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March 25, 2013 | By Stuart Pfeifer
The Securities and Exchange Commission has approved Nasdaq OMX Group Inc.'s proposal to pay brokerages as much as $62 million as compensation for last year's botched Facebook Inc. initial public offering. Nasdaq's trading system was overwhelmed by high volume on the first day that Facebook's stock traded, delaying trade confirmations and contributing to a chaotic and costly day for investors in the social media company. By some accounts, Wall Street firms lost as much as $500 million because of Nasdaq glitches during the Facebook IPO last May. Brokerages complained that they didn't get confirmation that trades were going through, leaving investors in the dark about whether they owned the stock, or at what price.
December 29, 2002
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.
May 1, 2008 | Tom Petruno, Times Staff Writer
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.
March 22, 1998
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.
June 5, 1997 | (Bloomberg News)
Prosecutors charged Nomura Securities Co., Japan's largest brokerage, and two former top executives with illegally compensating a gangster for $430,000 in trading losses. The charges were the first in the scandal, which has widened to include the rest of Japan's Big Four brokerages and Dai-Ichi Kangyo Bank Ltd., the nation's third-largest bank.
June 8, 2012 | By Tiffany Hsu
For all the grief the glitchy Facebook IPO has caused Nasdaq (or is it the other way around?), the exchange operator has still managed to woo major companies away from its competitor, the New York Stock Exchange. Nasdaq OMX Group Inc.'s newest prize isKraft Foods Inc., which said Friday that it is abandoning NYSE to list on Nasdaq instead. The KFT ticker will make the jump on June 26. But it won't last long in that form: Kraft - which makes brands such as Cadbury, Maxwell House, Oreo and Trident - is in the middle of spinning off its North American grocery business.
November 8, 1989 | From Reuters
Shearson Lehman Hutton Inc. will lay off several hundred workers over the next few weeks due to the recent slowdown in the financial markets, the brokerage company said Tuesday. The cuts would be the largest since the slew of layoffs that followed the October, 1987, market crash. Industry analysts predicted that a new round of staff cuts will occur on Wall Street due to recent sluggish retail brokerage activity and a slowdown in leveraged buyouts.
April 16, 1998 | From Bloomberg News
Executives at four brokerages colluded to drive down prices for stocks sold by another firm, eventually running the rival out of business in a scheme that involved tips passed to financial journalist Dan Dorfman, industry regulators alleged Wednesday. The National Assn. of Securities Dealers charged that the owners of New York-based Fiero Bros. Inc. and three now-defunct brokerages--including one that has been investigated for possible links to organized crime--made $6.
July 21, 2009 | Tom Petruno
Instead of the carrot-and-stick approach, New York Atty. Gen. Andrew Cuomo on Monday used two sticks in his bid to force Charles Schwab Corp. to pay off clients who bought auction-rate preferred securities from the discount brokerage. Stick No. 1: Cuomo threatened Schwab with a lawsuit if the firm didn't agree to buy back the notorious securities. Stick No. 2: Applying peer pressure, Cuomo announced that TD Ameritrade Inc.
September 21, 1991 | From Reuters
Japan's Big Four brokerages said Friday that they would introduce voluntary reforms after the industry's massive scandal. The reforms, unveiled at a managers meeting, were aimed at such practices as the compensation of favored investors for their losses and business links with gangsters, which drew government sanctions and have angered the general public.
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