Longboat Retirement Solutions LLC

Investing in Real Estate with your Self Directed IRA or Solo 401k June 30, 2012

Part One:  Using the Internal Method

BY: Lars Forsberg

Longboat Retirement Solutions LLC

As I have mentioned in several other posts and on my website www.myselfdirectedretirement.com although there is no legal prohibition of investments in land, homes, commercial property, trust deeds, mortgage notes, or real estate options within self directed retirement vehicles, often times the supposed “self directed” retirement options offered by the large financial institutions in fact limit you to traditional financial investments in stocks, bonds, or funds.

If your custodian tells you that you can’t invest in real estate within your IRA or 401k, get a new custodian, preferably yourself (in the case of a Solo 401k).

Assuming you have already set up a self directed retirement account, the process is simple.  The retirement account will hold title to the real estate for the account owner’s benefit.

Always keep the Internal Revenue Code in mind when making investments with your self directed retirement account.  In the specific case of investing in real estate with your retirement vehicle, avoid disqualified persons and self-dealing.

Don’t buy or sell a house from a spouse, ancestor, lineal descendant or any spouse of a lineal descendent.  Neither the account owner or any other disqualified person may benefit from the investment until qualified distributions are made.

Don’t use the purchased real estate for a vacation home.  Don’t let any disqualified persons live in, rent, or use for vacations, the property.  You cannot pay an account owner to rehab the property or pay a company that is owned by the account owner for services rendered.  A company that the account owner owns or controls cannot lease space in the property.

You cannot put a property that you or disqualified persons currently own inside your retirement account.

As long as you do not involve disqualified persons or self-deal, you are free to invest in real estate within your self directed retirement vehicle.

All rents or fees generated by the property will be directly deposited into the retirement account.  All expenses related to the property will come from the retirement account.

Stay tuned for Part Two:  Using the External Method


Is this who you trust with your money? June 24, 2012

BY: Lars Forsberg
Longboat Retirement Solutions LLC

Sam Israel — Bayou Hedge Fund Group
Scammed $450 million from the hedge fund he ran.

Joseph Nacchio — Qwest Communications International
Scammed $3 billion through insider trading by selling $52 million in stock despite knowledge that his company was facing financial difficulties.  As part of his severance agreement, he continues to serve as a consultant to Qwest. He is paid $1.5 million a year.

Bernard Ebbers — WorldCom
Scammed $100 Billion with accounting shenanigans. $3.8 billion worth of normal operating expenses, which should all be recorded as expenses for the fiscal year in which they were incurred, were treated as investments and were recorded over a number of years. This accounting trick grossly exaggerated profits for the year the expenses were incurred. When the gig was up WorldCom’s stock price, plummeted from more than $60 to less than 20 cents.

Kenneth Lay and Jeffery Skilling — Enron
Scammed $74 Billion with some fairly complicated accounting practices that involved the use of shell companies, Enron was able to keep hundreds of millions worth of debt off its books. The complex web of deceit unraveled and the share price dove from over $90 to less than 70 cents.

Bernard Madoff — Bernard L. Madoff Investment Securities LLC
Scammed $18 billion with Ponzi scheme.

Tyco International
CEO, Dennis Kozlowski, CFO Mark Swartz and CLO Mark Belnick sold 7.5 million shares of unauthorized Tyco stock, for a reported $450 million.

HealthSouth — CEO and founder Richard Scrushy sold HealthSouth shares worth $75 million in late 2002, prior to releasing an earnings loss. The scandal unfolded in March, 2003, when the SEC announced that HealthSouth exaggerated revenues by $1.4 billion. The stock fell from a high of $20 to a close of 45 cents, in a single day.

Allen Stanford —  Recently sentenced to 110 years in prison and ordered to forfeit $5.9 billion dollars for his $7 billion dollar Ponzi scheme.

Raj Rajaratnam — The founder of the $7 billion Galleon hedge fund, was sentenced in October 2011 to an 11-year prison term on an insider-trading conviction.

