Receiving Wide Coverage ...
Libor Probe Widens: You can add nine more big banks to the already too-long list of financial institutions being investigated for alleged attempts to rig the London interbank offered rate. New York Attorney General Eric Schneiderman (we're sure that name sounds familiar) and Connecticut Attorney General George Jepsen have issued subpoenas to Societe Generale, Royal Bank of Canada, Bank of America, Credit Suisse, Bank of Tokyo Mitsubishi UFJ Ltd., Norinchukin Bank, Rabobank, Lloyd's Banking Group and West LB AG in recent months in order to determine whether the firms played a part in any Libor-manipulation schemes. It was already widely known that seven banks, including Barclays and JPMorgan Chase, have received subpoenas related to the attorneys general investigations, thanks, in part, to an unnamed source "familiar with the matter" and several disclosures in financial filings. The investigation is part of a larger, global probe into the Libor scandal. Wall Street Journal, Financial Times, Washington Post
Rotten Acquisitions: Various news outlets are delving a bit deeper into the implications of acquisitions big banks made during the financial crisis, following the recently announced B of A $1 billion mortgage lawsuit. Dealbook has put together a rough estimation of just how much B of A's 2008 acquisition of subprime lender Countrywide has cost the bank over the years, pegging the monetary consequences "at upward of $40 billion." This estimate includes, among other things, a "preliminary $8.5 billion deal to settle claims by investors who purchased Countrywide mortgage securities that soured when the housing bubble burst" and an $11.8 billion settlement "following a nationwide investigation of foreclosure abuses at five big firms." Elsewhere, CNBC blogger John Carney takes issue with Barney Frank's assertion that other mortgage civil suit target JPMorgan Chase should not be punished for Bear Sterns' crimes. Carney argues that it is irrelevant whether JPMorgan — or B of A, for that matter — had their arms twisted by the U.S. government regarding the Bear Sterns and Countrywide acquisitions. "Both banks now receive substantial amounts of income from lines of business they acquired during the crisis," he writes, utilizing a fairly effective metaphor of charming your way into obtaining someone else's table at a restaurant only to stick its originally intended patron with the bill. "It seems fair enough that they should also inherit the legal liabilities associated with that income."
Wall Street Journal
Credit Suisse, which just yesterday announced cutbacks intended to boost profits, is quietly seeking to turn one of its trading venues into an exchange, "an unusual bid that, if successful, would create the only U.S. stock exchange owned outright by a Wall Street bank."
Alleged (and former) UBS rogue trader Kweku Adoboli is facing two new false accounting charges as U.K. prosecutors add to their ongoing case against him. Adoboli pleaded not guilty to the additional charges on Friday, which "relate to the umbrella accounts prosecutors say he set up" during his time at the Swiss investment bank.
The paper is elaborating a bit on incoming Barclays Chairman David Walker's plan to shake-up the rest of the bank's board following yesterday revelation that a purge may be on the way. Sources close to Walker are now relaying the changes will be "non-violent" and that "his manner may prove academic" as he moves forward with plans to bring in "new non-executives over the next six to 12 months." Sources say some existing board members, including Reuben Jeffrey, Fulvio Conti and Dambisa Moyo, may simply step down to pursue their "diverse other interests." General consensus seems to be that Walker "will also need to take a far bigger role in steering Barclays' strategic direction" as he seeks to revamp Barclays' beleaguered image following its involvement in the Libor scandal.
New York Times
Speaking of boards playing bigger roles in strategic decisions, the paper is reporting Vikram Pandit's departure from Citi last week was actually the result of a months-long effort by board chairman Michael O'Neill. This article provides details on Pandit's last day, asserting that after a morning spent fielding congratulatory emails on a better-than-expected earnings report, Pandit went into a meeting with the board chairman to find three news releases had been prepared: "One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his."
Lawmakers are urging regulators to finalize the Volcker rule. In a letter that is part of Congressional efforts to "light a fire under the five regulatory agencies" charged with the task, two senators argued regulators should publish the final rule "even if all the agencies are not yet on board."