Opening Bell: 08.28.09

Posted by Dealbreaker, Aug 28, 2009, 8:00am

Allen-Stanford.jpg'Blood Oath' Sealed Stanford Deal, Court Is Told (NYT)
You really can never trust a person, especially in the money game. Sometimes you need a little added security that they're going to be loyal to you no matter what. So why this happened, okay? "At a meeting in 2003, [Stanford and his chief regulator, Leroy King] became blood brothers, cutting their wrists and mixing their blood in a "brotherhood ceremony" that Mr. Stanford's chief financial officer said promoted an elaborate scheme to hide a multibillion-dollar fraud from American and other regulators. After the pact, King called Mr. Stanford "Big Brother." He received Super Bowl tickets, valued at thousands of dollars, for himself and his girlfriend. And he accepted regular bribe payments from a secret Swiss bank account that Mr. Davis said he was told to handle by Mr. Stanford."

SEC's Schapiro Calls Derivatives Data 'Critical' for Probes (Bloomberg)
Regulators need "information that allows us to construct an audit trail, so that we can find insider trading, manipulation and other concerns that can reverberate through the entire marketplace," Schapiro said in an interview for Bloomberg TV.

Madoff Victims Fight Picard Over Profits (NYP)
Irving Picard wants to cut checks for whatever money each investor gave to Madoff (minus whatever they with withdrew), which is pissing of the people who'd just prefer he gave them the $50 billion.

Treasury Document Called AIG Investment 'Highly Speculative' (Bloomberg)
"A slide with the phrase was included in documents obtained in a Freedom of Information Act request by Judicial Watch. The sentence was omitted from another version of the slide in a presentation describing the November revision to AIG's rescue in which the insurer got $40 billion from the Treasury. ("The prospects of recovery of capital and a return on the equity investment to the taxpayer are highly speculative," according to the first of the two Treasury slides.)"

Banks 'Too Big to Fail' Have Grown Even Bigger (WaPo)
"It is at the top of the list of things that need to be fixed," said Sheila C. Bair, chairman of the Federal Deposit Insurance Corp. "It fed the crisis, and it has gotten worse because of the crisis."

Hedge Critic May Get SEC Risk Post (NYP)
University of Texas law professor Henry Wu, "known for his research uncovering shady dealings in the derivatives market," is probably going to be named head of the SEC's Office of Risk Assessment.

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