After nearly five months, federal regulators have been able to dissect the events of May 6, the day when the Dow plunged almost 1,000 points.

A joint report issued by the Commodity Futures Trading Commission and the Securities and Exchange Commission (SEC) pieced together that day's events and came up with this finding, as reported in the Wall Street Journal. A computerized trading program run by a Waddell & Reed trader automatically sold 35,000 e-mini S&P contracts. These contracts mirror the larger S&P contracts. The trader's program was triggered at 9% of the trade volume.

Continue reading Flash Crash Report: What Really Happened?

Flash Crash Report: What Really Happened? originally appeared on BloggingStocks on Sat, 02 Oct 2010 09:40:00 EST. Please see our terms for use of feeds.

Continue reading Green Mountain Coffee's SEC Woes Inspire a Bearish Strangle

Green Mountain Coffee's SEC Woes Inspire a Bearish Strangle originally appeared on BloggingStocks on Wed, 29 Sep 2010 14:30:00 EST. Please see our terms for use of feeds.

Continue reading Can Regulators Fix the Market?

Can Regulators Fix the Market? originally appeared on BloggingStocks on Tue, 14 Sep 2010 11:30:00 EST. Please see our terms for use of feeds.

If you are familiar with Securities and Exchange Commission cases, you will recognize this boilerplate settlement. By "boilerplate" I mean that Goldman Sachs (GS) is fined, but neither admits nor denies any of the charges.

Goldman settled for a measly $550 million. This amounts to about a week's worth of trading. Goldman further got regulators to drop all fraud charges and settle for a lower charge, which said the marketing material for collateralized debt obligations(CDOs) "contained incomplete information."

Continue reading Goldman Settles with the SEC for $550 Million

Goldman Settles with the SEC for $550 Million originally appeared on BloggingStocks on Fri, 16 Jul 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading SEC Levels Charges in $40 Million Ponzi Scheme

SEC Levels Charges in $40 Million Ponzi Scheme originally appeared on BloggingStocks on Thu, 03 Jun 2010 14:40:00 EST. Please see our terms for use of feeds.

Continue reading Congress, SEC and Goldman Sachs Failures -- Part 2

Congress, SEC and Goldman Sachs Failures -- Part 2 originally appeared on BloggingStocks on Wed, 12 May 2010 17:00:00 EST. Please see our terms for use of feeds.

Continue reading Congress, SEC and Goldman Sachs Failures

Congress, SEC and Goldman Sachs Failures originally appeared on BloggingStocks on Wed, 12 May 2010 14:00:00 EST. Please see our terms for use of feeds.

Continue reading Serious Money: Goldman Sachs Is All the Rage

Serious Money: Goldman Sachs Is All the Rage originally appeared on BloggingStocks on Mon, 19 Apr 2010 14:20:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Goldman Sachs Fraud Charge Creates Opportunity

Chasing Value: Goldman Sachs Fraud Charge Creates Opportunity originally appeared on BloggingStocks on Fri, 16 Apr 2010 14:30:00 EST. Please see our terms for use of feeds.

How do you know the green finance sector has arrived? Well, it got its first Ponzi scheme! Allegedly.

The SEC filed charges against four people and two companies in a Denver federal court on Monday. Mantria Corp. and its principals, Troy Wragg and Amanada Knorr, stand accused of running raising $122 million from more than 300 investors in what could be a dozen fraudulent offers of securities. Mantria engaged Speed of Wealth LLC, run by Wayde and Donna McKelvy, to dump the cash out of their retirement plans and tap their home equity to "invest" in Mantria, which they said was offering returns ranging from 17% to "hundreds of percent" every year.

Continue reading Ponzi goes green, SEC in pursuit

Ponzi goes green, SEC in pursuit originally appeared on BloggingStocks on Tue, 17 Nov 2009 13:20:00 EST. Please see our terms for use of feeds.

Normal tech support phone call: "Press 1 for help with e-mail. Press 2 to have your password reset."

