Japanese Asset Management fraud may have cost investors $2.49 billion (Reuters)

Smart Investors fell victim to $1 billion scam (Barron's)
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Bidding war for Financial Advisers - what it means for you

News that major players in the financial services industry are involved in a bidding war for financial advisers should alert investors that they may be left paying the bill for irresponsible behavior by the employers of these advisers. After all, more pay for the lucky advisers who have large amounts of money lavished on them means that they are expected to 'produce' fees and commissions that justify their increased income. This could well tempt some - or the majority - among them to put their customer's money into investments that are selected not because they are particularly suitable but because they result in higher fee income for the adviser. Investors should therefore be wary whenever their financial consultant changes employer and take independent advice before considering shifting any accounts to a new firm.

Unbelievable neglect of customer confidentiality!

It is reported that in the course of its agreement with US authorities UBS in Switzerland accepted the obligation to report the destination banks for all US customers. It may have been done via the Swiss authorities but the bank should have been aware of the consequences for its 'clients'.

Private Banker diverts Sfr 1.5 million and escapes jail!

The selection of an trustworthy financial adviser is of the utmost importance. While no customers of the bank in question have lost any money the case case should still set alarm bells ringing. When the director of a bank can escape a prison sentence even after he admitted that he 'diverted' Sfr 1.5 million from commission payments to his own accounts the sentence demonstrates that crimes by banking and finance professionals are still not punished in the same way as crimes by 'ordinary' criminals and investors should be extra careful when selecting a financial adviser. That the banker in question enjoyed a basic annual salary of  Sfr 240'000 and at one stage received an annual bonus of Sfr 816'000 is proof for the extent of his greed.

What are 'complex financial products'?

An arbitration award that related to the sale of a 'complex financial product' illustrates the problem that ordinary investors face when offered these products. In nearly all such situations they find themselves at a severe disadvantage vis-a-vis the salesperson or financial adviser. It is like asking the patient to make a judgement about the correct procedure when faced with cancer. So trust is of paramount importance in any relationship between an investor and financial professionals. Sadly, we can only recommend to always get a second opinion from a neutral expert before buying any financial instrument as the layman cannot really know when an investment vehicle is 'complex' enough to warrant special caution and analysis.

'Vaporized' MF Global Funds - Insult added to Injury

"The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable." (Jesse's Cafe Americain)

Azentus Fund loses 6.70 % in first year

But assets under management are up. Need we say more? Nothing illustrates the need for careful fund selection more - and this applies to all investment funds, traditional, hedge or private equity.

When lawyers become greedy

A sobering reminder of the problems investors can face when they use a lawyer to get compensation for fraud or misdemeanour they suffer at the hands of a financial adviser. Dealing with a (real or imagined) compensation claim is a complicated affair and people are in most cases facing no option but to trust the legal expert once they have asked for his services.

Hopes fade on MF Global Funds

A new term enters the financial dictionary: sources state that $ 1.2 Mio in supposedly segregated customer funds may have been 'vaporized'. Just in case you ever thought you could or should rely on financial regulators or their taskmasters the politicians.

The Twelve Axioms of Investing

Quite interesting summing up of important investment rules. Nothing really new but the obvious cannot be repeated often enough.