By Suzanne Barlyn
A DOW JONES NEWSWIRES COLUMN
NEW YORK (Dow Jones)–A surge in arbitration claims over private placements is raising a good question: Shouldn’t someone raise the income and asset thresholds that were designed to ensure that these largely unregulated securities are marketed only to institutions and well-heeled, sophisticated investors?
The answer would seem obvious, considering that these thresholds were set more than 20 years ago.
When Charles Satterfield joined Stanford Financial Group in 2005 as managing director of fixed income, he had no idea this meant peddling Certificates of Deposit.
“They wanted to tie my compensation directly to sales of the bank CD,” said Satterfield, a fixed-income investment strategist.
“When grandma came in and wanted stability and a little bit of income, my answer was supposed to be, “Oh, the bank CD.” “When a young guy came in and wanted to grow his principal, my answer was supposed to be, “Oh, the bank CD.” “No matter what the question was, I was supposed to answer, “the bank CD.’” Continue reading…
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