The Role of Stockbrokers
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Defenses to Customer Claims Against Stockbrokers
DEFENSES TO CUSTOMER CLAIMS AGAINST STOCKBROKERS Elizabeth Hoop Fay, Esquire Morgan, Lewis & Bockius LLP Philadelphia Foster S. Goldman, Jr., Esquire Markel Schafer & Goldman, PC Pittsburgh DEFENSES TO CUSTOMER CLAIMS AGAINST STOCKBROKERS I. DEFENSES TO CHURNING, SUITABILITY AND UNAUTHORIZED TRADING CLAIMS A. The Elements of Causes of Action for Churning, Unsuitable Recommendations and Unauthorized Trading 1. Churning of a brokerage account occurs when a broker who exercises control over the trading engages in an excessive number of transactions in order to generate commissions. See, e.g., Costello v. Oppenheimer & Co., Inc., 711 F.2d 1361, 1368-69 (7th Cir. 1983). To prevail on a churning claim, the customer must prove three elements: (1) control of the account by the broker; (2) trading activity that is excessive in light of the customer’s investment objectives; and (3) that the broker acted with scienter, i.e., intent to defraud or reckless disregard of the customer’s interests. Craighead v. E.F. Hutton & Co., 899 F.2d 485, 489 (6th Cir. 1990). 2. While a churning claim is a challenge to the quantity of transactions, a suitability claim challenges the quality of the investments recommended by the broker. To prevail on a suitability claim, the customer generally must prove: (1) that the broker recommended securities that are unsuitable in light of the customer’s investment objectives; and (2) that the broker did so with intent to defraud or with reckless disregard for the client’s interests. E.g., Brown v. E.F. Hutton Group Inc., 991 F.2d 1020, 1031 (2d Cir. 1991). 3. -
A Fidelity Investments Webinar Series: Basics of Stock Investing
A Fidelity Investments Webinar Series: Basics of Stock Investing Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. © 2016 FMR LLC. All rights reserved. 734380.2.0 1 Agenda • Reasons for stock investing • Getting started • Research stocks • Analyze stocks • Buy Stocks • Monitor stocks • Resources 2 Reasons for Stock Investing • Why do you invest in stocks? – Create or grow your portfolio – Increase income 3 Getting Started with Stock Investing - Make a list Research – make a list of stocks to consider Analyze – narrow down your list Buy – place your trades Monitor – track performance and news to determine next steps 4 Stock Investing To Do List What to consider … – Timeframe – what timeframe are you looking to invest in stocks? – Investment – how much money do you want to put towards this strategy? – Exit Strategy – what is your plan if the stocks performs well or badly? 5 What are the different stock types? Equity Share Classes Common Stock • Represents ownership in a company and a claim (dividends) portion of the profits; investors get one vote per share to elect board members. Preferred Stock • Represents a class of ownership in a company that has a higher claim on the assets compared to common stock; has a dividend that must be paid out prior to common stockholders; these shares do not have voting rights. 6 Research Stocks Using Fidelity.com Research Analyze Buy • Where to start? Monitor – Determine proper research tools and information to help identify stocks • What tools to use? – Read Fidelity Viewpoints articles – Read Fidelity White papers – Review quarterly market updates – Use the Stock Screener • Where can I learn more? – View the Getting Started with the Stock Screener video from the Fidelity Learning Center Screenshots are for illustrative purposes only. -
Preparing a Venture Capital Term Sheet
Preparing a Venture Capital Term Sheet Prepared By: DB1/ 78451891.1 © Morgan, Lewis & Bockius LLP TABLE OF CONTENTS Page I. Purpose of the Term Sheet................................................................................................. 3 II. Ensuring that the Term Sheet is Non-Binding................................................................... 3 III. Terms that Impact Economics ........................................................................................... 4 A. Type of Securities .................................................................................................. 4 B. Warrants................................................................................................................. 5 C. Amount of Investment and Capitalization ............................................................. 5 D. Price Per Share....................................................................................................... 5 E. Dividends ............................................................................................................... 6 F. Rights Upon Liquidation........................................................................................ 7 G. Redemption or Repurchase Rights......................................................................... 8 H. Reimbursement of Investor Expenses.................................................................... 8 I. Vesting of Founder Shares..................................................................................... 8 J. Employee -
