LPL Financial Names Dan Arnold Chief Financial Officer - Stockhouse LPL Financial Names Dan Arnold Chief Financial Officer - Stockhouse

Tuesday, June 5, 2012

LPL Financial Names Dan Arnold Chief Financial Officer - Stockhouse

LPL Financial Names Dan Arnold Chief Financial Officer - Stockhouse

SAN DIEGO, June 5, 2012 /PRNewswire/ -- LPL Financial LLC, the nation's largest independent broker-dealer* and a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), today announced the appointment of Dan Arnold as chief financial officer, effective June 15.  In the role of CFO, Mr. Arnold, currently managing director and head of strategy for LPL Financial, will succeed Robert Moore, who was named president and COO on May 1.  Following a three-month transition of CFO responsibilities with Mr. Moore, Mr. Arnold will report to Mark Casady, LPL Financial chairman and CEO.  Mr. Arnold will be based in San Diego.

"I am very pleased that Dan Arnold will be stepping up to the role of CFO," said Mr. Casady.  "Over the course of his 25-year career, Dan built and managed a business, led the integration of that business into LPL Financial, and has taken on leadership of a new department, Strategy, where he has already made a real impact on the way our firm approaches planning for the future."

Before he was named head of strategy in October 2011, Mr. Arnold served as president of Institution Services, the LPL Financial business unit that provides third-party investment and insurance services to more than 750 banks and credit unions nationwide.

Mr. Casady continued, "As the latest step in the realignment of several of LPL Financial's key executive leadership roles, our search for a new CFO led us to interview a number of talented leaders.  We looked for a blend of knowledge, energy, and management expertise in an individual who would fit within and contribute to our strong culture.  And what this search process clearly demonstrated is that we have in our midst an executive who is ready to take on a new challenge with expanded responsibility."

In his new role as CFO, Mr. Arnold will have oversight of LPL Financial's Finance organization, as well as its Internal Audit and Strategic Planning functions. 

"I am pleased with this latest evolution in our leadership team, and with our track record in filling key roles with the best talent available.  The success of our IPO and the following stage of our growth as a public company owes much to Robert's contributions in the CFO role.  As we open the next chapter for LPL Financial, I believe Dan is uniquely positioned to carry forward our strategic vision for the future of the firm, and I am greatly encouraged by the strength and balance of our senior leadership team," Mr. Casady concluded.

Forward-Looking Statements

This press release may contain forward-looking statements that involve risks and uncertainties.  Forward-looking statements are not guarantees of future performance and actual results may differ significantly from the results discussed in the forward-looking statements. Important factors that may cause such differences include, but are not limited to, risks and uncertainties associated with changes in general economic and financial market conditions, fluctuations in assets under management, effects of competition in the financial services industry, changes in the number of the Company's financial advisors and institutions and their ability to effectively market financial products and services, the effect of current, pending and future legislation, regulation and regulatory actions and other factors set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the period ended March 31, 2012, which are available on and

You should not rely upon forward-looking statements as predictions of future events. The Company does not undertake and specifically disclaims any obligation to release publicly revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of events, whether or not anticipated. In that respect, the Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

About LPL Financial

LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation's largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans.  LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to over 12,900 financial advisors and approximately 680 financial institutions. In addition, LPL Financial supports over 4,400 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have approximately 2,700 employees with headquarters in Boston, Charlotte, and San Diego.  For more information, please visit

Securities offered through LPL Financial.  Member FINRA/SIPC

*Based on total revenues, Financial Planning magazine, June 1996-2011


LPL Financial Media Contacts
Michael Herley, Kekst and Company
(212) 521-4897                         



European Stocks Rise on Speculation of Global Stimulus - Bloomberg

European stocks rose, snapping a four-day decline, amid speculation that policy makers around the world will take steps to stimulate economic growth. U.S. index futures fluctuated, while Asian shares advanced.

Bankia SA (BKIA) led Spanish banks higher, rising 3.8 percent after the country’s budget minister said the lenders don’t need an excessive amount of money. BioInvent International AB (BINV) plunged after it stopped developing an anticoagulant drug.

The Stoxx Europe 600 Index added 0.3 percent to 234.56 at 1:14 p.m. in London. The Stoxx 600 has still declined 14 percent from its 2012 high on March 16 amid growing concern that Greece will leave the euro currency union. The U.K. market is closed today for a public holiday. Standard & Poor’s 500 Index futures expiring this month increased less than 0.1 percent, while the MSCI Asia Pacific Index climbed 1.3 percent.

