Posted on 09/28/2011 5:16:20 AM PDT by Libloather
RBC paying $30.4M to settle SEC charges
MARCY GORDON, AP Business Writer
Wednesday, September 28, 2011
WASHINGTON (AP) — RBC Capital Markets has agreed to pay $30.4 million to settle federal civil charges of misleading five Wisconsin school districts that lost $200 million invested in risky securities.
The Securities and Exchange Commission announced the settlement Tuesday with the brokerage firm, which is owned by the Royal Bank of Canada.
The SEC said RBC Capital Markets didn’t fully disclose the risks in 2006, when the school districts purchased the investments.
The agency said RBC is paying a $22 million fine, and $8.4 million in restitution and interest. The SEC will distribute all those funds to the districts.
New York-based RBC neither admitted nor denied wrongdoing.
The SEC last month sued another brokerage firm, Stifel Nicolaus & Co., over sales of the same investments to the five school districts. RBC put the investment deals together and St. Louis-based Stifel — which was the school districts’ financial adviser — sold the investments to them, the SEC said.
The school districts sued Stifel and the Royal Bank of Canada in 2008 in Milwaukee County Circuit court.
(Excerpt) Read more at newstribune.com ...
Boy talk about home field advantage. ;-)
so the school districts get back pennies on the dollar of pension money that “Went With the Wind” after being invested in snake oil
But but but....they had such a nice glossy prospectus!
Something tells me the people who invest pension money for school districts are not the sharpest tools in the box
$30.4 mil on $200 mil.....$169.6 million on the push....I’ll take that all day long.
The Wisconsin school districts had borrowed most of the money for the investments and hoped to use the profits to meet obligations to their pensions, health care and life insurance programs, the SEC said.
Sounds like the same sort of bundled home mortgages that wrecked so many other investment portfolios. And this school district had borrowed the money to purchase the investments.
It's still incredible that these bundled mortgages become so common before the high risk was widely understood.
Wow, that sounds exactly like the time I maxed out my credit cards to buy lottery tickets so that I'd never have to work again.
is this from the TARP money the canadian banks recieved?
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