College of Business Administration’s Student Investment Fund (SIF) program, launched in the Fall 2010 semester based on the $250,000 investment fund allocated to the CBA by the UEI,
is now ACCEPTING APPLICATIONS from students to participate as
Interns and Security Analysts
General Requirements
• Student is a business major student at CBA while participating in the SIF program
• Student will become a member of IIS (Institutional Investment Society) or FMA (Financial Management Association)
• Student will need to commit two semesters and register 2 credit hours in each semesters for FIN 199 (Special Problem in Finance) or MBA299A (Special Problem in Finance) for a total of 4 credit hours.
For Interns
• Student will register 1 credit hour for FIN 199 (Special Problem in Finance).
• Students who successfully complete the internship will be given priorities to join the Investment Committee (IC). After becoming IC members, students need to commit another two semesters first as Security Analysts and then Portfolio Managers. Students will need to register 1 credit hour in the 2nd semester and 2 credit hours in the 3rd semester for FIN 199.
For Security Analysts
• Student has taken FIN 101 (Business Finance) and received a grade of B or above
• Student is currently enrolled in one of the following finance classes at CSUS: FIN 134, FIN 135, FIN 136, MBA 220, MBA 222, and MBA 223.
Benefits:
• Gain real investment experience by managing a portfolio worth more than $250,000
• Network and collaborate with finance industry professionals
• Attend industry conferences and professional presentations
• Numerous opportunities to enhance leadership, presentation and investment skills
• Receive 4 units of upper division GE requirements
Student Expectations:
• Motivated to work independently and in groups
• Excellent writing and oral communication skills, and the ability to utilize in-depth research expertise and synthesize large quantities of information
• Committed to investing the time necessary to succeed in the fast paced field of investment
If you are interested, please submit your resume, transcripts and a letter of interest (including your goals for the program, why you are a good candidate and your career objectives) to Dr. Moore, Tahoe 2117, e-mail: djmphd@csus.edu
FOR SEMESTERS APPLICATION DEADLINE MANDATORY MEETINGS
SPRING 2013 – FALL 2013 January 30, 2013 Mondays 2:15 – 4:15 p.m.
Tuesday, January 29, 2013
Friday, January 18, 2013
Short Essay on White Collar Crime
A man named Gordon Gekko once said, “The point ladies and gentlemen, that greed, for the lack of a better word, is good.” Though Wallstreet is a fictional movie about insider trading, it is relative to the insurmountable illegal profit taking has been the creed of many corporate executives. In the book Infectious Greed, by Frank Partnoy, we explore many attempts of governmental agencies including the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to regulate and enforce the abuses of banks, blue chips, and institutions. Due to strategic ambiguity which these commissions would intentionally not regulate, precedence was set for future illicit activity. The easy answer to why this continued through the late 80’s into the late 90’s would be to assume lack of criminal prosecution, but the real answer to the nonexistent monitoring and regulation of key individuals was the considerable amount of conflict of interest.
Credit default swaps, collateralized debt obligations, and derivatives were as difficult to regulate as to pronounce. Congress, as illustrated in chapter 6 made numerous bill proposals to regulate the markets. Lead by Congressman Jim Leach, he battled with Mark Brickell, the President of the International Swaps and Derivatives Association (ISDA). There were many heated discussions with Brickell who complained that the 900 page bill written by Leach and his staff would impose on suitability and create standards for swaps (Partnoy, 152). Though Congress made a stand against the ISDA and their lobbyists, the government did not prevail which ended up with delegating a group made up of industry executives that would self-monitor the derivative companies. This is where our first conflict of interest can be seen with Gerald Corrigan, a Goldman Sachs employee was named the co-chairman of the self-monitoring group. By electing someone who previously held a political position in New York, as well as worked for an investment bank, there should have been an immediate concern. Government regulation was ineffective as a way to prevent abuse through the proposals of bills. The extraordinary efforts of manipulation and discretization of those who were against the ISDA would not be successful in their efforts, including our own Congress.
