Apparently, the SEC agrees with me that Regulation D offerings under Rule 506 are being used by felons and bad actors to raise money from unsuspecting investors. Under Reg D, money can be solicited from up to 35 non-accredited investors and an unlimited amount of accredited investors. These offers are exempt from SEC registration, therefore the potential for misuse exists.
Under the proposed rule, anyone who has had a criminal conviction, court injunction or restraining order would be prohibited from bringing a Reg D offering to investors. I am not sure if the proposed rule goes far enough, however. It seems to me if someone had their securities licenses revoked, then they would fall outside of this proposed rule. Further, what about someone who has been fined in a civil proceeding for previous securities rules violations? They too should be barred from being able to offer Reg D offerings in my opinion.
You can speak up and offer your own opinion at:
http://www.sec.gov/cgi-bin/ruling-comments?ruling=s72111&rule_path=/comments/s7-21-11&file_num=S7-21-11&action=Show_Form&title=Disqualification%20of%20Felons%20and%20Other%20%22Bad%20Actors%22%20From%20Rule%20506%20Offerings
Readers of this blog have long been informed about Reg D offerings and their pitfalls for investors. The bottom line is that I do not like them and neither should you, no matter what lies you may hear about how great they are for you.
Be smart out there!
Tuesday, May 31, 2011
Wednesday, May 11, 2011
Bernie Madoff Trustee's Fees
The Wall Street Journal wrote an Op Ed piece in their paper today entitled "Madoff and the Mets". Mr. Irving Pickard, the trustee and New York bankruptcy attorney in charge of recouping the funds for the victims is benefiting financially from his role. According to this article in the Wall Street Journal, "He has billed for $175.5 million in fees." The WSJ article goes on to say that "...he seems more interested in collecting fortunes from public figures by humiliating them into a settlement, before his claims are ever tested in court."
For WSJ subscribers, you can read the article via this link:
http://online.wsj.com/article/SB10001424052748704559904576228482383879982.html?KEYWORDS=new+york+mets
One hundred seventy-five million five hundred thousand in attorney's fees is what I want to vent about. Why is this injustice allowed in the first place? There is no way that it takes $175,500,000 to do his job. Once again, this kind of injustice should never be allowed. In my opinion, you could have found 100 or more equally qualified individuals to do this job for a $1,000,000 a year flat fee. Anyone of these other qualified individuals would have had the victims best interest at heart and I guarantee you that they would have gladly done the job for $1,000,000 per year in a flat fee.
By my calculations, this trustee is being over paid by $174,500,000. Where is the outrage? Where are the victims of Bernie Madoff? Why aren't they screaming about this blatant rip off? They were already victimized once. Now they are just supposed to stand by and take this lying down? No thank you.
Come on you Madoff victims. Raise a stink, please.
For WSJ subscribers, you can read the article via this link:
http://online.wsj.com/article/SB10001424052748704559904576228482383879982.html?KEYWORDS=new+york+mets
One hundred seventy-five million five hundred thousand in attorney's fees is what I want to vent about. Why is this injustice allowed in the first place? There is no way that it takes $175,500,000 to do his job. Once again, this kind of injustice should never be allowed. In my opinion, you could have found 100 or more equally qualified individuals to do this job for a $1,000,000 a year flat fee. Anyone of these other qualified individuals would have had the victims best interest at heart and I guarantee you that they would have gladly done the job for $1,000,000 per year in a flat fee.
By my calculations, this trustee is being over paid by $174,500,000. Where is the outrage? Where are the victims of Bernie Madoff? Why aren't they screaming about this blatant rip off? They were already victimized once. Now they are just supposed to stand by and take this lying down? No thank you.
Come on you Madoff victims. Raise a stink, please.
New Addition to My Do Not Buy List
Today, I would like to add another item to My Do Not Buy List. I have to do this without naming names, so if you are promoted something like this by an registered investment adviser, or a brokerage firm, then hopefully, you will recall this article.
