Practice

The Financial Industry Regulatory Authority (FINRA) has widened its ongoing auction rate securities (ARS) probe with a sweep letter aimed primarily at sellers, rather than lead managers, of the illiquid instruments.The six-page letter, sent last week to 40 broker-dealers, contains a laundry list of requests covering the period from June 1, 2007 through June 30, 2008. Firms must produce all documents, electronic or otherwise, indicating any arrangement with other parties, including ARS issuers and auction agents, to sell, remarket or solicit bids for the securities.“It appears that FINRA is interested in doing a thorough investigation, given the depth and breadth of the request,” said Brian Rubin, Washington, D.C.-based partner in law firm Sutherland Asbill & Brennan and former deputy chief counsel of enforcement at FINRA predecessor NASD.State regulators and the Securities and Exchange Commission have thus far pursued charges against firms -- including Citigroup, UBS Financial Services, Merrill Lynch & Co., Goldman Sachs Group and Deutsche Bank -- that have been lead underwriters as well as sellers of the securities.“Now, it appears that FINRA is looking at selling firms,” Rubin said.FINRA spokesperson Herb Perone would not comment on the letter except to say how many firms received it.Allegations against lead managers have focused on internal communications detailing problems with the auction rate securities market that were not disclosed when the products were sold.With the new sweep letter, according to Rubin, FINRA appears to be investigating whether the selling brokers obtained information from the lead managers that they failed to disclose to clients. The self-regulatory organization is also looking at basic sales practices including whether the securities were suitable investments, misrepresentations were made and advertising was fair and balanced.

The Pension Protection Act is succeeding at encouraging employers to automatically enroll and annually increase contributions for workers, Vanguard has found in an analysis of the defined contribution plans it administers.

When it comes to retirement and finances, members of Generation X and Generation Y talk the talk but they don’t walk the walk.

The Securities and Exchange Commission has opened a 60-day public comment period to see whether the U.S. should adopt international reporting standards.

While hybrid mutual fund and annuity product solutions began gaining advisers’ and investors’ attention last year, such managed payout funds still have flaws. That’s according to a report from MarketWatch.

New York Attorney General Andrew Cuomo is reportedly looking into whether Fidelity Investments might have been motivated to sell Goldman Sachs' underwritten auction-rate securities due to a pre-existing business relationship.

The European Commission’s legal certainty group (LGC) has issued a set of recommendations designed to help improve and harmonize post-trade securities processing across the European Union.

Baby Boomers and their financial advisers are going to increasingly look for one-stop-shop solutions that combine mutual funds, annuities and systematic or laddered drawn-down schedules, Investment News reports.

Symetra Financial has launched a new awareness campaign titled “Don’t Fear 65,” laying out a path for retirees to live a worry-free retirement.

The Securities and Exchange Commission suffered a setback last week in its efforts to prosecute individuals for insider trading after a judge dismissed the charges on a case from 2001.