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Understanding Security Management

Understanding Security Management

What is Security Management?

Security Management is the administrative process of the management and cultivation of securities, which are financial instruments that undergo trade and exchange within the realm of the public, commercial market – Security Management activities latent within this market rely heavily on the authentication, authorization, purchase, and general transactional activity undertaken by publically-traded securities.

Security Management differs from traditional money management, due to the fact that securities cannot be used as currency within a commercial setting; this means that while securities can be traded and exchanged within the setting of a financial market, individuals in possession of securities are not permitted to use securities as legal tender.

The Role of Security Management

Within individual securities exists an individual monetary value, which is valued both as per its immediate value, as well as its eventual value; eventual value with regard to securities exists as a result of the capacity for the increase or decrease with regard to its valuation.

Individuals or services specializing in the field of Security Management will be well-versed in the methodology of interest with regard to measures, ideologies, and strategies latent within the Security Management industry: While securities do retain an immediate valuation, they also retain an eventual – or prospective – valuation; the differences between these type types of valuation is vast

Immediate valuation represents that inherent value of the security in the event of its redemption; the eventual value is facet that typically taken into further consideration with regard to Security Management strategies – as a result of accrued interest or a decrease in valuation, securities are subject to increase, decrease, or stability with regard to future value

Security Management and Security Transfers

An activity that is commonplace with in Security Management strategy is the notion of transfer undertaken by an individual security; as a result, the receipt of a security certificate allows for the conveyance of legality within an individual transfer.

A Security Certificate is required by the SEC in order for the completion of the process; the Security and Exchange Commission (SEC) is the governmental body responsible for the oversight of all transfer and activity with regard to securities – this requirement is also imperative with regard to approval of the SEC with regard to the transfer of individual securities.

Security Management Legality

Security Management can be a vital resource with regard to investments, trades, and exchanges of both stocks, as well as securities; however, within the realm of the open stock market, there also exists a wide variety of legality and strict stipulations to which must be adhered. Prior to signing any legal documentation or paperwork with regard to the undertaking or contracting of the services of Security Management, individuals are encouraged to consult with an attorney who specializes in business, finance, employment, and contracts.

As a result of the legal acumen provided by a skilled attorney, a contract for the hiring of a business management consultant will retain the optimal benefit for both parties involved in the agreement.

 

What You Didn’t Know About Exchange Rates

What You Didn't Know About Exchange RatesWhat are Exchange Rates?

Exchange Rates are rates that are applied to currency; currency is another classification for the wide range of monetary systems in circulation. Exchange rates are defined by the innate value of an individual currency with regard to others in circulation. Currencies maintaining higherexchange rates may allow for an individual acquiring that currency – in exchange of another currency – to receive a larger amount of a currency with a higher exchange rate. Conversely, currencies with lower Exchange Rates may allow for a subtracted amount of that currency received upon exchange.

A Practical Example of Exchange Rates

Although seemingly complex, Exchange Rates can be explained in far more simpler terms:
A Scenario Illustrating Exchange Rates
On April 3rd, 2009, the following illustrates the Exchange Rates shared between the United States Dollar (USD) and the Indian Rupee (INR):
One United States Dollar, which will be referred to as ‘USD’, is equivalent to 49.89 Indian Rupees – Indian Rupees will be referred to as ‘INR’ for the purposes of this example.
In the event that an American traveled to India and wished to exchange the USD – with regard to applicable Exchange Rates – for the INR – approximately 50 INR were equivalent to 1 USD; upon exchanging 5 USD, the American traveler would expect to receive approximately 250 INR.

On May 7th, 2010, the following illustrates the Exchange Rates shared between the United States Dollar (USD) and the Indian Rupee (INR):

That same American traveler wishes to return to America on May 7th, 2010, whereas the applicable exchange rates between the USD and the INR had since declined subsequent to April 3rd, 2009; the then-current exchange rate was 45.41 INR for every USD.
Upon exchange the initial 250 INR with the hopes of receiving 5 USD, the American traveler will find that as per the actives exchange rates in India, 250 INR is equivalent to 227.05 USD; 23 USD less than the initial amount possessed.