Rajat Gupta — The former Goldman Sachs director, was convicted of conspiracy and three counts of securities fraud for feeding confidential information to a corrupt hedge fund manager.

Nice bunch of trustworthy guys.  These guys worked for large “trustworthy and knowledgeable” firms, with big names.

Who’s interests were they serving?

Maybe it’s time that you invest in yourself.  The good people at Longboat Retirement Solutions NEVER touch your money.  We liberate you from the Wall Street Ponzi scheme.  Make your move.


R. Allen Stanford gets 110-year sentence for Ponzi scheme

BY: Miami Herald Staff


In this March 6, 2012 file photo, R. Allen Stanford leaves the Bob Casey Federal Courthouse in Houston. Stanford, once considered one of the wealthiest people in the U.S., with a financial empire that spanned the Americas, was convicted on charges he bilked investors out of more than $7 billion. The 62-year-old is set to be sentenced by a Houston federal judge on Thursday, June 14, 2012.
Nick de la Torre / AP
In this March 6, 2012 file photo, R. Allen Stanford leaves the Bob Casey Federal Courthouse in Houston. Stanford, once considered one of the wealthiest people in the U.S., with a financial empire that spanned the Americas, was convicted on charges he bilked investors out of more than $7 billion. The 62-year-old is set to be sentenced by a Houston federal judge on Thursday, June 14, 2012.
The billionaire banker who plotted one of the biggest Ponzi schemes in U.S. history from a fancy high-rise office in Miami and a bank in Antigua was sentenced Thursday to 110 years in prison.R. Allen Stanford, 62, could have received 230 years. His attorneys pushed for 41 months.

U.S. District Judge David Hittner had final say, issuing the sentence after presiding over a hearing in Houston where two people spoke on behalf of Stanford’s investors about how the $7 billion fraud over 20 years affected their lives.

For what is considered to be the largest financial fraud, Bernie Madoff was sentenced in 2009 to 150 years in prison, convicted of bilking investors for more than $15 billion.

Stanford once spread his wealth across South Florida, living in a $10 million mansion in Coral Gables, bobbing on Biscayne Bay aboard a $6 million yacht and presiding over his financial empire from posh headquarters at the Miami Center near Bayfront Park.

He also was the big man in Antigua, with a newspaper, a couple of restaurants, a development company and lavish cricket grounds where he once bankrolled a $20 million winner-take-all match. His lawyers at his trial said their client was a visionary businessman who tried to bolster the economy of Antigua, where he was known as “Sir Allen” after being knighted by the government.

On Thursday, Stanford was just another convict in court awaiting his fate.

“To the bitter end, he was a con man and a coward,” prosecutor William Stellmach said, chastising Stanford for defrauding thousands of people of their life savings.

Stanford was found guilty in March by a federal jury in Houston. Arrested three years ago, he was convicted of 13 of 14 fraud-related counts.

His downfall marks the end of his rise from humble roots in Texas to one of the richest people in the United States.

Three years ago, The Miami Herald found that Stanford made a deal with Florida regulators allowing him to open a special trust office without regulation. His office sold $800 million in bogus certificate of deposits, mainly to South American investors. Checks were sent to Antigua and records were destroyed.

Calling Stanford arrogant and remorseless, prosecutors said he used the money from those investors to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle that included yachts, a fleet of private jets and sponsorship of cricket tournaments.

After his arrest, the man whose net worth was estimated at $2 billion had to rely on court-appointed attorneys to defend him. His assets were frozen and then seized.

Three other former Stanford executives are scheduled for trial in September. A former Antiguan financial regulator was indicted and awaits extradition to the United States.

During Thursday’s sentencing hearing, Stanford gave a rambling statement to the court in which he denied he did anything wrong. Speaking for more than 40 minutes, Stanford said he was a scapegoat. He blamed the federal government’s “gestapo tactics,” when a U.S.-appointed receiver took over his companies, for tearing down his business empire and preventing his investors from getting any of their money back.

