Receiving Wide Coverage ...
The Fault Lies Not in Our Stars: The fingers seem to be pointing at CEO Robert P. Kelly in his separation from Bank of New York Mellon. Kelly passed the blame for certain problems to others in senior management “people familiar with the matter” told the Journal. Also he reportedly was “difficult” to work with and the Board feared it would lose top employees the same sources told the paper. The Times cited an unnamed source who said Kelly’s departure was not rooted in litigation, nor was it related to one specific issue. Another unnamed source told the paper Kelly was not as engaged in day-to-day issues as the board would have liked.
Wall Street Journal
A deal was reached between New York’s financial-services superintendent and Goldman Sachs, its Litton Loan Servicing and Ocwen Financial, whereby the firms will stop the practice of robo-signing and will “comb through loan files for evidence they mishandled borrowers' paperwork and to cut mortgage payments for some New York homeowners.” The deal is scheduled to be announced today.
Failure of what may be the year’s biggest merger – AT&T and T-Mobile – could hurt some bank’s league tables in addition to costing about $150 million in fees. Citigroup would drop to number 6 from number 5 in the M&A rankings, Evercore Partners would slip four spots to 17th place, and boutique Greenhill & Co. would sink to 40th from 18th.
A Goldman Sachs report to hedge-fund clients puts a $1 trillion figure on the amount needed to right European banks, says China’s growth may not be sustainable, and suggests “a fancy option play that offers a way to take a bearish position on the euro, and a bearish bet through an index of insurance contracts on the credit of European financial stocks.”
Mortgage-backed securities aren’t exactly dead. Springleaf Financial expects to sell $242 million in residential mortgage-backed securities backed by subprime loans originated in past years, but the deal will carry 51.15% in credit enhancement, to guard investors against default. Using this structure, the deal was able to win a AAA rating from S&P.
New York Times
Bank of America said for weeks that it did not need to raise capital, but then went and accepted an investment from Warren Buffett on terms extremely favorable to him. One possible result of the deal, the head of an investment firm said, is investors will stop believing banks when they say they don’t need capital.
The SEC's destruction of documents for closed cases came to light in August and the SEC's practice has been confirmed by an SEC spokesperson, according to a story that looks at the archival standards of comparable regulatory bodies. "The Financial Services Authority, a British counterpart to the SEC, regards its investigative records as “intelligence,” and it orders that they be retained for seven to 15 years" and the FBI, which "which polices some of the same offenses that the SEC does, keeps case files of all criminal investigations for at least 20 years after they are closed," too name a few.