Category: Blog

In the 80’s Smith Barney a very large financial investment firm used to run TV commercial advertisements that were targeted toward savers and small business owners. The commercials would have an older gentleman saying, “We earn money the old fashion way, we earrrn it!”. Its a very iconic commercial because it portrays to investors that the hired investment firm has “financial advisors” with strong work ethics. Fast forward to today and we have similar terminology with the use of the word “fiduciary” thrown around in the financial advising industry. Although financial advisors have a fiduciary duty to its clients, they are all different.

Blurring the lines of a fiduciary financial advisor is when a investment firm is related to a broker dealer. Broker dealers conduct business based on commissions. The reason this is important to know is because an advisors goal may not be aligned with the individuals financial goal but of generating commissions for the broker dealer. Full disclosures usually has to be made to the client so the client is aware of any potential conflicts of interest. We see this conflict of interest recently with TIAA CREF investment advisors with incentives and firm pressure to peddle proprietary products. They have incentives to peddle firm products with compensation, sales target goals, and will be terminated if not met. The compensation model of the employees is widespread throughout big Wall Street and banks.

Because of these compensation packages, fancy words to incite clients trust are used to give the appearance of a “fiduciary” financial advisor. Again, we see this with the TIAA CREF case page 7 when they used the words “fiduciaries”, “objective”, and “non-commissioned”. But, in reality the advisor is trying to hit their corporate sales goals without getting fired regardless of the clients investment goals. Now, does this sound like a fiduciary looking out for your best financial interest? Will your investment goals be met with the firm proprietary products or employee compensation models? This is a industry wide practice to keep an eye on because the firm may be paid differently based on proprietary products versus non-proprietary products. These issues can be easily eliminated when the broker dealer is an independent third party.

A often overlooked conflict of interest is the 12b-1 fees on funds. This is a fee on mutual funds that get paid out but sometimes are not disclosed to the client as seen recently with an investment advisor failing to disclose conflicts of interest for mutual fund share classes.

A fiduciary financial advisor today can blur many lines depending on how they are structured. At Treveri Capital, we are a non broker dealer with a 3rd party custodian for transparency, and aligning our goals with your financial goals. Our fiduciary duty is earned with your trust as a boutique investment firm catering to individuals investment goals.

Copyright © 2021 All rights reserved. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

Big banks jump on the latest trends with the term “financial inclusion” for the masses. But, is financial inclusion from big banks a myth?

Recent news from Wells Fargo shows quite the opposite of inclusion from Wells Fargo by eliminating revolving lines of credit of users borrowing $3,000 to $100,000. Although this is financial exclusion, can this be seen as a form of “financial empowerment”? Elimination of debt is good but sometimes debt is used to create more wealth and savings which is “financial empowerment“.

What most people forget about is investment advisor accounts and/or brokerage accounts offer margin which can be used as a line of credit. Contact your investment planner today!

Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. Treveri Capital LLC is a California registered investment advisor. For information about Treveri Capital LLC’s, please consult the Firm’s Form ADV available at www.adviserinfo.sec.gov.

metropolis towers dtla eb-5 los angeles trevericapital SEC lawyer charges

Planned Metropolis Towers DTLA

EB-5 is quite popular here in the Los Angeles area.  Most of the construction downtown Los Angeles is from Chinese EB-5 money.  It definitely attracts multiple participants because of the money involved.  Although there is big money to be made in EB-5, it is highly regulated and difficult to successfully do.

EB-5 is a way for an immigrant (popular with wealthy Chinese) to get a greencard by bringing in money and following strict guidelines. If all guidelines are met, they get a greencard in a few years. This is where it gets tricky.  The general EB-5 guidelines are they need to bring $500K-$1M into the US and generate a minimum of 10 new jobs for 2 years for a new commercial enterprise. What does this mean?   Multiple professionals are needed to align these moons.

To do these deals, a lawyer is needed and somebody with good deal flow.  Why is the deal flow so important?  It’s important because of sustaining 10 jobs for 2 years. That means the project being done as a deal must not fail or eliminate jobs.  If the project fails, then no greencard.  Also, if done incorrectly, you can be in violation of securities laws.

Recently, the SEC charged EB-5 lawyers for being unlicensed securities brokers and in violation of the 1933, 1934, and Exchange Act. Not only did the lawyers charge their normal fees to the client, but they got commissions for the deals without disclosing this to their client.

These EB-5 lawyers that violated the securities laws are another example of why it’s so important to have transparency, full disclosure, and regulators watching after the general public.

 

Disclaimer: Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. TreveriCapital LLC is a California registered investment advisor.

The CFTC ordered a monetary penalty and permanently bans Garen Ovsepyan, Sharpe Signa LLC and Haeres Capital LLC from the commodities industry.  The ban was for misrepresentation of $145 million vs $15 million assets under management (AUM).  Also, the forex trading advisor was not registered as a CTA and claimed a false exemption from AUM.  Link to CFTC Fraud.

With all these Unicorns lately, the market for private stock has been getting hot.  The SEC has alleged that NetCirq has violated federal securities laws regarding transactions involving Pre-IPO companies, swaps, and registration requirements.

overcrowded-unicorns-trevericapital-pre-ipo

 

 





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