Laurenz Risseeuw

Blogs and Reviews

Blog Component

Potential commodities boom: Harmful for income inequality

June 13, 2017

Mid-year of 2017 which will be marked as mid-term of President Joko ‘Jokowi’, is now around the corner. Jokowi set key developmental targets at the beginning of his administration. One of them is narrowing down income inequality.


Income inequality has declined since President Jokowi took the office. Gini Coefficient, which measures income distribution ranges from zero (perfect equal meaning everyone earns the same income) to one (only one person earns all income in an economy), has fallen from 0.405 to 0.394. Gini Coefficient indicates a declining trend.


Therefore, the follow-up question for that progress is that what makes income inequality narrowing down? There is a tendency that lower commodity prices would lead to narrowing down income inequality.


It is no secret that Indonesia’s economy relies heavily on commodities, for example palm oil, rubber, and natural gas. When the commodity prices boom, Indonesia enjoys relatively massive amount of foreign exchange, and eventually higher national income and economic growth.


However, income from commodity price boom is not distributed well for many. And it might lead to widening income inequality, for two main reasons. First, only a certain small group of people benefits from commodity boom. They are generally rent seekers who get a permit to exploit natural resources.


Second, the concept of Dutch Disease is likely relevant to portray negative impact of commodity prices boom. The term was originally used to describe situation experienced by the Dutch in the late 1970s. The Dutch benefited (foreign exchange reserve accumulated) from the increased of natural gas price. But in contrast, it caused economic trouble and more unemployment rate. Economists define Dutch Disease is a condition when the commodity prices boom led to by the inflows of foreign exchanges.


According to Econ 101, large foreign reserves causing appreciation of exchange rate. It means that domestic products are relatively more expensive in the global market. So that, competitiveness of other products, including manufactured commodities, would decline. Only certain people who are involved in the production of commodities get the most gain from the commodity boom. But, the rest might get harmed.   


In the near future, there is a potential of another commodity price boom. According to the Central Statistics Agency (BPS), Indonesia’s cumulative exports rose by 18.63 percent in the January-April period this year from the same period in 2016.


The rise in export is mainly caused by higher price of commodities. Moreover, according to the World Bank’s Commodity Price Outlook as of April 2017, it is forecasted that prices of energy commodities and non-energy commodities are going to be in upward trends this year. 


The government should prevent the potential negative impact of commodity prices boom to widening income inequality. The government should more focus on two sectors to keep the income inequality narrowed down.


First is focusing on developing tourism sector. Over the past years, foreign exchange reserve from tourism industry has shown a positive trend. And it has been in the top four sectors for foreign exchange reserve contributors.


Moreover, tourism industry has relatively high multiplier effect comparing to other industries. By definition, multiplier effect is a condition occurred when a growth in one sector has positive effects on its sector and other sectors, also encourages growth in the local economy. According to World Travel and Tourism Council, tourism industry in Indonesia has multiplier effect 1.7. It implies that every one dollar spent on tourism would create 1.7 dollar income for the region.


Second is speeding up implementation of financial inclusion. According to the latest World Bank’s Financial Inclusion Data, less than half of total adults (age 15+) in Indonesia has been reached out by financial services, including formal saving and formal borrowing. In other words, there are many potential financial services users.


Many studies have shown that financial inclusion gives many benefits, for instance: manage cash flow through saving; finance business, particularly micro, small, and medium enterprises, through borrowing; mitigate risk of unexpected events, through insurance.


To make sure more people are included in financial services, policies in financial inclusion and financial access must get along together. All stakeholders, central and local government, the central bank, financial service authority (OJK) must collaborate to implement financial inclusion successfully.    


Indonesia should stop relying on commodities. History has recorded that commodity price boom is not last for a long period of time. It is good for economic growth for a while, but it affects income equality widen.   

