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Opening Bell: 12.18.14

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Countrywide Whistle-Blower to Receive More Than $57 Million (Dealbook)
A former Countrywide Financial executive who became a whistle-blower is collecting more than $57 million for helping federal prosecutors force Bank of America to pay a record $16.65 billion penalty in connection with its role in churning out shoddy mortgage and related securities before the financial crisis. Edward O’Donnell reached an agreement last week with the government that enables him to collect part of the settlement that Bank of America agreed to pay in August in a deal with federal prosecutors and a number of state attorneys general, according to a court filing. The payment to Mr. O’Donnell arises from a federal civil lawsuit he filed under the False Claims Act earlier this year and which Preet Bharara, the United States attorney for Manhattan, joined and used as the basis for pressing Bank of America to reach a deal. “In my opinion, Edward O’Donnell is the person most responsible for bolstering the bank settlements and holding Wall Street accountable,” said David G. Wasinger, the lawyer for Mr. O’Donnell, who worked at Countrywide from 2003 to 2009.

Ackman Says Pershing ‘Meaningfully’ Built Fannie-Freddie Bet (Bloomberg)
Bill Ackman, founder of Pershing Square Capital Management, said he’s added “meaningfully” to his bets on U.S. mortgage companies Fannie Mae and Freddie Mac in the past two weeks. His New York-based hedge fund firm is wagering that Congress or the courts will restore value to Fannie Mae and Freddie Mac securities after the companies were seized by regulators in 2008. Securities in both plunged after a federal judge threw out a lawsuit on Sept. 30 that would have forced the government to share the companies’ profits with private investors. “The government cannot act outside the law,” Ackman said Wednesday in an interview on Bloomberg Television with Erik Schatzker and Stephanie Ruhle. “This is a decision that will never stand.”

BlackBerry Tries to Win Back Die-Hards With ‘Classic’ (Bloomberg)
BlackBerry Ltd. (BBRY) is going back to its roots with a keyboard-equipped phone that looks like the original “crackberrys” that made the Canadian smartphone maker a household name. The Classic smartphone, which features a qwerty keyboard, trackpad and call and hang-up buttons nestled below a touch screen, was debuted today by Chief Executive Officer John Chen at an event in New York. It restores features largely abandoned on BlackBerry devices last year with the introduction of a new operating system. “When I went to visit customers -- and these are the CEOs of top banks in this town -- a lot of them pulled out their BlackBerrys,” Chen said at the event. Chen said one financial executive told him: “Don’t mess around with this thing.”

Office Parties—Without the Awkwardness (WSJ)
Keep office parties short—“no more than 30 minutes or an hour,” says Ms. Roth. “You don’t want to distract them for too long, and if you’re serving any alcohol, you want to watch it and not have people get too drunk, because that could get awkward.”

Intercontinental Exchange Proposing Major Stock-Market Overhaul (WSJ)
In a draft letter being circulated among large banks and investment firms, ICE is proposing a trade-off between exchanges and brokers, according to people familiar with the matter. The NYSE would drop the fee for trading stocks at its exchanges to five cents per 100 shares from 30 cents per 100 shares. Banks, in exchange, would accept a rule known as “trade at” that would give more precedence to the stock exchanges, except for transactions involving large blocks of stock and retail investors. A trade-at rule would mandate that stock trades take place on exchanges unless private venues, such as dark pools, offered a significant price improvement. It would force a significant chunk of the estimated 40% of all stock trades that occur away from exchanges back onto exchanges.

Pot shop removes smoking Santa window painting (UPI)
A Los Angeles medical marijuana dispensary removed a pot-smoking Santa painting from its window following complaints from members of the public.
The Harbor House of Dank in San Pedro hired an artist last week to create window paintings including Santa Claus smoking a blunt and a snowman holding a prescription bottle. Pictures of the paintings were posted on Facebook, where they drew hundreds of complaints. Posts on the closed "Coastal San Pedro Neighborhood Watch" Facebook group criticized the paintings for being prominently displayed in an area frequented by children. The paintings were removed from the windows Tuesday. The store manager said he had the artist scrape them off the windows when he learned about the complaints from the public. The furor over the pot-smoking St. Nick may have caused further troubles for the Harbor House, as Los Angeles Councilman Joe Buscaino's office said the business is operating illegally.

Justice Department Probes Forex Site That Vanished With Cash (Bloomberg)
The U.S. Department of Justice has begun a criminal investigation into the foreign exchange trading website, which vanished last May 1 with as much as $1 billion from investors around the world. The Financial and Capital Market Commission in Latvia is also probing the involvement of Latvian banks used by Secure Investment, says agency spokeswoman Elina Avotina. An investigator with the U.S. Attorney’s office for the Eastern District of New York has interviewed Secure investors in the U.S. and Canada, according to the people who were contacted. Two of those people were quoted in “Anything But Secure” in the December issue of Bloomberg Markets magazine. Bloomberg had interviewed customers in 11 countries on five continents who said they saw their money evaporate with Secure Investment when its website disappeared.