Uses for Exchange Rates
As per the previous example involving the fluctuation of exchange rates, individuals undergoing currency exchanges with regard to international monetary systems are subject to either gains or losses with respect to the applicable exchange rates; as a result, the following activities have arisen in conjunction with the notion of exchange rates:

Exchange Rate Trading (FOREX)
Akin to the act of investing and trading stocks, the act of trading currency is similar in the implementation of value fluctuation with regard to rendering financial losses or gains. FOREX, which is a colloquialism for the term ‘foreign exchange’ is the systematic activity of exchanging various forms of currency within a setting of a commercial market. 
Foreign Exchange Market (FOREX Market)
Existing both in physical and virtual forms, the marketplace used by traders is commonly referred to as the FOREX Market; with regard to the dynamic of exchange rates, international currency is exchanged between individuals interested in the monitoring of the behavior of that currency – in conjunction with the stock market, there exist a wide variety of observable trends and patterns with regard to the valuation of foreign currency and exchange.

What Are The Types of Tax Fraud

What Are The Types of Tax Fraud

What is Tax Fraud?

Tax Fraud is classified as the purposeful,unlawful criminal act committed by an individual – or entity undertaken in with the intent of avoiding the satisfaction of taxes owed to the Federal Government Department of Taxation or the Internal Revenue Service (IRS).Tax Fraud is a nature of fraud in which the perpetrator conducts illegal, unlawful, fraudulent, and typically clandestine activity in order to avoid the payment of taxes applicable to – and expected of – the business or commercial operation in question.

Types of Tax Fraud

Tax Fraud can take place in a variety of methods; furthermore, the means undertaken by individuals committing Tax Fraud can range in their nature, as well:

Misrepresentative Tax Fraud

Misrepresentative Tax Fraudis defined as the purposeful act of misrepresenting the status of finances, income, or expenses in order to intentionally avoid the fulfillment of tax payment required by a specific individual or entity:

This type of Tax Fraud can take place in the event that an individual not only misrepresents their respective, reported earning with regard to the fiscal year, but as a result, misrepresents the amount of tax payments owed; due to the fact that taxation is calculated by the earnings of an individual, a misrepresentation of earnings is corollary to a misrepresentation of expected tax payments

With regard to Tax Fraud, Money Laundering is the purposeful concealment of earnings through the facilitation of masking endeavors undertaken with regard to the accurate portrayal of detailed earnings; money can be laundered upon misrepresenting both the sources of income, as well as the whereabouts of that income

Falsified documentation involves the purposeful and fraudulent misrepresentation of financial records undertaken to mask the true amounts of income and resources with regard to tax fraud; illegal falsification of documents is typically employed in order to conceal accurate financial reports

The usage of offshore – or international – banking accounts is typically undertaken by individuals laundering funds or monies into untraceable or hidden bank accounts existing in other countries or nations; this type of tax fraud is typically undertaken in order to conceal the true amount of earnings, funds, or monies in possession in order to commit tax fraud – skewed earnings reports typically result in inaccurate tax payments

Tax Evasion

In contrast to Misrepresentative Tax Fraud, the nature of Tax Evasion is defined as the intentional and deliberate criminal activityundertaken by an individual – or entity – with the intent of defrauding the Federal Government by completely avoiding the fulfillment of taxes owed; while certain methods of tax evasion may be undertaken with regard to Misrepresentative Tax Fraud, certain cases involving Tax Evasion may be employed to avoid the satisfaction of taxes altogether:

Unemployment Fraud is not uncommon within the realm of criminal activity attributed to complete tax evasion and tax fraud; individuals may continue to collect unemployment benefits while maintaining additional employment classified as ‘Off of the Books’ – this classification is result of the absence of reporting earned income rendered from a particular act of employment

 