Eastern Alliance Insurance Group History

January 31, 2017


Educators Alliance Insurance Company (Educators Alliance), a Pennsylvania-based underwriter of workers' compensation insurance, is organized as a joint venture between Eastern Holding Company, Ltd. (Eastern Holding) and Educators Mutual Life Insurance Company.


Educators Alliance develops fronting programs for Pennsylvania-based associations and group consortiums.


Educators Alliance is assigned a B+ (Very Good) financial strength rating from A.M. Best Company - unusual at the time for such a young company.


Eastern Holding acquires Employers Alliance, Inc. (founded in 1983 as Employers Compensation Services) to function as Educators Alliance's claims department, to generate fee-for-services revenue from Pennsylvania's self-insured community of large employers, and to participate in the fronted/captive alternative marketplace.


Eastern Holding successfully negotiates the buyout of its joint venture owner of Educators Alliance and renames the company "Eastern Alliance Insurance Company" (Eastern Alliance).


Allied Eastern Indemnity Company (Allied Eastern) receives approval to underwrite workers' compensation insurance in Pennsylvania. Employers Alliance, Eastern Alliance, and Allied Eastern are restructured under the umbrella of "Eastern Alliance Insurance Group" or "EAIG."

Eastern Alliance Insurance Group's A.M. Best rating is upgraded to B++ (Very Good), accompanied by a very positive rating rationale highlighting EAIG's "improved capitalization, strong operating performance, and superior agency relationships."

Employers Alliance receives approval to provide workers' compensation claims and risk management services to self-insured employers in Maryland.

In November 2002, EAIG moves to its current headquarters at 25 Race Avenue in Lancaster, Pennsylvania.


EAIG receives approval to offer Large Deductible and Retrospective Rating plans in Pennsylvania.


EAIG begins its state expansion project by offering workers' compensation insurance in Maryland and Delaware.

People encouraged to better secure online accounts following Yahoo breach by Online Security

November 2, 2016

Residents who use Yahoo Mail are being encouraged by the S.C. Department of Consumer Affairs to take action to secure their online accounts following the announcement last month of a massive breach.


During the last two weeks of September, Yahoo announced that at least 500 million user accounts had been compromised.


An investigation by Yahoo following suspicions of an attack in July uncovered a far larger, allegedly state-sponsored attack in recent weeks, according to the Associated Press.


“We take these types of breaches very seriously and will determine how this occurred and who is responsible,” the FBI said in a statement last week.


Given the importance most people place on protecting personal information, the Department of Consumer Affairs is encouraging Yahoo Mail users to take action by following several tips, said Megan Stockhausen, communications coordinator with the agency.


• Change the account password and security questions immediately. Use strong, creative passwords (uppercase, lowercase and special characters) and don’t share them with anyone. Also, don’t use the same passwords or security questions for multiple accounts, especially when using an email address as the login name on a site.


• Watch out for phishing attempts, which is defined by asking for personal or sensitive information via a phone call, text or email is a tactic used by scammers. Never reply to texts, pop-ups, or emails that ask for verification of personal information. Avoid clicking on links or downloading attachments from suspicious emails or texts.


• Closely monitor financial and benefits statements/accounts. Check all monthly statements and account activity, especially for financial accounts saved as payment options on internet merchant sites.


Review them carefully and notify the financial institution/provider as soon as an unauthorized or suspicious item is spotted.


• Consider a fraud alert and security freeze. Scammers may use the stolen information to open new accounts.


A fraud alert and security freeze are free security measures for a credit report. A fraud alert tells a business accessing the report to take extra steps to verify that the person holding the account is the one seeking its goods/services.


When a security freeze is in place, no one can access the report without the account holder approving it.


Stockhausen said these tips can help anyone trying to secure any personal online information.

Online Security: Cyber crime How companies are hit by email scams

October 20, 2016

Fraudsters are using clever impersonation techniques to siphon millions from unprotected businesses


When Keith McMurtry, corporate controller of Scoular, a 124-year-old US grain-trading and storage company, was asked by his chief executive to wire $17.2m to an offshore bank account, he did not question it.


