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Fuzzy Numbers on Advisor Misconduct

Fuzzy Numbers on Advisor Misconduct

The numbers don't add up.

The numbers from the recent academic study on the high percentages of “bad brokers” still serving clients at financial advisory firms got a lot of attention in the press (“The Wolves of Wall Street Are Everywhere,” wrote Business Insider). The report’s authors did a deep dive into FINRA’s BrokerCheck Database and found that 12 percent of working advisors have been accused of some kind of wrongdoing, and 7 percent had been found guilty. But recruiter Mark Elzweig in Seeking Alpha finds the numbers “fuzzy.” Complaints are easy to make, he writes, especially from clients who have lost money in the markets, and firms often settle cases just to clean the slate even when there is no real guilt. “It would be interesting to review the size of the typical payments. For example, anything under $10,000 or a small percentage of the investment involved likely suggests that firms would rather clean the slate than fight to the death to prove innocence.”

Crowdfunding for Good Is Bad

Not always a good thing. | Tashatuvango/iStock/Thinkstock

Since the passage of JOBS Act rules easing the restrictions around crowdfunding, the number of crowd-investment platforms has swelled dramatically. Forbes reports these platforms generated an estimated $2.1 billion in investment for startups in 2015, with growth in 2016 expected to reach $4 billion. But those investors looking to combine socially responsible strategies with crowdfunding may need to rethink their position. Crowdfunding projects around public functions like education, infrastructure and health can be detrimental to society in the long run, Peter Moskowitz argues in a recent Wired article. “If crowdfunding for the public good is allowed to continue unchecked, it’s not hard to imagine a future in which everyone votes on public works with their dollars—distorting priorities and giving those with deeper pockets more of a say,” he writes. Probably better to stick with crowdfunding investment opportunities around entertainment, real estate or even legal battles.

What Judge Garland Is Investing In

He looks like such a nice Jewish boy. | Copyright Mark Wilson, Getty Images

U.S. Supreme Court nominee Judge Merrick Garland has a brokerage account that includes stock in General Mills, Pfizer, Bristol-Myers Squibb, General Electric, Procter & Gamble, J.M. Smucker and Citigroup, according to an analysis of his financial disclosure forms by the National Law Journal. Garland, the chief judge of the U.S. Court of Appeals for the District of Columbia, was nominated to replace Justice Antonin Scalia by President Barack Obama. His stocks, bonds, IRAs and other investments yielded dividends and interest of at least $165,500, and he reported at least $100,000 in rent income through New York property held in a trust. Besides his judicial salary of $215,400, he did not report any income on top of that in 2014, according to the most recent disclosure report that he filed last year. If confirmed by the Senate, his salary would jump to $249,300.

Brackets for a Cause

He got game. | Copyright Nick Laham, Getty Images

It’s NCAA tournament time, and while offices across the country are losing millions of dollars in productivity, Bloomberg once again is doing its annual Brackets for a Cause tournament. The firm asked 42 “titans from the worlds of business and finance” to fill out a March Madness bracket and donate $10,000 each, with the winner collecting the whole pot. The money will go to the victor’s charity of choice. Among those playing: Bloomberg CEO Michael Bloomberg, Pershing Square Capital Management CEO Bill Ackman, New York Knicks President Phil Jackson, AOL CEO Tim Armstrong, GE Vice Chair Beth Comstock and Greenlight Capital President David Einhorn.

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