“I’m not here to ask for sympathy or forgiveness or to throw myself at your mercy,” Stanford told Hittner. “I did not run a Ponzi scheme. I didn’t defraud anybody.”

Angela Shaw, a Dallas-area woman who founded the Stanford Victims Coalition and spoke during the hearing, said while she had hoped the financier would receive the maximum sentence, she was more upset that Stanford didn’t apologize in court for what he did.

“It would have gone a long way to show there is some level of remorse and some measure of humanity,” she said.

Jaime Escalona, a Venezuelan man who lost $1.5 million and founded the Coalition of Latin American Stanford Victims, turned to face Stanford and said: “You deserve what’s coming to you. You are a dirty rotten scoundrel.”

Madoff’s name was often mentioned during Thursday’s sentencing, with prosecutor Stellmach insisting Stanford’s crimes were worse because he kept most of the fraudulent proceeds for himself, bribed regulators and targeted middle-class investors. Defense attorney Ali Fazel said that unlike Madoff, Stanford had legitimate businesses.

In addition to sentencing Stanford to prison, the judge ordered him to forfeit $5.9 billion. But that was mostly symbolic.

Stanford is now penniless.



A Loophole Big Enough to Lose a Billion June 23, 2012

Filed under: Corporate Malfeasance — larsfforsberg @ 3:48 am
Tags: , , ,
The New York Times
BY: James B. Stewart

If nothing else, the collapse of MF GLOBAL has made one thing clear: The notion that customer assets were safe was a sham.

MF Global’s customers, who discovered that the firm had plundered $1.6 billion of their property, learned that the hard way. But they aren’t the only potential victims. The loophole that allowed MF Global to convert more than $1 billion in customer property to its own reckless bet on European debt is still in effect — although the Commodity Futures Trading Commission, which regulates futures and commodities brokers, said it had since pressured other firms to stop using it.

The CME Group, which is both the largest commodities and futures exchange and also regulates many brokers, told me this week that when MF Global collapsed last year, four of the 40 firms it oversees were still using an “alternative” calculation of customer assets that vastly understates what firms actually owe. A spokeswoman declined to name them, saying such information was confidential. In my view, they should all be identified publicly so their customers can demand reassurances that the practice has stopped — and that their assets are safe.

Since the Depression, when thousands of customers were wiped out by failing brokerage firms, the idea that customer assets are protected has been sacrosanct, embodied in laws and regulations that require the assets to be safely segregated. Violating these requirements is a crime.

The rules require a firm to put aside the amount it would owe if its customers’ accounts were liquidated. This would seem simple common sense: if a brokerage firm closed or failed, customers should expect to get the full value of their assets.

But the rules apply only to accounts in the United States. In 1987, the commodity commission approved a series of rules governing foreign futures and options transactions, one of which provided an alternative calculation of how much firms needed to put aside for accounts that traded on foreign exchanges.

The alternative calculation almost always resulted in a lower amount — sometimes much lower — that needed to be segregated in foreign accounts, because it covered only options and futures. Cash and securities held in customer accounts didn’t count. So if a customer held only cash and securities, the firm had no segregation requirement at all.

This may not have seemed such a big deal at the time, although even then, futures and options trading by American customers on foreign exchanges was growing rapidly. How and why this provision got into the federal register remains something of a mystery, and in the wake of MF Global’s collapse, no one seems to want to take credit (or blame) for it.

The commodity commission’s chairman at the time, Kalo Hineman, a cattle rancher and former Republican state lawmaker in Kansas who was appointed by President Ronald Reagan, died in 2003. Some regulators said that a tougher segregation requirement for foreign accounts would have been too costly and complicated to maintain given the technology at the time. Others point out that it was better than nothing, which was the prevailing standard for foreign accounts before the rule. A spokesman for the National Futures Association offered that “U.S. participation in foreign markets was small and generally limited to commercial users.”