“The euro zone is slowing and has now affected Germany and France, the so-far more resilient economies in the euro zone,” said Otto Waser, chief investment officer at Research & Asset Management AG in Zurich, said in a Bloomberg Television interview. “We see some policy response emerging; we’re going to be talking more rescue measures in Europe. I don’t think that’s going to really stabilize the economies.”

The Stoxx 600 fell yesterday as reports showed that orders to U.S. factories unexpectedly declined in April and growth in China’s services industries weakened in May.

G-7 Phone Call

Finance ministers and central-bank governors from the G-7 countries will hold a call today to discuss the euro area’s sovereign-debt crisis, Canada’s Finance Minister, Jim Flaherty, told reporters yesterday in Toronto.

German Chancellor Angela Merkel said systemic banks may need supervision at the European (SXXP) level.

The U.K.’s credit rating was cut one level to AA- by Egan- Jones Ratings Co. on concern the nation will be unable to continue reducing its budget deficit as the economy weakens.

A gauge of euro-area services and manufacturing output contracted in May. A composite index based on a survey of purchasing managers in both industries dropped to 46 from 46.7 in April, London-based Markit Economics said today, compared with an estimate of 45.9 published on June 1. The measure has remained below 50 -- indicating contraction -- for four months.

Separate reports showed that German and French services activity fell in May more than economists had estimated.

An index of Germany’s services industry based on a survey of purchasing managers dropped to 51.8 last month from 52.2 in April, Markit Economics said today. A measure of the industry in France slipped to 45.1 from 45.2 the previous month.

U.S. Service Industries

In the U.S., a report at 10 a.m. New York time will probably show that service industries grew in May at the same pace as they did in April, economists predicted. The Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the economy, held at 53.5, matching April’s four-month low, according to the median forecast of economists surveyed by Bloomberg News.

Bankia rose 3.8 percent to 1.05 euros for only its fourth advance in the last month. CaixaBank (CABK) climbed 2.7 percent to 2.18 euros. Bankinter SA (BKT) gained 3.5 percent to 2.56 euros.

Spain’s Budget Minister, Cristobal Montoro, said that the European Union should provide financial aid to the banks.

“That’s why it’s so important that the European institutions open up and help us achieve, help facilitate, that figure because we’re not talking about astronomical figures,” he said in an interview with Spanish broadcaster Onda Cero.

Banco Espirito Santo

Banco Espirito Santo SA (BES) jumped 3.3 percent to 47.7 euro cents. Portugal’s biggest publicly traded bank climbed for a second day after the country’s government said it will give more than 6.6 billion euros ($8.2 billion) to Banco Comercial Portugues SA, Banco BPI SA and Caixa Geral de Depositos SA to help them meet capital requirements.

Elekta AB (EKTAB) sank 6.5 percent to 319.90 kronor. The world’s second-largest maker of radiation-surgery equipment reported fourth-quarter sales of 3.12 billion kronor ($433 million), missing the average analyst estimate of 3.22 billion kronor.

BioInvent International tumbled 58 percent to 5.40 kronor. The company and partner ThromboGenics NV (THR) stopped work on the drug because it caused too much bleeding in a clinical trial.

Hip or knee surgery patients in a study showed “a significantly higher incidence of bleeding events” from the TB-402 drug than from Bayer AG’s Xarelto, BioInvent and ThromboGenics said in a statement today. ThromboGenics slumped 20 percent, the biggest drop since the company’s initial public offering in July 2006.

The volume of shares changing hands on the Stoxx 600 was 53 percent lower than its average over the last 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Tom Stoukas in Athens at

To contact the editor responsible for this story: Andrew Rummer at

Enlarge image European Stocks Rise on Speculation of Global Economic Stimulus

European Stocks Rise on Speculation of Global Economic Stimulus

European Stocks Rise on Speculation of Global Economic Stimulus

Hannelore Foerster/Bloomberg

The Stoxx 600 fell yesterday as reports showed that orders to U.S. factories unexpectedly declined in April and growth in China’s services industries weakened in May.

