Daily Archives: March 21, 2016

Call grows to break up big Wall Street banks

The chorus of voices that wants to break up Citigroup grew Monday.

Keefe, Bruyette & Woods analysts became the latest to chime in and suggest the bank will need to keep unloading assets to keep investors happy.

“Citi’s valuation remains near the lows since the financial crisis and we believe that is a reflection of investor views about the ultimate return of potential of the company post restructuring,” KBW analysts wrote. “The primary motivation for splitting up would be the faster return of excess capital to shareholders.”

Investors responded positively to the report, and Citigroup stock initially got a modest lift in early trading Monday before reversing to a decline.

However, it isn’t clear whether Citi executives will take the push to unbundle the bank seriously, even after years of its stock trading beneath tangible book value, or the value of a company’s equity minus assets that could not be sold in the event of liquidation.

Read on.

Bank of America sued over credit card debt

Customers who believe that they have been improperly sued by Bank of America (BoA) have filed a class action lawsuit against the financial institution. The suit alleges that BoA sued customers for unpaid credit card debt on debts that were securitized. These debts were sold, assigned, or transferred to a trust via credit card securitization, a financial move that resulted in BoA relinquishing its debt obligation.

Willard v. Bank of America, et. al was brought by G. Veronica Willard and was filed on March 15 in Pennsylvania’s Eastern District. The case alleges that BoA violated the Pennsylvania Fair Credit Extension Uniformity Act and the Fair Debt Collection Practices Act. It requests BoA pay punitive, actual, treble, and statutory damages along with injunctive and declaratory relief, attorney’s fees, the costs of suits, and other relief.

Read on.

Trump’s Circuit Judge Sister Receives Threat

Wow, serious stuff...

(CN) – Donald Trump’s sister, Senior U.S. Circuit Judge Maryanne Trump Barry, is the second member of the Republican presidential hopeful’s family to receive a threatening letter in the mail, warning him to drop out of the race.
The letter sent to Judge Barry’s Philadelphia home is said to be similar to a suspicious package Trump’s son Eric received on Thursday at his Manhattan apartment on Central Park South.
That letter reportedly contained a white powder that preliminary tests indicated was not hazardous. It also contained a note that warned Trump, the controversial frontrunner for the Republican presidential nomination, to drop out of the race or risk members of his family being harmed.
About the only detail to be made public about the Eric Trump letter is that it was postmarked in Massachusetts. The New York City Police Department, Secret Service and FBI are continuing to investigate.
Authorities didn’t go into detail about the contents of the letter mailed to Judge Barry other than to say she received it Friday, and that while it contained no white powder, it also included threats to Trump’s family.
In a statements the FBI’s Philadelphia office said, “The FBI is aware of the incident and is working closely with the United States Secret Service and U.S. Marshals Service.”

Read on.

Also, Trump’s son was threatened too.

Bank of New York Mellon : BNY Mellon to pay $3 million after Massachusetts probe of funds glitch

(Reuters) – Bank of New York Mellon Corp has agreed to pay $3 million in settling a state investigation into problems it faced in calculating net asset values on some 1,200 mutual funds last August, Massachusetts’ top securities regulator said on Monday.
Massachusetts Secretary of the Commonwealth William Galvin said the New York trust bank had subcontracted the calculations to a third party and lacked a backup plan when the sub-contractor was unable to calculate net asset values for the funds. The lack of the plan “represents a departure from high standards of commercial honor,” the settlement agreement states, according to Galvin’s office.

The glitch unsettled broad parts of the fund industry last summer and highlighted how reliant BNY Mellon remained on a patchwork of technology platforms.

Read on.

Interview of Robert Rubin by the Financial Crisis Inquiry Commission

Some interesting material. Full transcript below:

Valuewalk:

Interview – ROBERT RUBIN

MR. GREENE: On the record.

Good morning, Mr. Rubin. My name is Tom Greene. I am the executive director of the Financial Crisis Inquiry Commission. We are conducting an interview this morning in support of our mission, which is a statutory one, to investigate the causes of the financial crisis of 2007, 2008, arguably through 2010, but certainly in those key years.

You are not under oath today, but since it is a federal investigation there are provisions of the federal code that apply. 18 USC, Section 8001, indicates that truthfulness is the right answer here, which I am sure you would do anyway, but I do need to forewarn you.

