Opening Bell: 9.21.16

Senators vs Wells Fargo; Hedge funds vs SABMiller deal; DOJ vs former Fed staffer; Son of Chinese billionaire buys eight iPhone 7s for his dog; and more.
Author:
Updated:
Original:
By Captain-tucker (Own work) [CC BY-SA 3.0], via Wikimedia Commons

By Captain-tucker (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Former Fed Staffer Suspected of Abusing Computer Privileges (WSJ)
The U.S. Justice Department is examining the actions of a former Federal Reserve computer systems administrator, who is suspected of abusing access privileges and may have caused an information technology system to fail, according to people familiar with the matter. The Fed Board of Governors in Washington in recent months referred the matter to the Justice Department, which has considered treating it as a criminal case, the people added. The employee no longer works at the Fed, they said, and details of how federal officials expect to resolve the case aren’t known. It is also unclear which system was affected.

Elizabeth Warren Says Wells Fargo's CEO Should Face Criminal Prosecution (Bloomberg)
“You should resign,” Senator Elizabeth Warren told Stumpf, who had injured his right hand while playing with his grandchildren. “You should give back the money you took while this scam was going on and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.” Warren, a Massachusetts Democrat, led a chorus of criticism as lawmakers demanded more accountability from the company’s leadership and made clear the San Francisco-based firm is far from putting the matter behind it. Bank executives are “completely out of touch,” Patrick Toomey, a Republican from Pennsylvania, told Stumpf.
“This isn’t cross-selling, this is fraud,” Toomey said.

Senators push Wells Fargo CEO on pay clawbacks after bogus accounts (Reuters)
Lawmakers could use the fraud settlement as a springboard for new rules on executive pay, including clawbacks of compensation, and limits on forced arbitration. Wells Fargo has said its board will assess whether to cancel or claw back any incentive compensation paid to a now-retired executive at the center of the scandal, Carrie Tolstedt.

Regulators Take Heat Over Wells Fargo (WSJ)
Republican lawmakers on Tuesday grilled officials with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for possible shortcomings in investigating Wells Fargo and expressed concern that similar problems could be occurring elsewhere in the banking industry. Senate Banking Committee Chairman Richard Shelby (R., Ala.) blasted regulators in his opening statement: “Where were the federal regulators during these years?” He questioned the CFPB about the timing of the bureau’s problems and sources of its information. “If there were ever a textbook case where consumers needed protection, this was it. How many millions of unauthorized accounts does it take before the CFPB notices? And while the bureau is billing this as the largest settlement in its history, it’s unclear whether it had any significant role in discovering or investigating the bank’s conduct.”

Cops: Suspect's Distinctive "Man Bun" Helps Lead To Grand Theft Arrest (TSG)
An accused thief’s distinctive “man bun” helped lead to his apprehension in connection with the swiping of video surveillance cameras from a Florida business, according to a court filing. Police charge that Landon Hall, 26, last week stole four video cameras from the Villa Laundromat in St. Petersburg. Hall allegedly removed the cameras from their mounts while concealing his face with a “yellow colored pocket square” and a shirt. Hall’s efforts to hide his face were not successful, according to a sheriff’s deputy who noted that, “The defendant also had a very distinct ‘man bun.’” ... Hall was identified by a cop with whom the suspect had multiple prior contacts. Hall was collared Sunday afternoon for grand theft. He is locked up in lieu of $2000 bond on the felony charge.

Hedge Funds Put Beer Megadeal in a Bind (WSJ)
To close the transaction, SABMiller needs support from 75% of the shares voted, and only a small minority of shareholders plan to vote against the deal, which they believe undervalues the U.K.-based brewer. But because a significant portion of shareholders has been excluded from the vote, a relatively minor faction would be in a position to block one of the largest corporate takeovers in history...Hedge funds including Paul Singer’s Elliott Management Corp., TCI Fund Management Ltd. and Davidson Kempner Capital Management LLC control roughly 20% of SABMiller shares through derivatives and stock options. Those don’t have voting rights. To convert their options and derivatives into voting shares, these funds would have to pay a 0.5% tax, or a total of about £73 million ($95 million) combined, based on SABMiller’s current share price. The hedge funds are unlikely to want to spend the money if the vote can pass without them, according to financial advisers involved in the deal.

