Posted on Nov 27th, 2015
A Georgia financial advisor, Wayne Thaler, has been barred from the brokerage industry for three months for charging inflated commissions on the sale of penny stocks.
The Financial Industry Regulatory Authority (FINRA) regulates brokerage firms, and limits how much they can charge clients for securities transactions. Generally, markups should be under 5%. Mr. Thaler, however, charged customers commissions above 15% for transactions involving penny stocks.
Sometimes, higher commissions make sense when a brokerage firm bears risk in filling a customer’s order, but these transactions—called riskless principal transactions—carried, as the name implies, no risk whatsoever.
Posted on Oct 4th, 2016
If you’re reading this article, there is a good chance you invested in or through an entity that is now in receivership, and you probably have a lot of questions! The purpose of this article is to give you a general overview of how receiverships work so you know what to expect. Every receivership is different, but every receivership goes through four overlapping stages: 1) stabilization; 2) investigation; 3) litigation; and 4) distribution.
These four stages all support the overarching goal of every receivership—the orderly winding down of a business in a manner that maximizes value for investors.
We will come back to these four stages in a minute, but first it is important to understand the background context that gives rise to a receivership.
Posted on Jun 23rd, 2015
Financial advisors love to sell variable annuities. The reason is simple—commissions of up to 8%. If a financial advisor can sell you a $200,000 variable annuity, that means commissions of up to $16,000. Not bad for a day’s work!
Unfortunately, commissions are just about the only thing that is simple about variable annuities.
The one reason why variable annuities are almost always a bad idea is that they are too complicated for ordinary investors (and normal people in general) to understand. Seriously, have you ever tried to read a variable annuity policy? Here is just one example from an actual policy. Try to stay awake through this, because there is a lot more you urgently need to know about variable annuities: