Archive for May 2010

  • 19 May 2010 at 5:23 PM

UBS Trader Pleads Guilty in Massive Bid Rigging Scandal

By Zachery Kouwe

Mark Zaino, a former UBS trader who worked on the firm’s derivatives and municipal securities desk, pleaded guilty to fraud and conspiracy charges today in the wide-ranging investigation into sham auctions and bid rigging in financial products sold to municipalities.

Zaino is the first banker to plead guilty to charges and he has agreed to cooperate with investigators. Another banker at Bank of America, who participated in the massive bid-rigging scheme, is also providing information to the Feds about the scam. Continue reading »

  • 19 May 2010 at 4:01 PM

Highbridge, York Capital Cutting Risk Dramatically

By Zachery Kouwe

“The best course of action is to take risk off,” said Highbridge Capital’s Glenn Dubin at SkyBridge Capital’s hedge fund confab in Las Vegas. Dubin thinks there is a lot of risk in the market now, and Highbridge is reducing its balance sheet dramatically, moving to a defensive position.

“We are seeing massive de-risking and de-leveraging,” Dubin’s told CNBC’s David Faber. He also called Germany’s move to ban bearish bets on certain European debt and financial stocks “ill-advised.” As for the Volcker rule, which would affect the JPMorgan-owned Highbridge, Dubin said he disagreed with its premise because financial the business is not too big to fail and, therefore, not in jeopardy being bailed out by taxpayers.

Continue reading »

  • 19 May 2010 at 3:20 PM

Mandy Drury Is “Absolutely” Going To Consider Coming On Our Field Trip To Stamford

By Bess Levin

Though she’s been a favorite around these parts for almost a year now, it wasn’t until May 10 that Mandy Drury became a permanent member of the CNBC stateside team, an achievement which I’ve told you people I take an enormous amount of credit for. To celebrate this momentous occasion we decided it was high time to have a little chat about how things have been going so far.

Do you prefer to be called Mandy or Amanda?
Always Mandy. The only time I’m ever called Amanda is by my mother when I’m in big trouble.

Let’s just get the crushing of Wall Street’s dreams over with– are you single? Continue reading »

  • 19 May 2010 at 2:46 PM

May Proving to Be a Tough Month for Tiger Cubs

By Zachery Kouwe

Following a “disappointing” first-quarter, an investor in Andreas Halvorsen’s Viking Global Investors tells us the firm’s main fund is down 5 percent for the month. It appears the departure David Ott, Viking’s co-founder and CIO, is not helping matters. Continue reading »

  • 19 May 2010 at 2:03 PM

Ex-Trader Who Wrote Of Boss’s Attempts To Literally And Figuratively Screw Her Now Accusing Him Of Sending Her Hate Mail

By Bess Levin

Back in November, ex-bond trader Melanie Berliet, who left “an elite investment bank” to write about sleeping with married men and having people eat raw fish off her fish (all in the name of journalism, natch), penned a story about about loving the attention associated with being one of a few females in a male-dominated environment (“My token status gave me an extra thrill,” she wrote. “There was something gratifyingly titillating about my accidental flubs, like the time I announced, too loudly, ‘I love nuts.’”). She also enjoyed fielding texts from her boss “Carl Pratt,” whose name she generously changed for the article, such the one he sent her one evening after months of sexual banter (admittedly “calculated” on her part) that read: “Just woke up from a dream. I had you on your belly and took you from behind. You came multiple times.” Continue reading »

  • 19 May 2010 at 12:29 PM

Bachus to Call for Investigation into Shorebank Rescue

By Zachery Kouwe

We knew this was coming. Charlie Gasparino is reporting that Spencer Bachus is ready to call for a Congressional investigation into political pressure on big banks to rescue the failing lender Shorebank Corp. Continue reading »

  • 19 May 2010 at 12:10 PM

France is Pissed About German Ban on Naked Shorts

By Zachery Kouwe

France is none too pleased with Germany’s unilateral action yesterday to ban bearish bets on certain financial companies and European government’s bonds. Christine Lagarde, the French finance minister blasted the Germans for stepping out of school yesterday, a move she thinks could dampen liquidity on the European bond market.

Lagarde has ruled out imposing its own ban on naked shorting, however it is still enforcing a ban on shorting certain financial stocks that was put in place in September 2008. Sweden and the Netherlands also came out against the Germans yesterday.

“I think we should really request the views of those governments affected by this measure. We did not envisage doing this. And for liquidity reasons, it is useful to continue functioning without banning short selling,” she said.

Backlash builds against German ban [FT.com]

  • 19 May 2010 at 11:45 AM

Do Your Part: Buy Shares In Beer Pong Table Manufacturer Today

By Bess Levin

Southern Products CEO (CFO, Principal Accounting Officer, and sole director) Tyler Richard, 19, has a dream. A dream to sell custom-made beer pong tables that retail for (starting at) $300 a pop, with “more customized tables” going for $400-$600. Mr. Richard truly believes that no one wants to play this game on some POS ping pong table or any old hard surface they can get their hands on. The demand for an Official Beer Pong table made out of foam and stucco is there. But, there is a bit of a problem.

