It’s Dutch auction time, for the multi-strategy fund. Letter to follow.
Archive for February 2009
Bad Bank Program Probably Won’t Save RBS (Bloomberg)
RBS’s attempt to shed bad assets into a government insurance program, which is fundamentally the same thing as our Bad Bank program, probably won’t save them from nationalization. Because I’m an American, and therefore everything is about me, I have to wonder if our program’s structure is significantly different, or if our banks precarious situations are significantly different to warrant my belief that the same thing won’t happen to them. Aside, we should all stop being so serious for a minute and think about Vikram et al in kilts.
“”This is prolonging the inevitable and the inevitable is nationalization,” said Tom Kirchmaier, a corporate governance lecturer at the London School of Economics. “It will instill some trust, but I doubt it will solve all the problems with the banks. We still haven’t seen the worst of the real economy.”
Insider Trading Nets Broker Five Years (NYT)
“Mr. Tavdy and the former UBS AG executive, Mitchel S. Guttenberg, were among 13 people charged in 2007 in what authorities then called one of the most pervasive insider trading rings since the 1980s.
It included former employees of Wall Street businesses such as the Bank of America Corporation, Morgan Stanley and Bear Stearns. All 13 pleaded guilty.
In handing down the sentence, Judge Batts noted that from 2002 to 2006 Mr. Tavdy made “millions of dollars for himself and others by abusing insider information.” She added, “this is not a case of an isolated incident.”"
Merrill Surprises BAC With Debt, BAC Cries. (FT)
Relationships are hard. I mean Christ, I once bought a girlfriend a cake that said “Sorry I killed your dog” – I thought it was a perfectly reasonable joke, she didn’t (I hadn’t really killed her dog).
It looks like Merrill is getting hung out to dry here, which is a pathetic move; BAC should be castrated for letting this go down.
“The additional $500m in losses appear to have come from the discovery that Merrill used a flawed model for measuring the value of derivatives that were used in its hedging strategy.
Auditor Deloitte & Touche concluded that Merrill had “not maintained effective internal control over financial reporting” as of the end of 2008.”
Fidelity Chief Speaks Up (WSJ)
“In a rare public rebuke of the financial-services industry, Fidelity Investments Chairman Edward C. Johnson III called 2008 a “period laced with toxic investment waste and the casual use of other people’s money by a number of institutions.”
In a letter to shareholders issued Tuesday, Mr. Johnson blamed the economic climate on “well-intentioned policies…which made money ridiculously easy to obtain.”"
Apple Downgraded
“Before the market opened, Shebly of Calyon Securities lowered his rating on Apple’s stock to underperform, or sell, from outperform, or the equivalent of buy. Seyrafi sounded hesitant about Apple (AAPL 90.25, +3.30, +3.8%) in a research note, in which he cited several circumstances for his concerns about the challenges and issues facing the company.”
Those reasons include but are not limited to: Apple’s shit is expensive, and Jobs isn’t anywhere to be found.
AIG May Give Up On Plan To Sell Off (Reuters)
Here’s the plan: since we can’t find any buyers, we’ll just stop looking. Fuck everyone: let ‘em come for it.
“AIG is proposing additional ways to reduce the company’s debt to the U.S. government, including handing over stakes in some operations directly to the government, a person told the news agency.”
$$$ ‘Johns’ go to school, get charges dismissed [Charlotte Observer]
$$$ Latest calculator on nationalization [BV]
$$$ Grassroots: I am with Rick. [FW]
$$$ Checking in on Chuck Prince’s Golf Game [Cityfile]
$$$ Barney Frank Demands Immediate Repayment Of Northern Trust Boondoggle Money [zero hedge]
Fortunately for all you evil doers out there, the various bail out provisions in the works (or already implemented) stand to benefit you too. Times are hard on fraudsters these days. Your Ponzi scheme is in danger of running out of cash, withdrawals are up, and due diligence has seen a huge growth spurt in the wake of Madoff and Stanford. What is a white collar criminal to do in this recessionary environment?
Steal TARP funds, of course.
“History teaches us that an outlay of so much money in such a short period of time will inevitably draw those seeking to profit criminally,” Mr. Barofsky said in testimony for the afternoon hearing obtained by Dow Jones Newswires.
Federal regulators have already seen evidence of alleged TARP-related crime. In late January, the Securities and Exchange Commission charged a Nashville-based firm with defrauding investors of at least $6.5 million by claiming their money was invested in the TARP and other securities that didn’t exist.
“If, by percentage terms, some of the estimates of fraud in those programs apply to TARP programs, we are looking at the potential exposure of tens if not hundreds of billions of dollars in taxpayer money lost to fraud,” Mr. Barofsky said, noting that the total amount of money potentially at risk in TARP-related programs is approximately $2.875 trillion.
Hey, stimulus is stimulus.
TARP Fraud Could Cost Taxpayers Billions, Watchdog Warns [The Wall Street Journal]
I guess you could say that this is to be expected, but it’s the sort of malarkey we’d expect of a more Charlotte-based Ken and not our preferred K out (mid)West. Supposedly our favorite Chicago hedge fund has put a clause in bonuses to keep people loyal ’til at least June (when the majority of their goodie bags will be paid out), though “some ship jumping has already begun.” Also hideous: apparently bonuses this year were “in-line” with the rest of the Street, which is common, and uncool.
UPDATE: Au contraire: we’re told that Citadel’s bonuses were paid in their entirety in December and that they came out of KG’s pocket.
We suspect that when Harry Markopolis called FINRA “corrupt,” he at least seems to have hit the nail on the head:
Two employees of Allen Stanford’s financial business, which U.S. regulators have accused of massive fraud, held advisory roles at a watchdog group overseeing U.S. broker-dealers aimed at preventing abuses.
Lena Stinson, director of global compliance at Stanford Financial Group, is listed as serving on the membership committee of the Financial Industry Regulatory Authority, or FINRA, which describes itself as the largest independent regulator of U.S. securities firms.
Frederick Fram, the chief operating officer of Stanford Group Holdings, serves on the FINRA continuing education content committee, “where he participates in creating material for the Regulatory Element continuing education program,” according to a biography on Stanford’s website.
Entertaining. Of course, don’t forget:
On Tuesday, FINRA named Richard Ketchum as its chief executive officer. He replaces Mary Schapiro, who resigned after she was confirmed as chairman of the U.S. Securities and Exchange Commission.
Yes, we heard about the soirees thrown by Northern Trust last week, but seeing as though the bank received a measly $1.6 billion in TARP money, and there were no facials to speak of, we didn’t so much give a rat’s A. Others beg to differ, calling the thing an idiotic outrage, and surely Rep. Elijah Cummings is working on some zingers for the organizers of the thing in a Congressional holding room where Barney Frank keeps his people locked up and riled up (Maxine Waters is there, being spoon-fed a cocktail of uppers and downers, as is Rep. Rosa DeLauro, chewing on a piece of leather) so here it is, strangely courtesy of TMZ:
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
