House Vote Sends Finance Overhaul To Senate (WSJ)
Focus now shifts to the Senate, where questions linger about whether Democrats have nailed down enough support from the handful of Republicans needed to overcome a likely filibuster. The Senate won't take up the bill until after the July 4 recess, creating an awkward pause in which the bill's opponents will have one last chance to derail it.
AIG's Benmosche Said To Threaten To Resign Unless Golub Quits (Bloomberg)
During a June 25 meeting of New York-based AIG’s board, Benmosche, 66, demanded more control over the divestiture of the company’s main Asia unit, including making top-level management changes, said the people, who declined to be identified because the talks were private. A deal Benmosche had supported to sell the business collapsed four weeks ago after Golub and other directors rejected a reduced bid.
Goldman Executives Defend AIG Treatment, Swap Values (WSJ)
Goldman Executive Chief Financial Officer David Viniar said in prepared testimony that Goldman treated its relationship with AIG no differently than its credit terms with "other major counterparts." He also said Goldman's collateral requirements were "tightly managed." Before the government's takeover of AIG, Goldman's exposure to the insurance giant was roughly $10 billion, he said. Against that, the company held about $7.5 billion in collateral and the remainder was covered through hedges. "I believe the way we managed our exposure to AIG demonstrates the importance of systematically marking positions to market," he said.
Connecticut starts border war over NY hedge funds (Reuters)
"As lawmakers in Albany consider a proposal to vastly increase the tax liability of hedge fund professionals who work in New York - many of whom have already wisely decided to live in Connecticut - I would like to convey a very simple, yet heartfelt, message: Connecticut welcomes you!" Connecticut's Republican governor wrote the New York Hedge Fund Roundtable, a trade group.
Treasury Sells 1.1 Billion More Citi Shares (NYT)
The block trade is the second this year. So far, Treasury has sold about 2.6 billion of its 7.7 billion Citi shares, at an average price of $4.03 each. It has reaped about $10.5 billion in gross proceeds so far.
Steve Perkins, the broker who traded $520m when drunk, to resume career in Switzerland (Telegraph)
The revelation that Mr Perkins is once again poised to trade the global markets after single-handedly moving the oil price by $1.50 in the middle of the night will be deeply embarassing for the FSA. The regulator said that "Mr Perkins poses an extreme risk to the market when drunk". However, it admitted last night that it knew he was planning to restart his career in Switzerland – only 24 hours after being banned for five years in the UK.
Morgan Stanley May Hire 500 Bankers In Lending Push (Bloomberg)
The firm is building a private bank to squeeze more revenue from clients and encourage them to hold deposits at the company. Morgan Stanley’s wealth management group had $191 million of interest income in the first quarter, a fraction of the $1.1 billion at Bank of America Corp.’s Merrill Lynch unit.
Former Regulators Find Steady Work With Hedge Funds (Reuters)
In recent weeks a handful of former top U.S. Securities and Exchange Commission officials have started to advise some of the world's biggest and most prominent hedge funds. Hedge fund manager John Paulson in June tapped former SEC chairman Harvey Pitt and former commissioner Roel Campos as outside directors at some funds run by his $35 billion firm, to help beef up compliance and governance operations. Earlier this year, Pitt plus former SEC Commissioners Aulana Peters and Joseph Grundfest signed on as advisers to Israel Englander's $7.8 billion Millennium Management hedge fund. Former SEC Chairman Arthur Levitt also is doing his fair share of consulting work for private equity firms and hedge funds.