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• Tuesday, 18 June 2013

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• Pre-Dispute Mandatory Arbitration Challenged - 18 April 2013

On Wednesday April 17 up to seventeen members of the North American Securities Administrators Association Inc. (NASAA) met with lawmakers in Washington to garner support for ending, or at the very least restricting, the use of pre-dispute mandatory arbitration clauses in client contracts with investment brokers. With these clauses generally being presented as standard procedure, investors may not be aware that they are, in effect, losing their right to use the judicial system in any dispute arising out of agreements entered into with brokers. In other words, they cannot sue a broker who violates the terms of the agreement or neglects to act in the best interests of a client, the investor. Critics of mandatory arbitration clauses note that investors should be given the choice of omitting the clause from an agreement, thereby giving themselves a greater measure of protection should the client/broker relationship go sour.

• Walter to Replace Schapiro as SEC Chairperson - 28 November 2012

As Mary Schapiro prepares to leave her position as the 19th Chairperson of the SEC – U.S. Securities and Exchange Commission – on December 14, her performance in terms of successes and failures is being analyzed in the online and offline press, with much speculation regarding the road forward under her replacement, Elisse Walter. While the two women have often worked cooperatively alongside one another during their Washington-based careers, analysts have noted that they have differing views on some key issues.

• High-Speed Trading Back in the Spotlight - 9 August 2012

In days gone by, the floor of the New York Stock Exchange was crowded with market-makers and other specialists trading, creating a hive of activity and a buzz of excitement. Technology has replaced this scenario with computers, and as high-speed trading continues to move ahead, fortunes can be made or lost in the blink of an eye. While being fairly low profile in the public eye, Knight Capital Group is a major market-maker for the New York Stock Exchange and NASDAQ stocks, making extensive use of technology programmed to place buy or sell orders based on real-time market activity. Wednesday 1 August saw Knight Capital Group lose $440 million in the space of 30 minutes due to a technical glitch, once again bringing the pros and cons of high-speed trading into the spotlight and prompting a review of past problems caused by this hi-tech trend, such as the 'flash crash' of 2010 and the Facebook IPO debacle.

• JOBS Act - Easing Regulations for Growth - 5 April 2012

Having passed the United States House of Representatives with bipartisan support on March 8 this year, the Jumpstart Our Business Startups Act – more commonly, and maybe aptly, referred to as the JOBS Act – is awaiting the signature of Barack Obama to pass it into law. The purpose of the Act is to ease various securities regulations, and thereby encourage the funding of small businesses in the United States. The President has already made known his readiness to sign the JOBS Act once it has been passed by both chambers, and analysts are reportedly studying the new legislation with a view to making use of any opportunities it may present to Wall Street investors.

• Facebook Likely to Delay IPO - 15 September 2011

When LinkedIn started trading on the New York Stock Exchange in May this year, speculation was rife that other social media companies would do the same. It had been seven years since Google went public, and investors appeared to be eager to enter the realms of uncharted territory presented by the social media sector of information technology. Other social media companies that were targets of speculation included Twitter, Groupon, Zynga and FaceBook. Certainly, LinkedIn's foray onto Wall Street generated a few surprises as its pre-IPO price climbed to $45, with its first day of trading seeing an intra-day increase to $122.70, before retreating somewhat to close at $94.25 per share.

• Creative Accounting – Misrepresentation of Facts - 28 June 2010

It's a common misconception that accountants lack creativity. The numerous accounting scandals over past decades have revealed that at least some accountants can be extremely creative with the finances they control. Such creativity can include the misdirecting or misusing of funds, understating expenses, overstating revenues, understating liabilities and overstating corporate asset values, thereby misrepresenting the financial state of a company. To be fair, large scale creative accounting (also referred to as innovative accounting or aggressive accounting) is seldom, if ever, the brain-child of the accountant in charge, but is carried out with the support of key executives in a company, and may even rely on the cooperation of officials in other corporations or affiliated companies. Creative accounting generally skirts along the edges of the rules of acceptable accounting practices, using very complicated ways of presenting assets and liabilities, and income and expenditure, with the view to enriching certain individuals in some way. Creative accounting can also be used to manipulate the value of a publicly traded company’s shares for financial gain.

• FINRA Proposes New Measures to Curb Market Volatility - 20 may 2010

The dramatic 'flash crash' on Wall Street on May 6 served as a wake-up call to regulators that the growing trend of automated high-speed trading calls for updated regulations in order to deal with stock market volatility. With this in mind, the Financial Industry Regulatory Authority (FINRA) filed a proposal for public comment on Tuesday 18 May whereby trading on individual stocks will be paused if the price moves either way by 10 percent or more within a period of five minutes. Should the proposal become a reality, it will most likely be instituted as a six-month pilot program to test the waters, starting mid-June.