Security analysts or stock analysts are put in place to make recommendations on companies stocks which typically are followed religiously by the everyday investor. Their business is to conduct due diligence on particular industries and specific companies with utmost fiduciary responsibility. Chapter 9 states that the mid 1990’s were the start of the IPO frenzy, internet bubble fiasco. Security analysts were recommending every tech IPO at a buy rating, and it was for good reason because three-quarters of IPO’s increased during 1999. Analyst’s including Henry Blodget, Mary Meeker, and Jack Grubman became famous stock pickers because of their recommendations on these IPO’s, Blodget most famously for predicting that Amazon would double to $400 (Partnoy, 276). Investors who made fortunes would soon see the evaporation of easy profits in the tech bubble burst of 2002. This was caused directly from the security analyst making buy recommendations of these stocks which were drastically overvalued. Bankers and corporate executives pushed their analysts to make buy recommendations because it would appreciate their stock prices. Investors were easily persuaded by these “Oracles” of Wall Street, and once again another conflict of interest.
Before investors feared the corruption of security analysts, there was the fear of accounting malpractice and the cooking of the books. Investors seeking to mitigate risk more effectively after the technology bubble burst, were eager to invest in what they thought was the world’s greatest company. This company was known as Enron. With chapter 10 giving it the appropriate name of the time as “The World’s Greatest Company,” we can only expect to read about the “greatest” scams of all time. Enron was making generous profits from its derivatives trading desk (its only legitimate and profitable business) as well as its use of Special Purpose Entities. These uses of tricky accounting principles performed by Enron’s auditor, Arthur Anderson, were considered legal at the time, but would not be considered ethical and moral today. The illegal activity that came unaccounted and unaudited by Arthur Anderson was their prudency reserves and their forward curves. Anderson failed to audit when Enron was intentionally misstating their volatility and current valuations of their trading positions. Also failure in catching Enron when they made changes in their day to day forward curves which would hide profits up to $20 million dollars in a single trading period (Partnoy, 328). The accounting misappropriation as seen in the 1980’s with Andy Krieger at Banker’s Trust had reemerged with the accounting fraud with Arthur Anderson. Accounting firms, like security analyst, and lawyers have a fiduciary responsibility to represent their clients. In this specific case, it is to show the investors that this company is following the Generally Accepted Accounting Principles (GAAP). In this case, Anderson was paid frivolously to keep the SEC off of Enron’s back and reports say that they were even caught shredding important accounting documents in the midst of the scandal.
Although external and internal controls were set in place to prevent the abuse of the many banks, large cap companies, and institutions, there was little stopping these white collared criminals from achieving incredible amounts of wealth. Even in the case of private law-suits on executives that knowingly committed securities fraud, the punishment was typically a fine that was substantially lowered through appeal and a slap on the wrist which would occur as a suspension from the derivatives market for a short period of time. In each of the cases provided there were some case of conflict of interest that should and could have been prevented. Although there is not necessarily a common theme that relates all situations together, we can assume that with proper judgment during appointing heads of regulation as well as maintaining the fiduciary responsibilities of management and employees is critical to eliminating most problems. As for the need for regulation may be necessary in special cases, the market should be free to work efficiently.
Credit default swaps, collateralized debt obligations, and derivatives were as difficult to regulate as to pronounce. Congress, as illustrated in chapter 6 made numerous bill proposals to regulate the markets. Lead by Congressman Jim Leach, he battled with Mark Brickell, the President of the International Swaps and Derivatives Association (ISDA). There were many heated discussions with Brickell who complained that the 900 page bill written by Leach and his staff would impose on suitability and create standards for swaps (Partnoy, 152). Though Congress made a stand against the ISDA and their lobbyists, the government did not prevail which ended up with delegating a group made up of industry executives that would self-monitor the derivative companies. This is where our first conflict of interest can be seen with Gerald Corrigan, a Goldman Sachs employee was named the co-chairman of the self-monitoring group. By electing someone who previously held a political position in New York, as well as worked for an investment bank, there should have been an immediate concern. Government regulation was ineffective as a way to prevent abuse through the proposals of bills. The extraordinary efforts of manipulation and discretization of those who were against the ISDA would not be successful in their efforts, including our own Congress.
