Stock Preacher

USA regulators charged a money manager with fabricating several large client accounts in order to lure legitimate investors, the Securities and Exchange Commission said last week. The SEC alleged that Leila Jenkins and her firm, Locke Capital Management, invented large advisory client accounts purportedly based in Switzerland and repeatedly claimed the accounts contained more than US$1B in assets that she managed. Jenkins lied about the accounts’ existence to investors and SEC staff and provided the SEC with “bogus” documents in 2008 such as fake account statements that she created, the SEC said.
From at least 2003 though 2009, Jenkins and her firm, with offices in New York and Rhode Island, communicated falsehoods about the accounts in brochures, meetings and SEC filings, the SEC alleged. Locke’s assets under management of its real clients never amounted to more than a very small portion of the billion-plus- US$s Jenkins claimed to manage, the SEC said. A lawyer representing Jenkins and Locke said we have not been served yet with the complaint.

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A US House of Representatives panel got a pledge late last Thursday night from the Robert Hertz, Chairman of the independent Financial Accounting Standards Board to issue guidelines within three weeks that will ease the Mark to Market (MTM) rules that force US banks to value assets at current prices. The head of the US House panel, Rep. Paul Kanjorski (D-Pa.), held out the threat of legislation to pressure the standard setting board and the Securities and Exchange Commission to take steps that would give relief to battered US banks and US insurance companies. The current MTM rule has forced US banks to take steep write-downs on some financial assets, especially securities linked to mortgages, even as they have suffered from the housing slump. As the financial crisis grinds on and world banks large and small founder and fail, the banking industry has pushed for the accounting relief.

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US securities regulators are examining Apple Inc.’s disclosures about CEO Steve Jobs’ health problems, to ensure investors were not misled. The Securities and Exchange Commission’s review does not mean investigators have seen evidence of wrongdoing. Both the SEC and Apple declined to comment on the matter. Jobs has said he had an easily treatable “hormonal imbalance,” but last week came back to say that his problems were “more complex” than originally thought, and he would take a medical leave of absence for six months. In 2004, Jobs was treated for a rare type of pancreatic cancer called an islet-cell, or neuroendocrine, tumor. Such tumors can be benign or malignant, but they usually grow slowly and are far less deadly than most pancreatic tumors.

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Any Stock Broker Should be Registered

Any Stock Broker you deal with should be registered with National Association of Securities Dealers (NASD) and the Securities and Exchange Commission (SEC). In addition, to protect your money after you have deposited it into a brokerage account, that broker should be a member of the Securities Investor Protection Corporation (SIPC). SIPC doesn’t protect you form market losses; it protects your money in case the brokerage firm goes out of business. To find out whether the broker is resgistered with these organizations, contact the NASD, SEC, and SIPC.

The distinction between personal stockbrokers and institutional stockbrokers is important. Institutional brokers make money from institutions and companies through investment banking and securities placement fees (such as initial public offering and secondary offerings), advisory services, and other broker services. Personal stockbrokers generally offer the same services to individuals and small businesses.

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