What to Know About Yield to Maturity

What to Know About Yield to Maturity

Yield To Maturity
Yield to maturity, also known as the redemption yield of a bond, is the internal rate of a return that an investor will receive upon the maturity of a privately or government issued bond.  A bond is a debt security where the  authorized issuer owes the holder a debt.  Unlike stocks–which are equity–and give the shareholder a stake in the institution, bonds are treated like a debtor/creditor relationship where the debtor is the institution selling the bond and the creditor is the individual who purchased the bond.  A bond does not give the debtor any interest in the institution, but instead, obligates the debtor (issuing institution) to pay the creditor (holder) interest, in the form of a coupon, until the bond reaches its maturity.
Yield to maturity is calculated by an A.P.R. (annual percentage rate) but the interest is actually dispersed in a semi-annual basis in which the debtor will receive a coupon, consisting of the percentage of the face amount plus interest.  For example, if a 10 year bond is sold with a face amount of $100 at 10% Yield to Maturity that means that every 6 months the debtor will receive a coupon of $5.50 (The $100 face amount + $10 (the interest accumulated over the 10 year life of the bond) / 24 (the number of coupons that are distributed over the 10 year period).
When looking at bonds you will want to know the basics defining certain aspects of a bond:
FACE AMOUNT: The amount that the bond is worth on its face.
ISSUE PRICE: Is the amount of money that the debtor pays for the bond.  The issue price is not necessarily the amount that the bond is equal to.  Often bonds are sold at a discount where a debtor will buy a $100 bond for $75.  Upon maturity the debtor will receive $100 plus interest.
MATURITY DATE: This is the amount of time it will take for the bond to mature to the face amount.  Bonds that have a maturity date of less than one year are not necessarily bonds and are referred to as Money Market Securities
COUPON: This is the amount that the debtor will receive on a semi-annual or annual basis, depending on the bond, The Coupon signifies the payment of the creditor to the debtor in compliance with the bond agreement.
Yield to maturity rates depend on a number of factors including the current market rates, the term length and the overall creditworthiness of the issuer.  Typically the longer the bond maturity length the higher the yield to maturity will be.  On the same note, the more stable the issuer the less the yield to maturity rate will be.  United State Treasury Bonds are considered to be one of, if not the most, stable bond an investor can purchase.  The return on your investment is practically guaranteed and for that reason the coupon amount and the yield to maturity will be lower.

The Truth About a Stock Market Crash

The Truth About a Stock Market Crash

What is a Stock Market Crash?
A Stock Market Crash is classified as a massive, financial abatement of stock value with regard to the behaviors, values, and trends latent within the various facets of a stock market or trading institution. While marginal declines and rises are to be expected within a forum of investment trading, the nature of a Stock Market Crash is momentous.
Rather than experiencing gradual increases and decreases in the value of stocks and other investments, Stock Market Crashes illustrate rousing declines in stock value and investment trends complete with instantaneous and dramatic impacts affecting all of those involved.


What is a Stock Market?
A Stock Market is a financial forum in which financial instruments, such as stocks, bonds, and derivatives are traded, bought, and sold with the hopes of gaining a margin of profit. Stocks, which are shares of a publically-traded company, are available for purchase by the public, which allows for individuals to invest monies in the prospect that the business will experience financial gain in the form of monetary growth. Shares of stock are purchased as per their listed value. The prospect of the respective value of those shares facilitates the opportunity to either lose money or gain it.
Stock Market Crash Terminology
The following terms and instruments are common within Stock Market Crashes:
Stock Market Index: The formulaic measurement of investment trends that have the potential to surround, cause, or anticipate a Stock Market Crash.
Panic Selling: A communal or singular act that involves a drastic selling pattern with regard to a stock – or stock shares – believed to be rapidly declining. In many cases, panic selling is contributory to a Stock Market Crash.

Ouch: Facebook’s Mark Zuckerberg Faces $1 Billion Tax Bill

Ouch: Facebook’s Mark Zuckerberg Faces $1 Billion Tax Bill

 

Facebook’s Initial Public Offering made founder Mark Zuckerberg a multi-billionaire; however, it also left him with a pretty hefty tax bill. 
 
