(Reuters) – MF Global unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz), one of the sources said.
The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd (MFGLQ.PK: Quote, Profile, Research, Stock Buzz) filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.
New York (Reuters) – American International Group Inc’s (AIG.N: Quote, Profile, Research, Stock Buzz) mortgage-insurance subsidiary plans to launch a product next month that will independently review and store loan paperwork for a fee, the latest attempt to cut down on the battles between banks and insurers over bad mortgage loans.
Banks that agree to use United Guaranty Corp’s “CoverEdge” will pay a 10 to 15 percent fee in exchange for a full review of mortgage documents, both before and after loan closing. The fee will likely be passed on to borrowers as part of closing costs.
(Reuters) – Jefferies Group Inc’s (JEF.N: Quote, Profile, Research, Stock Buzz) profit dropped 23 percent during its fiscal fourth quarter as the investment bank took aggressive steps to reduce risk-taking after MF Global Holdings Ltd’s (MFGLQ.PK: Quote, Profile, Research, Stock Buzz) bankruptcy.
Jefferies management cut exposure to sovereign bonds of troubled European countries by $4.3 billion, or 82.5 percent, since early November and also took steps to reduce the bank’s leverage and broader balance sheet.
Dec 15 (Reuters) – Morgan Stanley, the only large
Wall Street bank to avoid major job cuts this year, said on
Thursday that it would fire 1,600 employees in the first quarter
to cut costs as trading and banking revenue show few signs of
Morgan Stanley declined to say how much it would save
from these cuts, but if the cost savings are similar to those
seen by Goldman Sachs Group Inc (GS.N: Quote, Profile, Research), the bank may save about
$2 billion in compensation expenses. Goldman reduced its payroll
by 1,300 last quarter, saving $1.6 billion in compensation
(Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) will cut 1,600 employees in the first quarter, the bank said on Thursday, as it trims costs in a difficult period for trading and banking revenue.
The job cuts will come across all staff levels and geographic areas, spokesman Mark Lake said, including investment banking, trading and back-office functions.
(Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) agreed to give up insurance claims against MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) in exchange for a $1.1 billion payment from the ailing insurer, ending a two-year legal fight over guarantees on mortgage bonds.
As the result the settlement, announced by Morgan Stanley on Tuesday and confirmed by MBIA, Morgan Stanley will take a pretax $1.8 billion charge in the fourth quarter for the deal. After accounting for tax benefits, the deal will reduce Morgan Stanley’s bottom line by $1.2 billion.
Dec 2 (Reuters) – Bank of America Chief Executive Officer
Brian Moynihan will have his work cut out for him next week
when he speaks at an investor conference in New York, despite a
recent uptick in his bank’s stock price.
Shares of the second largest U.S. bank have bounced around
a 52-week low and threatened to fall below $5 earlier this
week, before central banks pumped more liquidity into the
financial system and bank stocks surged.
Nov 23 (Reuters) – Jefferies Group Inc (JEF.N: Quote, Profile, Research) won a small
victory in its battle to improve market perceptions after Egan
Jones corrected a flaw in a controversial report that raised
the possibility the investment bank’s bonds could be downgraded
Jefferies shares rose as much as 8.6 percent on Wednesday
and ended 4.5 percent higher at $10.51, on a day that the S&P
500 and other major indexes fell more than 2 percent.
Nov 22 (Reuters) – Jefferies Group Inc needs to
raise $1 billion in equity capital and sell $5 billion in
assets to avoid another downgrade by Egan Jones Rating Co, the
ratings agency said in a note on Tuesday.
In its report, Egan Jones said Jefferies’ rating is
“unsustainable” because its debt-to-capital ratio, at over 90
percent, is much higher than other mid-size brokerage firms and
closer to the level of Goldman Sachs Group Inc and
Morgan Stanley , whose ratings and bond prices benefit
from higher perceived levels of government support.
Nov 21 (Reuters) – Jefferies Group Inc said it has
reduced its exposure to troubled European sovereign debt by
another 50 percent, part of the investment bank’s effort to
restore investor confidence following MF Global Holdings Ltd’s bankruptcy.
In a public letter on Monday, top Jefferies executives said
the company has reduced gross exposure to debt of Greece,
Ireland, Italy, Portugal and Spain by a total of nearly 75
percent since worries first surfaced in early November.