Brokerages

A securities scandal extends beyond Japan's "Big Four" brokerages to at least 18 smaller firms that also reimbursed favored clients for stock market losses, a newspaper reported Sunday. The small- to medium-sized brokerages voluntarily reported to the Finance Ministry that they paid a total of $146 million in compensation between September, 1987, and March, 1990, the Yomiuri newspaper said.

NEW YORK — First it popped, then it flopped. Facebook Inc.'s much-hyped debut on Wall Street was an event watched around the world. The social network's initial public offering valued it at $104 billion — more than market stalwarts such as McDonald's Corp. and Amazon.com Inc. The opening Friday seemed as if Facebook was destined for a big market surge, and the stock vaulted for a split second to $45. Then the surge evaporated and shares fell back to their IPO price of $38. Just 15 minutes after the stock opened for trading, the problems really began.

Two brokerage houses accused of joining in a conspiracy to corner the silver market in 1979 and 1980 have paid Minpeco SA, Peru's leading minerals company, a total of $34 million in an out-of-court settlement, Minpeco said Wednesday. The two brokerages--Merrill Lynch & Co. and Prudential-Bache Securities Inc.--were among several defendants in a multimillion-dollar civil lawsuit.

CBRE Group Inc., the world's largest commercial real estate brokerage, turned a profit in the first quarter as U.S. property sales took off. The Los Angeles firm said Tuesday that income from arranging transactions to buy or rent space in offices, warehouses and other commercial properties helped revenue increase 14% from a year earlier to $1.35 billion. Growth was driven primarily by activity in the United States as leasing transactions fell off in Europe and sales slid in Asian markets.

NEW YORK — First it popped, then it flopped. Facebook Inc.'s much-hyped debut on Wall Street was an event watched around the world. The social network's initial public offering valued it at $104 billion — more than market stalwarts such as McDonald's Corp. and Amazon.com Inc. The opening Friday seemed as if Facebook was destined for a big market surge, and the stock vaulted for a split second to $45. Then the surge evaporated and shares fell back to their IPO price of $38. Just 15 minutes after the stock opened for trading, the problems really began.

A federal judge Wednesday approved a $140-million settlement between 18 brokerage firms and thousands of customers who bought Baldwin-United Corp. annuities before the company collapsed. Brushing aside objections from 48 policyholders and officials from more than 20 state governments, U.S. District Judge Charles L. Brieant Jr. called the settlement "beneficial, fair and reasonable" considering the risk for plaintiffs of taking the case to trial.

Wracked by one of its worst scandals ever, Wall Street says it will change its ways and pay $1.4 billion to make amends. So what will it all mean for the average investor? Here are answers to some of the practical questions individuals may have about the scandal settlement with 10 major brokerages: Question: If I think I was cheated by brokerage practices in recent years, am I entitled to some restitution? Answer: In theory, yes. Federal regulators are setting up a $388-million fund for investor claims.

Investor Fred Sands, who once ran one of the country's largest residential sales brokerages, is adding to his growing commercial real estate portfolio by buying the large SouthBay Pavilion shopping center in Carson. In a sign of how much real estate values have declined since the recession began, Sands' company Vintage Capital Group is expected to complete its purchase of the mall near the 405 Freeway today for $50 million. That's well below the combined $34.

BancAmerica Robertson Stephens & Co. on Wednesday said it faces a possible $5-billion judgment in a class-action lawsuit that alleges the brokerage colluded with other firms to rig stock prices on the Nasdaq Stock Market. The San Francisco-based brokerage, a BankAmerica Corp. unit, is the lone holdout from a landmark $1.01-billion settlement between 36 brokerages and investors who filed the 1994 antitrust suit.

It is way past time for our various governments, legislatures, attorneys general, and courts to admit that corporations cannot commit misdeeds -- only persons can ("Brokerages Balk at Hefty Settlements," Dec 11). The continuing actions of corporate executives, personally or through underlings, purposely or by failure to supervise, causing losses of millions to others while reaping millions themselves, should be treated as felonies, resulting in prison and loss of their misbegotten fortunes.

Venerable commercial real estate brokerage Grubb & Ellis Co. will sell its assets to the parent company of rival Newmark Knight Frank as part of a prepackaged bankruptcy, the firms said Tuesday. BGC Partners Inc., a New York financial services firm that acquired Newmark Knight Frank in October, agreed to buy essentially all the assets of Grubb & Ellis for an undisclosed price. Grubb & Ellis will conduct its asset sale under Section 363 of the U.S. Bankruptcy Code and has commenced Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York.