Ladies of the Ticker
By George Robb During the late 19th century, a growing number of women were finding employ- ment in banking and insurance, but not on Wall Street. Probably no area of Amer- ican finance offered fewer job opportuni- ties to women than stock broking. In her 1863 survey, The Employments of Women, Virginia Penny, who was usually eager to promote new fields of employment for women, noted with approval that there were no women stockbrokers in the United States. Penny argued that “women could not very well conduct the busi- ness without having to mix promiscuously with men on the street, and stop and talk to them in the most public places; and the delicacy of woman would forbid that.” The radical feminist Victoria Woodhull did not let delicacy stand in her way when she and her sister opened a brokerage house near Wall Street in 1870, but she paid a heavy price for her audacity. The scandals which eventually drove Wood- hull out of business and out of the country cast a long shadow over other women’s careers as brokers. Histories of Wall Street rarely mention women brokers at all. They might note Victoria Woodhull’s distinction as the nation’s first female stockbroker, but they don’t discuss the subject again until they reach the 1960s. This neglect is unfortu- nate, as it has left generations of pioneering Wall Street women hidden from history. These extraordinary women struggled to establish themselves professionally and to overcome chauvinistic prejudice that a career in finance was unfeminine. Ladies When Mrs. M.E. -
Frequently Asked Questions About the 20% Rule and Non-Registered Securities Offerings
FREQUENTLY ASKED QUESTIONS ABOUT THE 20% RULE AND NON-REGISTERED SECURITIES OFFERINGS issuance, equals or exceeds 20% of the voting power understanding the 20% Rule outstanding before the issuance of such stock; or (2) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess What is the 20% rule? of 20% of the number of shares of common stock The “20% rule,” as it is often referred to, is a corporate outstanding before the transaction. “Voting power governance requirement applicable to companies listed outstanding” refers to the aggregate number of on nasdaq, the nYSe or the nYSe American LLC votes that may be cast by holders of those securities (“nYSe American”) (collectively, the “exchanges”). outstanding that entitle the holders thereof to vote each exchange has specific requirements applicable generally on all matters submitted to the issuer’s to listed companies to receive shareholder approval securityholders for a vote. before they can issue 20% or more of their outstanding common stock or voting power in a “private offering.” However, under nYSe Rule 312.03(c), the situations The exchanges also require shareholder approval in in which shareholder approval will not be required connection with certain other transactions. Generally: include: (1) any public offering for cash, or (2) any issuance involving a “bona fide private financing,1” if • Nasdaq Rule 5635(d) requires shareholder approval such private financing involves a sale of: (a) common for transactions, other than “public offerings,” -
And Liquidity-Related Variation in the Correlations and Mean Returns Across Stocks and T-Bonds
Flight-to-Quality- and Liquidity-Related Variation in the Correlations and Mean Returns across Stocks and T-Bonds1 Naresh Bansal,a Robert Connolly,b and Chris Stiversc a John Cook School of Business Saint Louis University b Kenan-Flagler Business School University of North Carolina at Chapel Hill c Terry College of Business University of Georgia This version: December 19, 2007 1We thank Tyler Henry, Lubos Pastor, Robert Savickas, Cheick Samake, John Scruggs, Jahangir Sultan, and seminar participants at the University of Georgia, the 2007 Financial Management Association meeting, the 2007 Washington Area Finance Conference, and the 2007 Southern Finance Association meeting for helpful comments. Please address comments to Naresh Bansal (e-mail: [email protected]; phone: (314) 977-7204; Robert Connolly (email: Robert [email protected]; phone: (919) 962-0053); or to Chris Stivers (e-mail: [email protected]; phone: (706) 542-3648). Flight-to-Quality- and Liquidity-Related Variation in the Correlations and Mean Returns across Stocks and T-Bonds Abstract Over the crisis-rich 1997 to 2005 period, we document new time-series and cross-sectional evidence which suggests a sizable flight-to-quality- and liquidity-related variation in the correla- tions and mean returns across stocks and T-Bonds. Our collective results support the premise of a \searching" in the relative valuation of stocks and bonds during times of market stress. First, higher levels of stock implied volatility (IV) and stock illiquidity and higher time-series variability in stock IV are associated with both: (1) a much lower correlation in the subsequent returns of stock and T-bond returns, and (2) much greater time-series variability in the subsequent stock IV and illiquidity values. -
The Operations of a Typical Stockbroker and an Issuing House
THE OPERATIONS OF A TYPICAL STOCKBROKER AND AN ISSUING HOUSE A PAPER PRESENTED BY MR. AZU ODITA GENERAL MANAGER/CEO, NETWORTH SECURITIES & FINANCE LIMITED (A MEMBER OF THE NIGERIAN STOCK EXCHANGE) LAGOS, NIGERIA Outline Who is a Stockbroker Requirements of a Stockbroker Services offered by a Stockbroker Relationship with other Stakeholders in the capital market Who is a Stockbroker A licensed dealing member of an Exchange Ø To deal in financial instruments available in the Money & Capital Markets uPrimary activity is in the capital market Dealing firms are the principal while the Authorized dealing clerks are the brokers/agents of the dealing firms Other features Ø Registered with CAC and SEC Ø Roles in the market depend on Capital bases, Expertise and Status of Registration u Broker = N40 Million u Dealer = N30 Million u Broker/Dealer = N70 Million – A broker transacts on behalf of customers only while a dealer transacts on behalf of his company Requirements of a Stockbroker ØIntegrity – His Word is his Bond ØInnovation in value-added services e.g. Margin Trading, Security Lending, REPO transactions ØKnow your Client (KYC) ØExcellent Analytical Skill ØFinancial Training ØFund Management & Administration ØFinancial Supermarket - gain advantage of size & distribution network ØOffshore Alliance. Services Offered by A Stockbroking Firm Not standardised Ø Differs from one organisation to another Examples Stockbroking New Issues Research & Portfolio Management Bond Trading Credit Analysis Stockbroking Receives and process transaction orders -
Semi Annual Report April 2008
FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2008 FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2008 TABLE OF CONTENTS Federation of Euro-Asian Stock Exchanges 3 Deutsche Boerse 10 Garanti Asset Management 13 Is Investment 14 NASDAQ OMX 16 Tayburn Kurumsal 18 Finans Asset Management 20 Quartal FLife 21 Stock Exchange Profiles Abu Dhabi Securities Market 24 Amman Stock Exchange 28 Armenian Stock Exchange 32 Bahrain Stock Exchange 36 Baku Interbank Currency Exchange 40 Baku Stock Exchange 44 Banja Luka Stock Exchange 46 Belarusian Currency and Stock Exchange 50 Belgrade Stock Exchange 54 Bucharest Stock Exchange 58 Bulgarian Stock Exchange 62 Cairo and Alexandria Stock Exchanges 66 Georgian Stock Exchange 70 Iraq Stock Exchange 74 Istanbul Stock Exchange 78 Karachi Stock Exchange 82 Kazakhstan Stock Exchange 86 Kyrgyz Stock Exchange 90 Lahore Stock Exchange 94 Macedonian Stock Exchange 96 Moldovan Stock Exchange 100 Mongolian Stock Exchange 104 Montenegro Stock Exchange 108 Muscat Securities Market 112 Palestine Securities Exchange 116 Sarajevo Stock Exchange 120 State Commodity & Raw Materials Exchange of Turkmenistan 122 Tehran Stock Exchange 126 Tirana Stock Exchange 130 “Toshkent” Republican Stock Exchange 134 Ukrainian Stock Exchange 138 Zagreb Stock Exchange 142 Affiliate Member Profiles CDA Central Depository of Armenia 147 Central Registry Agency Inc. of Turkey 148 Central Securities Depository of Iran 149 Macedonian Central Securities Depository 150 Misr For Clearing, Settlement & Central Depository 151 Securities Depository Center (SDC) of Jordan 152 Takasbank - ISE Settlement and Custody Bank, Inc. 153 Tehran Securities Exchange Technology Management Company (TSETMC) 154 Member List 155 FEDERATION OF EURO-ASIAN STOCK EXCHANGES (FEAS) The Federation of Euro-Asian Stock Exchanges Semi Annual Report April 2008 is published by the Federation of Euro-Asian Stock I.M.K.B Building, Emirgan 34467 Istanbul, Turkey Exchanges. -
The Professional Obligations of Securities Brokers Under Federal Law: an Antidote for Bubbles?
