Even arbitration no protection for investors

This case demonstrates that investors should not rely on securities arbitration for his protection as providers of financial services use every legal option to delay or void such an award. The reader can form his own judgement about the morality of such conduct.

Are your assets in safe hands?

Most financial assets are these days represented by bits on some faraway computer. In addition, the owner relies on some third party - a bank or fund manager in most instances - for the safekeeping of his 'bits' (wealth). When new court judgements make this remote control even less secure it represents an extra layer of risk that all investors have to guard against.

How to spot an investment scam

An suspected investment scam involving the sale of derivatives linked to gold has been uncovered in Poland (Wall Street Journal). Based on preliminary evidence the following lessons can be learned: (1) Always check out the credentials of senior management, (2) Do you really understand the investment? In this case I doubt that many - if any - of the investors understood the difference between physical gold and derivatives, (3) Unusual and high marketing expenditures.

Are Stock Markets rigged?

The controversy over 'algorithmic' and high-frequency trading rumbles on and on. While experts and regulators are unable to agree the ordinary investor is well-advised to tread with caution when investing in the stock market.

Financial TV news - treat with caution

While I admit that I enjoy quite a few financial news programs on TV I would like to add a word of caution - especially for those investors that do not have the time to make financial analysis and research their main focus during an otherwise busy worklife.

Don't rely on regulators alone for your protection!

When firms point out that they are regulated you should not blindly rely on this as your primary source of protection. Regulators are created by politicians and are often (too?) close to the industries they are supposed to police. (Bloomberg)

Bank deposits may be expropriated in Eurozone

The introduction of a European deposit insurance scheme could lead to the expropriation of savers in countries who end up as net contributors to the scheme warns former member of the ECB Ottmar Issing. (Financial Times)

Don't complain - do your research!

Too many investors - even professional money managers who should know better - chase fads and overpay for their investments. A quick look at the key numbers behind the Zynga should have sent out warning signals and it is pointless to complain about insiders who unloaded more than half a billion dollars worth of stock in a secondary offering last April.

Anti-Money Laudering measures bark up the wrong tree

Prevention, detection and prosecution of money laundering has become big business during the past 20-30 years. And it will keep on growing and feed an ever-expanding army of regulators, compliance officers and assorted consultants. By definition the term money-laundering can be applied to nearly all business transactions and it taints everyone - even innocent parties - that is involved in commerce. For who can with 100 percent certainty say that someone he transacts with is not in some way associated with a proscribed activity? As re-iterated on this site for a few times money-laundering legislation is only a get-out for poor legislation and poor government. If the crime (and quite a few of the proscribed activities do not rank as crime in everyone's eyes) would have been prevented, detected or prosecuted, or even better, bad laws would not have been enacted, the need for anti-money laundering would vanish. But it suits today's political class to create a climate of all-pervasive supervision and fear among the citizens they are supposed to serve.

How safe is your (US) Futures Broker?

Atlas Ratings is worth checking if you are nervous because of the failure of US brokers during the past year. You certainly do not want to rely solely on regulators.