Compliance October 15, 2009

SEC Hits Schwab with Wells Notice over Bond Funds

 Charles Schwab has been notified by the U.S. Securities and Exchange Commission (SEC) that it could be the target of an SEC civil suit.

Reported by

Schwab said in an SEC securities filing that it received a Wells notice on Wednesday, indicating SEC staff will recommend the regulator file the suit alleging securities law violations connected to the Schwab YieldPlus Fund and the Schwab Total Bond Market Fund. 

“The Company intends to respond to the notice to explain why it believes enforcement charges are unwarranted,” Schwab said in the SEC document. 

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Schwab has been the target of civil suits and regulatory investigations focusing on its handling of the two funds. The lawsuits filed against Schwab in recent months have alleged the company improperly represented the funds as safe for investors and as an alternative to cash when the funds were actually laden with risky mortgage-backed securities, according to the filing. 

The SEC serves a Wells notice on a company to notify it about a potential government regulatory action and to provide an opportunity for the targeted firm to offer a defense.

Diversions October 14, 2009

Mustached Americans Want Help with Finances

Financial advisers take note: Mustached Americans are looking to better their savings habits.

Reported by

More than half of mustache-wearers would consider seeking out counsel about personal finances, according to a survey commissioned by the American Mustache Institute (AMI), a tongue-in-cheek organization “protecting the rights of, and fighting discrimination against, mustached Americans” and Quicken, a provider of personal finance software.

Mustached Americans might feel the need to get their finances in order because their spending habits have left them fewer savings than their bearded and shaven friends. Despite earning 8.2% more than those with beards and 4.3% more than the clean-shaven, mustached Americans show an average 3% lower savings rate than the non-mustached, the research found.

The survey concluded that the “lavish Mustached American lifestyle” is a key contributor to lower savings among individuals in this facial hair cohort.

What do mustached individuals buy? According to AMI, the majority of Mustached Americans’ disposable income was spent on toiletries such as condoms, cologne, and teeth-whitening solutions (10%) and alcoholic beverages such as Budweiser beer and Rich & Rare Canadian Whisky (11%).

“If efficiencies in financial management could be realized in the near-term, it’s highly probable that over the next four to five years, we will see Mustached Americans’ savings rate grow to surpass their bearded and shaven peers,” said research consultant Hans Menjou-Bärtchen.

Menjou-Bärtchen Research Consultants conducted the survey during the first six months of 2009 using a random sample of 2,000 mustached Americans, 2,000 bearded Americans, and 2,000 clean-shaven Americans.

The study is available here.


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