U.S. judge narrows currency rigging lawsuit against seven banks (Reuters)
The U.S. judge overseeing litigation accusing 16 banks of rigging prices in the $5.3 trillion-a-day foreign exchange market on Tuesday narrowed but refused to dismiss lawsuits against Deutsche Bank (DBKGn.DE), Morgan Stanley (MS.N) and five other large banks that have yet to settle. U.S. District Judge Lorna Schofield in Manhattan dismissed antitrust claims in a class action brought by investors against the seven remaining banks arising out of some transactions executed outside the United States, and claims based on transactions conducted before Dec. 1, 2007. She also dismissed claims under the Commodity Exchange Act for false reporting and based on transactions conducted on foreign exchanges. Schofield said the remaining claims survived. The complaint "plausibly pleads both that artificial prices existed on FX exchanges," causing investors to pay more, "and that this artificiality was caused by defendants' actions," Schofield wrote in a 56-page decision.

SEC Investigating Exxon on Valuing of Assets, Accounting (WSJ)
The SEC sought information and documents in August from Exxon and the company’s auditor, PricewaterhouseCoopers LLP, according to people familiar with the matter. The federal agency has been receiving documents the company submitted as part of a continuing probe into similar issues begun last year by New York Attorney General Eric Schneiderman, the people said. The SEC’s probe is homing in on how Exxon calculates the impact to its business from the world’s mounting response to climate change, including what figures the company uses to account for the future costs of complying with regulations to curb greenhouse gases as it evaluates the economic viability of its projects.

Son of Chinese billionaire buys eight iPhone 7s for his dog (UPI)
The son of a Chinese billionaire bought eight newly released iPhone 7s for his pet dog Coco the Alaskan malamute. Wang Sicong shared photos of Coco lying down with a pile of the highly sought after phones to the dog's own Weibo social media account...Sicong is the son of Wang Jianlin, who has an estimated worth of $30 billion and is known as "the nation's husband." Coco is also a notable figure on Chinese social media, as her Weibo account is verified and she was previously photographed modeling a pair of Apple watches.

Related

By Captain-tucker (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Opening Bell: 9.27.16

Stumpf forfeits $41 million; Germany has no plans to save Deutsch Bank; SABMiller backs AB InBev takeover; Warren Beatty denies sleeping with 12,775 women; and more.

WilburRossChina

Opening Bell: 10.4.18

Chinese mega hack; DoJ in on Danske Bank; Third Point moving on Campbell's; Russian billionaire mad at Sotheby's; and more!

DeliciousCoffee

Opening Bell: 9.8.16

Wells Fargo is in trouble; ECB stands pat; Wall Street vs Trump; Felon named Coffee charged with coffee attack on fellow inmate; and more.

Wells Fargo.Insane

Opening Bell: 11.3.2016

Wells Fargo raises reserves in midst of SEC probe; Markets still not pricing in Trump; Lynn Tilton does good in court; Michigan dog freed from death row; something something Cubs win; and more.