The Stoxx 600 fell yesterday as reports showed that orders to U.S. factories unexpectedly declined in April and growth in China’s services industries weakened in May. Photographer: Hannelore Foerster/Bloomberg

CANADA STOCKS-TSX may open lower, G7 and Bank of Canada eyed - Reuters

June 5 | Tue Jun 5, 2012 8:19am EDT

June 5 (Reuters) - Toronto's main stock index looked set to open lower on Tuesday as investors await the outcome of emergency G7 finance chiefs' discussions and the Bank of Canada's rate decision.


* Germany is likely to come under severe pressure to do more to stimulate growth and help the euro zone on a conference call between finance ministers of the world's major economies on Tuesday, a senior G7 source told Reuters.

* The Bank of Canada may signal that it is more reluctant to raise interest rates than it was seven weeks ago, without completely reversing its message that Canadians must prepare for higher borrowing costs down the road.

* Spain said credit markets were closing to the euro zone's fourth biggest economy as finance chiefs of the Group of Seven major economies were to hold emergency talks on the currency bloc's worsening debt crisis.

* Russian state firm Rosneft has hired a former TNK-BP executive to run its refining and marketing businesses, sources close to the companies said, bolstering a management team as BP pursues the sale of a stake in the country's No.3 oil producer.


* Canada stock futures traded down 0.28 percent

* U.S. stock futures , , were down around 0.24-0.38 percent

* European shares, were mixed


* Thomson Reuters-Jeffries CRB Index : 269.84; fell 0.06 percent

* Gold Futures : $1617.7; rose 0.34 percent

* US Crude : $83.67; fell 0.37 percent

* Brent Crude : $98.14; fell 0.72 percent

* LME 3-month Copper : $7361.2; fell 1.14 percent


* Cable manufacturer Belden Inc said it agreed to acquire Canadian broadcast equipment maker Miranda Technologies Inc in a deal valued at about C$372 million ($357.31 million).

* Westport Innovations. : Earth-moving equipment maker Caterpillar Inc will tie up with Westport Innovations to develop natural gas-powered engines for mining trucks and locomotives to take advantage of low prices for the fuel.

* Crocotta Energy Inc. : The oil and natural gas company expects its second-quarter output to more than double on higher drilling at Alberta and British Columbia, which could help the company exceed its full-year production outlook.

* Canadian Pacific Railway : The railroad said Paul Haggis has been elected chairman, three weeks after a bitter proxy battle with New York activist shareholder William Ackman led to top level resignations at the company.


Following is a summary of research actions on Canadian companies reported by Reuters.

* Rainy River Resources : CIBC cuts price target to C$8 from C$11 to reflect revised estimates for project development and financing of the RRGP project, rating sector performer

* Blackpearl Resources Inc : Canaccord Genuity cuts price target to C$6.50 from C$6.75 to reflect the recent weakness in oil prices; rating buy


* Major Canadian economic data includes building permits and Bank of Canada rate decision

* Major U.S. events and data includes ISM Non-manufacturing

Stocks gain 1.47pc as RBA cuts rate - Australian Financial Review

The local sharemarket was up 1.47 per cent, to 4043.7, on Tuesday at close after the Reserve Bank cut the cash rate by 25 basis points to 3.5 per cent.

At 2.30pm AEST on Tuesday, before the RBA announcement, the benchmark S&P/ASX200 index was at 4024.7.

Earlier in the day the local market had rebounded ahead of the Reserve Bank of Australia's interest rate decision and a meeting of finance ministers and central bank governors from the Group of Seven major economies who will discuss Europe’s debt crisis later on Tuesday.

But the market is still fragile, with banks and financials the key indicator of where it will bottom, Peter Esho, chief market analyst at City Index, said.

“There’s definitely a possibility for the market to pull back over the next week or so on a negative offshore lead.

“If the financials can sustain these gains then the case for the index to have bottomed at yesterday’s levels might be a strong one.”

Financials stocks were 1.31 per cent higher in line with the broader market.

Stocks that had been hit hard during the last two weeks were finding support among investors and outperforming the market, Mr Esho said.

“I’m seeing a lot of beaten-down stocks do a little bit better today – Fortescue, Ausdrill, Dart Energy – those direct and indirect exposures to mining and energy.”

The market’s major faller was Qantas Airways, which plunged 18.31 per cent after saying it expected a fall of up to 91 per cent in its full-year underlying profit due to the troubled European economy and soaring fuel costs.