None of this withstands much scrutiny if the commodity commission really wanted to protect customers. The answer may well be, as one regulator told me, “it’s what the industry wanted,” and that’s pretty much what it got.

Why the futures and options brokers lobbied for such a loophole is obvious: it allowed firms to do whatever they wanted with customer money, including using it to speculate for their own accounts. And by last year, that was no small sum. In his recent report, James Giddens, the MF Global liquidation trustee, showed the difference between the amount the firm had to segregate using the net liquidating method and the more lenient alternative method. On many days, it was more than $1 billion, reaching a peak of $1.25 billion last Oct. 13.

Apart from people working at the firms themselves and their regulators, few seem to have known about such an alternative calculation, even as trading on foreign exchanges has exploded. “I didn’t know it existed,” James Koutoulas, chief executive of Typhon Capital Management, a commodity trading adviser in Chicago, told me this week. “And we’re pretty sophisticated traders. I had no idea they were allowed to make a report that was so different from reality. No one ever told us a thing about this.” Mr. Koutoulas is also president and co-founder of the Commodity Customer Coalition, which is advocating for the return of MF Global customer funds.

Nor does the alternative segregation calculation affect only foreign customers, since any resulting shortfall is shared by all customers. American customers of MF Global have lost approximately $900 million, and foreign customers about $700 million, according to Mr. Koutoulas.

“It’s obvious that the alternative calculation let firms understate the segregation requirements,” Mr. Koutoulas said. “The industry lobbied aggressively to introduce loopholes so firms could be more aggressive with customer funds. At MF Global, cash management was designed and carried out at every level of the firm to use customer money as a piggy bank to fund the firm’s operations. They were deliberately and systematically taking customer money to fund their operations.”

The alternative calculation not only jeopardized customer assets, but also obscured MF Global’s mounting problems and shielded the firm from regulators. The commodity commission was aware that MF Global was using the alternative calculation in the daily segregation reports it submitted to the agency as well as the CME. But MF Global officials also calculated the net liquidating amount — the real amount it owed customers — and withheld that number from regulators while circulating it internally. According to Mr. Giddens’s report, that calculation showed a glaring shortfall in the firm’s waning days. Jeff Malec, chief executive of  Attain Capital Management in Chicago, pointed out, “The alternative calculation methodology functionally allowed MF Global to live on borrowed time — presenting themselves as more stable than they really were until the clock ran out.”

To its credit, the commodity commission is taking action. This month the commission sent a letter to all regulated futures brokers telling them the agency expects them to use the net liquidating calculation — and not the alternative calculation — for all accounts, American and foreign, “pending adoption of the new rules.” It said those new rules would include “the elimination of the Alternative Method.” The letter also said that all firms still using the alternative method had agreed to discontinue using it.

It remains to be seen if the alternative method will also serve as an escape hatch from liability for MF Global’s top officials, who remain under investigation for possible criminal and civil actions. They and their lawyers will surely argue that taking customer funds cannot be a crime or a fraud if it was sanctioned by the commodity commission rules.

But in Mr. Malec’s and Mr. Koutoulas’s views, the officials shouldn’t be allowed to hide behind the calculation. Based on the trustee’s report, “they knew they were in trouble long before the public knew, and some of the decisions made in the final hours showed blatant disregard for the law,” Mr. Malec said. Mr. Koutoulas was more vehement: “I unequivocally think crimes were committed.”

Whatever the outcome, MF Global will be a sorry chapter in the history of federal regulation. The alternative method blatantly put the interests of regulated firms over their customers, and it never should have been enacted. That it now seems likely to be repealed may be a “silver lining,” Mr. Malec said. “The whole scandal really opened the eyes of the futures industry participants. Everyone had assumed that segregated funds were sacred, and why not? Prior bankruptcies had always been resolved without clients losing money. MF Global was a disaster, but we believe the end result will be a stronger, better futures industry.”


How To Invest Your IRA In Real Estate, Gold And Alternative Assets June 18, 2012

This article appears in the June 25, 2012 investment guide issue of FORBES magazine with the headline, “Go Rogue With Your IRA.”

