Receiving Wide Coverage ...
SAC Sacked: Federal prosecutors are expected to announce criminal charges this week against hedge-fund giant SAC Capital Advisors for alleged insider trading, the papers are reporting through anonymous sources. The Times says such a charge would likely be a "death blow" to the firm already saddled with government investigations, potentially causing trading partners like Goldman Sachs and Morgan Stanley to pull out. The papers also focused on the firm's founder, Steven A. Cohen, who is not expected to be charged by prosecutors in the multiyear probe. But fear not. Cohen is scheduled to face off with the Securities and Exchange Commission in August for not properly overseeing two traders charged with insider trading. Perhaps he would have known had he read his email.
New Rules, New Worries: The Journal reports that federal bank regulators are considering easing a proposal that requires banks to have skin in the game when selling mortgage-backed securities. While the Journal called it a "victory" for banks and consumer groups, former FDIC Chairman Sheila Bair calls it Washington having "lost its political will for serious reform" in the securitization market. Speaking of new rules, The FT reports that mega U.S. banks are worried that the new international leverage ratio requirements would damage the more than $7 trillion "repo market," where banks borrow against government bonds.
Commodities Conundrum: Lawmakers scrutinized megabanks that also hold physical commodities during a Senate Banking subcommittee hearing Tuesday. The Journal gave more credit to the Federal Reserve than lawmakers did, saying the criticism comes as the Fed is reconsidering a decade-old decision to allow big banks to trade and house raw materials. The Times instead pointed to an article it printed Sunday, which revealed that warehouses partly controlled by Goldman Sachs inflated the price of aluminum, costing consumers billions of dollars. Though lawmakers showed an interest in the "aluminum shuffle" a majority of their attention was on the lack of regulatory oversight of banks involved in commodities, American Banker reports.
Wall Street Journal
Lawmakers' efforts to reform Fannie Mae and Freddie Mac "are coming to a head" after the House Financial Services Committee began voting on a bill to wind-down the GSEs, the Journal reports. But the paper says the "real clash" is among "business and real-estate groups that want to preserve a federal backstop and antigovernment libertarians who want to eliminate it."
The SEC warned investors about Ponzi schemes using Bitcoin after a Texas man was charged Tuesday for promising big returns through the virtual currency, the Journal reports.
Wells Fargo has ousted the Industrial & Commercial Bank of China as the world's top bank by market capitalization six years after ICBC gained the top spot.
The FT reports that former senior HSBC executive Mark McCombe is no longer a leading candidate to run the Royal Bank of Scotland. The news came out after McCombe emailed senior colleagues Wednesday that he would not be leaving BlackRock. HSBC still has one other external and three internal candidates in the running for chief executive.