US STOCKS-Futures slide as G7 discusses euro zone crisis - Reuters UK

Tue Jun 5, 2012 1:08pm BST

* Spain says it is being shut out of markets

* All of the euro zone's major economies in decline

* Futures off: Dow 29 pts, S&P 1.6 pts, Nasdaq 9.5 pts (Updates prices, adds European data, byline)

By Rodrigo Campos

NEW YORK, June 5 (Reuters) - U.S. stock index futures fell in a choppy session on Tuesday as traders positioned for the outcome of emergency talks among the Group of Seven industrialized nations to tackle a deepening euro zone crisis.

Adding to the bearish sentiment, all of the euro zone's major economies are now in various states of decline, according `to business surveys that suggested even Germany is no longer immune to the crisis.

German debt prices rose and Spanish bond yields briefly jumped after Spain's treasury minister said the country was effectively shut out of the financing market. Spain's two-year yields rose above 5 percent for a fifth straight session while the 10-year held steady near 6.4 percent.

The S&P 500 was flat for the day on Monday after a steep decline last week as investors weighed low prices against the backdrop of Europe struggling with debt and stalling economies.

"Valuations are extremely attractive, dividend yields compared to Treasuries are at (multi-year) highs, but the global macro overhang can certainly create another down step in the short term," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York.

"I'd be genuinely surprised if at the end of the meeting the G7 came out with concrete steps of what they are going to do," said Pursche.

S&P 500 futures fell 1.6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 29 points, and Nasdaq 100 futures lost 9.5 points.

The Institute for Supply Management releases its U.S. non-manufacturing index for May at 10 a.m. (1400 GMT). Economists in a Reuters survey forecast a reading of 53.5, a repeat of the April figure.

Facebook Inc was down more than 1 percent in light premarket trading after reaching a low of $26.44 on Monday. Four out of five Facebook users have never bought a product or service as a result of advertising or comments on the social network site, a Reuters/Ipsos poll showed.

On Monday, the Dow Jones industrial average slipped 17.11 points, or 0.14 percent, to 12,101.46 at the close. The S&P 500 inched up just 0.14 of a point, or 0.01 percent, to 1,278.18. The Nasdaq Composite rose 12.53 points, or 0.46 percent, to 2,760.01. (Reporting by Rodrigo Campos; Editing by Padraic Cassidy)

Sixth annual global summit on financial literacy in Chicago reveals UAE ranks high for financial education - AME Info
Attended by senior Visa representatives from across the MENA region, the event explored potential solutions to improving financial literacy worldwide as part of both organisation's commitment to improving financial literacy rates.

Moderated by Janet Bodnar, editor of Kiplinger's Personal Finance Magazine, one of the most trusted personal finance publications in the U.S., and featured U.S. Consumer Financial Protection Bureau, Governor Jos Daro Uribe of the Colombian Central Bank and Canadian Parliamentary Finance Committee Chair James Rajotte. It also hosted a special panel presentation of original financial education research that explored ways financial knowledge and behavior can be improved.

"The public-private partnership between the Federal Reserve Bank of Chicago and Visa in hosting this Summit is a model on how we can improve financial literacy in the United States and around the world," said Charles Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago.

As part of Visa's global commitment to achieving greater community engagement and youth education within the field of Corporate Social Responsibility (CSR), the agency's objective was to develop a locally designed campaign to launch the global Financial Literacy programme in the GCC and help drive visitors to its Middle East financial literacy website:, Visa's aim is to reach 20 million people worldwide with financial literacy information by May 2013.

Global Financial Literacy Barometer: Key Findings
As part of the Summit, Visa and Kiplinger's Personal Finance Magazine released the results of the 2012 Global Financial Literacy Barometer that assessed and ranked the financial literacy levels of people in 28 nations.

Overall, the UAE ranked top of the countries surveyed in the MENA region, scoring just under ten points below the leading country Brazil. Brazil was followed by Mexico, Australia, the United States and Canada as having the most financially literate people.

The results show that parents in the UAE have a particularly positive approach to encouraging financial literacy among their children compared to most wealthy countries, with 78% believing it is important to speak to their children about their financial future on a regular basis.

Among the other key findings of the survey:

• 25% of respondents with a high income say they do not have enough funds to cover a personal economic emergency fall into high income categories. A high level of respondents in the UAE (70%) admitted that they do not have the funds necessary to survive a personal economic emergency lasting more than three months.
• Respondents in more than half of the 28 countries surveyed believe that overall, teenagers and young adults do not understand money management basics, such as budgeting, savings, debt and spending responsibly.
• Across the globe, the youngest and oldest citizens face the most personal economic risk in the sense that they have the smallest emergency reserves and they are least likely to follow a budget.