Madoff tech support phone call: "Hello, how can I help you dummy up some trading records today?"

The investigation of Bernie Madoff's fraudulent financial empire is leading to more arrests. Jerome O'Hara and George Perez, both computer programmers employed by the Ponzi schemer, were arrested by the FBI on Friday morning. The charges include conspiracy for falsifying books and records. They are accused of doing the deed for the boss and accepting hush money -- in the form of 25% raises and net bonuses of $60,000 -- to keep the scam afloat.

Continue reading Two more arrests in Madoff saga

Two more arrests in Madoff saga originally appeared on BloggingStocks on Fri, 13 Nov 2009 18:20:00 EST. Please see our terms for use of feeds.

Another player in the Bernie Madoff saga has fallen. His longtime auditor, David Friehling, pleaded guilty in federal court on Tuesday to charges of securities fraud, investment adviser fraud, making false filings with the SEC, and obstructing or impeding the administration of the Internal Revenue laws (among others).

Despite the plea, Friehling still told U.S. District Judge Alvin K. Hellerstein, "At no time was I ever aware Bernard Madoff was engaged in a Ponzi scheme."

Continue reading Friehling: Another Madoff domino falls

Friehling: Another Madoff domino falls originally appeared on BloggingStocks on Wed, 04 Nov 2009 12:20:00 EST. Please see our terms for use of feeds.

Investors are calling for an inquiry into mutual fund fees, but the Supreme Court is reminding them that it isn't beholden to public opinion. The mutual fund industry is being accused of charging "excessive" fees, which could be particularly harsh on individual investors who use these tools as their primary way to access the market. Currently, the mutual fund industry has more than $10 trillion in assets under management, some of it through retirement and 529 college savings plans.

The Court doesn't seem inclined to step into the fray, saying that regulatory agencies are better equipped to address the situation. Chief Justice John Roberts, for example, said during arguments that "It makes a lot more sense to have the SEC regulate rates than to have courts do it, doesn't it?"

Continue reading Supreme Court pushes back on mutual fund issue

Supreme Court pushes back on mutual fund issue originally appeared on BloggingStocks on Tue, 03 Nov 2009 10:20:00 EST. Please see our terms for use of feeds.

Sir Allen Stanford's attorney doesn't like Ralph Janvey, but that's not surprising. The SEC isn't crazy about him either, and U.S. Judge David Godbey told him, "You know everyone in the courtroom is angry with you," according to a report in USA Today.

Janvey has been tasked with taking over and cleaning up the wreckage from Stanford's $7 billion Ponzi scheme -- the second largest known disaster of this kind. Along the way, he's managed to piss off everyone he's encountered. The latest "transgression" is his demand for more than $27 million in fees for his team and the consultants he's hired to track down the missing billions of dollars in Stanford's former empire.

Continue reading Who is Ralph Janvey? Stanford's victims know he wants a third

Who is Ralph Janvey? Stanford's victims know he wants a third originally appeared on BloggingStocks on Sun, 16 Aug 2009 11:40:00 EST. Please see our terms for use of feeds.

So, here's one for you -- according to Joseph Cotchett (a lawyer for some of Bernie Madoff's victims), Bernie Madoff is surprised that his Ponzi scheme lasted as long as it did. The revelation came during a 4.5 hour interview, wherein Madoff revealed how the scheme worked and how securities regulators didn't catch him. Madoff did apologize, repeatedly, for the harm he caused victims.

The most interesting part of the interview is when Madoff described meetings with the Securities and Exchange Commission (SEC) while he was committing the fraud and how the SEC was unable to catch him, which didn't surprise him. These comments lead Cotchett to theorize that "many people" were negligent, including the government watchdog agencies. Let's not forget that the SEC has seen no evidence of wrongdoing by its staff as far as the Madoff situation is concerned. Nevertheless, the SEC has undergone many changes in order to continue to protect investors and the market.

