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Friday, June 27, 2014
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TOP STORY
Weekend Reading: Advancing on Bank Penalties Following DealBook's report that BNP Paribas is expected to plead guilty to criminal charges and pay an $8.9 billion fine, Wall Street's attention will soon turn to two civil investigations into the mortgage crisis.
Talks over Bank of America's mortgage settlement are said have stalled and the Justice Department is finalizing a complaint. The bank could still raise its latest offer of more than $12 billion to avert a lawsuit. Before that case moves forward, the Justice Department may file a lawsuit over Citigroup's mortgage investments. Tracking Criminal Inquiries of Wall St. Giants Some prosecutors say that guilty pleas and billion dollar fines are not enough to deter bad behavior. Senior bank employees keep their jobs and investors have largely shrugged off pleas and fines. In the chart below, you can see how prosecutors have slowly moved away from so-called deferred prosecution agreements toward guilty pleas by foreign units, guilty pleas by the bank and ever increasing cash penalties. If the trend towards bigger fines continues, we may see more banks willing to challenge the Justice Department in court. | ||||||
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A look back on our reporting of the past week's highs and lows in finance.
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Street Scene: Fed's Balance Sheet Punctuated by a Big Question Mark
The central
bank's balance sheet has ballooned to nearly $4.3 trillion in assets,
and how the Fed decides to handle it will have significant consequences,
William D. Cohan writes in the Street Scene column.
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Life@Work: Sleep as a Competitive Advantage
Too many of us
live by the myth that one less hour of sleep gives us one more hour of
productivity, Tony Schwartz writes in the Life@Work column. In reality,
lost sleep not only leaves us more fatigued, but also takes a toll on
our cognitive capacity.
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AT&T Names Silver Lake Co-Founder to Its Board
Glenn Hutchins
of Silver Lake, which has made a number of prominent investments in
technology, will become a director of the telecommunications giant.
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TUI of Germany Reaches Agreement to Acquire British TUI Travel
The deal, if
consummated, would create the world's largest integrated leisure travel
business, worth 4.5 billion pounds, or about $7.7 billion.
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Head of Dollar General to Retire
The
announcement by Richard W. Dreiling, the chairman and chief executive of
the discount retailer, comes as a smaller competitor, Family Dollar, is
under pressure from the activist investor Carl C. Icahn.
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U.S. Judge Says Payment Should Be Returned to Argentina
Judge says that
the $539 million deposited with the Bank of New York Mellon for the
purpose of paying Argentina's main class of bondholders "is illegal and
will not be made."
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Allergan, Maker of Botox, Acquiesces to Special Shareholder Meeting
An agreement
with Pershing Square Capital Management makes it clear that the calling
of a special meeting will not activate Allergan's poison pill.
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Shares of Michaels, Arts and Crafts Retailer, Open Flat on Debut
The arts and crafts retailer raised about $472 million in its initial public offering.
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R.B.S. to Spend $1.7 Billion on Mobile Banking Growth
The bank said
it planned to add nearly 100 automated teller machines and transform its
branches to centers for financial advice and education. It will also
upgrade its mobile platforms.
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UniCredit's Online Unit Raises at Least $916 Million in I.P.O.
FinecoBank
priced its offering of 181.9 million shares at 3.70 euros a share, on
the low end of its expected range. The pricing values the company at
€2.24 billion, or about $3.05 billion.
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Lawsuit Adds to Concern Over China Commodities Fraud
A coal producer
in China has filed a lawsuit to reclaim $170 million, naming among the
defendants the Chinese company at the center of an investigation into
aluminum and copper financing fraud.
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Reuters Breakingviews: Soros Dabbles in Shareholder Activism
George Soros's
first foray into activism gives underperforming companies a reason to be
nervous, Christopher Swann writes for Reuters Breakingviews.
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Reuters Breakingviews: Barclays Investors Express Investment Bank Fears
The drop in the
share price of Barclays after it was accused of favoring high-frequency
traders over other investors in its dark pool reflects more general
fears of investment banking, Dominic Elliott writes for Reuters
Breakingviews.
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Thursday
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BNP Paribas Expected to Plead Guilty and Pay $8.9 Billion Fine
New York has promised not to pull the bank's license, but certain parts of its business will be suspended.
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U.S. Prepares for Sale of Bitcoins Seized in Its Raid on Silk Road
The United
States Marshals Service has arranged an online auction for nearly 30,000
of the Bitcoins it took from the now-defunct Silk Road market.