Apparently, there is a company out there that loans money to credit worthy investors. Supposedly, these people who need money, cannot get a favorable loan from their local bank, or just prefer not to do business with them. One of the credit score qualifications is 660 or above. So, what happens is this firm attracts investors to put up money for these credit worthy borrows. The investors who put up the money, then are entitled to a high return of 8 - 10%.
Your first clue is the bogus 8 - 10% return being promoted. Your second clue here is that someone with a credit score of 660 or above can most likely easily get a loan in today's marketplace less than or the same as 8 - 10%. My question becomes, why should they go this route when any local bank or credit union will do?
If you dig and little deeper and think about this, then you will see the true picture.
I was just solicited today from a new registered investment adviser who is offering the investments from this lending firm.
The way I see it is the original investors who supplied the funds for this lending firm want their money back, because it is not working out like they planned.
So, what is the lending firm's solution? They created a new registered investment adviser firm that will raise money from guys like me (I'm not that stupid) and then bail out the original investors from the lending firm who want out. For the privilege of buying this credit paper, (or is it toilet paper?) the investor has to pay this new registered investment adviser a 1% fee that grades down a little bit, but not much. Then, the other firm that acts as the feeder fund (where have we heard about feeder funds before? Oh yes, Bernie Madoff) will also charge their fee on top. The total fee could be 2 -2.5% depending on your favorite feeder fund.
Want to hear something hilarious? The lending firm normally charges 1% for their services. Out of the goodness of their heart, they are going to waive this 1% fee for investors who give money to their new registered investment adviser firm. The truth is they own the registered investment adviser firm and they are charging the 1%, so they are not really waiving anything. The money is only going from the left pocket of the lending firm to the right pocket of the registered investment adviser firm that THEY OWN! I told you that was hilarious, didn't I?
The investor who buys this opportunity for high income (don't make me laugh) will instantly have no liquidity after they buy it. You see, this was the problem with the original investors who put the money up for the lending firm. They did not like the way things were working out, so they are screaming for a solution. They have no liquidity. Did I mention that they have no liquidity?
This lending firm created their own brand stinking new registered investment adviser firm full of conflicts of interests, by the way, and decide that they will reward these original investors with a buy out from other registered investment advisers who are stupid enough to put their clients in this investment. Is this really an investment? No.
It is a black hole with no liquidity and no guarantee of a return of principal.
They will tell you otherwise, of course. They will say there is a secondary market for these investments. Oh yes? Where is it? On the New York Stock Exchange? Not hardly. THEY are the secondary market! Let me get this straight. The original investors, in my opinion, want out. There was no secondary market for them. That is until they created this new registered investment adviser out of thin air. The feeder funds will be the solution for the original investors. They will get out with their original investment. But, the investors late to the party, they will not. When they want to liquidate, then they will find out how small and mostly non-existent that secondary market is for them.
This lending firm apparently is finding out that they are in competition with banks and credit unions. They have a stable of unhappy original investors who want their money back. Further, they are also finding out that they need an endless supply of feeder funds to keep their juggernaut going into the future. I predict that this firm will eventually go out of business once the banks get hot and heavy back into lending to consumers. Until then, this lending firm may have some limited success.
Sadly, I have to assume that there are people lining up for this high income opportunity. The readers of this blog will be protected from "opportunities" like this one. Drum roll, please! Here is your new addition to My Do Not Buy List.
Consumer Credit Funds.
They may call them something similar like Consumer Loan Funds, or Short Term Credit Funds. Be aware of differences in how they may be promoted. Be on guard!
The weird twist to this scenario is that this is all perfectly legal. Just like everything else on my Do Not Buy List.
The bottom line is Do Not Buy this ever!
Apparently, there is a company out there that loans money to credit worthy investors. Supposedly, these people who need money, cannot get a favorable loan from their local bank, or just prefer not to do business with them. One of the credit score qualifications is 660 or above. So, what happens is this firm attracts investors to put up money for these credit worthy borrows. The investors who put up the money, then are entitled to a high return of 8 - 10%.
Your first clue is the bogus 8 - 10% return being promoted. Your second clue here is that someone with a credit score of 660 or above can most likely easily get a loan in today's marketplace less than or the same as 8 - 10%. My question becomes, why should they go this route when any local bank or credit union will do?
