Posted in Recent Posts Regulations

Short Sales & Securities Lending… Ripping off 401(k) Investors!

Securities lending (SL) is one of the less-well-publicized shadow banking activities. Like repurchase agreements (repo) and asset-backed commercial paper, SL can be a source of very short-term wholesale funding, allowing a shadow bank to engage in the kind of liquidity, maturity and credit transformation that banks do. And, like other short-term funding sources, it can suddenly dry up, making it a source of systemic risk. When funding evaporates, fire sales and a credit crunch follow. ( Source: A Primer on Securities Lending )

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Posted in Recent Posts Regulations

The SEC will never approve a Fiduciary Standard

Reasons the SEC will never approve a Fiduciary Standard… There has been a lot of discussion in recent months about the Securities and Exchange Commission stepping up to protect investors with a “Fiduciary Standard” of care.  Following a huge volume of fan-fare, the SEC went silent on the use of…

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Posted in Regulations

How Principal uses “words” to steal money…

Defining Assets vs. Investments…  How Principal can steal money… Following my last post I was reminded by a colleague that most financial advisors think “Asset Manager” and an “Investment Manager” share the same meaning, so when Principal refers to “realized gains of the investment,” and Iowa law refers to “income, gains…

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Posted in Regulations

The Principal Group of Companies are ignoring Iowa regulations…

We all have to learn to be more pro-active if we expect to identify investment fraudsters like The Principal Group of Companies.  This rodeo with Principal will be soon coming to an end… we have wrapped up the barrel racing, calf roping and bronc riding, and now we are at…

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Posted in Ethics & Compliance Money Laundering Mortgage Fraud Regulations Your 401(k)

An Open Letter to President/CEO Dan Houston, The Principal Group of Companies

Mr. Dan Houston: Your company has been aware of my website since it’s inception three years ago.  Soon after publishing my first blog post, I received a call from a Principal Life Insurance Company attorney, advising if my website contained any information that was not truthful, he was instructed to…

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Posted in Regulations

Annual Audits and your 401(k)…

As a Fiduciary, you have a legal responsibility to have the “best interest” of your plan participants when choosing investments for their 401(k) plan.  If you don’t understand the term “fiduciary,” then Google it until you find a description that you understand.  The DOL holds the Plan Fiduciary personally liable…

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Posted in Regulations

Principal Life can steal your retained earnings

The Office of the Comptroller of the Currency is a major federal agency that regulates the regulators, as well as the entire banking system.  In their handbook published in February, 2014, the agency cautioned bank related fiduciaries that use Principal as a service provider.   A significant portion of their handbook…

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Posted in Regulations

The truth about ERISA regulation…. continued

The truth about ERISA regulation…. continued.   My previous post focused on how the regulators make decisions that favor the financial institution industry, and NOT the investor.  The amended ERISA regulations in 2010 exemplified that fact, when they literally made it legal for service providers like Principal Financial Group to lie…

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Posted in Regulations

The truth about ERISA regulation and your 401(k)…

ERISA regulation… Regulators were shocked a few years back when the financial crisis of 2008 hit investors hard…. they discovered financial institutions had been lying to investors, stealing their money to cover their losses, and violating every law on the books to the tune of trillions of dollars loss for…

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Posted in Regulations

ERISA Section 404(c)… A License to Lie…

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that establishes the standards for private pension plans, such as 401(k)s and 403(b)s. Section 404(c) is a specific  part of this law that permits employees to direct the investment of their own retirement accounts.  The section follows a prudent standard…

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