Receiving Wide Coverage ...
New Obstacle for Securities-Fraud Suits: A Supreme Court ruling on Monday added a hurdle to investors' efforts to win class-action lawsuits over claims of securities fraud. Companies defending themselves against such lawsuits can now attempt to get them thrown out of court by proving at an early legal stage that misleading statements did not have an impact on stock prices. But the decision in the case of Halliburton v. Erica P. John Fund is only a partial victory for businesses, according to the New York Times, since the court also "did not accept a broader challenge, one that could have put an end to most class actions for securities fraud." The Wall Street Journal agrees that the court "disappointed business interests by embracing the fundamental principle of a 1988 decision" that allows investors to point to companies' stock market prices as evidence of the impact of public information.
Climate Change Bad for Business: A bipartisan report released Tuesday warns of the high economic costs of climate change. The Times leads with a vivid picture of the destruction to businesses and industries that could be wrought by global warming, while the Journal foregrounds the report's high-profile backers, which include former New York City mayor Michael Bloomberg and three Treasury secretaries under Presidents Nixon, Clinton and George W. Bush. The "Risky Business" report focuses on identifying the impacts that climate change could have on U.S. businesses rather than on potential solutions. The Washington Post suggests this choice may reflect disagreement among members of the bipartisan group as to the best responses.
Wall Street Journal
"The U.S. Export-Import Bank has suspended or removed four officials in recent months amid investigations into allegations of gifts and kickbacks, as well as attempts to steer federal contracts to favored companies," anonymice told the Journal. The internal probe into possible misconduct is unlikely to help the agency's case as House Republicans push to shut it down when its charter expires in September.
Sales of existing homes rose almost 5% in May, but experts say the upswing reflects a recovery from a lousy winter rather than a broader rebound.
Investors still believe in the "implicit guarantee" that the U.S. government will swoop in to rescue Fannie Mae and Freddie Mac should the agencies run into trouble, according to a "Heard on the Street" column. The proof lies in brisk sales of a new type of bond that offers "a stream of payments linked to the performance of a pool of mortgages guaranteed by the two companies."
Wall Street's regulator is backing off of a plan that would require brokers to disclose to their clients the bonuses they receive when they switch firms. The Financial Industry Regulatory Authority plans to make some changes to the proposal and resubmit it "as soon as practical."
More banks and payment-processors will soon feel the heat of Operation Choke Point, according to Attorney General Eric Holder. "In the months ahead, we expect to resolve other investigations involving financial institutions that chose to process transactions even though they knew the transactions were fraudulent, or willfully ignored clear evidence of fraud," Holder said in an online video, according to the Journal.
The FT is all over the expected settlement between U.S. authorities and BNP Paribas over charges that the French lender breached U.S. sanctions. The U.S. hopes to reach an agreement by the Fourth of July, according to the FT, while BNP "seems to be playing for time. One anonymouse with connections to BNP jokingly suggests that the bank is holding out for a Bastille Day announcement. The paper also reports that the French government has appealed to its European brethren, including German chancellor Angela Merkel, for support as it pushes for restraint in the settlement. For anyone in the financial sector who's just been unfrozen from a bog and has no idea what's going on with BNP, there's a handy explainer.
New York Times
Neil Barofsky, the bane of big banks, is close to a securing a new gig as the corporate monitor of Credit Suisse, according to the Times. Credit Suisse agreed to hire a monitor as part of its tax-evasion settlement with New York's Department of Financial Services. Barofskywho previously served as the former special inspector general for the Troubled Asset Relief Programis reportedly the New York regulator's top pick for the job. Wall Street may find Barofsky's appointment "hard to swallow," according to the Times, but other industry observers are feeling quite cheerful about the prospect. Barofsky is "exactly the kind of monitor we need to get better control of banks like Credit Suisse," Stanford finance and economics professor Anat Admati said on Twitter.