Chuck Elsea told Mr McMurtry in a top-secret email that Scoular was in talks to acquire a Chinese company. The chief executive instructed him to liaise with a lawyer at KPMG who would provide the wiring instructions to an account in China.


“We need the company to be funded properly and to show sufficient strength toward the Chinese. Keith, I will not forget your professionalism in this deal, and I will show you my appreciation very shortly,” Mr Elsea wrote in an email in June 2014. Over three transactions, Mr McMurtry transferred the $17.2m to an account in the name of Dadi Co at Shanghai Pudong Development Bank, according to an affidavit signed by an agent with the Federal Bureau of Investigation and filed in a Nebraska court.


The email was a fraud. Criminals impersonated Mr Elsea by creating a phoney email account in his name. They also set up fake email and phone numbers in the name of a real KPMG partner, who later said he had never heard of Scoular. US authorities have traced the emails and phone number to Germany, France, Israel and Russia.


Scoular, which is ranked 66th on Forbes’ list of the US’s largest private companies with revenues of $5.9bn, is one of several thousand companies that have fallen victim to a new type of fraud known as business email compromise schemes which have netted $800m in the past six months.


In January 2015, Xoom, an international money transfer company bought for $890m last July by PayPal, a pioneer in digital payments, said an employee in its finance department was duped into transferring $30.8m in corporate cash to an overseas account.


Ubiquiti Networks, a US manufacturer of wireless networking products, disclosed that its finance department was targeted last June by an imposter and transferred $46.7m to overseas accounts. After discovering the fraud the company began legal proceedings and has recovered $8.1m.


In the boss’s name


More than 12,000 businesses worldwide have been targeted by the scams, also known as CEO email schemes, between October 2013 and this month. The transactions have netted criminals $2bn, according to the Internet Crime Complaint Center, an intelligence and investigative group within the FBI that tracks computer crimes. Companies large and small, across 108 countries, have been hit and the threat is growing, law enforcement officials say.


“It has gotten quite out of hand,” says Mitchell Thompson, a supervisory special agent and head of the financial cyber crimes task force in the FBI’s New York office.


The criminals are “becoming more brash”, he says, by introducing third parties, such as law firms and consultants, to carry out the fraud. They have also become more sophisticated about how they troll potential victims.


“They’re using social media a lot against us. They might send a spam email intentionally to see that the executive is out of the office, [making] it prime time to target. They might look on Facebook and see that [the chief executive is] travelling to Europe or Australia so they know you’re in the air for a certain amount of time” and have a window to strike, Mr Thompson says.


Tricking people using the internet to steal money is hardly new. There have been criminal groups taking advantage of users of dating websites and fundraisers for disasters or terrorist attacks. A decade ago authorities were flooded with complaints of bogus Nigerian email scams and false lottery winners.


Criminals use a variety of tactics. Sometimes they gain access to executives’ emails by hacking into the accounts using phishing emails. The accounts of chief executives can also be spoofed by changing a letter or replacing a company’s official email service with a Gmail account. The phoney account created to mimic the KPMG lawyer used the suffix, a fake address convincing enough to trick someone who is not checking carefully.


The criminals usually impersonate the executive and order the transfer, often through a second account they secretly control, such as the one said to belong to the KPMG lawyer. The money is sent to accounts in Asia or Africa, where it is harder for authorities to recover. By the time the company realises it has been duped, authorities say, the money has long gone.


Mr McMurtry told the FBI that he was not suspicious of the transfers since Scoular was discussing an expansion in China and he had been working on an annual audit with KPMG, according to the FBI affidavit. Mr McMurtry, who is no longer with Scoular, did not respond to requests for comment. Scoular also declined to speak.