Facebook’s stock market debut left founder and CEO Mark Zuckerberg with a fortune valued at roughly $13 billion and a 2012 tax bill of around $1.1 billion. 
 
Zuckerberg’s enormous tax burden stems from his move last May to increase his stack in Facebook. On the day of the company’s IPO, Zuckerberg exercised a stock option and purchased 60 million shares at a strike price of 6 cents per share. Even if these shares are never sold, the Internal Revenue Service treats them as regular income once they are exercised. The rational is that said options are a form of compensation similar to regular wages.
 
For Zuckerberg’s sake, these rules require the CEO to report income last year of roughly $2.3 billion for his stock options alone. To augment his obligation, add the top 2012 federal tax rate of 35 percent and the highest state income tax rate of California’s 13.3 percent and you get a total tax obligation of 48.3 percent. 
 
This massive amount owed comes before factoring in deductions and other income collected by the CEO of Facebook last year. Although the government and California’s tax agency know what is labeled in Zuckerberg’s return, but several California CPAs told various media outlets that the Facebook founder’s tax obligation will likely exceed $1 billion. 
 
Such a burden is highly unusual, even for billionaires. 
 
The Internal Revenue Service does not comment on the returns of individual taxpayers, but each year the agency releases aggregate data on the 400 American tax filers with the largest reported incomes. According to last year’s list, the average top earner possessed an income of roughly $245 million and a federal income tax bill of nearly $50 million. 
 
To cover the massive bill he knew was approaching, Zuckerberg dipped into his treasure chest of Facebook stock, selling over 30 million shares during the company’s IPO. At the time, Facebook announced in a regulatory filing that Zuckerberg planned to use the majority of the $1.135 billion in proceeds to cover the taxes on his stock-option purchase. 
 
In addition to his tax bill, Zuckerberg faces another sizeable hit in the upcoming years. 
Zuckerberg is sitting on over 60 million of unexercised options that expire during the winter of 2015. At Facebook’s current share price, Zuckerberg’s options would generate $1.6 billion worth of taxable income. If Zuckerberg were to redeem these shares today with the nation’s current tax rates, Zuckerberg would face a $826 million bill. 
 
The United States’ treasury will gladly accept such a large payment, as will California, which is expecting to receive a windfall from thousands of Facebook employees who are cashing in on stock grants and options. The state of California expects to collect approximately $1.5 billion in Facebook-related tax revenue, according to estimates from the state’s Legislative Analyst’s Office. 
 

S&P 500 Finally Hits New Record High

S&P 500 Finally Hits New Record High

 

 
After flirting with the milestone for the past few weeks, the S&P 500 finally topped its all-time closing high in morning trading today. The benchmark index climbed roughly 3 points to 1565.58, inching just beyond its record closing high of 1565.15 reached in October of 2007. 
 
Despite the new record, trading was relatively stagnant on Thursday as investors were busy watching the ongoing crisis in Cyprus and mulling over fresh economic data in the domestic markets. The NASDAQ, S&P 500 and the Dow Jones Industrial Average were all up between .1 and .2 percent during trading hours. 
 
That said, the first quarter of this year has been far from boring. The Dow, which has been enjoying record highs since early March, is up a staggering 11.5 percent and poised to secure its best first quarter since 1998; the S&P 500 is up almost 10 percent; and the NASDAQ is up roughly 8 percent. 
 
Despite the success, experts argue that valuations remain attractive for domestic stocks. The S&P is trading at just 16 times its 2012 earnings, compared to roughly 17 times profits for the period it reached its previous high in October of 2007. 
 
Volume is expected to remain low today, ahead of Good Friday, when markets will be closed throughout the United States and the majority of Europe. 
 