Renovations are underway at the historic building Laura Harth Rodriguez bought with an inherited IRA. Credit: Scott Goldsmith for Forbes

Sidney Harth, an acclaimed violinist and conductor, died last year at the age of 85, leaving $5 ­million in assets, including musical instruments, a New York City apartment and $2 million in ­retirement accounts to his daughter, Laura Harth Rodriguez, a pianist in her mid-50s. She decided to use part of her inheritance to buy a historic three-story building in an up-and-coming section of Pittsburgh’s East End.

“My father’s investments were tied to the stock market, and it’s been so volatile,” Rodriguez says. But she worried that to swing the $595,000 purchase—an all-cash deal—she’d have to take money out of the inherited IRA, paying income tax immediately on whatever she withdrew. Then her lawyer suggested an alternative: Leave the money in the tax-deferred retirement wrapper and have the IRA itself buy the property. The deal closed in February.

Yep, an IRA can legally own real estate and a lot of other alternative investments, too, ranging from private equity and promissory notes to gold, oil and gas and cattle. (It can’t own insurance, collectibles or stock in S corporations.)

Interested? The big financial institutions that act as custodians for most IRAs generally limit investments to publicly traded stock, bonds, mutual funds and bank CDs. So you’ll first need to move your IRA to one of about two dozen smaller custodians offering “self-directed IRAs.”

This is still a niche business. As of May 2011 only $94 billion (2% of total IRA assets) was in self-directed IRAs, according to the Investment Company Institute, the mutual funds trade group. Some belong to the very wealthy—Mitt Romney’s holds offshore investments, including one worth between $5 million and $25 million in a Cayman Islands entity, according to his financial disclosure forms.

But ordinary folks have gotten into the act, too. John Mitchell, a manufacturer’s rep for software companies, is investing $50,000 of his self-directed IRA in precious metals—primarily gold and silver. He uses the Entrust Group in Oakland, Calif. as custodian, but the metal is stored with a bullion dealer near his Tampa, Fla. home. Mitchell, 37, says he likes being able to drop by to admire his metals.

Matt Lutz of Bethel Park, Pa. owned a chain of dry cleaning stores in 2006 when he rolled over a $70,000 IRA into a self-directed account at Equity Trust Co. in Elyria, Ohio. Since then he has more than tripled its value—mostly by making loans from his IRA to car dealers to finance their inventory. Three years ago Lutz, 38, sold his dry cleaning business to work full-time putting together similar loans for other people to use as IRA investments.

Despite such success stories, there are risks to getting creative with your IRA. “Self-directed IRAs are not for the faint-hearted,” says Patrick J. Felix III, the Pittsburgh lawyer who helped Rodriguez. “You better damn sure know the rules.” These pointers should help keep you safe.

Avoid self-dealing
This is a legal principle that prevents IRA owners from making investments (or loans) that benefit themselves or certain family members, even indirectly. It also bars mingling of your IRA and nonretirement funds. Run afoul of the self-dealing rules and your entire IRA could be immediately taxed.

So, for example, Rodriguez couldn’t write a $10,000 personal check for the down payment on the building her IRA was buying. Instead, she had to first transfer her father’s IRA to a self-directed IRA trustee, San Fransisco-based Pensco Trust Co. (this must be done in a so-called “trustee-to-trustee” transfer) and then have Pensco cut a check to the seller.

Another complication: Rodriguez’s husband, Francisco, a recording artist, wanted to use the second floor of the building for his studio. But he couldn’t do that if her IRA owned the space. Felix devised a workaround: Create three limited liability companies (LLCs)—one for each floor.

The IRA owns two floors, Rodriguez and her husband the floor with the recording studio. Each LLC paid one-third of the purchase price and has $250,000 of spare cash for expenses. There’s an electric and gas meter on each floor, and the LLCs split the real estate taxes, the fee for a property management firm and bills for renovations, now under way.