"The Barometer clearly demonstrates that while there have been great strides made in advancing financial education there is still much more to be done," said Oliver Jenkyn, Group Executive, North America, Visa Inc..

"That is why Visa and the Federal Reserve Bank of Chicago share a commitment to helping people of all ages gain the financial tools necessary to become better money managers. The annual Financial Literacy Summit is an important part of this effort."

Duke, GE Tempt Savers With Higher Yield Than Money Funds - Bloomberg

Duke Energy Corp. (DUK), Ford Motor Co. (F) and General Electric Co. (GE) are enticing a growing number of individuals to buy their debt through investments pitched as higher-yield alternatives to checking accounts and money funds.

These and other companies that sell the debt, called floating-rate demand notes, are exploiting frustration with money-market funds paying an average 0.03 percent as of May 29 and bank savings accounts at 0.13 percent. The notes, which usually require a minimum deposit such as $500 or $1,000 and offer checks to access the money, are paying 1 percent to 1.6 percent.

The notes help companies diversify their funding, which is skewed to securities such as commercial paper and bonds bought mainly by institutions. For retail investors, they provide less protection than an insured bank account or a money fund that holds debt from many issuers. The notes aren’t secured.

“It looks like these programs are a much better deal for the company than they are for the individual investor,” said David Sekera, corporate bond strategist at Chicago-based research firm Morningstar Inc. (MORN) “These programs don’t appear to pay enough extra spread over money-market funds to compensate the investors for the credit risk and lack of diversification.”

Issuers generally can change payout rates weekly. Duke Energy, a Charlotte, North Carolina-based utility, and Ford Credit, the company’s finance unit, promise to pay at least 0.25 percent more than the average money fund rate. Fairfield, Connecticut-based GE doesn’t guarantee a minimum.

Checkbook Bond

“I like to call them a bond with a checkbook,” said John Heffernan, director of the PremierNotes program at Duke Energy. “The unique thing about this is we’re selling them directly to the investors.”

Duke Energy started offering floating-rate notes to individuals about a year ago, marketing them first to employees and through billing inserts to customers before advertising in newspapers, Heffernan said in an interview. The amount of debt outstanding through the program increased 59 percent to $126 million as of March 31.

The finance arm of Peoria, Illinois-based Caterpillar Inc. (CAT), the world’s largest construction-equipment maker, had about $550 million outstanding in the floating-rate demand notes as of December. Detroit-based Ally Financial Inc. (ALLY), the auto-finance company, had issued about $3 billion outstanding in a similar product as of March 31.

Caterpillar’s notes are available to the general public. Ally’s generally are offered to its employees, retirees and immediate family members, as well as those at General Motors Co. (GM) and the Chrysler group of companies, said spokeswoman Gina Proia.

GE Capital

“Looking for CD or Money Market Rates? You can do better,” according to the marketing on GE’s Interest Plus website. The notes are issued by GE Capital, the finance unit of the industrial and financial-services company. GE has been offering the notes to individuals since 1992. It had $8.7 billion outstanding as of March 31, compared with $5.6 billion at the end of 2008.

“The real benefit of this product is flexibility,” Russell Wilkerson, a spokesman for GE Capital, said in an interview. “It allows customers to come in without a sales fee and exit at any time without a penalty. That supreme flexibility and an attractive yield is the strength of the offering.”

If a corporation selling these notes defaulted, investors’ money would probably be tied up in bankruptcy court and they may lose a significant portion of their investment, Sekera said.

While the investments let investors write checks against them and access the money daily, they aren’t insured by the Federal Deposit Insurance Corp. against losses and there are restrictions. Duke Energy requires that checks written or online transfers total at least $250.

No Trading

The notes, unlike traditional bonds, don’t have stated maturity dates and aren’t tradable in a secondary market. Buyers must rely on the company issuing them to get their money back.

People “tend to use it like a savings account or a money- market account,” Brad Reynolds, chief investment officer for LJPR LLC, said of Ford Credit’s Interest Advantage notes. Investors who are also employees of the companies may be inadequately diversified if there are credit problems with the issuers, said Troy, Michigan-based Reynolds, who works with clients who invest in the notes.

Money-market funds by comparison pool assets from a variety of sources.

