Receiving Wide Coverage ...
Sold: Well, we knew this was coming. Anonymice are telling their favorite news outlets JPMorgan Chase has agreed to sell its commodities trading business to Mercuria, a Switzerland-based energy trading house. Their lips are sealed about how much Mercuria will pay for the unit, but its assets are believed to be valued at $3.3 billion. The deal comes as many big banks are scaling back on their commodities business amid growing regulatory scrutiny. Both the FT and the Journal note that it is unclear if Blythe Masters, the head of JPM's commodities unit, will transfer as part of the deal. Financial Times, Wall Street Journal
Barclays Bonus Shaming: If Barclays thought that disclosing executive share payout had dropped year over year would temper criticism over how its bankers' pay could increase while profits were down and a since-updated FT article from Tuesday indicated that it did well, it was mistaken. All the disclosure did was generate another round of headlines highlighting the compensation. (Per Dealbook: "Barclays Grants $53 Million in Shares to Top Executives"; per the Journal: "Barclays Bosses Get $53 Million in Shares.") And everyone, it seems, has a suggestion for how the beleaguered British bank can go ahead and fix itself. The latest comes courtesy of Breakingviews columnist Dominic Elliott. "[CEO Antony Jenkins] needs to be brutal with businesses he doesn't need. And he needs to defend vigorously what remains," he writes.
Executive Pay, Elsewhere: A filing with the Securities and Exchange Commission revealed that Wells Fargo CEO and American Banker's 2013 Banker of the Year John Stumpf will receive $19.3 million for his work last year. This is the same amount of annual compensation he received in 2012. The Wells disclosure, the Journal points out, means Goldman Sachs CEO Lloyd Blankfein, who made an estimated $23 million in 2013, "is poised to regain the title of highest-paid chief executive of a major U.S. bank."
A New Bitcoin Fund: Several big investment firms, including Fortress Investment Group and Pantera Capital, are teaming up to create Pantera Bitcoin Partners, LLC, a hedge fund that buys and sells virtual currencies. The Times notes "the creation of the partnership represents a significant step in the push to move Bitcoin into the financial mainstream at a time when several well-publicized claims of theft have pointed to potential weaknesses in the digital currency economy." New York Times, Wall Street Journal
Fulfilled: A final report from monitor Joseph Smith indicates that the nation's four biggest banks Bank of America, Citigroup, JPM and Wells Fargo have "more than fulfilled their financial obligations" to homeowners under 2012's $25 billion national mortgage settlement. "Still, regulators and consumers groups remain concerned that borrowers still encounter problems with mortgage servicers, including delays in processing modifications," the Journal notes.
High-Speed Trading Under Fire: The Times reports that New York State Attorney General Eric Schneiderman is expanding his crackdown on high-speed trading, zeroing in exchanges, "including the New York Stock Exchange and Nasdaq, that permit high-frequency traders to pay to put their computer servers within the exchanges' data centers." Meanwhile, the Journal reports both the Commodity Futures Trading Commission and the SEC have launched separate probes into high-speed trading firms. While the specifics vary, both essentially address whether these firms are receiving preferential treatment from various exchanges.
Wall Street Journal
Citigroup has been ordered to pay $1.1 million over allegations it engaged in short-selling ahead of participation in five public offerings, according to Finra and BATS.
A look into the prison life of Lee Farkas, former chairman of mortgage company Taylor, Bean & Whitaker, who is now serving a 30-year-sentence following his 2011 fraud conviction: "Farkas suggests his unusual position as a jailed senior financier may be due in part to Taylor Bean's lack of influence on Capitol Hill, compared with many of the big firms involved in the crisis. It is 'important to understand that I was a small-town businessman
with no political connections or power,' he says in an email sent after the interview."
Financial Times
A curtain-raiser on the forthcoming Federal Reserve stress test results: "With several years of profits behind them in a more benign economy, the question posed by the stress test has become how much capital the banks will be allowed to return to shareholders this year in the form of dividends and share buybacks."
New York Times
State authorities are doubling down on the ongoing crackdown on short-term credit companies. "The crackdown gained momentum on Tuesday when the Illinois attorney general, Lisa Madigan, accused All Credit Lenders of misleading borrowers into taking out expensive loans that come with insurance products that they do not need or cannot use," reports Dealbook.
