Daily Archives: August 26, 2014

Argentina default: George Soros sues Bank of NY Mellon in London over $500m payment

Argentina’s international row over its $1.5bn default took another twist on Tuesday after the US bank that has frozen a $539m payment was sued by creditors including George Soros in London.

The billionaire investor, who famously “broke the Bank of England” after shorting the pound, is joined by Knighthead Master Fund, RGY International and Kyle Bass’ Hayman Capital Master Fund in the lawsuit against Bank of New York Mellon.

The lender’s “actions have been designed consistently to protect its own interests without reference to the interests” of the bondholders, they claim.

Following a ruling by District Judge Thomas Griesa, who has jurisdiction over the $1.5bn that Argentina owes bondholders, Bank of New York Mellon is holding on to a $539m payment by Argentina to its creditors. He has ordered Argentina to first pay $1.5bn to settle a dispute with holdout investors stemming from the country’s first default in 2001.

The hedge funds’ lawsuit, which was filed in London’s Chancery Court, argues that Bank of New York Mellon should release the portion of the $539m that relates to euro-denominated bonds, as these are governed by British law and not US law, so are not affected by Mr Griesa’ injuction.

 

Read on.

With Half Of City Residents Delinquent, Detroit Restarts Water Shut-Offs

Water utilities in Detroit can expect more controversy as Detroit News reports,

 
 

…a monthlong moratorium against shutting off water for those behind on their bills expires at the end of the day Monday.

 

Crews are set to resume water shutoffs Tuesday after weeks of promoting how residents behind on their bills can get on a payment plan or get help paying.

 

Other Metro Detroit cities, facing a financial pinch from unpaid bills, have gotten results by halting service to people who don’t pay.

Citigroup To Pay $2.5M To Settle FINRA Trading Charges

Law360, New York (August 26, 2014, 11:13 AM ET) — Citigroup Global Markets Inc. will pay nearly $2.5 million to settle Financial Industry Regulatory Authority charges that it failed to provide best execution on some 22,000 customer trades and supervise this trading even after being alerted about the alleged problems, FINRA said Tuesday.

According to the bank’s consent agreement with FINRA, the failures partly occurred on a Citi trading desk for retail fixed-income securities. The desk used manual pricing methods for trades in nonconvertible preferred securities that did not appropriately incorporate the National Best Bid and…

 

Source: Law360

Bank of New York Mellon : Argentina strips BNY Mellon’s authorization to operate

Argentina said on Tuesday it has stripped Bank of New York Mellon’s authorization to operate in the country, its latest move against the bank, which blocked an Argentine government debt payment on the orders of a U.S. court.

BNY Mellon, a financial intermediary between the Argentine government and its bondholders, has been caught up in a bitter legal battle between U.S. investment funds and the South American country, which in July defaulted for the second time in 12 years.

Argentina’s Congress is due on Wednesday to discuss a law that would replace BNY Mellon as intermediary for payments on foreign law bonds with state-controlled bank Banco Nacion, as part of a new debt restructuring plan.

The central bank “has revoked BNY’s authorization for representation in Argentina,” Cabinet Chief Jorge Capitanich said in his daily briefing. The authorization applied specifically to two BNY Mellon officials.

Read on.

Royal Bank of Scotland : RBS to be fined by regulator over mortgage advice – sources

Royal Bank of Scotland will be fined by Britain’s financial regulator on Wednesday over mortgage advice given to customers, sources familiar with the matter told Reuters on Tuesday.

The Financial Conduct Authority (FCA) is expected to provide further details, including the level of the fine, at 1000 BST on Wednesday, the sources said.

It would be the latest setback to hit Chief Executive Ross McEwan, whose efforts to turn around the bank – which made an 8.2 billion pound loss last year – are being hampered by ongoing investigations into past misconduct.

Read on.

Wells Fargo CEO: GSEs choke mortgage business

Wells Fargo (WFC) CEO John Stumpf warned the government-sponsored enterprises that they must stop being so quick to accuse banks of faulty underwriting and then forcing them to repurchase soured loans, according to an article from the Financial Times. (This article is behind a paywall)

“We’re just not going to make those loans and there’s going to be a whole bunch of Americans that are underserved in the mortgage market,” Stumpf said.

“If somebody makes a payment for – let’s say – three years, the risk ought to transfer then to the insurance company … If you’re going to pick through each one looking for a technical fault not to pay your insurance policy we’re not going to be in that business,” he added.

Meanwhile, Wells Fargo is working in overdrive to combat the industry-wide plummet in mortgage volume, easing its standards on jumbo loans and lowering its FICO requirement on Federal Housing Administration-backed mortgage loans.

Source: FT
 

Bank of New York Mellon : U.K. Suit Against BNY Mellon on Argentine Debt

A group of hedge funds holding EUR1.3 billion ($1.71 billion) of Argentine government bonds has filed suit against the U.S. bank charged with overseeing payments to the nation’s bond investors, seeking to gain access to interest payments they are owed.

The suit, filed in London’s Chancery Court, names as defendant Bank of New York Mellon Corp. The suit opens up a new front in the decadelong war between Argentina and investors including so-called holdout creditors that are seeking payment on bonds the country defaulted on in 2001.

The plaintiffs include Knighthead Master Fund LP, RGY International LLC, which is a unit of Perry Capital, as well as Kyle Bass’s Hayman Capital Master Fund LP and George Soros’s Quantum Partners LP, according to a copy of the suit.

,a href=”http://www.4-traders.com/THE-BANK-OF-NEW-YORK-MELL-11848/news/Bank-of-New-York-Mellon–UK-Suit-Against-BNY-Mellon-on-Argentine-Debt-18949645/”>Read on.