Rents for the IRA-owned first floor will generate about $40,000 per year, Rodriguez figures. She hopes the third floor, with its city views, can be rented for parties.

Plan for distributions
Satisfying the requirements for IRA payouts can get more complicated with illiquid assets in your IRA. An IRA owner must take an annual required minimum distribution (RMD) starting at age 70½ unless the account is a Roth. Nonspouse heirs, regardless of age, must begin withdrawals from both regular and Roth IRAs by Dec. 31 of the year following the IRA owner’s death. Miss an RMD and the IRS could hit you with a penalty equal to 50% of the required payout.

The RMD is based on the account balance on Dec. 31 of the previous year divided by life expectancy, as listed in IRS tables. Rodriguez will need to have the building reappraised each year to calculate her RMD. For now there are plenty of liquid assets in the inherited IRA to make the payout. But if the cash runs dry, the IRA would have to distribute an interest in the LLC instead, Felix says. “It’s a bit of a pain in the butt.”

Go Roth, if you can
Distributions from a traditional IRA are taxed at ordinary federal income rates, which top out at 35%. That includes long-term gains, which outside an IRA are currently taxed at a 15% top rate. In other words, you might undercut the benefits of tax deferral by paying a much higher rate than needed on your gains. With a Roth, all withdrawals by you or your heirs are tax free. That’s why an investment that might appreciate greatly belongs in a Roth IRA.

A striking example comes courtesy of Max R. Levchin, chairman of social review site Yelp. According to Securities & Exchange Commission filings, he has 3.9 million low basis shares of Yelp in his self-directed Roth IRA at Pensco. With Yelp now trading around $18, his kitty is worth at least $70 million.

For IRA owners a Roth also avoids the requirement to take yearly distributions after 70½. Not only can that leave more for beneficiaries if you don’t use the money yourself, but with assets that are partly or totally illiquid it also avoids the cumbersome calculation of RMDs that someone like Rodriguez will have to make.

If you earn too much to make annual contributions to a Roth IRA (there are income limits), consider converting a traditional IRA to a Roth. To do this you pay tax on a traditional IRA, then shift the money to a Roth where all future growth is tax free. Inherited traditional IRAs aren’t eligible.

Don’t get snookered
Both federal and state regulators note a recent increase in complaints of fraudulent investment schemes that have a self-directed IRA as a key feature. In fact, fraudsters often steer potential marks to self-directed IRAs.

Among those who got burned that way are 120 IRA investors in a promissory notes Ponzi scheme run by USA Retirement Management Services between 2005 and 2010. The SEC sued to recover the $20 million IRA owners lost, plus interest, and got a judgment from the U.S. District Court in the Central District of California in April. Whether the scammers will actually cough up the money is another matter.

Several investors in that case are suing Entrust. But don’t count on an IRA custodian to cover your losses; contracts say they aren’t on the hook if you pick a bad or bogus investment.

Just last year a Colorado federal district court judge dismissed a class action filed against four independent custodians by IRA owners who invested with Ponzi schemer Bernard Madoff. The lawsuit claimed the trustees breached their duty to hold IRA assets safe. But the judge found (among other things) that the IRA agreements clearly stated that investors were “solely responsible for making investment decisions in connection with their funds.”

In a separate case defrauded investors whose IRAs were at Equity Trust and Entrust filed a class action suit in April charging that those custodians “encouraged, facilitated, aided, abetted, promoted and consummated” fraudulent schemes while giving investors a false sense of security. According to that complaint, investment promoters required exclusive use of these custodians, and the account statements the custodians sent out showed high returns even though “the fraudsters had absconded with the victims’ investment monies within days or weeks.”

In a statement Entrust said, “It does not provide any investment advice or endorse any investment product provider or service—it simply follows the investment directives of its clients.” Equity Trust CEO Jeff Desich said in a statement that clients “should always ask a trusted financial professional such as their accountant, financial planner or lawyer for a second opinion before investing.”