Opening Bell: 05.09.12

Greek Turmoil Raises Euro Risk (WSJ) "The market is really working out what the risks are," said Justin Knight of UBS. "It is a bit of a slow burner, but it is gathering pace." Whether investors are right depends on a messy drama under way in Athens, in which the leading parties have been sidelined in favor of a collection of radicals bent on upsetting the painful measures that are Europe's price for Greece's bailout. On Tuesday, the head of Greece's leading left-wing party, Alexis Tsipras of Syriza, took a turn at trying to form a government. His conservative counterpart, whose party won slightly more votes on Sunday, tried and failed Monday. Mr. Tsipras demanded that Greece renounce the bailout's required Greek budget cuts, saying they were nullified by the "people's verdict" of the election. But Mr. Tsipras's party won just 52 of the 300 seats in parliament, and chances he could form a governing coalition appeared slim. Roubini: Situation In Europe Is A 'Slow Motion Trainwreck' (CNBC) Roubini, who warned last year that a perfect storm was coming for the global economy in 2013, said the euro zone will “eventually break up,” and expects two or three euro zone members to exit the bloc over the next few years. “Europe will be lucky if it ends up in stagnation like Japan for the next 10 years,” he added. German Patience With Greece on the Euro Wears Thin (NYT) “Germans are now predominantly of the opinion that they would be better off if Greece left the euro zone,” said Carsten Hefeker, a professor of economics and an expert on the euro at the University of Siegen. “If the country really is continuing on the path they are taking now, it would be hard to justify keeping them in. How do you deal with a country that says we don’t want to keep any of the commitments we have made?” Chesapeake CEO arranged new $450 million loan from financier (Reuters) In the weeks before Chesapeake Energy CEO Aubrey McClendon was stripped of his chairmanship over his personal financial dealings, he arranged an additional $450 million loan from a longtime backer, according to a person familiar with the transaction. That loan, previously undisclosed, was made by investment-management firm EIG Global Energy Partners, which was at the same time helping arrange a major $1.25 billion round of financing for Chesapeake itself. The new loan brings the energy executive's total financing from EIG since 2010 to $1.33 billion and his current balance due to $1.1 billion, this person said. It was secured by McClendon's personal stakes in wells that have yet to be drilled by Chesapeake - and by his own life-insurance policy. Remaking Yahoo's Board, Again (WSJ) "Mr. Loeb has launched a proxy fight to put himself and three other new directors onto the board. It isn't clear the Loeb team can fix the company. But at this point, shareholders should vote for his slate, given the repeated lapses in judgment by existing company leadership." Hot Dog Hooker ‘relishes’ her return (NYP) Long Island’s Hot Dog Hooker was sprung from jail yesterday, and said she’ll be serving up Sabretts and stripteases from her mobile wiener wagon this morning. “I’ll be out there in my bikini top selling my hot dogs!” Catherine Scalia boasted as she strutted out of a Nassau County jail after a court appearance. Scalia was busted for prostitution last Friday for allegedly agreeing to pleasure an undercover cop for $50 after he purchased a hot dog. Judge Anthony Paradiso sentenced Scalia to seven days in prison and ordered her to undergo a psychiatric evaluation. Green Mountain Roasted (Bloomberg) Green Mountain Coffee Roasters said Robert P. Stiller will no longer serve as chairman after he sold shares to make a margin call. Michael J. Mardy, chairman of the company’s audit and finance committee, will serve as interim chairman. Fannie Mae Won’t Seek Aid After Reporting $2.7 Billion Profit (Bloomberg) FYI. Wells Fargo Says DOJ May Seek Penalties in Fair-Lending Case (SFG) Wells Fargo & Co., the largest U.S. mortgage lender, said federal prosecutors may seek damages and penalties after investigating whether it violated anti- discrimination laws while financing homeowners. “The Department of Justice has advised Wells Fargo that it believes it can bring claims,” the bank said today in a regulatory filing, without elaborating on potential allegations. “We believe such claims should not be brought and continue seeking to demonstrate to the Department of Justice our compliance with fair-lending laws.” U.S. Millionaires Told Go Away as Tax Evasion Rule Looms (Bloomberg) The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns.

Getty Images

Opening Bell: 9.13.16

Wells Fargo CEO will face senate panel; Fed probably going to hold steady; Hank Greenberg gets his day in court; Catfish Falls From The Sky, Hits Woman In The Face; and more.

wells-fargo-sloan

Opening Bell: 12.8.17

Wells Fargo gets a mulligan or three from the Trump administration; making Credit Suisse Swiss again; Deutsche Bank is worried about a bitcoin crash; a congressman asked to borrow a staffer's uterus; and more.

Opening Bell: 1.7.16

CHINA; Bonuses; Morgan Stanley; "Another Chinese Billionaire Goes Missing"; Man Vows To Draw A Butt Everyday This Year; and more.