Deutsche Bank has agreed to pay a fine of $55 million to settle charges by the SEC that it filed misstated financial reports during the height of the global financial crisis relating to a multibillion dollar portfolio of derivatives. The SEC’s multi-year investigation culminated in an Order Instituting a Settled…
Reuters reports that Morgan Stanley’s annual 10-K, filed March 2, 2015, indicates that the New York Attorney General intends to file a lawsuit related to 30 subprime securitizations sponsored by the company. This follows lawsuits and similar allegations by attorneys general in California, Virginia and Illinois. The New York Attorney…
Fraud in the privately traded markets? Aline van Duyn of the FT wrote a fascinating piece over the weekend about the lessons of the Galleon case going much wider than stocks. We agree. Next wave of large and complex fraud will be in non-exchange traded products. Here is the piece.…
Over-the-counter (OTC) derivatives can be scary. Derivatives may pose an unsuitably high amount of risk for non-institutional investors yet are being sold by dealers around the world to investors who do not clearly understand the products. According to Reuters yesterday, U.S. Representative Stephen Lynch said that “taking a ‘soft approach”…
Over-the-counter (OTC) derivatives are very complicated investments. OTC derivatives are sometimes defined as contracts that are traded (and privately negotiated) directly between two parties, without going through an exchange or other intermediary. They include swaps (such as credit default swaps (CDS)) and interest rate, currency and commodities contracts. The OTC…