The new JOBS Act, which makes it easier for some startups to raise money online with little SEC oversight, could tempt even more retirement savers to switch to self-directed IRAs. Buyer beware.


Fed members gave their own banks $4 trillion during bailout June 15, 2012



A report just released by the US Government Accountability Office explains how the Federal Reserve divvied up more than $4 trillion in low-interest loans after the fiscal crisis of 2008, and the news shouldn’t be all that surprising.

When the Federal Reserve looked towards bailing out some of the biggest banks in the country, more than one dozen of the financial institutions that benefited from the Fed’s Hail Mary were members of the central bank’s own board, reports the GAO. At least 18 current and former directors of the Fed’s regional branches saw to it that their own banks were awarded loans with often next-to-no interest by the country’s central bank during the height of the financial crisis that crippled the American economy and spurred rampant unemployment and home foreclosures for those unable to receive assistance.

Although the crisis continues to have an effect on Americans that were devastated by the recession, the banks that survived the near meltdown were largely able to do so because some of their CEOs sat on the same Federal Reserve board the decided on how to dish out trillions of dollars.

“This report reveals the inherent conflicts of interest that exist at the Federal Reserve,” Sen. Bernie Sanders (I-Vermont) says in a statement about the report. “At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks,” adds Mr. Sanders. “These conflicts must end.”

The GAO’s report is believed to mark the first time that the Fed’s records about their major bailout identifying the parties involved to the public.

In a press release published on the official US Senate website for Mr. Sanders, the lawmakers singles out JPMorgan Chase CEO Jamie Dimon over an alleged conflict of interest that could have contributed to the bailout his bank received through the Fed. Sanders also calls out General Electric CEO Jefferey Immelt for sitting on the same Federal Reserve board that approved massive funding to GE during a time of financial insecurity in the United States.

Sen. Sanders’ office has released a report summarizing the information published by the GAO in a four page document hosted on his website titled “Jamie Dimon Is Not Alone.”

“Jamie Dimon, the Chairman a CEO of JPMorgan Chase, has served on the Board of Directors at the Federal Reserve Bank of New York since 2007,” the report mentions. “During the financial crisis, the Fed provided JPMorgan Chase with $391 billion in total financial assistance. JPMorgan Chase was also used by the Fed as a clearinghouse for the Fed’s emergency lending programs.”

One year later, the report notes, the Fed handed Dimon’s bank $29 billion to help acquire Bear Stearns. In the case of General Electric’s Immelt, Sanders recalls that the Fed handed over $16 billion in low-interest financing to GE during the five-year span that the company’s CEO sat on the Federal Reserve’s board of directors.

Other Fed members that benefited by the bailout include officials at the top of Citigroup, Lehman Brothers, SunTrust Banks and PNC, among others.

Testifying before the US Senate Banking Committee this week, Dimon apologized for a recent JP Morgan Chase in-trading gaffe that cost the institute billions.


Using Retirement Funds for Real Estate Investment

BY: Lars Forsberg

The ability to invest in real estate with your IRA or 401k is one of the most appealing attributes of self directed retirement as people lose faith in the stock market and it’s less than illustrious “professionals”.

There are many ways to approach real estate investment with retirement funds.  The two main divisions are the Internal Method and External Method.  With the Internal Method, the investment property is held in the retirement account name for the benefit of the account holder.  With the External Method, the title of the investment property is held personally in the name of the owner.

We will compare the internal and external methods over several posts so that the information is digestible as it can get pretty thick with technicalities.  Due to the nature of these real estate investment techniques, it is recommended that you get a good handle on the process and procedure before jumping.

Before you leap, make sure that you organize your thoughts and goals just as you would for any investment related to your retirement savings.  Are you investing for value appreciation or cash flow?  What is your timeframe?  Are you considering living in this property during retirement?  Will this property be used to generate cash investment into your IRA or 401k….during your working years?….your retired years?….both?  Do you plan to sell the property when you retire?….before you retire?