NEW YORK, May 22 (Reuters) – The U.S. Justice Department
has dropped a probe of American International Group Inc <AIG.N>
executives involving the credit default swaps that sent the
insurer to the brink of bankruptcy and forced a huge taxpayer
bailout, lawyers for the executives said on Saturday.
The investigation had centered on AIG Financial Products,
which nearly brought down the giant insurer after writing tens
of billions of dollars on insurance-like contracts on complex
securities backed by mortgages that turned out to be toxic.
LONDON/NEW YORK (Reuters) – Goldman Sachs Group Inc faced rising regulatory and legal pressure on Monday as allegations that the bank duped clients fueled momentum for regulatory reform on both sides of the Atlantic.
Shares in the Wall Street powerhouse fell again and the cost of insuring its debt rose as investors struggled to assess how big a hit Goldman and the rest of the financial industry would take from the fraud charges.
A bit grayer and world wearier, maybe, but there’s no mistaking the family resemblance between NYSE Chief Operating Office Larry Leibowitz and his kid brother Jon Stewart. Unlike the Daily Show host, Leibowitz mostly keeps a low profile, although he did find himself in the spotlight even before his appearance at the Reuters Global Exchanges and Trading Summit on Monday. The Wall Street Journal interviewed him in a story about the NYSE’s effort to turn some high frequency traders — who have been chipping away at the exchange’s business — into exchange floor traders.
Leibowitz may be sick of the Jon Stewart questions, but when pesky Reuters editors and journalists inevitably raised them, he answered them with relatively good humor.
NEW YORK/CHARLOTTE, North Carolina (Reuters) – American Express Co and Capital One Financial Corp both reported better than forecast fourth quarter earnings, but expressed concern about the growth outlook for credit cards.
American Express, the largest U.S. credit card company by purchases, posted much higher fourth quarter earnings, beating forecasts, helped by rising consumer spending and lower credit losses, but revenue was flat.
Lloyd Blankfein has very much been a man in the news lately, sometimes to good effect and sometimes not so much. In the past few weeks the Goldman Sachs CEO has made headlines by declaring that his firm was “doing God’s work” and, just this week, by suggesting that Goldman probably would have survived without the government largess that was channeled its way at the height of last year’s financial sector meltdown. Those comments, made in interviews with the Times of London and Vanity Fair, were part of a broad media offensive which has sought to burnish the image of the bank Rolling Stone’s Matt Taibbi famously described as a blood sucking vampire squid.It seems surprising, then, that the nearly ubiquitous Blankfein will be absent when Goldman convenes its annual U.S. financial services conference next week, featuring such industry heavyweights as JPMorgan’s Jamie Dimon and Blackstone’s Steve Schwarzman, there will be no appearance by Blankfein or any other Goldman senior executive. That’s in sharp contrast to what happens at many top banks when they sponsor conferences; Bank of America’s outgoing CEO Ken Lewis, for example, was keynote speaker at his bank’s financial services conference early last month.Does this mean Blankfein has said his piece for now and is going to adopt a lower profile going forward? Not necessarily, Goldman says. Blankfein, or whoever the Goldman CEO is at a given time, is never a featured guest at the conference, said Ed Canaday, a spokesman for the bank. “Historically we have not had our CEO or another member of senior management speak at the conference,” he said. “I know it’s different from some other companies but that’s how it’s been done historically.”Meanwhile Bank of America, which on the initial conference agenda had the initials “TBD” next to its name in the space where other banks listed their CEOs, has dropped out entirely as speculation swirls about who will take the top job at the troubled lender. Given Blankfein is as secure in his job as any CEO of a major bank, perhaps the next Bank of America chief will take a page out of his book and be conspicuously absent from the stage next year.
More consolidation may be coming to the world of private equity lenders. Debt-laden Allied Capital solved its long-standing problems last week when it sold itself to Ares Capital. Rival American Capital, once an S&P 500 component but now struggling for survival, could be the next takeover target.
But some investors wonder if Allied got a raw deal. Ares paid $3.47 a share in stock for a company that had a book value of $7.49 in June. One law firm has already launched a “shareholder investigation“. Similarly, American Capital’s shares trade below $3, compared with a book value of $8.76 at the end of June.
His past subjects have included Lehman Brothers’ Dick Fuld, AIG’s Hank Greenberg and Bear Stearns Jimmy Cayne. So when Brooklyn-based artist Geoffrey Raymond, 55, decided to do a portrait of Ken Lewis it wasn’t exactly something to celebrate for the embattled Bank of America CEO.Like a grim reaper of high finance, Raymond was proudly exhibiting his latest work on a balmy Wednesday afternoon outside Bank of America’s new Manhattan tower. His latest is a rendition of the now-famous photo from Lewis’ Feb. 11, 2009 testimony before Congress.Lewis is downcast, his scowl on full display.Raymond’s art is an interactive experience — he encourages people to write on the portraits, venting their frustration, and Lewis’ was no exception.For Raymond, a painting — the latest in a series of 18 — that last year would have met with audience furor is now more muted.After much wheedling and begging with a pair of women re-entering the building, Raymond got one woman’s opinion of Lewis, but had to write it for her after she whispered it in his ear.”Nobody will know it’s you,” he said.The resulting quote, referred to the bank’s contentious buyout of Merrill Lynch last year: “I can’t believe you sold BofA out. It’s the little people who suffer ’cause the ML guys suck!”Raymond’s next project?A series of paintings in same spirit, portaits of CNBC luminaries (he previously portrayed Maria Bartiromo as the Money Honey) like Erin Burnett, Jim Cramer and Charles Gasparino.Leaving plenty of room for annotation, of course. — By Joe Rauch(Photograph, of a previous Geoffrey Raymond portrait, of Alan Greenspan, by Reuters)
It’s a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It’s a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler – inventor of the K-car and the minivan – and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company’s takeover by the penny pinching Belgians and Brazilians at InBev.
Gary Katz, CEO of Deutsche Boerse unit International Securities Exchange, insisted during his appearance at the Reuters Exchanges and Trading Summit that all has been sweetness and light since the Germans assumed control of the upstart American options exchange and that there has been “nearly zero turnover” since the takeover.
Now, that could be about to change, Nasdaq OMX President Magnus Bocker said at the Reuters Exchanges and Trading Summit. As Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, it sees financial services firms as one of the most promising areas.