The AFL-CIO online newsletter this week noted that Edward Jones Investment company hosted a seminar for its representatives about how to "sell" privatized Social Security account to its customers; and, noted that Edward Jones was also the self same brokerage house fined heavily for misdeeds.
There is nothing new in this diary. However, there is a list of the brokerage firms that have paid heavy fines and settlements, especially those included in the historic $1.4 billion settlement, for mismanagement and misleading investment advice.
Below are the brokerages who have paid heavy fines and settlements during the past four years. Remember, these are the brokerage houses and investment banks that will be overseen by an SEC staff which will have fewer resources available to it in 2006 than in the President's 2005 budget request.
Are these the folks we want handling privatized Social Security accounts? Rogues List Below
Smith BarneyOctober 23, 2003
Following the Wall Street scandals, Citigroup has said that it has fired four Smith Barney brokers for "inappropriate behavior related to market timing." The Smith Barney firing comes at a time where there is a lot of scrutiny on illegal trading practices.
source
Citigroup agreed to pay
$400 million, the largest fine among those involved.
source
Goldman Sachs
Goldman Sachs stock fraud cases stem largely from emails exchanged between two senior Goldman Sachs stock analysts, mentioning possible Goldman Sachs stock fraud tactics, such as failing to lower ratings on overvalued stocks. source Goldman Sachs settlements terms were $50 million in fines, $50 million towards independent research, and another $10 million toward investor education.source
Lehman Brothers
Lehman Brothers stock fraud was included in a recent SEC settlement regarding the deception of investors by stock analysts: Lehman Brother stock fraud fines resulting from this investigation will help fund investor education and independent stock research.source
Lehman agreed to pay $50 million in fines, $25 million toward independent research, and $5 million toward investor education. source
J.P Morgan Chase
Groups claiming JP Morgan Chase stock fraud resulted in loss of investments are the University of California and former Enron employees, among others.source
JP Morgan Chase stock fraud investigations conducted by the federal government are mostly related to the company's relationship with Enron. JP Morgan Chase stock fraud allegations center around a balance sheet designed to hide risks from Enron's shareholding investors; other JP Morgan Chase stock fraud accusations come from various banks, claiming that they made loans to Enron, due to JP Morgan Chase stock fraud. source The settlement calls for J.P. Morgan Chase, the second-largest U.S. bank by assets, to pay $135 million. source
Morgan Stanley
Possible Morgan Stanley stock fraud actions involved client companies such as Gucci, and investigators claim that some alleged cases of Morgan Stanley stock fraud were specifically designed to influence investment banking business with specific clients. Additionally, Morgan Stanley stock fraud is suspected in association with overvalued telecom stocks, and also in conjunction with Enron. Morgan Stanley stock fraud accusations have led to federal investigations related to failure to follow SEC required records-keeping. source
$19 million for a variety of regulatory infractions, including failure to supervise two rogue brokers.
The big Wall Street firm had previously announced the fine, one of the larger ones ever handed down by the NYSE's regulatory arm source
Merrill Lynch
Some Merrill Lynch stock fraud allegations stem from emails between analysts, deriding the very stocks they pushed clients to buy. source
New Jersey: TRENTON - Attorney General David Samson today announced that the State of New Jersey has reached an agreement with Merrill Lynch & Co. requiring the investment firm to pay approximately $1.4 million in fines to New Jersey under a multi-state settlement source
Merrill Lynch will pay $100 million in fines prior to the $1.4 billion settlement; $75 million towards independent research, and $25 million toward investor education. source
Bear Stearns
In the past, Bear Stearns stock fraud allegations have included claims that the firm provided clearing services for another company; in this alleged Bear Stearns stock fraud, investigators claimed that Bear Stearns knew the company was running a stocks scam. A second Bear Stearns stock fraud scandal charged that one of the firm's employees set up a Ponzi scheme. source
Bear Stearns agreed to settlement terms of $50 million in fines, $25 million toward independent research, and $5 million toward investor education. source
UBS Warburg
UBS Warburg stock fraud accusations in recent months stem largely from its connection to sister company, Paine Webber, Inc. UBS Warburg stock fraud allegations claim that the relationship between the two firms aided the commission of UBS Warburg stock fraud, since UBS Warburg supplied investment research and analysis to Paine Webber. At the center of UBS Warburg stock fraud charges is the collapse of Enron, whose stock UBS Warburg rated a "strong buy." source
UBS Warburg agreed to pay $50 million in fines, $25 million towards independent research, and $5 million toward investor education. source
Piper Jaffray
One Piper Jaffray stock fraud allegation claimed the company threatened to end analyst research of a biotech company, this case of Piper Jaffray stock fraud was an example of the firm attempting to gain underwriting business through favorable stock analysis. source
The New York Stock Exchange fined Minneapolis-based Piper Jaffray & Co. $250,000 for deficiencies in recordkeeping, communication with the public, regulatory reporting and supervision. Jan 12, 2005 source