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Madoff 5 Years Later – Part 2, FINRA

A little over five years ago, Bernie Madoff confessed that for decades he had been running a massive Ponzi scheme.  February 4th marked the 5 year anniversary of the testimony of Harry Markopolos before the U.S. House of Representatives Committee on Financial Services.  Markopolos spent eight years repeatedly trying to prompt the SEC to take action against Madoff, which it never did.


By |February 5th, 2014|Categories: Scams|Tags: , , , , , , , |1 Comment

Madoff 5 Years Later – Part 1, The SEC

A little over five years ago, on December 10, 2008, Bernard Madoff’s sons informed law enforcement authorities that their father confessed to them that he had been running a massive Ponzi scheme for decades.  Madoff’s confession was prompted by the massive calls for redemption triggered by the calamitous events in the financial markets in late 2008 and the obvious impossibility of luring new money into his Ponzi scheme.  Importantly, Madoff confessed his Ponzi scheme when it no longer functioned.  It was not a case cracked by regulatory or law enforcement authorities. […]

By |February 4th, 2014|Categories: Scams|Tags: , , , , , , |0 Comments

The Wolf on Wall Street is not Extinct

There are three simple rules you should follow when you are solicited over the phone by a financial advisor. First, do not start a conversation. Second, you should immediately hang-up. And third, contact the Do Not Call Registry.

High quality financial advisors do not make unsolicited phone calls. Only aggressive salesmen, who are usually young and inexperienced, make cold calls. They are predators who are trained to prey on nice people. […]

Should You Leave Your Wall Street Firm?

You have seen the headlines. Bank of America buys Merrill Lynch. Goldman Sachs sells toxic mortgage pools as safe investments. JPMorgan Chase pays a $13 billion fine for cheating customers. It goes on and on and on. There is no apparent end to the greed and corruption that runs rampant on Wall Street.  How does this impact you?

A Corrupt Business Model

Wall Street’s lobbyists have a big job. They make sure no executives, who make the decisions to rip-off investors, go to jail. It is safe to say the lobbyists have been extraordinarily successful creating a regulatory environment that allows big firms to pay fines without admitting guilt. No guilt means no jail time for the executives who made the unethical decisions. […]

When a ‘Retirement Specialist’ offers a Free Dinner – Run!

At least once a week, I get a fancy looking invitation for a free dinner.  The sponsor usually paints himself as a ‘retirement specialist.”  He may say he is endorsed by a religious organization.  The invitation may include a free seminar on retirement planning.

If you are a recipient of one of these invitations, you are probably retired or approaching retirement.  Before taking the bait, however, please consider the following:

First, there is no such thing as a free dinner.  You are being targeted as part of a sophisticated marketing scheme.  The sponsor has targeted you for a reason and that reason has nothing to do with world hunger or doing a good deed.
Second, remember that Jesse James robbed banks because that is where the money is.  Financial planners target retirees because that’s who has investable money.  In addition, most retirees converting a 401k plan to an IRA have little or no experience managing assets.
Third, be under no illusion that the purpose of the dinner is to peddle some type of investment product to you.  Be assured that the sales pressure will continue until you buy something.  The sponsors of these dinners know that most people view dinner as a social event.  People tend to let their guard down.  They may also feel a sense of obligation in accepting something for free.  The sponsors of these dinners are playing a psychological game where the rules have been stacked in their favor.
Fourth, the product most often sold at these dinners is something called a variable annuity.  A variable annuity is a costly and complex insurance product that is one of the most abused products in the financial services industry. […]

Weighing In: It’s just the way Wall Street Wants It

Politicians and professional athletes have a lot in common. Politicians sell votes for cash to stay in power. Athletes take PEDs to stay employed and […]

By |August 29th, 2013|Categories: Washington|Tags: , , |0 Comments