U.S. Presses Mortgage Cases With Morgan Stanley, Goldman Sachs (WSJ)
Morgan Stanley and Goldman Sachs Group Inc. are inching closer to resolving U.S. claims that the two Wall Street firms misled investors in mortgage bonds that plummeted in value during the financial crisis. Morgan Stanley is in talks with Justice Department officials to settle its investigation, with the costs likely to exceed $1 billion, people familiar with the matter said. On Monday, Goldman said it was informed by federal litigators in December that the firm might face a civil lawsuit stemming from the government’s mortgage-bond probe.
Meet Wall Street Refugees Running Bonds at Freddie Mac (Bloomberg)
Way up in a Manhattan skyscraper, a band of Wall Street refugees is quietly staking billions of dollars on the American mortgage machine. Their pedigrees are A-list: Citigroup Inc., Bank of America Corp., Credit Suisse Group AG. Their job is to prowl for an edge in the $6 trillion market for home-loan securities, a place where, just seven years ago, greed and hubris collided in the worst financial crisis since the Great Depression. It might sound like some high-flying hedge fund, but it’s not. It’s Freddie Mac, the taxpayer-backed mortgage giant that collapsed in 2008, along with its larger cousin, Fannie Mae. Today, after multibillion-dollar bailouts, both effectively are still wards of the state. Which is why what’s happening inside Freddie Mac might come as a surprise. With little fanfare, the company has recruited traders from major banks and empowered some to place new wagers.
Big Banks Face Scrutiny Over Pricing of Metals (WSJ)
U.S. officials are investigating at least 10 major banks for possible rigging of precious-metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries.
Goldman Sees Value Outside of ‘Stretched’ U.S. Equities (Bloomberg)
Seven months after the Federal Reserve warned that valuations of some smaller, biotechnology and social-media stocks may be “stretched” in the U.S., Goldman Sachs Group Inc. is using the same word to describe the whole shebang. “Stocks with attractive valuation are rare in the current environment of stretched share prices,” Goldman’s chief U.S. equity strategist David Kostin and colleagues wrote in a Feb. 20 report, citing the ratio of price to estimates of future profit and the ratio of enterprise value to earnings before interest, taxes, depreciation and amortization. “The only time during the past 40 years that the index traded at a higher multiple was during the 1997-2000 Tech Bubble.”
Teacher Gets Battered During Pick-up Game (TSG)
A hulking school advisor was arrested yesterday for aggravated battery after he slammed a female teacher to the ground during a pick-up basketball game, an assault that was recorded by a surveillance camera in the Florida elementary school’s gymnasium. During a two-on-two game Tuesday evening at Holly Hill School, Travis Mims, 27, assaulted Katherine Martin, a 33-year-old special education teacher, police allege. Mims, who is 6’ 2” and weighs 260 pounds, “picked up Ms. Martin’s body, turned her upside down, and maliciously threw her body onto the floor,” according to a charging affidavit that neatly summarizes what is seen on the above video released by police. Martin, who was teamed up with a student, was playing against Mims and another pupil. Martin told cops that during the game Mims was becoming increasingly aggressive, and that “there was an exchange of words between” her and Mims “concerning fouling.” “Then all of a sudden Mims violently picked up Ms. Martin by her waist, turned her body around, and slammed her to the ground,” reported cops, who added that the teacher’s “head struck the ground first, then other parts of her body sustained injury.” Martin subsequently drove herself to the hospital for treatment of injuries that police described as “substantial” and “serious and permanent.”
Chinese startup gives away Teslas as a year-end bonus (UPI)
A Chinese startup is being quite generous with their year-end bonuses for employees by offering a Tesla to anyone who's worked there for at least four months. The move will allegedly cost the company, translated as WiFi Master Key, over $4 million. There are supposedly dozens of employees at the company who meet the minimum requirement. The company creates software that automatically connects cell phones to any Wi-Fi signals that are accessible in an area. The company that backs this startup, game developer/publisher Shanda, states its employees appreciate the Tesla brand.
HSBC may face extra $1 billion in FX fines, U.S. compensation costs (Reuters)
HSBC Holdings Plc has set aside $550 million more to cover potential fines for alleged manipulation of foreign exchange markets and warned it could face a $500 million bill to compensate U.S. customers sold debt protection products. HSBC said in its annual report on Monday it had paid restitution to some U.S. customers in connection to debt protection and other products offered before May 2012. It said additional remediation for this issue "may lie in a range from zero to an amount up to $500 million."
Gulliver Seeks Extreme Solutions as HSBC Breakup Option Seen (Bloomberg)
On Monday, he cited Brazil, Mexico, Turkey and the U.S. as potential markets for disposals, among 74 countries where HSBC operates. The bank has more than 250,000 staff, even after exiting 77 businesses and cutting some 50,000 jobs in Gulliver’s four-year tenure. HSBC is the largest European bank by market value, leaving it exposed to the toughest regulator scrutiny.
As ‘Spoof’ Trading Persists, Regulators Clamp Down (WSJ)
One June morning in 2012, a college dropout whom securities traders call “The Russian” logged on to his computer and began trading Brent-crude futures on a London exchange from his skyscraper office here. Over six hours, Igor Oystacher ’s computer sent roughly 23,000 commands, including thousands of buy and sell orders, according to correspondence from the exchange to his clearing firm reviewed by The Wall Street Journal. But he canceled many of those orders milliseconds after placing them, the documents show, in what the exchange alleges was part of a trading practice designed to trick other investors into buying and selling at artificially high or low prices. Traders call the illegal bluffing tactic “spoofing,” and they say it has long been used to manipulate prices of anything from stocks to bonds to futures. Exchanges and regulators have only recently begun clamping down.
Embattled CTPartners faces potential takeover by rival (NYP)
CTPartners, the embattled Wall Street head-hunting firm at the center of a sexual discrimination complaint, now has a takeover-hungry rival as its fourth-largest shareholder as acquisition talks have entered into a third week. The rival firm, Chicago-based DHR International, owns 5 percent of CTPartners’ stock, the company said on Monday. That puts DHR’s stake in New York-based CTP just a few notches smaller than reclusive investor Austin Marxe and the company’s CEO Brian Sullivan — the two largest shareholders in the company. Sullivan and CTP made headlines last year after The Post reported allegations of a boozy, nude romp at a company function held at Sullivan’s Florida waterfront estate — allegations contained in a complaint filed with the Equal Employment Opportunity Commission, a copy of which was obtained by The Post.
Sunlight passing through Nutella jar ignites fire on windowsill, killing beloved family dog (NYDN)
A fire ignited by sun rays refracted through an emptied nutella jar on a girl’s bedroom windowsill tore through a southwest London home and caused the death of a family dog, the London Fire Brigade announced Monday. The blaze broke out in the Twickenham neighborhood on Feb. 15 when the rays from the glass jar set the window’s blinds aflame while Declan Murphy, his wife and his two children were gone celebrating the couple’s engagement anniversary, GetWest London reported. The fire gutted the first floor bedroom where Murphy’s daughter had been using the container to store rubber loom band bracelets and caused roof damage, the publication reported. And the Murphys’ trapped 9-year-old Jack Russell Terrier, Chili, perished from smoke inhalation as fires engulfed the home, according to investigators.