In the event that any of my questions are not clear, stop me and ask me to make them clearer if at all possible. If you want to take a break, don’t be shy, let me know. I understand you have some back issues, so if you need to stand up, we understand that is something you may need to do and we will certainly take that into account as we proceed.

BY MR. GREENE:

Q Let’s start initially with a little bit of background on you. Obviously you have had a stellar career at Goldman Sachs. Briefly, what were the top two orthree achievements from your perspective of your time at Goldman?

Robert Rubin: Achievements of mine or theirs?

Q Yours.

Robert Rubin: Mine? That is an interesting question. I don’t think of it that way.

I don’t know that I had any particular outstanding achievements. I started there in the risk arbitrage area, and for a variety of reasons became a  partner at a very early age.

And then after several years of  doing that, I began to take on a managerial  responsibility more broadly for trading activities, and then as time went on I just  became more and more senior.

And then at about the mid-1980s — no, I will go back one step further. In roughly 1980 or ’81, Goldman made the only acquisition it made during the entire time I was there. It bought J. Aaron, which was commodity trading and then eventually became currency trading and energy trading. And it turned out to be very troubled, although we hadn’t realized it when we bought it, so about six months in they asked me to take responsibility for it.

And what I did was to set up a process with a bunch of the younger people who knew about the business, because I certainly didn’t know very much about it, and they developed a plan to go forward which turned out to be extremely successful. And so that turned around, not because of me but because of them. And then about the mid-1980s, John White had left in 1984 as co-senior partner, so Steve Friedman and I became the co-COOs.

At that point Goldman had begun to get a little bit, a little set in its ways, and Steve and I felt that if we didn’t change,that we could fall by the wayside, gradually, but nevertheless fall by the wayside, and so we initiated a very dynamic strategic focus, and the consequence I think was a lot of change at Goldman that was very constructive.

And then I became co-CEO in December 1990, I guess, when John Weinberg decided to retire, and then I left Goldman to go to the Treasury.

Q Just to follow up on that, what was the nature of the strategic focus you and your co-CEO developed?

Robert Rubin: We felt at the time that others had become more innovative than we had in finding ways to do what clients needed to do in what was then the earlier stages, but nevertheless an occurrence, early stages of a globalizing economy, so we felt that we needed to be more innovative.

We felt that we needed to expand abroad, we felt that we should begin — I guess we had already begun to some extent, but expand our private equity and real estate areas. And then we felt very strongly that there was a tremendous opportunity to build an asset management business which would provide regular fees that weren’t dependent on the cycles of the market; to some extent affected by, but not as dependent on cycles in the market as our trading activities.

Then we also we also, or the firm had a whole array of processes for dealing with reviewing people and advancing people or not advancing people, one thing or another. We felt that a lot more could be done in that area, and so we moved further into that realm, if you will, of reviewing people regularly, and extended that not only to the non-partners but to the partners.

 

Colorado landlord placed ad for his two bedroom apartment for rent, but specifically said anyone voting for Trump need not apply

Wow, that is interesting…

Housingwire:

From the CBS affiliate in Denver:

“He’s preaching hate and he’s preaching … a lot of venom, spit and vinegar. And I live in the top part of the house,” Holmes said. “I don’t want anybody that even thinks that Donald Trump can be a good president to live in my home.”

Holmes said he’s already got several applicants.

Is it legal for landlords to apply a political test for who they will rent to? The surprising answer is yes, at least according to the article:

Some thought Holmes was violating federal housing rules by discriminating against political affiliations, but that’s not the case, according to the U.S. Department of Housing and Urban Development.

“That has nothing to do with the Fair Housing Act,” HUD spokesman Jerry Brown told The Daily Sentinel. “But that seems to be a first, and it’s original.”

California real estate agent gets 14 years in prison for $30M mortgage fraud

Tried to get witnesses to lie to the FBI and blame a dead woman

A California woman will spend the next 14 years in prison after being convicted for her role in a mortgage fraud scheme that involved straw buyers, cost financial institutions over $16 million, and subsequently lead to attempts to coerce witnesses to lie to the FBI and blame a dead woman for the fraud.

According to the U.S. Attorney’s Office for the Eastern District of California, Vera Kuzmenko was convicted on multiple counts of mail and wire fraud, witness tampering, and money laundering for her involvement in a mortgage fraud scheme involving more than 30 properties in the Sacramento area from late 2006 through early 2008.

Read on.