Icahn brokers ‘deal’ to save Atlantic City’s Trump Taj Mahal (NYP)
Carl Icahn is saving Atlantic City’s second-biggest casino, the Trump Taj Mahal, The Post has learned. The bankrupt, nearly 25-year-old casino was scheduled to close its doors Saturday morning. The move will save 3,000 jobs. The union representing roughly 1,100 casino workers, which had been seen as a stumbling block toward keeping the Taj Mahal open, is expected Wednesday evening or Thursday morning to execute a new agreement with management, two sources said. Icahn, the billionaire investor who owns all of the $292 million in Taj Mahal bank loans, conceded Wednesday to the union’s demands to restore all work rules after earlier agreeing to restore just health care and some pension benefits, two sources close to the negotiations said.

RBS, HSBC and JPM Reveal Bets on How Far Swedish Riksbank Can Go (Bloomberg)
As Sweden’s central bank considers new measures to fight deflation, economists at some of the world’s biggest banks are speculating on how far policy makers will need to go to regain credibility. At Royal Bank of Scotland Group Plc, clients are being advised to brace themselves for negative rates in February. The Riksbank will then also need to buy assets and may even resort to currency interventions, according to RBS. “If they don’t do anything, the market will probably be very disappointed,”Par Magnusson, head of Scandinavian rate strategy at RBS in Stockholm, said by phone. “To do nothing is not an option.”

Woody Johnson apologizes after Jets owner favorites tweet calling for team to fire GM (NYDN)
Jets owner Woody Johnson backtracked from a social media slip-up Tuesday night after he favorited a tweet calling for the firing of Gang Green GM John Idzik. “@woodyjohnson4 you really need to #FireIdzik at this point. This roster is garbagio,” was the tweet that the 67-year-old billionaire favorited. Shortly after 10 p.m. Tuesday, Johnson posted his first message in two weeks, saying “Have to be more careful when scrolling through my Twitter feed. The tweet I most recently favorited was inadvertent.”


