The Daily Brief: Broker/Dealer Liable for Inside Trades

The Daily Brief: Broker/Dealer Liable for Inside Trades

Broker/Dealer Liable for Inside Trades

The Securities and Exchange Commission charged Wells Fargo for failing to stop a broker from trading on insider information (the broker had previously been charged.) The broker traded on material non-public information when he learned from a client that Burger King was being sold to 3G Capital Management. Securities law firm Morrison & Foerster points out this is the first time the SEC has charged a broker/dealer for failure to protect against insider trading, and lays out some background, implications and take-aways for B/Ds in a comprehensive client alert.

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Brokers’ Stocks are Rising

Zack’s investment research points out that iShares U.S. broker/dealer ETF (ticker: IAI) has been on a tear. The fund tracks the investment services industry via exposure to broker/dealers, like Morgan Stanley, Raymond James and LPL, and has returned 22 percent in the past year, outpacing both the S&P 500 as well as the broader financial sector, which each returned 17 percent.

Good Bye Brad

Long-time well-followed bank analyst Brad Hintz announced he was retiring from Sanford Bernstein, and penned a memo describing how the business has changed.

 

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