Insurable Interest Canadian Insurance Blog

What You Need to Know he $250 billion closed-end fund industry is now the scene of one of the most dramatic power struggles in finance. Last month, Saba Capital Management launched a frenetic bid to have investors remove BlackRock as manager of six funds overseeing about $10 billion in assets. BlackRock is warning investors that Saba could radically alter the composition of the funds should it win control, exposing shareholders to greater risk. A few days ago, BlackRock Inc. sent an unusual message to thousands of clients. It contained none of the formulaic language or inscrutable fine print typically packed into these sorts of statements. No, this was a call to arms. “Your fund is under attack,” the headline screamed in bold print. The attacker: Boaz Weinstein, the sharp-elbowed Wall Street money manager who says price distortions in funds run by BlackRock and others are cheating investors out of billions of dollars, and they need to be eliminated. This has turned into something of a crusade for Weinstein. Last month, his hedge fund, Saba Capital Management, launched a frenetic bid to have investors remove BlackRock as manager of six funds overseeing about $10 billion in assets. Boaz Weinstein, founder and...

The Financial Industry Regulatory Authority has censured and fined SoFi Securities $1.1 million for failing to establish and maintain a reasonable Customer Identification Program for SoFi Money, its cash management brokerage account, which resulted in $2.5 million in stolen funds. According to FINRA’s order, from December 2018 through April 2019, SoFi used “a largely automated process to approve the opening of SoFi Money accounts that was not reasonably designed to verify the customers’ identity and was, therefore, vulnerable to fraud perpetrated by third parties using fictitious or stolen identities.” The firms approved the opening of approximately 800 accounts that third parties then used to transfer approximately $8.6 million from the accounts of customers at other financial institutions without authorization, FINRA’s order states. Approximately $2.5 million of those transfer were subsequently withdrawn by these third parties from the SoFi Money accounts. “As a result, SoFi violated FINRA Rules 33 l0(b) and 2010,” FINRA found. “During this period, SoFi also failed to develop and implement a written Identity Theft Prevention Program (ITPP) reasonably designed to detect, prevent, and mitigate identity theft.”

2. Build your board with people you admire. Davis recalled Munger’s thoughts on choosing directors, saying, “Those people are the face of your clients — and keeping people in front of you that you don’t want to disappoint will always make you behave better.” 3. Earn people’s trust. Munger advised living life “in a web of deserved trust,” Davis recalled. “He said that the nature of trust, of behaving in a certain way, it makes other people better as well,” and advised treating people in a way that they’re given “a reputation to live up to,” Davis said. 4. Be patient. Munger “talked about how difficult it is to do nothing … And he said, it’s often not that making a good decision is rare and valuable, but then sticking with it, not getting shaken out, letting it unfold over a very long period of time,” Davis said. “So Charlie was very comfortable doing nothing for long periods of time, and often in the investment industry, professionals are uncomfortable with that, because it looks like they’re doing nothing. “But Charlie and I used to admire the man who built the Suez Canal, the architect named Ferdinand de Lesseps. And he...

At the same time, the suit continues, “the DOL amended several related ‘prohibited transaction exemptions’ … including an amendment to PTE 84-24, which directly relates to the compensation that insurance agents may receive if they are deemed to be fiduciaries under the new 2024 Fiduciary Rule.” Labor’s 2024 fiduciary rule and PTE “amendments are just the latest salvos by the DOL in its almost 15-year quest to re-define what it means to be an ERISA fiduciary in contravention of the will of Congress,” the suit states.  “Moreover, it blatantly defies the prior ruling of the United States Court of Appeals for the Fifth Circuit … striking down a rule package that was effectively indistinguishable from the 2024 Fiduciary Rule,” it explains. FACC said in a statement Thursday that it was “disappointed that the DOL has chosen to go down this same tired path with yet another proposal that blatantly violates the 2018 ruling by the Fifth Circuit and arrogantly ignores limitations of its authority under ERISA.” The DOL’s new rules, finalized on April 23, “are yet another assault on the financial services industry — especially insurance agents — that only serve to create more cost and confusion for American consumers,” FACC...