Banks in Cyprus reopened this morning after being shut down since March 16th. The island nation is planning to limit the amount of funds depositors can withdraw in an attempt to prevent a run on banks. In addition to shrinking its banking sector for a 10 billion European Union bailout, the nation agreed earlier this week to raise billions of euros from large depositors at the Popular Bank of Cyprus and at the Bank of Cyprus. 
Meanwhile in the United States, the Federal Government released weekly data on the initial jobless claims and the fourth quarter GDP tally. 
 
Jobless claims in the United States totaled 357,000 in the week that ended on the 23rd of March, which is an increase of 16,000 from the prior week. The forecast called for a total of 335,000 based on a consensus of economists and industry professionals. 
The government report for the fourth-quarter GDP revealed an annual increase of 0.4 percent, which was slightly better than the expected increase of 0.3 percent. 
 
 
Source: Associated Press

Cyprus Banks Reopen with Harsh Cash Limits

Cyprus Banks Reopen with Harsh Cash Limits

 

Banks in Cyprus reopened today for the first time in nearly two weeks. The reopening was met with strict limits on cash withdrawals as authorities are attempting to prevent a run on the island nation’s bank following a bailout by the European Union. 
Cyprus became the first Eurozone nation since the currency was launched on the 1st of January 1999, to place restrictions on how much money companies and individuals can take across its borders. 
 
Cyprus banks had been closed since the 16th of March when it became clear that deposits would be raided as a condition of the bailout. The island nation was brought to the cusp of collapse and a possible exit from the Eurozone after its two largest banks—Popular Bank and the bank of Cyprus—took massive losses on Greek government debt, wiping out over a third of their combined capital. 
 
Following months of negotiations, the banks signed up for a bailout from its Eurozone partners worth roughly 60% of the island nation’s gross domestic product. 
 
In return for the bailout, Cyprus is committed to raising billions from leading depositors to recapitalize the Bank of Cyprus and the winding down of Popular Bank. The European Union wants the island nation to shrink its banking industry by 50 percent by 2018. 
 
Deposits above 100,000 euros were frozen at both big banks since the 16th of March. These deposits may be wiped out entirely at Popular while 40 percent may be converted into equity at the Bank of Cyprus. 
 
Deposits of less than 100,000 euros are guaranteed at all Cyprus banks. Moreover, the bailout will not impact smaller banks in Cyprus, which account for roughly 60 percent of the nation’s total deposits of 68 billion euros. 
 
Many of these deposits belong to foreign investors, specifically Russians, and authorities in Cyprus fear an uncontrolled flight of funds that would cause the economy to collapse. 
 
The use of austerity controls breaks new ground for the European Union, which was established on the principle of free movement of payments and capital. Many economists and those close to the situation argue that a partial collapse of the Eurozone is underway because a Euro held in Cyprus is no longer worth the same amount as a Euro held in Germany. 
 
In addition to the limits placed on withdrawals, debit and credit use abroad has been capped at 5,000 euros per month, and individuals leaving the island nation may only take 3,000 euros in cash each trip. 
 

All Fun and Games Till Somebody gets Caught

All Fun and Games Till Somebody gets Caught

 

Federal investigators, on Friday, charged Michael Steinberg of SAC Capital with securities fraud to which he pleaded not guilty. 
 
The high-ranking trader at SAC Capital—the powerful hedge fund run by multi-billionaire Steve Cohen is at the center of an insider trading investigation—was formally charged with securities on Friday, according to the Federal Government of the United States. 
 
Mr. Steinberg, a prominent portfolio manager with the hedge fund is facing five counts—including securities fraud—for allegedly short-selling tech stocks Nvidia and Dell based on inside information, according to documents for the U.S. Attorney’s Office for the Southern District of New York.
 
Steinberg pleaded not guilty in federal court and posted bail of $3 million. The trader’s next court date is set for May 3rd. 
 
“As alleged, Mr. Steinberg was another Wall Street insider who fed off a corrupt trail of confidential information cultivated by other professionals who created their own rules to make obscene amounts of money,” said U.S. Attorney Preet Bharara. 
 
