Goldman faces losses on erroneous trades (FT)
A computer glitch at Goldman Sachs could cost the investment bank $100m or more after it inadvertently made a large number of erroneous options trades on Tuesday that disrupted trading across multiple US exchanges, market participants told the Financial Times. A trading system that normally tracks how Goldman would price options on behalf of its clients malfunctioned and sent expressions of interest as orders to exchanges operated by NYSE Euronext, Nasdaq OMX and CBOE in the opening minutes of the US trading day, a person familiar with the bank’s trading said. Some of those orders were sent with default prices that differed dramatically from market prices for options linked to stocks and exchange-traded funds including JPMorgan Chase and Kellogg. The bank’s losses from the mishap are expected to become clearer in coming days as the exchanges review each transaction. The problem sparked heated discussions between Goldman, the exchanges and trading firms that took the other side of the trades, people familiar with the situation said.
Justice Department Plans New Crisis-Related Cases (WSJ)
Attorney General Eric Holder said the Justice Department is nearing decisions on a number of probes involving large financial firms and that he plans to announce new cases stemming from the economic meltdown in the coming months. “My message is, anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time. If any individual or if any institution is banking on waiting things out, they have to think again,” Mr. Holder said in an interview Tuesday with The Wall Street Journal.
Investment banks’ hiring points to uptick in recruitment (FT)
Investment banks including Nomura, Citigroup and Bank of America have started hiring dealmakers and traders in Europe in a sign that recruitment is picking up following a two-year cull that saw thousands of bankers lose their jobs. Recruiters say they are at their busiest since 2010 as banks add new staff in revenue-generating positions including M&A advice to equities trading. … “I think it’s fair to say that there’s been a pent-up desire to hire and all of the recent positive data are making it much easier for them to pull the trigger,” said Joseph Leung, founder of Aubreck Leung, the executive search group. It comes as the rate of job losses in the global investment banking sector has fallen to its slowest pace in two years.
S.E.C. Charges Former Oppenheimer Manager With Misleading Investors (DealBook)
Federal securities regulators accused a former portfolio manager at Oppenheimer & Company on Tuesday of misleading investors about the performance of a fund, a rare enforcement action involving the private equity industry. The Securities and Exchange Commission contends that Brian Williamson issued quarterly reports and marketing materials that inflated the performance results of an Oppenheimer private equity fund.
Volkan the Intruder: Man in Underpants Partied in Merkel’s Jet (Spiegel)
On the night of July 25, a 24-year-old man clutching a bag full of marijuana and ecstasy pills managed with relative ease to get on board an empty government jet used frequently by Chancellor Angela Merkel, while it was parked at a closed military section of the Cologne airport. The man, a bodybuilder of Turkish descent named as Volkan T., proceeded to stage a raucous, one-man party. Reports said he stripped down to his underpants, sprayed fire extinguisher foam around the elegant cream and beige interior, pushed buttons in the cockpit, released an inflatable emergency slide and danced on the wing of the Airbus 319.
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