Here’s A Fun, Market-Crash-Unrelated Disaster Roiling Some Investors

The sound of Leon Cooperman whacking his computer monitor is deafening.
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WHY CAN'T THINGS JUST FUCKING WORK?

Something SunGard Data Systems made screwed up, so BNY Mellon’s mutual-fund administration is screwed up, so clients of 800 or so mutual funds are screwed. Who can we sue?

A computer glitch is preventing hundreds of mutual and exchange-traded funds from providing investors with the values of their holdings, complicating trading in some of the most widely held investments….

Fund-research firm Morningstar Inc. said 796 funds were missing their net asset values on Wednesday….

Fund industry attorneys said the real challenges would arrive in the coming weeks, as fund companies and BNY Mellon hash out who is liable if investors traded on false pricing.

If an investor paid a higher net asset value than he should have, for example, some fund companies believe BNY Mellon should pay that difference. BNY Mellon declined to comment about the liability issue.

A New Computer Glitch is Rocking the Mutual Fund Industry [WSJ]

Related

Now Here Are Some Guys Who Knew How To Rip Off A Client

One aspect of good salesmanship is that you have to offer an attractive proposition not merely to the abstract entity that is your nominal client - El Paso, Italy, Greece - but also to the specific human being who is your contact at that client. Telling a corporate treasurer who is five years from retirement that a trade will have a significantly positive NPV due to huge cash flows in years 11-15 is not always as effective a sales technique as buying him a nice steak and an evening of unclothed entertainment. I suspect, though, that the latter strategy is more highly correlated with whatever you're selling ending up on the front page/op-ed page/sec.gov. Anyway, I definitely admire these guys for this particular con*: The SEC alleges that Argyll Investments LLC’s purported stock-collateralized loan business is merely a fraud perpetrated by James T. Miceli and Douglas A. McClain, Jr. to acquire publicly traded stock from corporate officers and directors at a discounted price from market value, separately sell the shares for full market value in order to fund the loan, and use the remaining proceeds from the sale of the collateral for their own personal benefit. Miceli, McClain, and Argyll typically lied to borrowers by explicitly telling them that their collateral would not be sold unless a default occurred. However, since Argyll had no independent source of funds other than the borrowers’ collateral, Argyll often sold the collateral prior to closing the loan and then used the proceeds to fund it. Got it? Argyll gave corporate executives margin loans at 50-70% loan-to-value based on the market price of their stock (based on the volume weighted average price over five days leading up to the closing of the loan). They took the stock as "collateral." They then trousered the stock and sold it for, y'know, 100% of the market value, with 50-70% of that funding the loan and the remaining 30-50% funding miscellaneous expenses that presumably included unclothed entertainment for themselves. The loans had three-year terms and were not prepayable for 12-18 months, so the expected life of the scam was at least 12 months (but see below).