Daily Archives: April 9, 2017

Shareholder suit may offer best chance to fix Wells Fargo

The bills keep piling up for Wells Fargo as it grapples with a scandal where employees signed up customers for millions of accounts they never asked for. There’s $110 million to settle a class-action lawsuit, on top of $185 million in fines to regulators. The company has made amends in other ways, firing CEO John Stumpf, adding two independent directors to the board and slashing executive bonuses.

The question is whether these moves are enough to suck out the poison that has infected the bank.

Joe Cotchett doesn’t think so. The Burlingame trial lawyer filed a suit last fall in San Francisco Superior Court on behalf of shareholders to force executives and directors to give back bonuses and fees to the company. He also wants directors to personally compensate shareholders for the money the bank used to pay fines to regulators.

“This case is one more example seeking to hold officers and directors of the bank accountable for their conduct and not blame the managers who were simply told what to do,” Cotchett told me.

This month, Cotchett will file documents contesting Wells Fargo’s motion to dismiss the case. He’s not surprised by the bank’s defense, which has been to plead ignorance on behalf of the top brass.

Read on.

Donald Trump personally profited from missile-maker Raytheon’s stock jump after his Syria attack


 

Rawstory:
While the world is dealing with both the implications and the fall-out from President Donald Trump’s missile attack on a Syrian airfield on Thursday, the manufacturer of the Tomahawk missile used in the attack is seeing their stock surge which is good news for their investors — including the president.

As noted by the Palmer Report, Trump owns stock in Raytheon, which was reported byBusiness Insider in 2015.

According  to Trump’s financial disclosure reports filed with the FEC in 2015, his stock portfolio includes investments in  technology firms, financial institutions and defense firms, including Raytheon.

On Thursday, Trump launched an attack on the al-Shayrat military airfield, used by both Syrian and Russian military forces, hitting it with 59 Tomahawk missiles manufactured by Raytheon. Trump’s attack on Syria was reportedly in response to a deadly gas attack launched by Syrian President Bashar al-Assad against his own people earlier in the week.

While the Tomahawk attack did little damage to the airfield — with the Syrian air force  continuing to launch assaults from the same base on Friday — investors, sensing an increasing escalation in tensions between two countries and the possibility of war , pushed Raytheon stock up.

The Man in Charge of Fixing Fannie and Freddie Knows Them All Too Well

NY Times:

You may not know much about Craig S. Phillips, special counselor to Steven Mnuchin, the United States Treasury secretary. Because Mr. Phillips was not a political appointee, he did not face congressional scrutiny before he began directing our nation’s housing policy, one of his main tasks.

Getting to know Mr. Phillips and his background is a worthwhile exercise, especially because he’s determining the Trump administration’s path forward on Fannie Maeand Freddie Mac, the mortgage finance giants that remain in conservatorship.

Mr. Phillips certainly knows a thing or two about Fannie and Freddie. As the leader of Morgan Stanley’s mortgage desk during the peak mortgage-mania years of 2004 and 2005, he ran the operation that bundled loans and sold them to the two government-sponsored enterprises. When those loans blew up and the government sued Morgan Stanley, Mr. Phillips was a named defendant in the initial case — a case that resulted in the firm paying a $1.25 billion settlement.

But first things first.

Mr. Phillips’s landing at Treasury is peculiar from a political standpoint. He contributed over $100,000 to Hillary Clinton’s presidential campaign last fall.

Much more germane is the work he’s done on Wall Street, much of it in the mortgage arena.

According to regulatory records, Mr. Phillips has spent 38 years at an array of Wall Street firms, including Credit Suisse First Boston, Morgan Stanley and, most recently, BlackRock, the huge asset manager. While there, he headed the financial markets advisory and client solutions teams at BlackRock Solutions, the powerhouse advisory unit; he left in January.