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Chevron Is Buffett’s Latest Billion-Dollar ‘Mystery’ Investment

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Berkshire Hathaway has invested US$4.1 billion in Chevron stock, Warren Buffett’s conglomerate announced in a filing with the SEC with holdings as of the end of 2020.

Berkshire Hathaway has acquired 48,498,965 shares of Chevron, the filing of the latest portfolio update revealed. The other company in which Buffett’s conglomerate has recently invested a large amount of money in Verizon. Berkshire Hathaway has invested US$8.6 billion in the telecom giant, buying nearly 147 million shares.

The form 13F information table filing didn’t reveal whether Buffett himself had decided that Berkshire Hathaway should invest in one of the biggest U.S. oil corporations, or whether the decision was taken by the money managers at Berkshire Hathaway.

In the previous 13F report to the SEC for holdings as of September 30, 2020, Berkshire Hathaway said in November it omitted confidential information about building positions from the public Form 13F report, and that information was filed separately with the SEC. Analysts said back then that Buffett was most probably building a large position in one or more companies and didn’t want the filing to create a rush of other investors buying those stocks.

“He is undoubtedly building a large position now and may reveal it in his next 13F,” David Kass, a finance professor at the University of Maryland who has studied Buffett’s investments for decades, told Business Insider in November.

“Buffett has received confidentiality treatment several times in the past,” Kass noted.

One of those mystery investments was Chevron, the latest Berkshire Hathaway report revealed this week. Shares in Chevron (NYSE: CVX) rallied nearly 4 percent pre-market on Wednesday.

Berkshire Hathaway’s investment in Chevron comes at a time when portfolio managers are shunning oil stocks due to ESG issues and uncertainty over how the pandemic would affect long-term oil demand trends. The bet on Chevron is not the only investment in the oil and gas industry Buffett has made since the start of the pandemic. Last July, an affiliate of Berkshire Hathaway bought all of the gas transmission and storage assets of Dominion Energy in a nearly $10-billion deal, including debt assumption. For Berkshire Hathaway, it was the first major acquisition since the start of the coronavirus pandemic, and the biggest acquisition in four years.

By Tsvetana Paraskova for Oilprice.com

Source:- OilPrice.com

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Segregated funds: an often-overlooked option for estate planning – Investment Executive

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Segregated funds may be a lesser-known option for estate planning, but they’re versatile instruments for clients with specific concerns, says John Yanchus, a tax and estate planning consultant with Canada Life.

A segregated fund is an insurance contract issued by a life insurance company. Seg funds have two parts: a pooled investment component (similar to a mutual fund), plus an insurance policy that protects against the loss of the invested capital when a contract matures. By law, a seg fund must guarantee a return of at least 75% of the original capital, and many provide guarantees for 100%. Seg funds are defined as life insurance policies under the Income Tax Act.

Yanchus said segregated funds have numerous advantages over other investments in an estate-planning context — particularly when it comes to avoiding probate and protecting privacy.

“They can provide the ability to determine how your beneficiary gets paid,” he said. “You can bypass the estate, and bypass probate. You can take advantages of liquidity and timing of the payment, protect those funds from creditors, and also accomplish your philanthropy goals, all in one action.”

When it comes to privacy, clients may not realize that wills are considered public documents, and anybody can obtain a copy for a small fee. Segregated funds, on the other hand, generally do not become public documents.

“Your affairs will remain private,” he said, but noted that in Saskatchewan, the provincial government must be made aware of life insurance policies and segregated funds that are handled by an estate executor.

Charitable donations can also be easily accommodated and dispersed through seg funds by naming a charity as the beneficiary of the policy.

Yanchus, who called seg funds one of estate planning’s best kept secrets, added that seg funds can allow the owner to name up to 20 beneficiaries.

He also explained that a seg fund can be structured as an annuity, allowing a beneficiary to receive scheduled payments instead of a lump sum after the insured dies.

