If you thought the SEC’s charges against Goldman Sachs poured fuel on an already-raging populace fire, Wall Street’s involvement in a massive bid rigging scandal in the $2.8 trillion municipal bond market will fan the flames even more.
Earlier this month, we heard about an SEC investigation of conflicts of interest at big banks that bought credit default swaps on muni bonds they sold to state and local governments. But Bloomberg is out with a big investigative piece today about a massive bid-rigging scandal in the muni market that, if true, bilked 160 state agencies, local governments and non-profits out of hundreds of millions of dollars. Read more »
That question came up in the hearing earlier this week in reference to an email sent by Josh Birnbaum, a former MD in Goldman’s structured products group.
The email, sent in July 2007, sought authorization form senior management for the structured products desk to buy put options on a slew of competitors including Merrill Lynch, Bear Stearns and Lehman Brothers. The email also revealed that Birnbaum had bought put options on MBIA, Ambac and Countrywide. Read more »
Former Lehman Brothers chief Dick Fuld was just spotted walking by himself in Times Square near 42nd Street. Is he looking for office space or just paying a visit to his old firm?
More from Dick Fuld’s bizarre testimony yesterday in front of the House Financial Services Committee. Read more »
Apparently not. The former Lehman CEO devolved into long soliloquies about the history of the bankrupt firm, took long pauses and seemed generally delusional in his testimony in front of the House Financial Services Committee this afternoon. Here’s a recap of Fuld’s bizarreness:
The most peculiar answer: “We were risk averse,” Fuld says in response to a question about why the firm failed. He chalks the losses up to “terrible timing” on commercial real estate investments. Still, at the end, Fuld says there was “no capital hole.” “We could not convince the world about the [good] position we were in.” He also blamed naked short sellers, again.
Asked if 30 to 1 leverage seemed risk averse to him, Fuld said 30 to 1 was a misconception. (It seems as though he really believes this.) Read more »
Last November we mentioned that Maureen Murphy and Anna Francis, two female Nomura employees (legacy Lehman girls), had sued the bank claiming that “sexist Japanese company chiefs effectively sidelined them because they were women and not Japanese.” Murphy, a senior analyst earning £55,000-a-year said that on one occasion a male colleague told her women “belonged at home cleaning floors” and that one woman trader had her breasts referred to as “honkers” during a meeting (actual alleged quote: “Oh, you don’t have your honkers out today”). Today a judge threw out their case. Read more »
It’s not that they want to, as it would go against everything the Commission stands for (incompetence, letting frauds run rampant), not to mention seriously cut in on everyone’s porn surfing time. It’s just that, (no) thanks to the infernal examiner’s report, they might have, or risk looking worse than they already do.** Read more »
As mentioned earlier this morning, Dick Fuld thought last week’s report on his firm’s bankruptcy was phenomenal, as it, in Dick’s mind, cleared him of any real wrongdoing because Repo 105 is completely legit. Others have now had a chance to weigh in and the consensus? The whole thing was a real gas. At least one former employee of the firm is finding some much needed comedic relief in this whole thing.
“When I read this, I giggle a little bit. Because $50 billion is a shitload of money, but in the grand scheme of things,” said a former managing director in England—where the accounting gimmick, named Repo 105, was given a legal endorsement that it couldn’t get here, “$50 billion is a drop in the ocean.”
Once Chuckles got a second to catch his breath, he wanted to get one thing straight. He’s not laughing with you, he’s laughing at you.
The former managing director in London said that Repo 105 was an open secret there, if it was a secret at all. “Yeah, yeah, yeah. In Europe, people just generically talk about it. It’s funny, for nonprofessionals, you can try to make it a smoking gun,” the source said, “I’m like, whatever.”
It’s such a NBD that I don’t even know why we’re talking about it. But while we’re on the subject? If you thought Lehman was bad? Maybe you should stick your nose in Goldman’s business. That shit will haunt your dreams. It’s like Saw over there. Read more »
Under the Chapter 11 reorganization plan proposed by the company, Lehman sought authority to create an asset manager business called LAMCO that would specialize in management of Lehman’s commercial real estate, mortgages, principal investments, private equity, corporate debt and derivatives assets.
Lehman said LAMCO would provide management services to Lehman, administer its assets and offer long-term employment opportunities for the hundreds of Lehman employees working to liquidate the former investment bank’s estate.
Lehman plans to end bankruptcy, create new company [Reuters]
I don’t think I have to tell you people it takes a big man to admit when he’s wrong, and an even bigger one to follow that admission up with an apology. Charlie Gasparino is fully aware of this truism, though in his 40 some-odd years, he’s had nothing to say sorry for, and certainly never gotten anything wrong. Sure, other people have seen it differently– the guy Chaz cut off on the BQE the other day, the San Pietro busboy he screamed obscenities at for getting his order wrong (twelve martinis, roast chicken with ketchup on the side), etc– but that’s their problem. Today you can add Barry Ritholtz to the list of people that Chaz doesn’t owe nothing. Yes, BR’s argument has its quasi-valid points– Ritholtz reminds us today that Chaz defended Lehman Brothers by saying Dick Fuld obviously knew more about the firm’s balance sheet than David Einhorn and Barry– but those are just facts. Charlie does have one thing to say to Ritz, though, which is simply this: ba fungul. No further questions. But just for the memories…