Inauspicious origins


The scam began simply enough. Mr McMurtry received an email purporting to be from Mr Elsea. “I have assigned you to manage file FT-809,” the bogus email said. “This is a strictly confidential operation, which takes priority over other tasks. Have you already been contacted by Rodney Lawrence [the KPMG lawyer]?” It went on: “This is very sensitive, so please only communicate with me through this email, in order for us not to infringe SEC regulations.”


The following day “Mr Elsea” sent another email stating that the transfer was urgent and he should “proceed asap with the wire to the same beneficiary and bank account as yesterday”.


FBI agents traced the phoney email account in Mr Elsea’s name to Germany. The KPMG email name was linked to a server in Moscow. The phone number provided was traced to a Skype account registered in Israel.


Scoular’s lawyers told the FBI that Wells Fargo said Dadi — the name on the account in Shanghai where Mr McMurtry sent the money — manufactured army boots. Dadi claimed to the bank that the wire transfers were part of a sales contract for the manufacture of boots, according to the FBI affidavit. Scoular said it did not purchase boots.


Mr Lawrence, the KPMG lawyer whose identity was used in the email scheme, is the global leader of KPMG’s international tax services. When interviewed by the FBI he told them he was not familiar with Scoular and had not spoken with anyone at the company, according to the affidavit.


The FBI obtained a court order to seize the funds held at Shanghai Pudong Development Bank but was told that the account had been closed and the funds transferred.


Business email compromise crimes are “a huge” problem, says Austin Berglas, head of cyber investigations at K2 Intelligence and a former chief of the FBI’s cyber branch in New York. Executives are so reliant on email they do not pick up the phone to confirm the transaction and “there is no second check,” he adds.


Some of the email scams are similar, suggesting they come from the same criminal organisation.


The FBI and US Justice Department have several investigations under way. Over the past 12 months the FBI has put more intelligence analysts on the case and have liaised with law enforcement agencies worldwide. “We will open cases this year and we will make arrests this year,” says James Barnacle, chief of the FBI’s money laundering unit.


‘Strictly confidential’


Glen Wurm, director of accounting at AFGlobal Corp, which makes products for the aerospace, oil and gas industries, received an email in May 2014 similar to that sent to Scoular.


Purportedly from Gean Stalcup, the company’s chief executive, it said: “Glen, I have assigned you to manage file T521. This is a strictly confidential financial operation which takes priority over other tasks. Have you already been contacted by Steven Shapiro [attorney KPMG]?”


Mr Wurm was told not to speak to anyone and was directed to wire $480,000 to an account at the “Agriculture Bank of China”, according to legal documents. The hacker mimicked the tone Mr Stalcup used with Mr Wurm, according to a lawsuit that AFGlobal filed against its insurer Federal Insurance.


Six days later, Mr Shapiro contacted Mr Wurm confirming he had received the transfer, adding that he needed another $18m, according to a lawsuit. At this point Mr Wurm became suspicious and said he could not send so much money without alerting senior executives.


It was too late: the bank account had been emptied. AFGlobal is suing Federal Insurance and Chubb, its parent company, seeking more than $1m for allegedly breaching its contract by not covering the claim. Chubb has declined to comment.


Mr Thompson has declined to discuss either scheme but says criminal groups copy successful tactics. While some schemes have been as large as $90m, the average loss is $120,000.


“The ones you don’t hear about are the smaller corporations that send $50,000. They’re saying, ‘I’m not going to make payroll, we’re going to close our doors’ as a result of the fraud,” Mr Thompson says.


There is little that companies can do to recover the funds. Banks are not required by law to reimburse a company that makes a transfer. Cyber insurance policies might not cover a fraud against a company if its network has not been hacked.


“The bank will look at the totality of what the company has done to protect itself and whether or not they’re adhering to the agreement that the company has signed associated with the initiation of any of these wires,” says Doug Johnson, senior vice-president of overseas payments and cyber security at the American Bankers Association. One good practice is requiring the approval of two people, he says.


