Tullett Prebon Shares – Will The Ensuing Controversy Prove Costly?

Odds are if someone were to ask you about inter-dealer money brokers, you will more than likely only be able to think of one name. Tullett Prebon was founded back in 1971 as a simple foreign exchange broker, but throughout the 1970s and 1980s, the business would grow tenfold. Operating as an intermediary in the financial markets, it has become an outfit that many people are intrigued by. However, as of 2014 the company is having to face controversy head-on, but is this making Tullett Prebon shares a bargain or a must-avoid stock?

Tullett Prebon has been no stranger to controversy over the years, in fact, it almost seems that they bring it on themselves at times. In 2014 Tullet Prebon shares were hit hard by yet another media storm when it was announced that it was being investigated by UK authorities for the behavior of two of its employees. The FCA accused two employees of “manipulation of trades” and they are said to be “certain” that such had taken place. Obviously, the results of the investigation may never actually see the light of the day, but the effect of the controversy on Tullett Prebon shares almost qualifies as punishment enough. Other global authorities have also put the microscope on Tullett Prebon operations, calling that the offending traders were “wash trading”, which meant the trades involved canceled each other out. It sent alarm bells ringing that the two offending parties were using such market maneuvers to cover up other illicit activities. Whatever the outcome of this investigation is, Tullett Prebon will not come out of it smelling of roses.

Even though Tullett Prebon is battling wave upon wave of controversy, it isn’t all bad news from a business perspective. As also in November 2014 the company acquired leading oil brokerage firm PVM Oil Associates. The move stands as a signal of intent from Tullett Prebon to move into an area that isn’t investment banking exclusive, diversifying their operations in the process. By acquiring the company they are adding 33 new broking desks and countless petroleum and crude oil products to their catalog. The move is bold one; of that there is no doubt, as it will allow Tullett Prebon to strengthen its data business no end. Will this acquisition do enough to make potential Tullett Prebon shares investors look past their controversies? Only time will tell.

When it comes to buying Tullett Prebon shares, your entire decision will be based on which side of the fence you sit on. It is clear that controversies are following Tullett Prebon in a rather unhealthy way. As each one crops up the image of the “badly behaving” company becomes harder and harder to shake off. The flip side of this is that the company is still performing well from a business perspective; with the acquisition of PVM Oil Associates arguably being a sign of things to come. When it comes to Tullett Prebon shares you have to ask yourself if you’re a glass half full or a glass half empty type of investor.

Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

This report does not constitute a personal recommendation and does not take into account your personal circumstances or appetite for risk.

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