HBK SORCE and PRESQUE ISLE UNVEIL MERGER: CPA and business advisory firm Hill, Barth and King has merged Presque Isle Capital Management into its financial planning unit, HBK Sorce Advisory LLC.Terms were not disclosed.
Founded in 1991, Erie, Pa.-based Presque Isle specializes in financial planning for affluent clients, as well as corporations. The addition boosts HBK Sorce's assets under management to more than $1 billion.
Going forward, PICM will do business as Presque Isle Capital Management, a Unit of HBK Sorce Advisory. HBK Sorce was formed five years ago following the merger of HBK and Sorce Financial.
Headquartered in Boardman, Ohio, HBK ranked No. 65 on Accounting Today's 2006 Top 100 Firms list with revenues of $34.1 million.
SUPREME COURT BACKS MERRILL LYNCH: In a unanimous decision, the U.S. Supreme Court sided with Merrill Lynch & Co. in limiting the rights of some shareholders to bring class-action cases. The loophole would have allowed class-action securities lawsuits to proceed at the state level.
In the opinion, written by Justice John Paul Stevens, the justices said that the case fell outside the scope of the Securities Litigation Uniform Standards Act of 1998.
The law had been aimed at restricting civil class-action securities lawsuits, but several attorneys have sought ways around the statutes at the state level, where local laws can allow broader claims.
The actual case concerned a lawsuit filed by a former Merrill Lynch broker, Shadi Dabit, who said that research reports issued by the securities firm were biased. Among other things, the class-action suit alleged that the fraud harmed brokers' personal portfolios and their businesses. Dabit pursued his case under Oklahoma state law.
Merrill Lynch has already paid $100 million in fines related to its research report practices, and has faced lawsuits from different classes of investors beyond the brokers' case.
"[The decision] is of great significance to all publicly traded companies and financial services firms, as securities class-action plaintiffs will no longer have the ability to bring so-called 'holders' class-action suits," said Merrill Lynch's law firm, Skadden Arps Slate Meagher & Flom, in a statement.
Most shareholder class actions involve allegations that an investor was misled in being convinced to buy or sell stock. "Holders" are investors who supposedly would have sold their shares, but instead held them or were convinced not to buy shares.
MORNINGSTAR ADDS FIVE NEW FUND CATEGORIES: Morningstar has added five new categories and one broad asset class to its proprietary classification system for mutual fund portfolios based in the U.S. The company said that the additions will aid investors in finding funds that use distinct investing strategies, and provide better peer group comparisons among funds in each category. These include long-short, inflation-protected bond and target date 2000-2014. It also added a balanced broad asset class to its current set of four broad asset classes.
NASD LAUNCHES FINANCIAL EDUCATION EFFORT FOR THE MILITARY: The NASD Investor Education Foundation has unveiled a $7 million financial counseling program that is geared toward helping members of the U.S. military services and their spouses.
The initiative is to teach U.S. troops how to manage their money and avoid scams. This, says NASD, is an upshot of the recent scandals in which some financial firms have been accused of exploiting troops headed for Iraq with deceptive loans, investments and life insurance.
The program was created with the assistance of the Securities and Exchange Commission and several consumer groups. NASD chairman and chief executive officer Robert Glauber said, "We know that military personnel want and need objective, unbiased information to help them make sound financial decisions."
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