Steinberg was arrested at 6 in the morning at his Manhattan residence; FBI officials claim that Steinberg was at the center of an elite criminal circle, where corruption and cheating were rewarded with million-dollar payouts. 
 
Steinberg’s lawyer, Barry Berke insists that the Wall Street trader is innocent. “Mr. Steinberg did nothing wrong; his trading decisions were based on detailed analysis and information that he understood had been legitimately obtained through the channels that institutional investors rely upon.” 
 
The charges of securities fraud come on the heels of a settlement reached on March 15th of this year between the Securities and Exchange Commission and SEC. 
On March 15th, two sectors of SAC Capital agreed to pay $614 million to the SEC to settle insider trading charges. The settlement, which was the largest in SEC history, required hedge fund advisory firm CR Intrinsic Investors to pay roughly $600 million in fines for making $275 million in illegal profits or to avoid losses and Sigma Capital to pay $14 million for trading based on nonpublic information.
 
The SEC stated that Steinberg worked at Sigma, where he allegedly received illegal tips from an analyst who is being charged by the U.S. Attorney’s office as being a co-conspirator. The SEC claims that Steinberg’s “illegal conduct” netted north of $6 million in profits and avoided significant losses. 
 
The investigation focused on conversations from 2008 between the analyst and Steinberg. The indictment accuses the analyst of telling Steinberg that an employee at Dell warned him the company was going to miss its earnings projections, prompting Steinberg to sell short 30,000 shares before the stock dropped 13 percent. 
The analyst allegedly emailed Steinberg saying, “please keep this information to yourself,” to which Steinberg replied, “Yes, we would never divulge information like this, so please be discreet.”
 
Steve Cohen, the founder of SAC Capital, has not charged, though investigators have been circling him for months, looking for signs of insider trading. 
 
 
Source: Associated Press

The Rich get Poorer?

The Rich get Poorer?

 

 
French President Francois Hollande is reviving calls for a 75 percent top income tax rate for the wealthy. 
 
President Hollande altered his failed proposal for a 75 percent top tax rate this week to shift the burden of payment from individuals to companies that pay salaries over 1 million euros. 
 
President Hollande, during last year’s presidential campaign, proposed the 75 percent tax rate on individuals earning at least 1 million euros per year; however, the proposal was ultimately rejected by the nation’s judiciary body. 
 
Following rejection, Hollande created a new payroll tax proposal on large salaries during a late night television appearance. Hollande claimed the measure is mandatory to ensure transparency at large businesses, which seemingly are the only companies that can afford to pay employees such a hefty salary
 
President Hollande’s initial proposal, which never was enforced, inspired French actor Gerard Depardieu to leave the country and renounce his citizenship. Depardieu, who now holds a Russian citizenship and lives in Belgium, is a cultural icon in France, and his departure triggered a firestorm of public comment for and against him. 
 
In the United States, the Democratic Party has also raised the argument that the wealthy should pay higher taxes as a matter of equality and fairness. As part of the fiscal cliff deal during the beginning of this year, the top marginal tax rate on income was allowed to revert to the pre-2001 level of 39.6 percent. 
 
President Hollande’s popularity has taken a drastic hit during the recent months, and the embattled leader used the television broadcast earlier this week to urge for more reforms. 
 
The proposal comes at an awkward time as the French economy, which is second in size only to Germany in the euro-zone, has stagnated. Several economists stated earlier this month that France’s performance in the first quarter of this year was shaping up to be the worst since 2009. 
 
“The widespread weakness across manufacturing leaves little room for hope, with a range of indicators from backlogs, new orders, output prices and employment all residing at depressed levels,” said economist Jack Kennedy. 
 
The nation of Germany, by contrast, saw increased improvement in business activity last month for a third consecutive month. Kennedy claims the gap in performance between the Eurozone’s healthiest economies was at its widest margin since surveys began in the early stages of 1998. Kennedy believes that France is begging to look like it belongs on the periphery of the Eurozone’s strong economies, rather than at the core. 
 
Source: CNN
 

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