Continue reading Bernie Madoff expresses surprise at how long his scheme lasted

Bernie Madoff expresses surprise at how long his scheme lasted originally appeared on BloggingStocks on Wed, 29 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

David Friehling is only the second person to face criminal charges in the Bernard Madoff debacle. He served as Madoff's auditor from 1991 to 2008, though it's hard to say if they'll resume their relationship as cellies. For now, Friehling has only been charged (innocent until proven guilty, and such) with securities fraud, abetting investment adviser fraud and filing false reports with the SEC. On five of the six charges filed, he faces a 20-year maximum.

It's alleged that Friehling didn't conduct "meaningful" audits while in Madoff's employ, despite issuing reports saying that he'd done his job -- which paid close to $15,000 a month (no work for big pay . . . where do I sign up?). In particular, he's said to have not bothered to verify Madoff's business assets, revenue sources or bank accounts. This is no-brainer stuff for an auditor.

Continue reading Madoff bean-counter pleads not guilty

Madoff bean-counter pleads not guilty originally appeared on BloggingStocks on Sun, 19 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

State Street Corp. (NYSE: STT) said today that its State Street Bank & Trust Co. unit received a Wells Notice from the Securities and Exchange Commission (SEC). The notice, which indicates that civil charges may be brought against the company, relates to disclosures and management of certain fixed-income strategies during 2007 and previous periods.

Some investors have accused State Street of misleading them about the risks involved in mortgage-related investments. A legal reserve fund worth $625 million was established in 2007 to cover investor claims, and $418 million has already been paid out. The firm says it is currently cooperating with the SEC, as well as state and other regulators.

Continue reading State Street unit slapped with Wells Notice

State Street unit slapped with Wells Notice originally appeared on BloggingStocks on Mon, 29 Jun 2009 11:00:00 EST. Please see our terms for use of feeds.

Hedge fund manager Michael Regan has pleaded guilty to running a Ponzi scheme. Manager of the Massachusetts-based River Stream Fund, he admitted to defrauding around 70 investors. The fund held just shy of $20 million in assets ... despite the relatively meager $101,600 sitting in its accounts. The fund purported to return 20 percent a year since 2001, paying out $9 million in "profits" and returned capital.

Continue reading Ponzi manager pleads guilty and settles civil charges

Ponzi manager pleads guilty and settles civil charges originally appeared on BloggingStocks on Fri, 26 Jun 2009 15:00:00 EST. Please see our terms for use of feeds.

Matrixx Initiatives (NASDAQ: MTXX), maker of the allegedly scent-stealing Zicam nasal swabs, tumbled to a new annual low this morning on news that the Securities and Exchange Commission (SEC) is launching an informal inquiry. The SEC is requesting documents and other information regarding the warning letter issued to Matrixx by the U.S. Food and Drug Administration.

Last week, the FDA told consumers to stop using certain nasally administered Zicam products after the agency received more than 130 complaints from users who lost their sense of smell. Matrixx has defended its homeopathic, over-the-counter offerings, calling the safety concerns "erroneous," but the firm settled hundreds of lawsuits in 2006 with consumers making the same allegations.

Continue reading Matrixx Initiatives plummets to 11-year low on SEC inquiry

Matrixx Initiatives plummets to 11-year low on SEC inquiry originally appeared on BloggingStocks on Tue, 23 Jun 2009 13:00:00 EST. Please see our terms for use of feeds.

Pequot Capital Management is coming to an end, closing the book on two decades of hedge fund history. Arthur Samberg, at one point the biggest hedge fund manager in the world, is closing the company as a result of a Securities and Exchange Commission (SEC) insider trading investigation.

At its peak in 2001, Pequot had $15 million in assets under management. By November 2008, it was only $4.3 billion ... and $3.47 billion as of May 15, 2009, according to a regulatory filing.

Continue reading Insider trading probe to shut Pequot Capital Management

Insider trading probe to shut Pequot Capital Management originally appeared on BloggingStocks on Thu, 28 May 2009 08:20:00 EST. Please see our terms for use of feeds.