If you dig and little deeper and think about this, then you will see the true picture.
I was just solicited today from a new registered investment adviser who is offering the investments from this lending firm.
The way I see it is the original investors who supplied the funds for this lending firm want their money back, because it is not working out like they planned.
So, what is the lending firm's solution? They created a new registered investment adviser firm that will raise money from guys like me (I'm not that stupid) and then bail out the original investors from the lending firm who want out. For the privilege of buying this credit paper, (or is it toilet paper?) the investor has to pay this new registered investment adviser a 1% fee that grades down a little bit, but not much. Then, the other firm that acts as the feeder fund (where have we heard about feeder funds before? Oh yes, Bernie Madoff) will also charge their fee on top. The total fee could be 2 -2.5% depending on your favorite feeder fund.
Want to hear something hilarious? The lending firm normally charges 1% for their services. Out of the goodness of their heart, they are going to waive this 1% fee for investors who give money to their new registered investment adviser firm. The truth is they own the registered investment adviser firm and they are charging the 1%, so they are not really waiving anything. The money is only going from the left pocket of the lending firm to the right pocket of the registered investment adviser firm that THEY OWN! I told you that was hilarious, didn't I?
The investor who buys this opportunity for high income (don't make me laugh) will instantly have no liquidity after they buy it. You see, this was the problem with the original investors who put the money up for the lending firm. They did not like the way things were working out, so they are screaming for a solution. They have no liquidity. Did I mention that they have no liquidity?
This lending firm created their own brand stinking new registered investment adviser firm full of conflicts of interests, by the way, and decide that they will reward these original investors with a buy out from other registered investment advisers who are stupid enough to put their clients in this investment. Is this really an investment? No.
It is a black hole with no liquidity and no guarantee of a return of principal.
They will tell you otherwise, of course. They will say there is a secondary market for these investments. Oh yes? Where is it? On the New York Stock Exchange? Not hardly. THEY are the secondary market! Let me get this straight. The original investors, in my opinion, want out. There was no secondary market for them. That is until they created this new registered investment adviser out of thin air. The feeder funds will be the solution for the original investors. They will get out with their original investment. But, the investors late to the party, they will not. When they want to liquidate, then they will find out how small and mostly non-existent that secondary market is for them.
This lending firm apparently is finding out that they are in competition with banks and credit unions. They have a stable of unhappy original investors who want their money back. Further, they are also finding out that they need an endless supply of feeder funds to keep their juggernaut going into the future. I predict that this firm will eventually go out of business once the banks get hot and heavy back into lending to consumers. Until then, this lending firm may have some limited success.
Sadly, I have to assume that there are people lining up for this high income opportunity. The readers of this blog will be protected from "opportunities" like this one. Drum roll, please! Here is your new addition to My Do Not Buy List.
Consumer Credit Funds.
They may call them something similar like Consumer Loan Funds, or Short Term Credit Funds. Be aware of differences in how they may be promoted. Be on guard!
The weird twist to this scenario is that this is all perfectly legal. Just like everything else on my Do Not Buy List.
The bottom line is Do Not Buy this ever!
Monday, May 9, 2011
My Marketing Brochure
After careful thought, design, input and prayer, I have approved for printing my business brochure. No brochure will sell itself or make you a bazillion dollars, but you should have one to deliver to prospective clients and centers of influence. Also, existing clients may want a few to hand out to select friends.
This brochure is 11 x 17 inches and when folded over, each page is 8 1/2 by 11 inches. When you take a peek at it, be sure and zoom to 100% to get the feel of it. Follow this link to see it:
MarianFS Brochure
Feel free to leave your comments here, or you can contact me directly at 904-262-0888. If you prefer email, then you can email me at rick@marianfs.com. I would love some feedback.
This brochure is 11 x 17 inches and when folded over, each page is 8 1/2 by 11 inches. When you take a peek at it, be sure and zoom to 100% to get the feel of it. Follow this link to see it:
MarianFS Brochure
Feel free to leave your comments here, or you can contact me directly at 904-262-0888. If you prefer email, then you can email me at rick@marianfs.com. I would love some feedback.
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