From the September 2007 issue of Investment Advisor • Subscribe!

News & Products

Morgan Stanley DW Inc. has been fined $1.5 million by the Financial Industry Regulatory Authority (FINRA), and ordered to pay more than $4.6 million in restitution for "rule violations relating to the sale of corporate bonds to retail customers at excessive prices." The action was investigated and settled by NASD's Enforcement Department prior to the creation of FINRA, which consolidated the regulatory functions of the NASD and the New York Stock Exchange. Morgan Stanley was cited for charging excessive markups ranging from 5.88% to 17.86% on 2,807 sale transactions of Kemper Lumbermans Mutual Casualty Surplus Notes in the 9.15% and 8.30% series, with a face value totaling over $59 million. FINRA found that the firm failed to have a supervisory system in place that would have allowed Morgan Stanley to detect the excessive markups, and failed to properly register the individual responsible for review of the trading activities...

...Wells Fargo & Co.'s Wells Fargo Home Mortgage announced that it will close its nonprime wholesale lending business, which processes and funds subprime loans for third-party mortgage brokers. In 2006, the business represented 1.6% of Wells Fargo's total residential mortgage loan volume of $397.6 billion...

...Wells Real Estate Investment Trust, the public, nontraded REIT with about $5 billion in assets across the country (mostly class A office buildings) has changed its name to Piedmont Office Realty Trust Inc. The REIT began operations in 1998 and was closed to new investors in 2003, but used external advisors until it became a self-managed office REIT in April by acquiring those external advisor companies...

...The Nasdaq Stock Market said its matched market share of all U.S. Equity share volume was a record 29.1% in July 2007, more than any other U.S. exchange for the third consecutive month...

...Fidelity's National Financial unit has added eight firms to its alliance program. Through EverBank Advisor Services, National Financial-affiliated broker/dealers will gain access to a range of residential mortgage and home equity products. The other new members in the program include Beacon Research, which provides fixed-rate tax-deferred annuity research; BenefitProtect, which provides access to health insurance for broker/dealers and reps; Fixed Income Securities LP, a fixed income provider; Forefield Inc., a publisher of legal and regulatory presentations, newsletters, and seminars; NetWorth Services, Inc., which helps firms calculate adjusted cost basis for investments going back to 1925; Seabury & Smith, Inc., which provides insurance products; and thinkorswim, inc., which offers an equity order management system. Separately, National Financial has established a relationship with Daylight Forensic & Advisory LLC to provide clients access to its financial investigations and accounting services.

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