Court Case May Help Define ‘Insider Trading’

A case where two hedge fund managers are appealing their conviction may help finally define “insider trading”, a term which has always had an ambiguous definition. The issue is whether to be actual insider trading, trader has to realize the tip had been illegally revealed in exchange for compensation. The two managers are called “downstream tippees”, who receive info after it has went through multiple middlemen. They claim they didn’t know the tips were confidential when the analysts got them. If the judge rules in favor of the two, other convictions such as SAC Steinberg’s could be void.

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SEC’s Lack of Fiduciary Action Is Hurting Investors, Advocates Warn

The primary difference between a broker and a RIA is the fiduciary responsibility of a RIA to put the client first. Brokers only have to make sure products suggested to clients are suitable. Many adviser advocates are now saying there is concrete evidence that “suitable” brokerage accounts harm investors. Most Americans cannot tell the difference between a broker and adviser because they compete so closely with almost identical services. There is now a push for SEC to make the fiduciary rule uniform for industry to rid of conflict of interest and excessive fees that harm investors.

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Big win offers Wall Street brokers path to clean up records

Last week a UBS broker was paid damages for business lost and his record was expunged because a FINRA arbitration panel ruled that UBS misled him about products he sold to clients. Now many brokers are encouraged that they can wipe their slate clean too. However, the ruling was unusual and will not guarantee the same results in a future arb panel. Brokers who have long rap sheets with other disclosures are not in luck. The lawyers typically choose the cases they are confident they can win. If broker was an RIA, SEC would send copy of RIA’s history for each new complaint/disclosure.

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