Loyola University Chicago, School of Law LAW eCommons Faculty Publications & Other Works 2002 The rP ofessional Obligations of Securities Brokers Under Federal Law: An Antidote for Bubbles? Steven A. Ramirez Loyola University Chicago, School of Law, [email protected] Follow this and additional works at: http://lawecommons.luc.edu/facpubs Part of the Securities Law Commons Recommended Citation Ramirez, Steven, The rP ofessional Obligations of Securities Brokers Under Federal Law: An Antidote for Bubbles? 70 U. Cin. L. Rev. 527 (2002) This Article is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Faculty Publications & Other Works by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. THE PROFESSIONAL OBLIGATIONS OF SECURITIES BROKERS UNDER FEDERAL LAW: AN ANTIDOTE FOR BUBBLES? Steven A. Ramirez* I. INTRODUCTION In the wake of the stock market crash of 1929 and the ensuing Great Depression, President Franklin D. Roosevelt proposed legislation specifically designed to extend greater protection to the investing public and to elevate business practices within the securities brokerage industry.' This legislative initiative ultimately gave birth to the Securities Exchange Act of 1934 (the '34 Act).' The '34 Act represented the first large scale regulation of the nation's public securities markets. Up until that time, the securities brokerage industry4 had been left to regulate itself (through various private stock exchanges). This system of * Professor of Law, Washburn University School of Law. Professor William Rich caused me to write this Article by arranging a Faculty Scholarship Forum at Washburn University in the'Spring of 2001 and asking me to participate. -
Earnings Per Share. the Two-Class Method Is an Earnings Allocation
Earnings Per Share. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities, according to dividends declared and participation rights in undistributed earnings. Under this method, net earnings is reduced by the amount of dividends declared in the current period for common shareholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the earnings per common share is computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding during each year presented. Diluted (loss) earnings attributable to common shareholders per common share has been computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding plus the dilutive effect of options and restricted shares outstanding during the applicable periods computed using the treasury method. In cases where the Company has a net loss, no dilutive effect is shown as options and restricted stock become anti-dilutive. Fair Value of Financial Instruments. Disclosure of fair values is required for most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. This disclosure requirement excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value, employee benefit obligations, lease contracts, and all nonfinancial instruments, such as land, buildings, and equipment. -
The Impact of Earning Per Share and Return on Equity on Stock Price
SA ymTsuHltRifaeEcvetePIdMhreavirePwmjoA2ur0nCa2l Ti0n;t1hOe1fi(eF6ld)o:Ef1ph2Aa8rmR5a-cNy12I8N9 G PER SHARE AND RETURN ON EQUITY ON STOCK PRICE a JaDajeapnagrtBmaednrtuozfaAmcacnounting, Faculty of Economics and Business, Siliwangi University of Tasikmalaya [email protected] ABSTRACT Research conducted to determine the effect of Earning Per Share and Return on Equity on Stock Prices, a survey on the Nikkei 225 Index of issuers in 2018 on the Japan Stock Exchange. the number of issuers in this study was 57 issuers. The data taken is the 2018 financial report data. Based on the results of data processing with the SPSS version 25 program shows that Earning Per Share and Return on Equity affect the Stock Price of 67.3% and partially Earning Per Share has a positive effect on Stock Prices. Furthermore, Return on Equity has a negative effect on Stock Prices. If compared to these two variables, EPS has the biggest and significant influence on stock prices, however, Return on Equity has a negative effect on stock prices Keywords: Earning Per Share, Return on Equity and Stock Price INTRODUCTION Investors will be sure that the investment can have a People who invest their money in business are interested positive impact on investors. Thus, eps is very important in the return the business is earning on that capital, for investors in measuring the success of management in therefore an important decision faced by management in managing a company. EPS can reflect the profits obtained relation to company operations is the decision on the use by the company in utilizing existing assets in the of financial resources as a source of financing for the company. -
The Relationship Between EPS and CFO with Return on Shares in Companies Listed in Tehran Stock Exchange
International Journal of Academic Research in Business and Social Sciences April 2015, Vol. 5, No. 4 ISSN: 2222-6990 The Relationship between EPS and CFO with Return on Shares in Companies Listed in Tehran Stock Exchange Abolfazl Ghadiri Moghaddam Accounting Associated Professor, Accounting Department, Mashhad Branch, Islamic Azad University, Mashhad, Iran Yones Gholami Accounting Department, Neyshabour Branch, Islamic Azad University, Neyshabour, Iran Arezoo Salarian Accounting Department, Mashhad Branch, Islamic Azad University, Mashhad, Iran Mahsa Sareminia Accounting Department, Neyshabour Branch, Islamic Azad University, Neyshabour, Iran Navid Farzaneh Accounting Department, Neyshabour Branch, Islamic Azad University, Neyshabour, Iran Mahsa Asgari Accounting Department, Mashhad Branch, Islamic Azad University, Mashhad, Iran DOI: 10.6007/IJARBSS/v5-i4/1541 URL: http://dx.doi.org/10.6007/IJARBSS/v5-i4/1541 Abstract The present study was designed to gather evidence about the relationship between earnings per share and cash flow from operating activities and current return on shares in listed companies in Tehran. A multiple linear regression was used to test the relation between earnings per share and operating cash flow and the rate of return on equity. Also four hypotheses for this study were provided. Statistical sample of study consists of 50 participates in a period of time 5 years from 2010 to 2013. The findings indicated that the first hypothesis is confirmed. It means there is a positive significant relationship between earnings per share and return on equity. Also about third hypothesis that examines the relationship between earnings per share and current return on equity, the result showed there is significant positive relationship between these two variables.