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Out of Sight Out of Mind on Facebook IPO Rules; More About the Cliff

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Facebook IPO Settlement: Morgan Stanley's paying $5 million to settle a Massachusetts probe of how it handled the Facebook IPO. According to a Journal story crosschecked between the state's attorney general's office and people "familiar with the matter," star tech analyst Michael Grimes wrote a script with detailed, non-public information for Facebook's CFO to share with investors. Then, in what might seem a cynical approach to dealing with Morgan Stanley's supposed Chinese walls, Grimes walked down the hall so that he was out of earshot when the CFO read it. "I took extra precaution to do that, and sat on the floor," Grimes later said, according to the Massachusetts order. The two takeaways from this one are: that Morgan Stanley's actions do appear to run against post-Spitzer prohibitions of selective disclosures and analysts in bed with bankers, and that nobody seems to care enough to do anything serious about it. Financial Times, New York Times

Fiscal Cliff Breakthrough: Maybe. Conventional wisdom in Washington is rapidly congealing around the idea that the Obama administration and House Republicans will work out a budget deal. New York Times, Wall Street Journal, Financial Times

Wall Street Journal

The U.S. banking system may not be robust, but it's not Spanish, either. Banco Santander is buying out its struggling affiliate Banesto, and plans to close 700 branches. Also, no more real estate lending. The notable part is that, despite plans for major staffing and branch cuts, Santander is expected to gain as a relative pillar of health.

European bank executives are making their U.S. counterparts look good. Deutsche Bank co-CEO Jürgen Fitschen was already dealing with a tax fraud probe. Now he's dealing with the fallout from calling a senior German politician to complain about a related police raid last week, too. A highlight of the article is a German saying about corruption, "the fish rots from the head down."

Treasury is rolling up TARP with plans to sell two-thirds of its remaining bank stakes in 2013, says a person familiar with the matter. We already knew that sales were accelerating post-election, so how much of this is fresh is hard to say.

Financial Times

"Dozens to be implicated in UBS Libor deal," the FT announces before noticing that not all of the employees will face charges or civil suits for their alleged attempts to rig the Yen Libor stats. The bank is also expected to pay $1.5 billion and have a subsidiary plead guilty to a criminal offense. When was the last time that happened?

The National Credit Union Association has sued JPMorgan over $3.6 billion of "faulty" Bear Stearns mortgage backed securities. Think back to all the other suits it's filed or those filed by the Federal Home Loan Banks, and this one's just like it.

New York Times

Consumer advocates generally favor financial industry regulation — although less so when it makes it more difficult to sue banks. The Times' Peter Eavis looks at the growing unease advocates feel about the qualified mortgage rulemaking process, which would give banks substantial legal defenses assuming that their mortgages meet regulatory standards for qualified mortgages. But how real the litigation concerns even are is a decent question, Eavis writes, given the relative scarcity of homeowner lawsuits against banks.

Andrew Sorkin writes a kind of bizarre column titled "Wall Street, Invested in Firearms, Is Unlikely to Push for Reform." It's about private equity firms with holdings in firearm manufacturers. But since when did anyone expect that Wall Street would lead the charge to reinstate an assault weapons ban? We're awaiting the parallel piece, "Gun Manufacturers Unlikely to Push on Dodd Frank Reform."

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(Image: Bloomberg News)

Comments (1)
I'm not so sure about Facebook and its strategy to make money. They went public at $38 and then dropped to a low of $17. I'm just glad they are up again at $31.
Posted by yluu | Monday, January 14 2013 at 10:43PM ET
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