Yanchus said estate planning can be a complicated process, and without a clear plan for avoiding pitfalls, clients usually end up creating more headaches than they solve.

“I think of probate planning as one of those areas where clients willfully engage in self-destructive hell,” he said. “Many, many people love the idea of avoiding probate. The problem is they lack the knowledge on which avenue to use.”

Yanchus said that using seg funds’ beneficiary designations can be quite powerful.

“You have the ability to name the estate, if that’s where you want the funds to flow for liquidity purposes. Or you have the ability to pass these assets outside of the estate, thereby avoiding probate, avoiding contestation, and avoiding other potential creditors of the estate,” he said.

“It’s almost a way to control from the grave.”

**

This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.

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RBC Dominion Securities fined $350K for supervisory failings – Investment Executive

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The friend — referred to as SC — acted as SK’s accountant and had trading authority over SK’s accounts. According to IIROC, Benson placed undue reliance on communications with SC as SK’s trading authority, rather than ensuring the account parameters were appropriate for SK.

SC went on to open margin accounts at RBC DS for himself and his spouse. The margin accounts were guaranteed by SKL, a business owned by SK that had a corporate account with RBC DS.

As with SK’s accounts, SC was the sole trading authority for SKL. SC signed the guarantees for his and his spouse’s margin accounts on behalf of SKL — representing a conflict of interest that Benson failed to address, IIROC noted.

“Benson did not take adequate steps to ensure that SK understood the nature, significance, and financial implications of the guarantees, and RBC DS failed to sufficiently supervise Benson in regard to confirming the extent of her direct communication with SK,” the settlement agreement read.

The use of margin in SC’s and his spouse’s accounts was several times their stated net worth, according to IIROC. SC’s most heavily traded account was almost always in a negative equity position, and his spouse’s account was always in a negative equity position.

When RBC DS inquired about the spouse’s account, Benson adjusted the spouse’s investment knowledge upward on a KYC form without undertaking the due diligence to support such a change, according to IIROC.

Following SK’s death in October 2014, SC began transferring money from SKL to his and his spouse’s margin accounts, beginning in December 2014. RBC DS approved three transfers totalling more than $3 million following discussions with Benson. The transfers amounted to “a substantial part of the assets of SKL,” according to the agreement.

Although Benson became aware of SK’s death shortly after it happened, she didn’t inform RBC DS of her client’s death until January 2015. When the transfers were approved, RBC DS had not been provided a copy of SK’s will or received instructions from SK’s estate trustees.

RBC DS did arrange a meeting with SK’s estate trustees and alerted them to the transfers from the SKL account. RBC DS also made a voluntary payment of $500,000 to SKL. IIROC considered both of these actions to be mitigating factors.

Nonetheless, IIROC said RBC DS “placed undue reliance on Benson’s representations regarding her knowledge and discussions with the clients at issue, when heightened supervision or direct contact with clients was required.”

In addition to a $350,000 fine, RBC DS agreed to pay $50,000 in costs.

In a separate settlement hearing, Benson agreed to a $30,000 fine and a five-year suspension from IIROC. She also agreed to pay $10,000 in costs. Benson retired from RBC DS in March 2016 and is no longer a registered representative.

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RBC GAM names new global infrastructure head – Investment Executive

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First-ever G-Corp lists on NEO Exchange

Canaccord Genuity G Ventures Corp. will focus on acquisitions in the mid-cap space

  • By: IE Staff
  • July 26, 2021
    July 26, 2021
  • 11:59

Richardson Wealth adds to tax and estate planning team

The firm announced three new hires in its Western offices

  • By: IE Staff
  • July 26, 2021
    July 26, 2021
  • 11:03

Yellen outlines to Congress emergency measures on debt limit

The measures would seek to avoid an unprecedented default on U.S. national debt

TD issuing $1.75B in LRCNs

The notes will bear interest of 3.6% annually for the first five years

  • By: IE Staff
  • July 23, 2021
    July 23, 2021
  • 10:39

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