Citigroup’s settlement with the Securities and Exchange Commission, announced on Monday, comes more than seven years after the two hedge funds collapsed, saddling investors with billions of dollars in losses...In the fall of 2007, one of the hedge funds, called Falcon Strategies, sold as much as $110 million in additional shares in the funds to investors. Yet only a few months later, in January 2008, the liquidity problem had become so dire that the manager of the Falcon fund had drawn up “liquidation scenarios.” Even Citigroup, the parent, wouldn’t extend emergency liquidity to its own hedge funds...Citigroup agreed to pay the $180 million to harmed investors without admitting any wrongdoing. [Dealbook]
Citigroup Investors Don't Care About Making Vikram Pandit Smile
[caption id="attachment_73871" align="alignleft" width="234" caption="Y'all can kiss this ear to ear grin good-bye"][/caption] In the spring of 2010, almost exactly two years ago to date, the New York Times reported that some of Vikram Pandit's top lieutenants had noticed "a new bounce in his step" and "a smile on his face," with one executive speculating that the Citi CEO's cheer could be attributed to the fact that he was starting to "see the day when he will earn more than $1 a year" within reach. On January 18, 2011, that day came. After essentially not receiving a salary since 2008, when he pledged to abstain from getting paid until Citi turned a profit, the board of directors approved "an increase in the annual rate of base salary for Vikram from $1 per year to $1,750,000 per year, effective immediately." It felt good. Really good. Know what doesn't? This crap. Citigroup investors rejected the bank’s executive pay plan, a first among the six largest U.S. lenders, amid criticism it lets Chief Executive Officer Vikram Pandit collect millions of dollars in rewards too easily. About 45 percent of the votes favored the plan, which Citigroup had argued would help attract and retain top talent, according to a preliminary tally at the New York-based firm’s annual meeting in Dallas today. While the vote isn’t binding, outgoing Chairman Richard Parsons said changes will be made. Citigroup Shareholders Reject Management’s Compensation Plan [Bloomberg]
UBS Sorry About Using The Words "Crap" "Vomit" And "Kewl" Re: Notes It Sold To Hedge Fund Client
Traders at the Swiss bank (presumably!) won't make that mistake again.
Bill Gross Is Not The Only One Who Feels Fat
Are your pants getting a little tight? Have you become convinced mirrors have a personal vendetta against you? Are you too distracted by the rolls spilling over your pants to trade? Do you find yourself veering off course in your letters to investors to talk about your love handles? Is it only a matter of time before you lose your firm billions and/or take down the entire market because your fingers are so big they span four keys each on the keyboard? Do you want to do something about it but are repulsed by the idea of healthy eating and exercise and also know yourself well enough to realize that there is no way you're going to be able to stay strong if everyone around you is eating delicious fried food at lunch and sooner or later you, a usually pretty mild-mannered guy, will be leaping across a row of Bloomberg terminals and threatening to kill a coworker (and meaning it) unless he hands over Ho Ho now? Then round up your tubbiest colleagues and tell them they're in for a real treat. Eric Helms, who founded the four-year-old Cooler Cleanse company with the actress Salma Hayek, says office cleansers now make up 30 percent of his business, and in the last year he has hired three customer-service employees just to handle the details of them. He said there has been a “huge increase in popularity” of cleansing with co-workers in the last year, which he credits to juice diets being more mainstream. “Everyone knows someone who’s done one, and they realize they’re a lot easier to do with colleagues during the workweek,” he said. “People want to indulge” — not sip celery — “on weekends.” Recent six-juice-a-day-dieters include employees at Merrill Lynch and the Carlyle Group, she said. In May, Citigroup began offering BluePrintCleanse in some of its Manhattan cafeterias, a spokeswoman said...About two-thirds of cleanse clients over all are women, but corporate cleanses “commonly skew toward men, especially traders, investment bankers and lawyers,” said Jina Wye, director of sales and marketing for BluePrintCleanse, founded in 2007 by two former Hudson Hotel bartenders looking to swap their poisons. (Mr. Helms said 90 percent of his male customers are part of groups.) Ms. Wye said: “These Type-A men have an all-or-none perspective. If they’re going to commit, they do it whole hog.” Most popular among male en masse cleansers: the Excavation cleanse, described on the Web site as “the most intense.” And if you want to really crank things up a notch, consider gauging interest in a group colonic to top things off. Cleansing From Cubicle To Cubicle [NYT] Related: I’m afraid I might tell her to buy a gun and just shoot me before the fat and the cellulite strike again.
Former Citigroup VP Who Helped Himself To $23 Million Gets 8 Years
Nobody fucks with Count Vikula! Former Citigroup Vice President Gary Foster was sentenced to 97 months in prison for embezzling almost $23 million from the bank, according to federal prosecutors in Brooklyn, New York. Foster pleaded guilty to bank fraud in September, admitting that he transferred money from various Citigroup accounts to his own at JPMorgan Chase. He concealed his activities by making false accounting entries, according to the government. He used the money to buy real estate and luxury sports cars, including a Ferrari and a Maserati, prosecutors said. The government has seized or restrained property from Foster valued at a total of $14 million. “I executed a scheme to defraud Citigroup,” Foster told U.S. District Judge Eric Vitaliano at his plea hearing last year in Brooklyn. “I directed funds to be wired into my personal account at JPMorgan.” Ex-Citigroup Executive Gets 8 Years For Embezzlement [Bloomberg]
Vikram Pandit To Get Back In The Hedge Fund Saddle Again, At Some Point
Just a question of which hedge fund he'll be riding-- his own or his former Old Lane colleague's. The buzz on Wall Street is that ousted Citigroup CEO Vikram Pandit will return to the hedge-fund world. UK hedge fund Portman Square Capital declined to comment on chatter that its founder, Sutesh Sharma, is eager to nab Pandit for his new firm. Sharma, a former money manager at Pandit’s now defunct Old Lane hedge fund, launched Portman this year with $500 million...Pandit is viewed by the hedge fund community as a rainmaker due to his ties to deep-pocketed investors. “I wouldn’t be surprised if he felt the timing was right to join an existing fund . . . or start his own fund,” said Robert Olman of hedge-fund search firm Alpha Search Advisory Partners. Thinking ahead, how much do we predict Citi will pay to acquire Portman Square (or Pandit Partners) in order to lure Big Vik back, which is kind their thing? Last time around it was $800 million so they'll probably have to offer at least $2bn. Pandit Packing For London Hedges [NYP via FINalternatives]