UPDATE 2-Janney to pay $850,000 to settle SEC charges
* Janney settled without admitting or denying charges
* No adequate firewall between banking and research - SEC
* Firm agreed to hire independent compliance adviser (Adds a comment from Janney Montgomery Scott)
WASHINGTON, July 11 (Reuters) - Broker-dealer Janney Montgomery Scott LLC has agreed to pay $850,000 to settle charges it failed to protect against the misuse of material, non-public information, the U.S. Securities and Exchange Commission said on Monday.
The SEC said that from at least January 2005 through July 2009, Janney's policies and procedures for its Equity Capital Markets division were deficient, creating the risk of insider trading.
Elaine Greenberg, associate regional director of the SEC's Philadelphia office, said it was important for broker-dealers to establish and enforce robust policies and procedures to detect potential insider trading.
"Broker-dealers such as Janney must take these duties seriously, because failing to do so can result in the misuse of confidential information to the detriment of investors," she said.
Philadelphia-based Janney settled without admitting or denying the charges.
Karen Shakoske, a spokeswoman for the firm, said the charges in the SEC's order were "limited to policies and procedures and there were no charges of insider-trading."
"Upon being informed of the allegations, the firm reviewed and, as appropriate, strengthened and amended its policies and procedures," she said. "No client accounts were harmed... and the fine is not material to Janney's financial condition."
The SEC order found that Janney failed to maintain an adequate email "firewall" between its investment banking and research staff, which posed the risk that material, nonpublic information could be exchanged and misused.
It said the broker-dealer also failed to enforce policies that banned noncompliance personnel from chaperoning meetings between investment banking and research staff; and did not require its investment bankers to seek pre-clearance for personal trades.
The SEC said Janney agreed to hire an independent compliance consultant to conduct a comprehensive review and make recommendations about its policies and procedures. (Reporting by Sarah N. Lynch, Karey Wutkowski and Andrea Shalal-Esa; editing by Bernard Orr and Tim Dobbyn)
The banks are going to end up eating this.
I just can’t see anything else.
That’s a lot of fraud that both parties are trying to ignore.
The title insurers will go bankrupt and the poor schlubs will still wind up without a house of the money they paid for it.
Bottom line, the erstwhile new homeowner has a tort against the seller, and the title company. Since fraud is involved there are additional damages that can be claimed by the ENHO because they were told that the home was indeed available to be sold when it wasn’t. This would be in addition to the DA deciding to prosecute for grand theft or wire fraud or RICO, or any number of other state and federal laws. “St” Ronnie sent the S&Lers to jail for destroying that market, by the hundreds. Time for more of the same.
It’s all the fault of the poor black people!
It’s all Fannie & Freddie fault!
Add to my scapegoat list. I’m sure I missed some faves.
I don’t suppose that the vultures will get caught in this. Oh no no no no no. They flipped the houses too quickly. They, as usual, get off scott free.
That’s good for the resident, but it sure does F Up the housing market. For years, until every one of these properties gets sorted out. Not to mention puts a lot of liability right back where it belongs, on the crooks who bundled all these mortgages together and never did what their prospectuses said they would (actually transfer the mortgage).
it will be a good lesson in the true corruption of the American system – how this all gets made OK so nobody who made money off this scam has to take any losses. It will make a Cirque d Soleil contortionist look like an iron beam.
For starters.
The solution to the eurozone crisis is for Europeans to work harder and for longer, rather than being cushioned by the welfare system, said Jin Liqun, chairman of China Investment Corp, China’s sovereign wealth fund. He warned on Wednesday that Europe’s fundamental problem was that its workers were simply not productive enough.
“The root cause is the overburdened welfare system built up since the second world war in Europe: sloth-inducing, indolence-inducing labour laws,” Jin told Channel 4 News. The average Chinese working week is nearly 48 hours, the maximum allowed under European law. “We work like crazy,” said Jin. Graeme Wearden
Jaango
“Title Companies got bailed out!
We got sold out!”
I doubt it will be homeowners — previous or current — that will receive any sort of help.
And, as soon as Title Co’s start to feel the heat, that will depress the housing market even more, because who wants to buy insurance from a company that might go belly up any second? Thank god for the state AG’s who didn’t go along with the settlement ideas, so there’s still a prayer that a few banks will pay up a very small fraction of what they need to.
Guess you weren’t paying attention 3 years ago.
I wonder what the “savvy businessmen” are going to say about that.
Think how many scoundrels in congress will have to go for the banks
to be held accountable.
A few years down the road, if a true owner is identified, the taxes due will be enormous! And, what about inheritance laws and succession? What the banks did just totally gums up the works!!
I’m surprised our resident trolls haven’t swanned to this post to adjure us on how it’s always & only the fault of the lousy lazy 99%. Banks are blameless… yadda yadda…
Apparently, Germany has done extremely well with national banks.
http://www.alternet.org/economy/152736/what_we_can_learn_from_germany%3A_how_countries_with_publicly_owned_banks_do_better_than_america/?page=4
“The example of Germany shows that even success is no guarantee in the face of a relentless onslaught of propaganda by large privately owned banks interested only in making money for their CEOs, wealthiest clients and shareholders. But peering behind the propaganda, the public banking model that helped underwrite Germany’s economic success might be the fast track to a US banking system that serves Main Street rather than Wall Street.”
Thanks.