Tuesday, August 18, 2009
New books are now available
New books are now available at internet shop. Special price for TKL Sudoku Vol 1 ($3.90 only) and pocket size Sudoku ($7.90 only for 3 volumes).
U.S. Supreme Court to Hear Case on Executive Pay
The Supreme Court will hear the case this fall, as anger over huge bonuses paid to the executives of failing companies continues to grow...
Last summer, Richard A. Posner, a federal appeals court judge, issued a surprising and prescient dissent... “Executive compensation in large publicly traded firms often is excessive,” he added, “because of the feeble incentives of boards of directors to police compensation.” ..
Here is how Warren Buffett analyzed the situation in his 2003 letter to shareholders: “Year after year, at literally thousands of funds, directors had routinely rehired the incumbent management company,however pathetic its performance had been. Just as routinely, the directors had mindlessly approved fees that in many cases far exceeded those that could have been negotiated.”..
Maintenance of my blog
Someone offered to make a donation towards the maintenance of my blog. I replied that this is not necessary.
But, if he (or others) wishes to help, he can buy my books that are sold here (click on Internet Shop). He can also buy copies to give to their friends.
Monday, August 17, 2009
How secure is your credit card info?
Read this report.
Quote
Credit and debit card information is just not incredibly secure ...... But it is counterbalanced by the amount of fraud losses due to cheque fraud and direct debit fraud which is much greater than credit card fraud."
Credit and debit card information is just not incredibly secure ...... But it is counterbalanced by the amount of fraud losses due to cheque fraud and direct debit fraud which is much greater than credit card fraud."
Unquote
Reuters.com - Schwab sued by NY's Cuomo over auction-rate debt
NOTE: This case is similar to the credit linked notes sold in Singapore. The New York Attorney General sued the financial institution for mis-representing the financial product to the retail investors. The Singapore authority should do the same. Tan Kin Lian
By Jonathan Stempel
NEW YORK (Reuters) - Charles Schwab Corp was sued by New York Attorney General Andrew Cuomo, who accused the discount brokerage of fraudulently misleading investors about the safety of auction-rate securities.
The civil lawsuit filed Monday in New York State Supreme Court in Manhattan was expected, after Cuomo's office announced its intent to sue Schwab on July 20.
It represents an escalation of Cuomo's efforts to punish brokerages and force them to repurchase the debt at face value from investors who were misled into believing the securities were as solid as cash.
Much of the debt became illiquid in February 2008 when dealers stopped supporting the $330 billion market. Cuomo has already gotten more than a dozen other banks and brokerages to buy back more than $61 billion of the debt.
"This may be a strategic move to get Schwab to agree to a more pro-investor settlement," said James Cox, a law professor at Duke University in Durham, North Carolina. "Schwab has built a foundation as the broker for the middle-class and would not want its reputation harmed by letting the lawsuit fester."
Thousands of customers of San Francisco-based Schwab held about $787.9 million of auction-rate securities as of February 13, 2008, Cuomo's office estimated.
Schwab said the lawsuit lacks merit.
"The New York Attorney General's lawsuit casts blame for a bad situation in the wrong direction," spokeswoman Sarah Bulgatz said. She said Cuomo should instead punish underwriters that deceived brokers on the safety of auction-rate debt.
"GREAT" ALTERNATIVE TO CASH, BROKER SAYS
According to the complaint, which cited recordings of brokers' conversations with clients, one broker labeled auction-rate securities "great alternatives to cash, frankly."
Another called an investor who was planning to buy a home and had been keeping cash in a money market fund. Expressing a "humble opinion," the broker told the investor that auction-rate debt would be a "very safe" place for that money.
"Schwab owed its customers a duty to properly understand and make accurate representations," Cuomo said. "Anyone in the industry who misrepresented the risks of investing in auction-rate securities will be held accountable."
Two brokerages that, like San Francisco-based Schwab, only sold the securities, Fidelity Investments and TD Ameritrade Holding Corp, have settled with Cuomo's office.
Underwriters that settled with Cuomo include Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co and Royal Bank of Canada, among others.
Cuomo charged Schwab with four counts of fraud, including action under the state's Martin Act, which gives Cuomo wide powers to fight financial fraud.
He wants Schwab to buy back auction-rate debt from clients at face value and pay penalties, among other remedies.
"The Martin Act is an extraordinarily broadly written statute," Cox said. "It essentially gives Cuomo carte blanche."
FRAUD ALLEGED
According to the complaint, Schwab sold customers "a product it did not fully understand and could not properly explain," despite "advertisements promising expertise."
The company also knew, or was reckless or negligent in not knowing, of the market's problems in the summer of 2007, when auctions began to fail, the complaint said.
In a July 24 letter to Cuomo, released Monday, Schwab said it did not actively market or induce the sale of auction-rate debt, and never made any commitment to support that market.
Cuomo's demand that Schwab "act as an insurer against an unprecedented market collapse that it did not cause and could not predict is legally unsound," wrote Faith Gay, a partner at the law firm Quinn Emanuel Urquhart Oliver & Hedges LLP.
In afternoon trading, Schwab shares were down 82 cents, or 4.5 percent, at $17.44 on the Nasdaq.
The case is Cuomo v. Charles Schwab & Co, Supreme Court of the State of New York, County of New York.
(Reporting by Jonathan Stempel; Editing by Phil Berlowitz and Gerald E. McCormick)
By Jonathan Stempel
NEW YORK (Reuters) - Charles Schwab Corp was sued by New York Attorney General Andrew Cuomo, who accused the discount brokerage of fraudulently misleading investors about the safety of auction-rate securities.
The civil lawsuit filed Monday in New York State Supreme Court in Manhattan was expected, after Cuomo's office announced its intent to sue Schwab on July 20.
It represents an escalation of Cuomo's efforts to punish brokerages and force them to repurchase the debt at face value from investors who were misled into believing the securities were as solid as cash.
Much of the debt became illiquid in February 2008 when dealers stopped supporting the $330 billion market. Cuomo has already gotten more than a dozen other banks and brokerages to buy back more than $61 billion of the debt.
"This may be a strategic move to get Schwab to agree to a more pro-investor settlement," said James Cox, a law professor at Duke University in Durham, North Carolina. "Schwab has built a foundation as the broker for the middle-class and would not want its reputation harmed by letting the lawsuit fester."
Thousands of customers of San Francisco-based Schwab held about $787.9 million of auction-rate securities as of February 13, 2008, Cuomo's office estimated.
Schwab said the lawsuit lacks merit.
"The New York Attorney General's lawsuit casts blame for a bad situation in the wrong direction," spokeswoman Sarah Bulgatz said. She said Cuomo should instead punish underwriters that deceived brokers on the safety of auction-rate debt.
"GREAT" ALTERNATIVE TO CASH, BROKER SAYS
According to the complaint, which cited recordings of brokers' conversations with clients, one broker labeled auction-rate securities "great alternatives to cash, frankly."
Another called an investor who was planning to buy a home and had been keeping cash in a money market fund. Expressing a "humble opinion," the broker told the investor that auction-rate debt would be a "very safe" place for that money.
"Schwab owed its customers a duty to properly understand and make accurate representations," Cuomo said. "Anyone in the industry who misrepresented the risks of investing in auction-rate securities will be held accountable."
Two brokerages that, like San Francisco-based Schwab, only sold the securities, Fidelity Investments and TD Ameritrade Holding Corp, have settled with Cuomo's office.
Underwriters that settled with Cuomo include Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co and Royal Bank of Canada, among others.
Cuomo charged Schwab with four counts of fraud, including action under the state's Martin Act, which gives Cuomo wide powers to fight financial fraud.
He wants Schwab to buy back auction-rate debt from clients at face value and pay penalties, among other remedies.
"The Martin Act is an extraordinarily broadly written statute," Cox said. "It essentially gives Cuomo carte blanche."
FRAUD ALLEGED
According to the complaint, Schwab sold customers "a product it did not fully understand and could not properly explain," despite "advertisements promising expertise."
The company also knew, or was reckless or negligent in not knowing, of the market's problems in the summer of 2007, when auctions began to fail, the complaint said.
In a July 24 letter to Cuomo, released Monday, Schwab said it did not actively market or induce the sale of auction-rate debt, and never made any commitment to support that market.
Cuomo's demand that Schwab "act as an insurer against an unprecedented market collapse that it did not cause and could not predict is legally unsound," wrote Faith Gay, a partner at the law firm Quinn Emanuel Urquhart Oliver & Hedges LLP.
In afternoon trading, Schwab shares were down 82 cents, or 4.5 percent, at $17.44 on the Nasdaq.
The case is Cuomo v. Charles Schwab & Co, Supreme Court of the State of New York, County of New York.
(Reporting by Jonathan Stempel; Editing by Phil Berlowitz and Gerald E. McCormick)
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