Personal Finance

A&A

SEC, NASD Release Report on Broker-Dealer Sales of Variable Insurance Products

The Securities and Exchange Commission (SEC) and NASD today released a joint staff report on the findings of their examinations of broker-dealer sales of variable annuities and variable life insurance.
Community News

Tyco Faces Follow-On Suit over Settlement

As part of their 2001 settlement with Tyco International Ltd., an investor group was given company shares.
A&A

Tax Law Changes Drive Higher Error Rate on 1099s

The Securities and Industry Association says that 9.5 percent of dividend tax forms sent by major Wall Street firms this year were wrong.The error rate is usually 5 to 8 percent, the Washington trade group says, but the new tax law created difficulties in reporting the corporate-dividends tax rate correctly this year.
Tax

Former IRS Officer Sentenced for Looting Grandmother’s Estate

A former Internal Revenue Service employee will go to prison after she admitted to abusing her position as trustee of her grandmother’s estate to divert funds to herself.Sandra J. Valencia, of Goodsprings, NV, was sentenced last week to 33 months in prison and three years supervised release after pleading guilty in January to six counts of mail fraud, five counts of wire fraud and four counts of tax evasion, the Associated Press reported, adding that U.S.
A&A

Student Loan Interest Rates to Fall to All-Time Lows

Interest rates on federally guaranteed student loans will drop to historic lows again this summer, potentially saving both new and current education loan borrowers thousands of dollars in interest over the life of their loans. These record-low rates will help families and students finance college this fall. "College financing has never been more affordable," said Tom Joyce, Vice President of Corporate Communications for Sallie Mae.
Tax

Hawaii Leads in per Person State Income Tax Collections

A report recently released by the United States Census Bureau lists Hawaii residents as the greatest contributors (per person) to state taxes in the nation. Residents in Hawaii’s top income bracket pay a state tax rate of 8.25% (for income over $80,000) - one of the highest rates in the country.
A&A

USPS Offers Solution to Validate Mutual Fund Trades

Cleaning up the mutual fund industry is going to take more than good intentions on the part of traders. The U.S. Postal Service is suggesting the $7 trillion mutual fund industry make use of technology that would stamp the date and time on electronic transactions, making it impossible to sneak in a late trade.The mutual fund sector has been beset by scandal as it came to light that fund mangers were allowing some preferred trades to go through after the 4 p.m. close of trading for the day.
Tax

10 Percent Bottom Tax Bracket May Be Here to Stay

The House on Thursday extended the bottom tax bracket that was created by President Bush’s tax cuts in 2001 and then expanded two years later.Tax on the first $6,000 in earned wages was lowered from 15 percent to 10 percent in 2001, then broadened in 2003 to cover the first $7,000 earned. The bill passed 344-76, with strong Democratic support despite worries about the ballooning federal deficit, the Associated Press reported.Without this legislation, those who fall into the 10-percent tax bracket will be pushed into a 15-percent tax bracket by 2011.

Companies Form Alliance to Seek Group Insurance

Embracing the old adage that there’s "strength in numbers," more than 50 of the country’s largest employers are banding together to find affordable health insurance for more than 4 million of their currently uninsured employees, the Washington Post reported.The companies, which include McDonald's, Marriott, Sears and Lockheed Martin, are looking for a single insurer to cover part-time employees, contractors and others who don’t qualify for traditional company plans.

GAO Recommends Twelve Actions For Exchange Listing Standards

Investors need timely and ongoing information on the listing status of issuers for use in making investment decisions.
Tax

Taxpayer Advocate Service Seeks Input on Universal Tax Issues

Members of the public who encounter systemic tax problems can now use the Internet to bring them directly to the attention of the IRS Taxpayer Advocate Service.The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service that helps taxpayers resolve problems with the IRS and recommends changes that will prevent problems."Individuals who have identified systemic issues that affect taxpayers on an ongoing basis will find it both easier and faster to use this new system," said Nina E. Olson, the National Taxpayer Advocate.
Community News