Opening Bell: 11.09.12

RBS, UBS Traders Said to Face Arrest in Libor Probe (Bloomberg) U.K. prosecutors are poised to arrest former traders and rate setters at UBS, Royal Bank of Scotland Group and Barclays within a month for questioning over their role in the Libor scandal, a person with knowledge of the probe said. The arrests will be made by police under the direction of prosecutors at the Serious Fraud Office within the next month, said the person, who declined to be identified because the matter isn’t public. Arrests in the U.K. are made at an early stage of the investigation, allowing police and prosecutors to question people under caution and may not lead to charges. The SFO has 40 people working on the probe into manipulation of the London interbank bank offered rate, a benchmark for financial products valued at $360 trillion worldwide, and has involved the City of London Police, said David Green, the agency’s director. “Significant developments” in the case are coming “in the near future,” Green said yesterday in an interview at his office in London without giving further details and declining to comment on any possible arrests. Pressure Mounts On Fiscal Crisis (WSJ) The CBO on Thursday detailed its view that if Washington policy makers don't act before the end of the year, the economy would contract by 0.5% in 2013. The unemployment rate would jump from 7.9% to 9.1% by the end of 2013, according to the CBO—a nonpartisan arm of Congress. Ex-Goldman Bankers See Crisis Opportunity in Greek Insurance (Bloomberg) Alexis Pantazis and Emilios Markou are on a three-year odyssey to become next-generation car insurance executives in Greece that’s a million miles from their previous incarnation as bankers for Goldman Sachs. “One of our investors says you cannot wipe out a country,” said Pantazis, 36, a consultant at Boston Consulting Group before working as an executive director at Goldman Sachs from 2005 to 2008. “A country like Greece has 11 million people and these people need basic services. They need bread, they need milk, they need car insurance.” As French banks Credit Agricole and Societe Generale sell their Greek units to exit the only euro area country that’s in need of a second rescue package, Pantazis and Markou see an opportunity. After swapping business-class lounges and sushi for budget flights and sandwiches, the pair began pitching their Internet-based vehicle policies to Greeks two months ago. SEC Left Computers Vulnerable to Cyberattacks (Reuters) Staffers at the U.S. Securities and Exchange Commission failed to encrypt some of their computers containing highly sensitive information from stock exchanges, leaving the data vulnerable to cyberattacks, according to people familiar with the matter. While the computers were unprotected, there was no evidence that hacking or spying on the SEC's computers took place, these people said. The computers and other electronic devices in question belonged to a handful of employees in an office within the SEC's Trading and Markets Division. That office is responsible for making sure exchanges follow certain guidelines to protect the markets from potential cyber threats and systems problems, one of those people said...The security lapses in the Trading and Markets Division are laid out in a yet-to-be-released report that by the SEC's Interim Inspector General Jon Rymer. The Last Days Of Romneyland (NBC) From the moment Mitt Romney stepped off stage Tuesday night, having just delivered a brief concession speech he wrote only that evening, the massive infrastructure surrounding his campaign quickly began to disassemble itself. Aides taking cabs home late that night got rude awakenings when they found the credit cards linked to the campaign no longer worked. "Fiscally conservative," sighed one aide the next day. In conversations on Wednesday, aides were generally wistful, not angry, at how the campaign ended. Most, like their boss, truly believed the campaign's now almost comically inaccurate models, and that a victory was well within their grasp. (Outside Republicans and donors are another story. Some are angry over what they felt was an overly rosy picture painted by the campaign, and at what amounts to the loss of their investment.) New York Subway Repairs Border ‘on the Edge of Magic’ (NYT) There were some hiccups. At West Fourth Street, unexpected third-rail and switch problems delayed the return of the D, F and M trains. As the authority prepared to bring the G train back this week, a transformer blew, keeping the train offline for the morning rush hour on Wednesday. There were still service gaps on the N train, the A train in Far Rockaway and the R line, among others. On Thursday morning, inside his office, Joseph Lhota, the chairman of the transportation authority, checked his BlackBerry often, hoping for an update on the L train. Moments later, he placed a call to Howard B. Glaser, Mr. Cuomo’s director of state operations, whom he wanted to brief on the Queens-Midtown Tunnel. The tunnel could open Friday, he told Mr. Glaser, remarking that Mr. Bloomberg, “like an idiot,” had predicted publicly that the tunnel might open over the weekend. “He’s making it up,” he said, after a brief hail of profanity in which Mr. Lhota wondered aloud who, exactly, Mr. Bloomberg had been talking to. “It’s wrong,” he told Mr. Glaser. “It’s just wrong.” Mr. Lhota also spoke of the L line’s importance, as if his audience needed convincing. “You know who knows where the L train goes?” he barked into the phone. “All the hipsters in Williamsburg.” The BlackBerry buzzed on the table in front of him. He grabbed it quickly, then put it back. No good news yet on the L, he said. Hours later, that would change. “Ladies and Gentlemen,” he wrote on Twitter. “The L train is back. Enjoy your trip home tonight.” Whistleblower To Get Big Payment In Bank Of New York-Virginia Deal (WSJ) Bank of New York Mellon Corp. has reached an agreement with the state of Virginia to resolve accusations the bank charged hidden markups on currency transactions to Virginia's employee pension fund, in a deal that will also involve a $1.1 million payment to a whistleblower group, according to a person familiar with the negotiations. The whistleblower group includes Grant Wilson, who spent two years as a secret informant while sitting on the bank's Pittsburgh trading desk. Mr. Wilson's identity was disclosed in a page-one article in The Wall Street Journal last year. As part of the agreement, Virginia won't pursue litigation against BNY Mellon, and the bank will offer reduced fees in the future under a new custodial deal, according to people familiar with the negotiations. Nearly Half Of Britons Want EU Exit (Reuters) Nearly half of Britons would vote in a referendum to leave the European Union and less than a third to stay in, according to a poll highlighting divisions facing Prime Minister David Cameron. Polling company YouGov said on Thursday 49 percent favoured leaving the EU, 28 percent would vote to stay in the 27-nation bloc, 17 percent were undecided and the rest would not vote. Crédit Agricole Posts Record Loss After Greek Sale (WSJ) The Paris-based lender, France's third-largest bank by market value, posted a third-quarter net loss of €2.85 billion ($3.63 billion), well below analyst forecasts of a €1.76 billion net loss. The bank reported a €258 million profit in the same quarter a year earlier. Rochdale Traders Await Rescue (NYP) Sixteen days after a rogue trader rocked Stamford, Conn.-based Rochdale Securities, the broker-dealer, still hasn’t reached a deal with a deep-pocketed investor, sources said. Fla. principal resigns after offering promotions for sex (WPBF) A Florida high school principal who offered teachers' promotions in exchange for sex has resigned from his position. Steve Van Gorden's resignation comes after a 300-page investigative report by Pasco County school officials into allegations of sexual harassment. Several teachers claim Van Gorden, who is also the mayor of Zephyrhills, sent text messages offering career boosts in exchange for sex and threatened them if they refused. Van Gorden said he's sorry. "The bottom line is I'm truly sorry for what occurred, and it's not going to happen again," Van Gorden said. Van Gorden has a year and a half left on his term as mayor.

By Василий Красюк ( [GFDL or CC BY 3.0], via Wikimedia Commons

Opening Bell: 8.29.16

Short-seller says Herbalife may have misled investors, SEC; Goldman Sachs, Morgan Stanley reinvent themselves; IPO market poised for a rebound; Cop accidentally filmed himself stealing marijuana; and more.