As of February 28, 2010, we had $9,500 in current assets and current liabilities in the amount of $3,500. Accordingly, we had working capital of $6,000 as of February 28, 2010. Our current working capital is not sufficient to enable us to implement our business plan as set forth in this prospectus. Our management estimates that, until such time that we are able to generate sales revenue sufficient to pay our ongoing and planned expenditures, we will experience negative cash flow in the approximate amount of $2,500 to $3,500 per month. For these and other reasons, our independent auditors have raised substantial doubt about our ability to continue as a going concern. Accordingly, we will require additional financing, including the equity funding sought in this prospectus.

Continue reading »

  • 19 May 2010 at 11:12 AM

Volcker Thinks Dodd Bill is Pretty Good

By Zachery Kouwe

Paul Volcker, President Obama’s special advisor on financial regulatory reform, appears to have endorsed the main bill sponsored by Sen. Chris Dodd of Connecticut. Although details are still being worked out, Congress is moving to pass the bill by the end of the month. Continue reading »

  • 19 May 2010 at 10:46 AM

Allen Stanford Wants Out Of Prison, Claims Constitutional Rights, Among Other Things, Are Being Violated

By Bess Levin

How can we get back to here?

Hey remember Allen Stanford? It’s been a while, hasn’t it? When we last checked in with the accused Ponzier, in December, a prison psychologist was arguing that if the guy wasn’t let out of jail ASAP, it was very likely he’d “a complete nervous breakdown.” Apparently that wasn’t a convincing argument for those who make the decisions as to whether or not people are just allowed to up and leave because he’s still there, asking to be freed. Stanford, who never recovered after the SEC robbed him of being listed as the 405th wealthiest person in the world by Forbes, said in a filing that he should be cut loose because 1) keeping him behind bars is unconstitutional 2) he’s been getting some serious shit kicked out of him.

In a filing on Tuesday with the federal court in Houston, lawyers for Stanford said their client had been “subjected to substantial and undeniable punishment,” including nearly a year of incarceration and both physical and psychological damage. This and the prospect of more than a year of further custody until and during his trial, which is scheduled to start in January 2011, violates his constitutional rights to due process, effective assistance of counsel, a speedy trial, and an absence of excessive bail, the lawyers said. “When Mr. Stanford surrendered to authorities, he was a healthy 59-year-old man,” Stanford’s Houston-based lawyer, Robert Bennett, wrote in a brief on which Harvard Law Professor Alan Dershowitz consulted.

Continue reading »

Opening Bell: 05.19.10

By Dealbreaker

Goldman Sachs Hands Clients Losses in ‘Top Trades’ (Bloomberg)
Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar.

Winfrey Hires Star Manager (WSJ)
Steve Cohen is going to work for the talk show host. No, BUT MAYBE SOME DAY. “Ms. Winfrey, one of the most powerful brands in media, has begun setting up a so-called family office to handle her personal investments, according to people familiar with the situation. Her first hire: Peter Adamson, a well-regarded investor who currently serves as chief investment officer for Eli Broad, the Los Angeles billionaire and philanthropist.”

‘Flash Crash’ Plan: Circuit Breaker For Every Stock (WSJ)
The SEC said trading would pause in certain stocks if the price moved 10% or more in a five-minute period, under a plan set to start in mid-June for a six-month pilot period.

Roubini: Financial Reform ‘Cosmetic,’ Won’t Stop Losses (CNBC)
“We need more radical reforms,” he added. “The idea that we’ll be able to close down an institution like Goldman in an orderly way—a business that operates in nearly a hundred countries—is absurd.”

Goldman’s O’Neill Says Financial Crisis Helped Curb Euro’s `Overvaluation’ (Bloomberg)
“People need to remember that for the past couple of years the euro’s been very expensive,” O’Neill told Bloomberg Radio from London today. Still, the euro’s recent slide indicates expectations that monetary union could unravel, “so, there needs to be something done by European policy makers to stabilize the euro in the near future,” he said.

Hedge Funds Bet Europe’s $1 Trillion Rescue Package Won’t Cure Debt Crisis (Bloomberg)
“The EU and the IMF effectively went all-in with a bad hand in the highest stakes game of financial poker ever played with the world,” wrote Kyle Bass, head of Dallas-based Hayman Advisors LP, in a letter to clients sent after the bailout was announced. John is one manager who may not be replicating the CDS trade he used three years ago. Earlier this month, in a conference call with investors, he called Europe’s debt problems “manageable.”

Hugh Hendry Shorts China, Betting on 1920s Japan-Like Crash (BW)
Hendry’s flagship Eclectica Fund, a global macro hedge fund with $180 million in assets, may gain almost $500 million from its options if China’s economy plunges into a recession, he said. The options cost the fund about 1.5 percent of its net asset value annually, Hendry said. Continue reading »