That practice is not fail-safe, however.


Like AFGlobal, Medidata Solutions, a clinical technology company, fell victim to email fraud in September 2014.


An employee in accounts received an email from an executive requesting a money transfer, according to a lawsuit filed in a federal New York court against Federal Insurance. The email included an image of the executive’s face and his signature.


Like the other alleged scams, the email included the name of a lawyer, who would act as a liaison for the employee. The employee told the lawyer that he needed the approval of two others before a $4.7m transfer could be made.


The fraudsters had a solution, though. Later that day, two employees with authority to sign off on the transfer were emailed instructions, purporting to be from the chief executive of Medidata, telling them to approve the wire to a bank account in China.


The transfer went through. Two days later, an email from the lawyer told the same employees to initiate a second transfer of $4.8m. One of the employees had grown nervous and called the executive direct — stopping the fraud and saving millions for the company.


Yet law enforcement officials say companies need to be more vigilant to guard against a crime that has become simpler to commit. “It’s easy,” says Mr Barnacle. “All you need is a computer.”

Online Security: Anonymous Internet Vigilantes Are Taking Peer Review Into Their Own Hands

October 11, 2016

Since 2012, the message board PubPeer has served as a sort of 4chan for science, allowing anyone to post anonymous comments on scientific studies. Originally intended as a forum for the discussion of methods and results, PubPeer has perhaps become best known as a clearinghouse for accusations of scientific error, fraud, and misconduct—forcing journals to issue corrections and retractions, damaging careers, and eventually embroiling the site in a court case in which it’s advised by Edward Snowden’s legal team at the American Civil Liberties Union.


In the view of its critics, PubPeer enables an unchecked stream of accusations with no accountability. But to its supporters, PubPeer is maybe the only consistently effective way to expose fraud and error in the current scientific system. It exists at a time of quiet crisis for science and science journals, when the community is concerned about an inability to replicate past results—the so-called “reproducibility crisis”—and the number of papers retracted is on the rise. The traditional system of peer review seems unable to address these problems.


“We started it because we wanted more detailed arguments about science, and we were really shocked at how many fundamental problems there are with papers, involving very questionable research practices and rather obvious misconduct,” said Brandon Stell, a neuroscientist at the Centre National de la Recherche Scientifique in Paris and the creator of PubPeer.


There’s certainly no denying its effect. According to Retraction Watch, a blog that monitors scientific corrections, errors, and fraud, at least three high-profile scientists in the past few months have had their studies retracted by journals after their data was questioned by anonymous commenters on PubPeer.


The most frightening words a researcher could read on PubPeer are 'There are concerns'


One of the scientists, Fazlul Sarkar, is currently suing several of the commenters. His lawyers argue the site must reveal the identities of the users that have done damage to Sarkar’s career, after he lost a tenured position at the University of Mississippi. PubPeer has refused to release the information. Both Google and Twitter have filed a court brief in support of the site, which is currently being defended pro-bono by lawyers from the ACLU.


It’s perhaps the most interesting case about internet privacy you've never heard of, and it all stems from a frustration among scientists with the shadowy politics of publishing and peer review.


At its base, PubPeer is a site that allows anyone to post comments on any scientific paper listed on the federally-funded PubMed database, either anonymously or under their own name. It’s functionally very simple, but the built-in anonymity makes it a safe outlet for scientists—especially young, early-career scientists—to discuss and criticize research without fear of repercussion. And that’s something they’re apparently eager to do: The site has logged over 55,000 mostly anonymous comments since its launch.


Back in October 2013, someone on the PubPeer site started threads for about 20 previously published papers on which Fazlul Sarkar, a cancer researcher then at Wayne State University in Michigan, was an author. The papers span over a decade and involve a variety of complex molecular signalling pathways involved in cancer. The issues raised by the comments, though, were relatively straightforward: They claimed that images in these studies appeared to have been changed, duplicated, and re-used across papers, suggesting that the experiments they appeared in may have never actually happened, or could have produced different results.


