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Fighting May Move to the Courts. House Republicans are calling on the Securities and Exchange Commission to provide an accounting of the time and money it spent on a failed plan that would make it easier for shareholders to fire members of corporate boards. A federal appeals court killed the SEC plan several days ago, the Post reported. But, the ruling could have greater implications, according to the Journal. The court ruling has given business leaders hope that if their appeals for changes in Dodd-Frank are nixed by regulators and lawmakers, the courts may be a last option.

Wall Street Journal

The commercial mortgage-backed security market was turned on its ear as Goldman and Citi pulled a $1.48 billion deal from the market after it was priced, because a rating didn’t come through. Although the deal was priced based on a preliminary rating, a last-second decision by Standard & Poor’s to call for “multiple technical changes” in the deal before issuing a final rating put the kibosh on the deal for now. This could slash CMBS volume, which would have a negative impact on the real estate market.

Credit Suisse will slash its workforce 4%, the paper confirmed, a reversal of the recent hiring spree by the bank.

New York Times

It doesn’t add up. A 2007 Ernst & Young audit certified that Lehman had followed Generally Accepted Accounting Principles, yet last week a judge let the accounting firm off the hook even though he determined that Lehman did not follow GAAP and its officers and directors could be held responsible for misleading investors. In High & Low Finance, Floyd Norris says, “The ruling ought to raise a few eyebrows at the Public Company Accounting Oversight Board, which sets auditing standards and regulates auditing firms. If the Lehman audit was in compliance with the auditing rules, it is time to review the rules.” Despite strong results, some independent merger and acquisition specialists have missed second-quarter estimates, according to the Breakingviews column. The firms are facing compensation issues. The fear has been that with recovery, the boutiques would fall by the wayside. “Of course, the danger still remains that megabanks will be more aggressive about using their balance sheets to steal market share.” In a related item, DealBook said Lazard reported a 23% gain in second-quarter profit, while Evercore Partners saw revenue jump a staggering 119%.

 

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