Wall Street is about to get Facebook fever. The social networking giant with nearly 1 billion users is expected to file papers any day now to sell stock to the public. The timing stems partly from federal rules that would require Facebook to begin disclosing its financial information in April because of its phenomenal growth. Beyond minting an estimated 1,000 new millionaires at the company, Facebook's initial public stock offering could provide a huge boost to Wall Street investment banks sorely in need of a hot stock to excite investors.

Prominent Los Angeles property brokerage Ramsey-Shilling Commercial Real Estate Services Inc. has been bought by Avison Young, Canada's largest independent commercial real estate services company. Avison Young plans to acquire more Southern California brokerages and other real estate companies in the U.S. in the months ahead, Managing Director Neil Resnick said. Resnick, a broker formerly with Grubb & Ellis, opened Avison Young's first Los Angeles office in August. The acquisition of Ramsey-Shilling for an undisclosed amount added 23 employees, including 18 brokers, to Avison Young.

Lehman Bros. Holdings Corp., now just the odds and ends of the global financial behemoth that collapsed in September 2008, received court approval Tuesday to exit bankruptcy early next year. Lehman may now wind down its remaining operations, U.S. Bankruptcy Judge James Peck said at a hearing in New York. Once a mammoth investment bank and brokerage, Lehman is now a collection of assets including real estate, private equity and banking investments. Peck, who has spent more than three years overseeing the bankruptcy, choked up as he looked back on the largest ever bankruptcy, one that accelerated the global financial crisis and eroded confidence in markets worldwide.

The gig: Before becoming online real estate brokerage Redfin's chief executive, Glenn Kelman was a Silicon Valley entrepreneur with little experience in real estate. He co-founded Plumtree Software, backed by the venture capital firm Sequoia Capital, and before that worked at another start-up, Stanford Technology Group. At Redfin, a Seattle company that has helped move shopping for homes online, Kelman, 40, has at times knocked heads with the real estate world. Realtor resistance: "I was unprepared for the Redfin job," Kelman said.

The stock market is beginning what is often its best two-month period of the year. But the bulls lost control on the last day of October. Equities tumbled worldwide on Halloween, denting the month's powerful advance, as worries about Europe's debt crisis flared again and the bankruptcy of brokerage MF Global Holdings Inc. rattled Wall Street. The dollar jumped as some investors sought the usual havens, and as Japan intervened in currency markets to try to beat back the yen from all-time highs.

The American Funds mutual fund firm on Wednesday lost its battle to challenge a regulator's 3-year-old allegations of improper sales practices. An appeals panel of the Financial Industry Regulatory Authority, the securities industry's self-policing agency, upheld the authority's case contending that the sales arm of Los Angeles-based American Funds broke industry rules in rewarding brokerages that sold its funds to investors. The upshot: About 50 major brokerages got nearly $100 million in improper financial incentives, beyond normal sales fees, to hawk American Funds to clients from 2001 to 2003, according to FINRA . The money was awarded through a now-banned industry practice known as directed brokerage.

Before the real estate recession of the 1990s, large brokerages gave agents an assortment of perks--such as paying for postage on mailers and for several lines of advertising each week on each listing--to help them build and maintain good production. As sales became few and far between and prices started going down, these perks gradually disappeared. Many overextended brokerages went out of business, and the survivors needed to tighten their belts. It was at the bottom of that market cycle that companies started taking an administration fee off the top of the commission before splitting with the agents, and began charging the clients an extra administration fee. We were always told that these fees were needed because it now took so much longer--and so much more advertising, etc.--to sell each house.

Dear Liz: After nine months of unemployment I finally landed a new job, but at half my former $100,000 salary. In this economy I was happy to get it. I always contributed the maximum to my 401(k) and employee stock purchase plan, but my new company does not offer either of these options. I made it through my period of unemployment on severance, savings and belt tightening. Other than a mortgage, I have no debt. I realize I need to both catch up on missed contributions and continue to put away money for retirement.

CBRE Group Inc., the world's largest commercial real estate brokerage, reported a strong third quarter propelled by robust growth in property sales and leasing in the U.S. and abroad. The Los Angeles firm, formerly CB Richard Ellis Group Inc., said Thursday that income from arranging transactions to buy or rent space in offices, warehouses and other commercial properties grew at a double-digit pace from the same period last year. Sales were particularly strong in the Americas; Asia and Europe recorded big increases in leases.