David Bowie Fronts Own Internet Bank
PHILADELPHIA - Rock star David Bowie, who started a minitrend among pop musicians by securitizing his song royalties, recently became the first to open his own Internet bank.Under an arrangement between Mr. Bowie's company, Ultrastar Internet Services, and USABancshares.com, began offering David Bowie affinity accounts about three months ago. The 10-month-old, $350 million-asset Internet bank attracted attention when US Bancorp sued it last summer, forcing it to change its name from USBanc.com.
The site offers 12 months of free access to bowienet.com - touted as a "virtual backstage pass" geared to music fans - as an incentive to open accounts. The site advertises 5%-interest checking accounts that have an average balance of at least $250, as well as debit and credit cards emblazoned with Mr. Bowie's image.
Kenneth L. Tepper, chief executive officer of USABancshares.com, said the Philadelphia company has several account marketing arrangements, including deals with Earthlink and Yahoo, and plans to market affinity accounts with celebrities and sport teams. Though he could not provide statistics on the number of accounts generated by the Bowie site, he said the site has been "extremely" attractive to customers. A second version of the site is expected shortly, he said.
- Stephen Kleege
Barclays Plans Overhaul Of U.S. Asset Manager
LONDON - Barclays PLC plans to establish a new independent holding company structure for its U.S. asset management unit, Barclays Global Investor, its chief executive told an analyst conference here Tuesday.The executive, Matthew W. Barrett, said the move is in recognition that Barclays Global is operating in "the fastest-growing part of the financial services industry."
Tom Taggart, a U.S. spokesman for San Francisco-based Barclays Global, said certain employees will probably be given equity stakes in the unit, which has $780 billion of assets under management.
No public offering for the unit is planned, nor are there plans to sell it, Mr. Taggart said. However, the move will give the operation more flexibility, he added.
- Niamh Ring
Subprime Lender Aames Narrowed Loss in 4Q
LOS ANGELES - Aames Financial Corp. reported a fourth-quarter loss of $47.7 million, or $1.60 a share, compared with a $6.31 per-share loss in the year-earlier period.The subprime home equity lender said adverse market conditions caused an operating loss of $12.5 million, as the company wrote down its interest-only securities and mortgage servicing rights by $35.2 million. Aames also said it had secured a $200 million warehouse line of credit. Up to $35 million of the line can be drawn on for working capital. The new line replaces a $90 million warehouse line that expired Feb. 9.
The company also said it had purchased the subprime mortgage-origination assets of United Pan American Mortgage, a unit of United PanAm Financial Corp.
- Marc Hochstein
Contifinancial Expects To File for Bankruptcy
NEW YORK - Contifinancial Corp. said it expects to file for Chapter 11 bankruptcy protection.The subprime mortgage lender said it does not have the resources to repay its bank loans when they come due March 31, and that "no assurance can be given" that it will be able to extend, renegotiate, or refinance any of the facilities. Moreover, Conti said, any sale of its assets would not raise enough money to repay its bank loans or senior notes, or replace its warehouse line.
The company had more than $400 million of bank loans outstanding last August.
Conti and its advisers, Lehman Brothers and Blackstone Group, have identified potential buyers for "various groups of assets," the company said, but it expects that any such sale would "be consummated under the supervision of the bankruptcy court."
- Marc Hochstein
Nasdaq Fines Hibernia And Investment Exec
WASHINGTON - The regulatory arm of the National Association of Securities Dealers Inc. has censured and fined Hibernia Corp.'s brokerage unit $10,000 for securities violations.The NASD levied a $5,000 fine on Kenneth A. Rains, executive vice president of trust, retail investments, and insurance at the New Orleans banking company. The NASD order was dated Jan. 3 and became public on Tuesday.
The NASD said that Hibernia Investment Securities Inc. allowed Mr. Rains "to be actively engaged in the management of the firm's securities business without being registered with the NASD in any capacity."
A spokesman for Hibernia said the violation was "highly technical" and involved different interpretations of the NASD's regulations. He said the brokerage took voluntary corrective action prior to the settlement and that the NASD's action was not precipitated by a customer complaint.
Hibernia and Mr. Rains did not admit or deny wrongdoing.
- Cheryl Winokur