Receiving Wide Coverage ...
Back to Business: The East Coast continues along its long road to recovery post-Sandy with some subways and airports set to resume (albeit limited) service today in the tri-state area. Also back in business is the New York Stock Exchange, which reopened its doors yesterday amid much criticism that a two-day shutdown signaled insufficient disaster preparedness. Both the Journal and the Times have pretty detailed play-by-plays of how the exchange's first day back went and the news is good. Despite a few "visible glitches" (including some blank monitors related to unreliable data connections) and relatively low staffing levels, "things went very, very smoothly." So smoothly, in fact, that Dealbook deems the exchange as "a small sign of reassurance and resilience" in the storm's aftermath. Activity was "average" with the Dow "closing down 10.75 points at 13096.46," but traders are now readying themselves for several big influential events including Friday's October jobs report and Tuesday's presidential election.
A Whale of a Lawsuit: JPMorgan Chase has decided to sue Javier Martin-Artajo, a former executive in its chief investment office and (perhaps more notably) ex-boss of the now infamous London Whale Bruno Iksil. Details about the suit are scarce since the London court filing publicizing the case didn't list any and JPMorgan is declining to comment. Martin-Artajo, however, did say via a lawyer that he "utterly denies any wrongdoing," It had been previously reported that an internal investigation conducted by the bank was focused on Martin-Artajo, Iksil (who, according to the FT, is apparently also referred to in certain circles as "Voldemort"), Achilles Macris, the executive in charge of the international chief investment office and low-level trader Julien Grout. But a civil case filed by JPMorgan is no precursor to whether authorities will file criminal charges since, according to Dealbook, "traders are given significant leeway to price financial instruments like the complex credit derivatives at the center of the bet."
Barclays Faces Probe and Fine: As if the lingering scent of alleged Libor manipulation wasn't enough, Barclays' beleaguered reputation took another one-two punch yesterday when a U.S. regulator announced it was seeking "a record $435 million in penalties for the bank's alleged manipulation of U.S. electricity markets" at the same time the bank disclosed U.S. authorities are looking into whether it breached corruption laws. The corruption case, being investigated by the Justice Department and the Securities and Exchange Commission, is related to "Barclays's use of middlemen serving as brokers to connect the bank with powerful Middle Eastern interests" at the onset of the financial crisis. The Federal Energy Regulatory Commission is looking into alleged electricity price manipulation in the U.S. from 2006 to 2008. The bank's new CEO Antony Jenkins told analysts they should "not assume" either investigation "will imply any wrongdoing on behalf of the Barclays group." Wall Street Journal, Financial Times
Wall Street Journal
Lloyd's Banking Group posted a third-quarter loss as a $1.61 billion provision for misselling payment protection insurance products "weighed on the bank's bottom line."
UBS' recent downsizing and restructuring has claimed a senior position. Co-head of the bank's fixed income division Roberto Hoomweg "is poised to leave" after three years at UBS. Rajeev Misra is expected to be promoted "from co-head to sole head" of the fixed income trading business.
New York Times
This article asserts that the big banks' domination of the current mortgage market, or, alternately, their proclivity to take advantage of big profit margins "on the rates they can charge customers and the price they can earn for selling those mortgages to investors," is the "unintended consequence of the flawed banking bailout and the flaccid regulatory response in the aftermath of the financial crisis."
Dealbook takes a deeper look at how MF Global's collapse, now just over one year ago, impacted the brokerage firm and the broader futures trading industry with the general takeaway being it did not change things nearly as much as it should have.