Insight and investigations from our expert reporters
After the latest news from Mexico where armed men torched a casino in Monterrey, killing at least 52 people, it’s a good time to re-read Robin Emmott’s special report “If Monterrey falls, Mexico falls.”
As the story says:
In just four years, Monterrey, a manufacturing city of 4 million people 140 miles from the Texan border, has gone from being a model for developing economies to a symbol of Mexico’s drug war chaos, sucked down into a dark spiral of gangland killings, violent crime and growing lawlessness.
Since President Felipe Calderon launched an army-led war on the cartels in late 2006, grenade attacks, beheadings, firefights and drive-by killings have surged.
That has shattered this city’s international image as a boomtown where captains of industry built steel, cement and beer giants in the desert in less than a century — Mexico’s version of Dallas or Houston.
By Matt Goldstein
It’s too soon to say whether the recent madness on Wall Street will drive away ordinary investors from the stock market, but the trend lines certainly aren’t looking good.
In the past two weeks, retail investors pulled $17.4 billion out of U.S. equity mutual funds, according to the mutual fund information service Lipper. But the exodus from stock funds really began in late 2008 at the height of the financial crisis. And the move of retail money out of stock funds continued through 2009, even as the markets bottomed and rallied back.
Today’s special report, “Pension fund scandal shakes up Venezuelan oil giant,” examines state oil company PDVSA and the problems it has exploiting what are said by OPEC to be the world’s largest known reserves of crude oil.
At the heart of the latest scandal is a Connecticut hedge fund manager named Francisco Illarramendi who has pleaded guilty to multiple counts of wire fraud, securities and investment advisor fraud. Prosecutors say he ran a Ponzi scheme that lost up to half a billion dollars, most of it money that had been entrusted to Illarramendi by PDVSA’s pension fund.
Laurence Fletcher and a team of reporters from Canberra to the small town of Apache Junction in Arizona have a special report today that is the latest in our series “Shell Games,” exploring the extent and impact of corporate secrecy in the United States and beyond.
“The bonds that turned to dust” tracks the fate of $500 million of highly illiquid paper purportedly issued by a company in a trailer-park suburb of Phoenix, on behalf of a small Australian commodities firm — and backed by the proceeds from $10 billion of diesel from the tiny autonomous Russian republic of Bashkortostan.
Today’s special report “The perils of Paulson” takes a look at hedge fund king John Paulson, who shot to fame by calling the U.S. housing market crash in 2007, and making a lot of money out of it. This year, his funds are not doing so well.
This graphic tells the story — while Paulson may have reduced his stakes in the companies concerned, the size of his holdings will have made it difficult to unload in full.
All too often, the U.S. Securities and Exchange Commission gives its critics plenty of ammunition to complain about.
The SEC’s spectacular failure to detect the massive Ponzi scheme being run by Bernie Madoff is only the most high-profile miss by the agency. Over the years, the nation’s top securities cops have been slow to police abusive trading by hedge funds and spread of complex structured products–including subprime ones–churned out by Wall Street banks.
Action in March by federal bank regulators wasn’t enough to scare banks away from the way they handled foreclosures. Reuters found that big banks that service mortgage loans continue to use robo-signers, file false documents and mislead courts in their efforts to take houses from homeowners delinquent on their mortgages.
The findings point to the need for a widespread audit of mortgage documentation by federal bank regulators, a step they have so far strongly resisted. The pervasive use of questionable documents in foreclosures suggests that the cause is deeper than just corner-cutting by mortgage loan servicers. It suggests that to a large extent, original lenders never turned over the required ownership documents when pools of new mortgages were securitized and sold to investors. Investors may have spent billions to buy mortgages they never received.
Back in December, a Reuters investigation examined the ties between economists who testify to Congress on financial regulation and big financial institutions.
A Reuters review of 96 testimonies given by 82 academics to the Senate Banking Committee and the House Financial Services Committee between late 2008 and early 2010 — as lawmakers debated the biggest overhaul of financial regulation since the 1930s — found no clear standard for disclosure.
Steven Barnett, professor of communications at London’s Westminster University, spoke for a lot of people when he said of the news: ”Astonishing. I’m completely gobsmacked. Talk about a nuclear option.”
On Tuesday, a Reuters Special Report called “A Little House of Secrets on the Great Plains ” explored the questionable – and sometimes illegal practices – of several businesses incorporated at a single-family home in Cheyenne, Wyoming. The 1,700-sq. ft, brick house is the address of a business incorporation specialist called Wyoming Corporate Services, which has set up more than 2,000 companies there, according to incorporation records.
The article launched a Reuters series which will explore the extent and impact of corporate secrecy in the U.S., which stands in stark contrast to its call for greater transparency in global transactions to lift the veil on shadowy money flows.