“A money market fund is a diversified, professionally managed, highly transparent portfolio consisting of high- quality, liquid assets and governed by all the investor protections of a mutual fund,” Rachel McTague, a spokeswoman for the Washington-based Investment Company Institute, a lobbying group for mutual-fund companies, said in an e-mailed statement.

Money Funds

The staff of the Securities and Exchange Commission has been drafting two proposals aimed at reducing the risk money- market funds may pose to financial stability. The first would strip funds of their traditional fixed $1 share price, substituting a floating value. The second would impose capital requirements and restrict redemptions.

Duke Energy and GE Capital both said they are transparent about how the products work and that it’s the responsibility of individuals to determine what investments are right for them depending on their risk tolerance.

Ford Credit, a unit of the Dearborn, Michigan-based automaker, prominently discloses how its notes differ from bank accounts or other guaranteed products, said spokeswoman Margaret Mellott. The company had about $4.7 billion outstanding in its demand notes at the end of 2011.

Some of the companies issuing the notes generally can’t sell commercial paper to money-market funds because their short- term debt isn’t top-rated, said Peter Crane, president of Crane Data, which tracks money markets.

Credit Ratings

Moody’s Investors Service on May 22 raised the unsecured credit ratings of Ford and its finance unit to investment grade from junk status. Money-market funds generally can’t hold the company’s short-term debt, which was raised to P-3, the lowest level of investment grade, from Not Prime by Moody’s. GE’s short-term debt is rated first tier by Moody’s and S&P, while Duke Energy’s is rated P-2 by Moody’s and A-2 by S&P.

Investors should look up the ratings for the different companies offering these programs and check both the short-term and long-term ratings, said Morningstar’s Sekera. While the probability of a large corporation going bankrupt is low, the failure of companies such as Enron Corp. and Lehman Brothers Holdings Inc. are evidence that it’s possible, he said.

Setting Rates

Duke Energy and GE Capital have internal committees that can reset the rates paid on the accounts weekly. Ford Credit updates the rates weekly to reflect money-market rates plus 25 basis points and may pay greater than that “at its sole discretion,” according to the notes’ prospectus. Mellott, the spokeswoman, declined to comment beyond the prospectus on how the company sets its rates.

Duke Energy currently pays investors 1.2 percent for accounts less than $10,000 and as much as 1.6 percent for those with more than $50,000. GE Capital and Ford Credit paid a rate of 1 percent for investments of less than $15,000 and as much as 1.1 percent on amounts greater than $50,000 as of June 4.

Income on the notes is treated as interest and taxed at ordinary income rates.

If the rate is set by the company rather than an index, it’s harder to determine the value of an investment, said Richard Saperstein, managing director at New York-based Treasury Partners, which is a unit of HighTower Advisors and advises corporations and individual investors.

Consumer Confusion

“Clearly they are playing off of consumers’ interest in eking out a little bit better return on their money than they can get from bank accounts or money-market funds,” said Barbara Roper, director of investor protection for the Consumer Federation of America.

Even though the risks are disclosed in the notes’ prospectuses, investors may still confuse the products with money markets or guaranteed accounts because of the features they offer, Reynolds, the investment adviser, said. “It looks like a duck, quacks like a duck and swims like a duck.”

To contact the reporters on this story: Margaret Collins in New York; Elizabeth Ody in New York

To contact the editor responsible for this story: Christian Baumgaertel at

Enlarge image Duke Tempts Savers With Higher Yield Than Money Funds

Duke Tempts Savers With Higher Yield Than Money Funds

Duke Tempts Savers With Higher Yield Than Money Funds

Andrew Harrer/Bloomberg

Duke Energy, a Charlotte, North Carolina-based utility promises to pay at least 0.25 percent more than the average money fund.

Duke Energy, a Charlotte, North Carolina-based utility promises to pay at least 0.25 percent more than the average money fund. Photographer: Andrew Harrer/Bloomberg

Money market report for week ended June 1 - Times of Malta

On Monday, May 28, the ECB announced its weekly Main Refinancing Operation (MRO). The auction was conducted on Tuesday, May 29, and attracted bids from euro area eligible counterparties of €51.18 billion, €13.32 billion higher than the bid amount in the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing main refinancing rate of one per cent, in accordance with current ECB policy.

Also on Tuesday, May 29, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €212 billion. This operation was designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, May 25. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of one per cent. It attracted bids amounting to €420 billion, with the ECB allotting €212 billion, or 50.48 per cent of the total bid amount. The marginal rate on the auction was set at 0.26 per cent, with the weighted average rate at 0.26 per cent.

