Wednesday, 3 September 2014
Last updated 13 hours ago
Sep 19 2011 | 12:37pm ET
The Securities and Exchange Commission hopes to put an end to the alleged shenanigans involving hedge funds and banks when it comes to setting up asset-backed securities.
The regulator unanimously voted today to approve a new conflicts of interest rule for asset-backed securities. The new rule, mandated by last year's Dodd-Frank law, would both bar firms that package the securities from shorting them for one year following their sale to investors, and would also bar banks from allowing third parties—read: hedge funds—to short ABS they had a hand in selecting the securities for.
The rule stems from the SEC's case against Goldman Sachs, which resulted in a $550 million settlement with the bank. The regulator accused Goldman of structuring and marketing a collateralized debt obligation on behalf of Paulson & Co. without informing investors that Paulson participated in the asset selection—or that the hedge fund was shorting the CDO.
Since then, the SEC has launched probes into several other CDO transactions, several linked to Magnetar Capital.
None of the hedge funds tied to those transactions has been accused of wrongdoing.
The new SEC rule must complete a 90-day comment period before it can go before the panel for final approval.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
The twin debacles of MF Global and PFG have damaged the reputation of the futures industry demanding an examination of customer protection rules. New rules are being implemented, which will add cost a...