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Brokerage Firms Shun Barclays Trading Pool After Suit; Brief Shutdown Is Reported
Barclays
investors and clients appeared to be spooked on Thursday by a lawsuit
accusing the bank of fraud in how it marketed its private stock trading
platform.
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Teabox Seeks to Bring India's Teas Into Modern Era
With the
backing of venture capital, an entrepreneur is seeking to bring
high-quality Indian teas rapidly to global consumers via his retail
website, Teabox.
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Action by Argentina Seems to Defy Judge's Order on Bond Payments
Argentina
announced Thursday that it had deposited $539 million with the Bank of
New York Mellon for the purpose of paying its main bondholders, a move
that would defy a federal judge's order.
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Alibaba, Chinese Internet Giant, Picks N.Y.S.E. for Its Listing
The choice is a
major victory for the exchange, for what is expected to be one of the
biggest initial public offerings in years. Alibaba's ticker symbol will
be BABA.
Wednesday
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Barnes & Noble to Spin Off Nook Unit as Sales Continue to Fall
The company
said that it planned to spin off its Nook business, once viewed as the
company's best hope for surviving in an age of a dominant Amazon.com, as
a separate public company.
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S.E.C. Limits Derivatives Trading by Foreign Branches of U.S. Banks
The rule,
stemming from the Dodd-Frank law, identifies which subsidiaries need to
register with the Securities and Exchange Commission and fall under more
stringent trading standards.
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Senior U.S. Prosecutor Who Fought Wall St. Is Departing
Lorin L.
Reisner, who helped overhaul the S.E.C.'s enforcement unit before
heading the criminal division of the United States attorney's office in
Manhattan, is expected to join a law firm.
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In Puerto Rico, a Proposal for Revamping Debt
With fear of financial trouble looming, Puerto Rico's governor proposed a new law meant to regain the confidence of bondholders.
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S.E.C. Stops City in Illinois From Selling Municipal Bonds
Regulators say
the City of Harvey sold $14 million in bonds under false pretenses since
2008 and was planning to bring more to market.
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GoPro's I.P.O. Prices at Top of Range, Leading a Wave of Newly Public Companies
GoPro is only
one of nearly 20 companies looking to make their market debuts this
week, a pace unseen since the height of the dot-com boom in 2000.
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Barclays Faces New York Lawsuit Over Dark Pool and High-Frequency Trading
Eric T.
Schneiderman filed civil fraud charges against the British bank,
contending that it favored high frequency traders over other investors.
Tuesday
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A Hunt to Find the Next Generation of Financial Advisers
The average
financial adviser in the United States is older than 50, creating a
problem for asset management firms that must figure out how to attract
and retain fresh talent.
Monday
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Neil Barofsky, Old Foe of Bank Bailouts, Said to Be a Monitor for Credit Suisse
Neil Barofsky
was a government gadfly who made a career of needling, and at times
pillorying, Wall Street and Washington over the 2008 bank bailouts.
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Realizing the American Apparel Chief, Dov Charney, Isn't Wearing Any Clothes
Mr. Charney's
dismissal raises all sorts of thorny corporate-governance questions for
investors and boards about iconic - and notorious - leaders, especially
in creative fields.
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Dean Foods Receives a Subpoena in an Investigation Into Mickelson's Trades
The food
company has been asked to supply documents to the investigation
involving the golfer Phil Mickelson and the gambler William T. Walters,
according to people briefed on the matter.
A Fired Banker and Monroe Capital's Public Suit
Monroe Capital
claims that Warren Woo, a former executive at the company, stole
sensitive information to help start Breakaway Capital, a new private
investment firm.
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Oracle to Buy a Software Maker Micros Systems for $5.3 Billion
The deal for
Micros Systems, a maker of software for restaurants and hospitality
providers, is Oracle's biggest since the takeover of Sun Microsystems
five years ago.
Sunday
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An Employee Dies, and the Company Collects the Insurance
Many companies
insure their employees' lives with themselves as beneficiaries, a
practice some deride as immoral. But companies say the policies, for
which they get tax breaks, help them bolster pensions and health care.
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Last Barrier Is Cleared in G.E.'s Deal With Alstom
Haggling ended
over how much the French government would pay the Buoygues family for a
stake in Alstom: a 25 percent premium over Friday's close.
