Daily Archives: March 15, 2013

Shareholders Certified to Sue AIG Over Bailout

(CN) – A federal judge certified two classes challenging the government’s bailout of American International Group at the brink of the 2008 financial collapse.
     AIG, a financial services company, faced “significant liquidity pressures” in the summer of 2008, according to a report from the Federal Reserve, as U.S. financial and credit markets began to sag under the weight of subprime mortgage delinquencies. Failure seemed imminent after similar problems felled the investment bank Lehman Brothers Holdings.
     Many feared, however, that AIG’s widespread dealings with financial institutions would cause unsustainable ripples beyond Wall Street. The U.S. government in turn gave AIG an $85 billion revolving credit line in exchange for a 79.9 percent equity stake.
     Meanwhile federally appointed trustees also oversaw a 1-for-20 reverse stock split approved by AIG’s board of directors.

Read on.

Senate 309 pg Report | JPMORGAN CHASE WHALE TRADES: A CASE HISTORY OF DERIVATIVES RISKS AND ABUSES

Link

JPMorgan Hid Trades Banned by Volcker Rule, Senate Probe Finds

JPMorgan Hid Trades Banned by Volcker Rule, Senate Probe Finds

JPMorgan Chase & Co. (JPM) engaged in high-risk proprietary trading under the guise of ordinary hedging, said Senate investigators, who urged U.S. regulators to strengthen the proposed ban on such trades known as the Volcker rule.

Regulators should require banks that hold federally insured deposits to explicitly link positions in derivatives to the underlying risk they are hedging, the Senate’s Permanent Subcommittee on Investigations recommended in a 300-page report released yesterday.

Link

Foreclosure Protesters Disrupt Wells Fargo CEO’s Speech

Foreclosure Protesters Disrupt Wells Fargo CEO’s Speech

CARLSBAD, Calif. — A group of about 50 to 60 protestors interrupted a speech by Wells Fargo (WFC) Chief Executive Officer John Stumpf on Thursday at a banking conference, taking over the stage with chants and complaints about home foreclosures.

The protestors were affiliated with the Alliance of Californians for Community Empowerment, a group that in the past few months has accused Wells of failing to offer principal reductions to delinquent borrowers, as required under the national mortgage settlement.

Stumpf was about 25 minutes into a speech about the state of the banking industry and increased regulation when a woman walked onto stage and held out her hand, which Stumpf shook. The woman then grabbed a microphone, raised her voice and told the audience “Wells Fargo is taking my house tomorrow.”