Stell noted that, in an effort to keep the discussion civil (and legal), PubPeer specifically requests that users do not accuse authors outright of misrepresentation or fraud. Comments are moderated in case they break these guidelines, so any discussion of such allegations tends to have a muted tone.


That doesn’t make this group of self-appointed watchdogs any less effective, though. The most frightening words a researcher could read on PubPeer are “There are concerns.”


Discussion over “concerns” surrounding Sarkar’s work expanded rapidly as it became clear the commenters had found a rich vein to mine: According to the NIH funding database and PubMed, Sarkar has received more than $12 million in NIH funding and authored over 500 research papers over his career. The community is nothing if not meticulous—PubPeer commenters have been known to pull up decades-old PhD theses looking for dirt—and a search of the message board shows that eventually 77 papers with Sarkar on the author list were presented for scrutiny. By checking the papers against each other patterns began to emerge; for example, one user claims a single set of images were duplicated up to 54 times in 13 papers, across three years.

Top Story: Apple customers targeted with massive email scam by Oakmere Road

September 19, 2016

There's been an alarming number of phishing scams identified this year and these emails are getting more clever and realistic than ever.


The latest phishing email you need to keep an eye out for disguises itself as an iTunes email. Much like the Amazon phishing scam we showed you, this email claims that you have been overcharged for a download purchase, $25 for one song, which is usually $1.99 or less, or $45 for the Netflix app.


The email will show you a very official-looking billing statement and will encourage you to click a link that says, "Cancel andx Manage Subscriptions." But, because you're a reader, you'll notice the typo in the link and know that's red flag number one.


Whatever you do, don't click that link. It could take you to a malicious site that can steal all of your valuable information, then it's game over.


If you think you really might have been overcharged, check your bank statements first before clicking any links.


Just being in the know about these emails is step one. There are other steps you can take to keep yourself safe from these phishing attempts. If you see an email like this in your inbox:


- Be sure to exercise caution before you click on anything. Hover over any links and see where they direct before you click. If the links provided go to a website, don't click it. Navigate to the company's site yourself without the link.

- Take some time and try to spot the typos.

- If you're not sure that you can spot the signs, click here to take our phishing IQ test to see how many stand out to you.

- Practice multi-level authentication, which means you have at least two forms of verification, such as a password and a security question before you log into any sensitive accounts.

- Another thing is to have an internet security system. We recommend our sponsor Kaspersky Lab. Software from Kaspersky Lab can recognize and block ransomware. Even if it's a new version or unknown version of a ransomware, Kaspersky Lab can figure out that the program is doing something it shouldn't. Kaspersky Lab will stop it from running and will roll back any files that were encrypted to a previous non-encrypted version. Of course, Kaspersky Lab software also helps filter out and warn you about phishing scams, so your odds of downloading a ransomware virus are slim. Get this protection, and so much more, with Kaspersky Total Security. 

Oakmere Road: Scholarship scams target college students

September 8, 2016

As college students and parents seek assistance to cover the ever-soaring costs of tuition, some have been targeted by scammers offering false promises of scholarships and grants.


“At CPA, we always encourage prospective and current families to apply for as many scholarships as possible in order to receive the maximum amount of free financial help,” said Mary King of College Parents of America. “Free is a key word. Remember to apply more, but give the least amount of information needed, and never pay to win money.”


According to the Federal Trade Commission, unscrupulous companies sometimes approach prospective college students with bogus offers of scholarships, financial aid or consulting services in exchange for an application fee or payment. Some use high-pressure sales pitches at seminars, urging students to pay immediately or risk in losing out on opportunities for aid.


“We don’t know how widespread this is,” FTC spokesman Frank Dorman said.