WorldCom Investors, Enron Employees Win Settlements

Two of the most stunning business collapses of the last few years produced hefty settlements for some of the victims this week.Citigroup, Inc. on Monday agreed to pay $2.65 billion to investors who claim the firm’s brokerage unit pumped up WorldCom despite their knowledge of massive losses at the company. The suit, which sought $54 billion, also alleged that Citigroup's brokerage arm, Salomon Smith Barney, offered big loans to WorldCom’s then-chief executive Bernard Ebbers in a swap for investment banking business.Citigroup, the world's largest bank, denies wrongdoing.
A&A

SEC Files Civil Fraud Charges Against PIMCO

The Securities and Exchange Commission today filed civil fraud charges in federal court against PIMCO Advisors Fund Management LLC (PAFM), PEA Capital LLC (PEA), PIMCO Advisors Distributors LLC (PAD), Stephen J. Treadway, the chief executive officer of PAFM and PAD as well as the chairman of the board of trustees for the PIMCO Funds: Multi-Manager Series, and Kenneth W. Corba, PEA's former CEO, for their defrauding of PIMCO mutual fund investors, in connection with an undisclosed market timing arrangement with Canary Capital Partners LLC.
Tax

Dream of Fleeing the Taxman? Get Real

Another April 15 has come and gone and if, like many Americans, you are still feeling bitter about the bite the taxman took out of your wallet, it’s still safe to indulge in a little fantasizing about skipping off to a tax haven like the Cayman Islands.
A&A

Vanguard’s Founder Calls For Better Fund Governance, Highlights Nine Emerging Issues

In a speech before the Mutual Fund Regulation and Compliance Conference entitled, "Mutual Funds in the Coming Century ... While We're At It, Let's Build A Better World," John Bogle called on the mutual fund industry to heed the Investment Company Act of 1940, which requires that mutual funds be managed in the interest of the fund shareholders, and not in the interest of their managers. Mr.
Tax

Treasury Issues Final Regulations On Student Loan Interest Deduction

The Treasury Department and the Internal Revenue Service this week issued final regulations relating to the deduction for interest paid on qualified education loans. "The final regulations issued today clarify which amounts qualify for the student loan interest deduction to ensure that students obtain the maximum deduction permitted under the law," said Acting Assistant Secretary for Tax Policy Greg Jenner.
Tax

IRS Issues Guidance On Capital Gain Dividends

The IRS and the Treasury Department this week issued guidance to clarify that capital gain dividends received from a mutual fund in 2004 will be taxed at the new, lower capital gain rates enacted last year.The lower rates are currently only legislated through 2008. The maximum tax rate on net capital gain has been reduced to 15 percent from 20 percent for most tax payers, and reduced to five percent from 10 percent for taxpayers in the 10 percent and 15 percent tax brackets for property sold or otherwise disposed of after May 5, 2003.
Tax

IRS Approves Automatic 401(k) Enrollment

Companies that offer 401(k) plans are becoming more aggressive about automatically enrolling employees in the wake of an Internal Revenue Service blessing on the practice, as long as employees are aware of what is occurring.While 401(k) plans have been long considered among the best retirement preparation tools, millions of eligible workers are not taking full advantage of the programs, the Sun-Sentinel reported.Some start with good intentions by committing a percentage of their pay to the savings plans but never increase the contribution as their pay increases.
A&A

Most Americans Don't Have the Right Plan for a Financially Secure Retirement

A Retirement Income Flexibility study commissioned by Golden Retirement Resources, Inc., creator of RetireMentor®, an integrated retirement income planning and management system, found that 64 percent of Americans are trapped by retirement plans that don't allow them to make adequate adjustments to their investments in response to market pressures or life changes.
Tax

Lesson from Quattrone Retrial: Don’t Cover Up Your Crimes

The retrial of Frank P. Quattrone suggests that prosecutors are focusing on the cover-up of the crime rather than the crime itself.Rather than mire a jury in the complexity of financial transactions and other details, prosecutors are filing charges connected with the straightforward question of whether the defendant lied to the government or hindered its investigation, the New York Times reported.

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