Daily Archives: June 29, 2016

GE Says Too-Big-to-Fail Exit Puts Stamp of Approval on Overhaul

  • Lew: Finance unit made ‘fundamental strategic changes’
  • Firm could seek acquisitions of up to $7 billion, analyst says

General Electric Co. isn’t too big to fail anymore. All it took was the most sweeping transformation in the company’s 124-year history.

The Financial Stability Oversight Council released GE from the designation as asystemically important institution, saying Wednesday that the industrial giant no longer poses a threat to U.S. financial stability. The decision came after the company agreed to sell almost $200 billion of lending assets since early last year.

“Getting de-designated in this time frame is a great milestone for us,” Keith Sherin, chief executive officer of GE Capital, said in a telephone interview. Regulators “recognized that we’ve transformed the company. It validates the change in strategy.”

Read on.

DNC Platform for Wall Street Tax

The Democratic Party’s draft policy agenda reflects a major shift in the debate over a small tax on financial transactions that would curb short-term speculation and generate massive revenue.

The Democratic Party Platform Committee has taken a position in support of a tax on Wall Street transactions, according to a statement by committee member Rep. Keith Ellison. This is just the latest sign of the mainstreaming of a bold policy that would shrink the size and power of Wall Street.

Even at a rate of just a small fraction of a percent on each trade, such taxes would slash the profitability of the high-speed speculation that dominates our financial markets but has no real economic value. At the same time, the tax could generate massive revenue for job creation and other urgent needs.

Read on.

Hong Kong regulator censures Bank of America units for takeover code breaches

Hong Kong’s Securities and Futures Commission (SFC) has publicly censured two units of Bank of America for breaches of the city’s takeover codes in two deals last year, the regulator said on Wednesday.

The SFC said the censures were linked to the role of the units in a partial offer for China Resources Beer (CRB) and the privatization of Power Assets Holdings Ltd.

The regulator said the Bank of America units failed to disclose their dealings in equity swaps in both the CRB partial offer and the Power Assets privatization, despite taking the role of adviser on both transactions.

Read on.

 

Largest Pro-Hillary Clinton Group Accused of Taking Illegal Donations

 

A pro-Hillary Clintonsuper PAC is accused of accepting illegal donations from a company that holds contracts with the federal government. That’s a big no-no under federal law.  LawNewz.com reviewed the Center for Response Politics online federal database and found the Massachusetts-based Suffolk Construction donated at least $200,000 to the pro-Hillary group, Priorities USA, in July and December of 2015.  As The Hill first reported, at the time of making the contributions, Suffolk Construction also held multiple contracts with the U.S. Department of Defense worth nearly $1 million. LawNewz confirmed that report through a search on usaspending.gov.

Why is that a problem? Federal law says that is not allowed. Here is what the government’s website says (Federal Election Campaign Act of 1971 (2U.S.C.§441c(a):

Federal government contractors may not make contributions to influence Federal elections. For example, if you are a consultant under contract to a Federal agency, you may not contribute to Federal candidates or political committees. Or, if you are the sole proprietor of a business with a Federal government contract, you may not make contributions from personal or business funds.

Read on.

Trump Slapped With FEC Complaint For ‘Illegally’ Soliciting Foreign Money

LawNewz.com has learned a nonprofit, nonpartisan group, The Campaign Legal Center, has filed a federal complaint against Donald Trump for allegedly illegally soliciting money from foreign nationals to fund his presidential campaign.

“Donald J. Trump’s presidential campaign committee is violating black-letter federal law by sending campaign fundraising emails to foreign nationals — including foreign politicians — in at least Iceland, Scotland, Australia and Britain,” the group said in a statement.  The group filed a complaint with the Federal Election Commission highlighting this violation.

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If the allegations are true, federal law is pretty clear on this (See number 2): 

It shall be unlawful for-

(1) a foreign national, directly or indirectly, to make-

(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election;

(B) a contribution or donation to a committee of a political party; or

(C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the meaning of section 30104(f)(3) of this title); or

(2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1) from a foreign national.

Read on.

Here is a copy of the complaint:

 

Despite Anti-Trade Rhetoric, Donald Trump’s Campaign Team Includes Pro-Trade Lobbyists

Donald Trump denounced the controversial Trans-Pacific Partnership trade agreement on Tuesday and charged that Hillary Clinton, a long-time supporter of the deal, is deceiving voters when she says she now opposes it.

Trump wasn’t wrong to charge that Clinton has surrounded herself with members of the global elite who promote and benefit from deals such as TPP. In fact, many members of Clinton’s inner circle have continued to advocate for the trade agreement.

But a similar critique could be made against Trump, now that his growing campaign operation includes lobbying and political consultants who have worked to pass the TPP or have been recently employed by firms that promote the TPP. Among them:

David Urban, a consultant with the American Continental Group, lobbied on behalf of Time Warner, the parent company of CNN, in support of the Trans-Pacific Partnership, according to disclosures. Urban volunteered with the Trump campaign during the GOP primary in Pennsylvania, and is now serving as the deputy director of the Trump campaign’s GOP convention team.

Tony Fabriziohired in May as the Trump campaign pollster, serves as a senior counselor at Mercury Public Affairs and is a principal at the consulting firm Fabrizio Lee. Disclosures show that Mercury has lobbied for the Trans-Pacific Partnership on behalf of a number of clients. Fabrizio Lee alsoprovides strategic consulting to the Emergency Committee for American Trade, an advocacy group that has aggressively touted the TPP trade deal.

Doug Davenport founded the lobbying practice of the DCI Group, a public affairs firm that was retained last year by the government of Japan to help promote and secure passage of the TPP. Davenport joined the Trump campaign in April and is now reportedly helping to court delegates.

Alex Castellanos, a veteran Republican advertising strategist, is the co-founder of Purple Strategies and National Media, Alexandria, Va.-based political consulting firms that have long provided consulting for the U.S. Chamber of Commerce, the corporate trade association that has taken the lead role in promoting the TPP. Castellanos, once a Trump critic, now advisesthe largest pro-Trump SuperPAC, Rebuilding America Now. Speaking to theLos Angeles Times last year, Castellanos was dismissive of Republican opposition to the TPP, claiming that most simply opposed the deal because it is backed by Obama. These Republicans, Castellanos said, “oppose their president more than they support free trade and economic growth.”

Read on.

JPMorgan Chase : beats traders in silver futures rigging lawsuits

JPMorgan Chase & Co on Wednesday won the dismissal of three private antitrust lawsuits, including from hedge fund manager Daniel Shak, accusing the largest U.S. bank of rigging a market for silver futures contracts traded on COMEX.

The lawsuits accused JPMorgan of having in late 2010 and early 2011 placed artificial bids onto the trading floor, harangued employees at metals market COMEX to obtain prices it wanted, and made misrepresentations to a committee that set settlement prices.

This allegedly squeezed traders like Shak, who is also known for playing high-stakes poker, forcing them to post more capital to support their positions in silver futures spreads, and ultimately liquidate them at heavy losses.

U.S. District Judge Paul Engelmayer in Manhattan, however, said the plaintiffs, who also included traders Mark Grumet and Thomas Wacker, did not show that JPMorgan made “uneconomic” bids, or intended to rig the market at counterparties’ expense.

He also questioned the plaintiffs’ use of Silver Indicative Forward Mid Rates (“SIFO”) as a benchmark for determining proper levels for the spreads in their lawsuits.

Read on.