Security analysts or stock analysts are put in place to make recommendations on companies stocks which typically are followed religiously by the everyday investor. Their business is to conduct due diligence on particular industries and specific companies with utmost fiduciary responsibility. Chapter 9 states that the mid 1990’s were the start of the IPO frenzy, internet bubble fiasco. Security analysts were recommending every tech IPO at a buy rating, and it was for good reason because three-quarters of IPO’s increased during 1999. Analyst’s including Henry Blodget, Mary Meeker, and Jack Grubman became famous stock pickers because of their recommendations on these IPO’s, Blodget most famously for predicting that Amazon would double to $400 (Partnoy, 276). Investors who made fortunes would soon see the evaporation of easy profits in the tech bubble burst of 2002. This was caused directly from the security analyst making buy recommendations of these stocks which were drastically overvalued. Bankers and corporate executives pushed their analysts to make buy recommendations because it would appreciate their stock prices. Investors were easily persuaded by these “Oracles” of Wall Street, and once again another conflict of interest.
Before investors feared the corruption of security analysts, there was the fear of accounting malpractice and the cooking of the books. Investors seeking to mitigate risk more effectively after the technology bubble burst, were eager to invest in what they thought was the world’s greatest company. This company was known as Enron. With chapter 10 giving it the appropriate name of the time as “The World’s Greatest Company,” we can only expect to read about the “greatest” scams of all time. Enron was making generous profits from its derivatives trading desk (its only legitimate and profitable business) as well as its use of Special Purpose Entities. These uses of tricky accounting principles performed by Enron’s auditor, Arthur Anderson, were considered legal at the time, but would not be considered ethical and moral today. The illegal activity that came unaccounted and unaudited by Arthur Anderson was their prudency reserves and their forward curves. Anderson failed to audit when Enron was intentionally misstating their volatility and current valuations of their trading positions. Also failure in catching Enron when they made changes in their day to day forward curves which would hide profits up to $20 million dollars in a single trading period (Partnoy, 328). The accounting misappropriation as seen in the 1980’s with Andy Krieger at Banker’s Trust had reemerged with the accounting fraud with Arthur Anderson. Accounting firms, like security analyst, and lawyers have a fiduciary responsibility to represent their clients. In this specific case, it is to show the investors that this company is following the Generally Accepted Accounting Principles (GAAP). In this case, Anderson was paid frivolously to keep the SEC off of Enron’s back and reports say that they were even caught shredding important accounting documents in the midst of the scandal.
Although external and internal controls were set in place to prevent the abuse of the many banks, large cap companies, and institutions, there was little stopping these white collared criminals from achieving incredible amounts of wealth. Even in the case of private law-suits on executives that knowingly committed securities fraud, the punishment was typically a fine that was substantially lowered through appeal and a slap on the wrist which would occur as a suspension from the derivatives market for a short period of time. In each of the cases provided there were some case of conflict of interest that should and could have been prevented. Although there is not necessarily a common theme that relates all situations together, we can assume that with proper judgment during appointing heads of regulation as well as maintaining the fiduciary responsibilities of management and employees is critical to eliminating most problems. As for the need for regulation may be necessary in special cases, the market should be free to work efficiently.
Tuesday, January 15, 2013
Bullish Report on Responsys "MKTG" Proves Correct
Attached is the analysis my teammates put together for the CFA Research Challenge in early December 2012.
https://docs.google.com/file/d/0B8Uo5UtVXY9hUVJtVlhhYm9nVUU/edit
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