On Wednesday, May 30, the ECB conducted a three-month Longer-Term Refinancing Operation to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The auction attracted bids of €8.31 billion from euro area eligible counterparties, which amount was allotted in full, in accordance with current ECB policy.

Furthermore, on Wednesday, May 30, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.50 billion, which was allotted in full at a fixed rate of 0.66 per cent.

Domestic Treasury bill market

In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day bills maturing on August 31. Bids of €13 million were submitted, with the Treasury accepting €8 million. Since €2 million worth of bills matured during the week, the outstanding balance of Treasury bills increased by €6 million, to stand at €267.45 million.

The yield from the 91-day bill auction was 1.039 per cent, i.e. 1.2 basis points higher than that on bills with a similar tenor issued on May 25, representing a bid price of 99.7381 per 100 nominal.

During the week under review, there was no trading on the Malta Stock Exchange.

Today, the Treasury will invite tenders for 91-day bills and 182-day bills maturing on September 7, and December 7, respectively.

Money-Transfer Fees: Profits Come From Immigrants Sending Money Home - The Ledger

Both resent having to pay Western Union a $10 fee to send money abroad and an additional cut to convert dollars to pesos. But these charges have fueled the company's record profits and made it a relative outlier in the financial services industry. As billions of dollars in fee income have evaporated at the nation's largest banks because of regulations passed in the wake of the financial crisis, the money-transfer industry has escaped the crackdown.

Soon, however, the companies, which are largely regulated by states, will be subject to new federal rules. Starting in February, they will have to disclose more to customers about transfer fees and currency exchange rates. The rules, part of the Dodd-Frank financial regulation law, will also require companies to give customers up to 30 minutes after a transaction to get a full refund.

But consumer advocates are raising alarms that money-transfer companies face fewer restrictions because the rules do not touch the pricing of services.

"You still have a situation where customers are subjected to these predatory products with no cap on fees or exchange rates," said Oscar Chacon, the executive director of the National Alliance of Latin American and Caribbean Communities in Chicago.

Money-transfer companies say that they offer an invaluable service for customers who might not have access to traditional banks and who would otherwise have no way of transmitting money to their families.

"The money-transfer industry is very competitive, and consumers have a range of choices for sending money," said Tom Fitzgerald, a Western Union spokesman.

Western Union, which dominates the money-transfer market, notes that it already discloses the amount of money being submitted, the exchange rate and the amount that the recipient will receive. It also tells customers that "in addition to the transfer fee, Western Union also makes money when it changes your dollars into foreign currency."

Esparza, who sends money to his children in Mexico City, said that the $10 fee would not be onerous if he were sending a larger amount, but that it seemed exorbitant for $50.

Gonzalez said that even though $10 might not seem like a lot, "In Mexico, that money goes farther."

Aside from the transfer fees, Western Union and other similar services profit as they buy batches of currencies at a wholesale rate. The money-transfer companies do not disclose the spreads they benefit from when they set exchange rates.

"It's a big profit center for these companies, borne on the backs of the people who can least afford it," said Matthew Piers, a lawyer in Chicago, who successfully brought a lawsuit on behalf of Mexican immigrants against Western Union in 2000 that accused the company of misrepresenting exchange spreads.

Western Union did not admit or deny wrongdoing, but agreed to pay more than $400 million to settle the claims.

For Javaid Tariq, a taxi driver in New York City who sends money monthly to his family in Pakistan, the exchange rate is particularly infuriating because of how much money he loses. When he sent $300 to his family in April, he received 89.2 rupees for every dollar, less than the 91.2 exchange rate that he checks each morning, he said. For his family, that means 599 fewer rupees, or more than a week's salary in Lahore.

Frustrated, Tariq said, "They are taking this money from the people who can least afford it."

Analysts expect the market for money transfers to grow. The value of cross-border transfers is expected to reach $437 billion in 2012, up from $387 billion in 2009, according to the Aite Group, a research and advisory firm. In the United States, this is led partly by a growth in transfers to China and India and an influx of immigrants from western and eastern Africa, said Larry Berlin, an analyst with First Analysis in Chicago.

Western Union and rival companies are poised to profit. Western Union, with the largest share of the market at nearly 18 percent, recorded $4.2 billion in transaction fees last year, up 4 percent from 2010. The fees accounted for more than 75 percent of the company's total revenue last year.

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