Some scammers, according to the FTC, guarantee the students will get their fees refunded if they don’t receive a scholarship, but then attach conditions that make it impossible to collect a refund.


Others tell students they’ve been selected as finalists for awards and demand an upfront fee, or request bank account information on the false premise of confirming their eligibility.


“Don’t pay,” King advised. “Legitimate scholarships do not require a fee. Stay away from any types of fees when looking for scholarships.”


Legitimate scholarships, she said, also don’t require recipients to provide personal banking or credit card information.


Conducting some online research into the background of a scholarship or consulting company can also help students spot fraudulent or deceptive offers, she said.


Signs that a scholarship offer may be a scam include the presence of application fees, no proof of past winners, no phone number listed, a request for personal financial information and winning a scholarship you didn’t apply for, King said.


There are also companies that claim they have programs that can increase a student’s eligibility for certain scholarships or grants.


Some legitimate companies provide students with lists of scholarships or run students’ profiles through national scholarship databases to find potential scholarships for which they’re eligible. But legitimate companies won’t guarantee scholarships or grants, according to the FTC.


King recommends that students and parents can save money by doing the legwork themselves.


“Avoid companies that state they will do the work for you,” King said. “Scholarships are work. No one else can do it for you. Try to avoid any company that states it will do the work for you.”

Oakmere Road: 5 Signs That Your Investment Adviser Is Scamming You

August 27, 2016

When it comes to investing, there are precious few certainties, other than the fact that nobody works for your financial best interest as completely as you do.


That fact became obvious to the clients of the Warrenville, Ill., company Capital Management Associates recently when the SEC brought a suit against the father-and-son team that run it for "cherry picking" trades.


We'll get back to that story in a moment. But it's important for everyone to know that even the ethical players in the financial industry earn their living based on the fees they get directly from you or via the providers of products they recommend to help you achieve your goals.


In addition, because financial management is somewhat complicated and the future is never guaranteed, it's an industry rife with opportunities for fraud and theft. That's especially a risk when people turn over complete control of their hard-earned cash to an "expert" who promises to manage it for them.


If you suspect that your financial adviser may be scamming you, here are five signs that can help you uncover it.


Sign No. 1: An Adviser Won't Provide Real-Time Trading Information.


In the case against Capital Management Associates, the SEC alleges that the duo ran trades without specifying whether they were for clients' accounts or for the owners' accounts. Then, once the profitability or loss of the trade was assured, the company would backdate that information, assigning the profitable trades for themselves and the losers to clients.


Losing money in an investment is not a crime, but cherry-picking among winning and losing trades after the fact is.


How could clients of Capital Management Associates have known that they were getting saddled with the bad trades? The short answer is: by staying in the loop.


Those who trust their adviser to trade on their behalf should, at the very least, insist on receiving a running total of all trades when they are made. If your financial adviser can't or won't do that for you, then chances are pretty good that you're being scammed.


Sign No. 2: An Adviser's Returns Are Too Good to Be True.


Bernie Madoff swindled investors out of billions of dollars in what has been called the largest Ponzi scheme ever uncovered. While Madoff, a former chairman of the Nasdaq stock exchange and securities representative on SEC industry panels, knew enough to hide from the regulators for decades, his returns were too consistent to be real.


Sponsored Links Any time an investment advisor is guaranteeing returns or assuring consistency, year in and year out, there's a pretty good chance it's a scam. And while there are a few legitimate annuities with investment accounts structured in a way to "guarantee" you won't lose money, they're generally just high-cost insurance plans where you're paying dearly for those guarantees through the structure of the deal.


Sign No. 3: You're Getting Hot Tips That You're Told You Need to Act on Now.


Any legitimate investment worth owning will still be available tomorrow, after you've had the time to think about it (and research it independently). Any pushy advisor telling you things like, "You've got to act today to get in on the ground floor" or "You don't have time to read the paperwork" is asking you to act without reviewing something, which is a common hallmark of a scam.


