as an FII, which then operates different fund pools that may have a variety of investors whose identities are never revealed.
The development comes at a time the FIIs have been showing a huge appetite for Indian equities with the sensex showing a 19.32 per cent gain over the past year.
The FIIs have made net purchases worth Rs 34,809.39 crore this year.
-Indian Stock Market dances on FII’s Money only.I had told and written 1000 times……just take out all the money the FII’s had Invested in India………..and think where will your Sensex and Nifty will trade ?………..Apart from FII’S many more GOLMAAL going on….just wait and watch….Thoda Time lagega !!!