While there are real deadlines for things like IRA contributions, the money in those accounts can easily sit as cash until you've had time to review the details of the investment recommendation. And be aware that prices in the stock and bond markets do change regularly -- often several times throughout a trading day. If your adviser brings you an investment to consider and you do take the time to review it before buying, don't be surprised if the price winds up being a bit different than initially discussed.


Still, it's better to wait and lose a little bit than to lose everything to an outright scam.


Sign No. 4: You're Promised Investments That Will Be "No Cost to You."


If you're working with a financial adviser, that advisor is getting paid by you, either directly by checks you write or indirectly via commissions, spreads, or fees generated by the investments you make. Any adviser claiming otherwise is hiding something -- likely an outlandishly high fee for placing an investment or insurance policy, which can often run north of 7 percent of the invested amount.


A competent advisor deserves to be paid for his or her time and expertise. But one that won't tell you how much you're paying for the service or how you're paying for it is an adviser to walk away from.



Sign No. 5: Your Account Is Being Churned and Burned.


And speaking of fees, be wary of an adviser who regularly churns your account through multiple trades of similar types of annuities, mutual funds, or other investments. If your adviser is getting paid through a hidden commission from making the transaction, that activity is very likely lucrative for the adviser ... but not so much for you.

Not all investments work out, of course, but a common definition of insanity is doing the same thing over and over again while expecting different results.


If your advisor is trying to convince you that the investment you are in is so much worse than a fairly similar one you should be in, that's a sign that neither investment is likely right for you.

Investor Education Gateway by International Financial Securities Regulatory Commission

August 25, 2016

Welcome to the IOSCO Investor Education Gateway! This is the place to find information about many IOSCO members' on-line investor education activities, as well as IOSCO publications and presentations regarding investor education.


Investor Education has been and continues to be a significant part of multiple IOSCO seminar training programs. Additionally, and upon requests made by IOSCO members, dedicated Investor Education training has been organized and presented by IOSCO staff.


IOSCO has a major commitment to improving and promoting investor education. Just some of the priorities on the horizon for the IOSCO Education and Training team include:


- Conducting Investor Education Workshops;

- Expanding the Investor Education Gateway;

- Making investor education resources available for all IOSCO members;

- Continuing IOSCO research regarding all aspects of investor education, and offering assistance to IOSCO members with respect to their own investor education initiatives;

- Providing forums and other platforms for IOSCO members to share "Best Practices" and "Good Ideas";

- Analyze what does the current research show with respect to investor education?;

- Focus on what works and what does not work...and what is the proof if something does work?"


The International Financial Securities Regulatory Commission was established to promote investor confidence in the securities and capital markets by providing more structure and government oversight.

International Financial Securities Regulatory Commission: Reporting by undertakings with listed securities

August 16, 2016

The Transparency Directive prescribes for Member States to set out rules for issuers with securities admitted to trading on an EU regulated market so that they disclose certain key information about their operation. With such a transparency, European issuers build sustained investor confidence and contribute to the capital market union.


Legal framework

Basic acts

- Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (Directive 2004/104/EC) – consolidated version including subsequent amendments


Other acts

- Equivalence of third country accounting standards: Read more (Later)


Other acts

- Commission Delegated Regulation (EU) 2015/761 of 17 December 2014 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to certain regulatory technical standards on major holdings (Regulation 2015/761/EU)

- Commission Recommendation of 11 October 2007 on the electronic network of officially appointed mechanisms for the central storage of regulated information referred to in Directive 2004/109/EC of the European Parliament and of the Council (notified under document number C(2007) 4607) (Recommendation 2007/657/EC)

- Commission Directive 2007/14/EC of 8 March 2007 laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (Directive 2007/14/EC) – consolidated version including subsequent amendments


The International Financial Securities Regulatory Commission was established to promote investor confidence in the securities and capital markets by providing more structure and government oversight.

View older posts »