Lehman Brothers Holdings Inc. has informed three private-equity firms that they remain in the running to purchase its asset management business, even though the company hasn’t decided about whether it should sell the unit, according to the Financial Times.
New York-based Lehman Brothers told Bain Capital LLC of Boston, Hellman & Friedman LLC of San Francisco and KKR & Co. LP of New York that their bids were high enough to go forward, according to the report.
The National Association of Independent Life Brokerage Agencies has announced its opposition to the Securities and Exchange Commission’s regulation of fixed indexed annuities as securities.
A key provision in proposed Rule 151A states that annuitants bear the majority of the investment risk if they are likely to receive payments that exceed the guaranteed payment within an FIA.
The risk in this case is that the gain in the annuity contract will be higher than the guaranteed floor within the annuity but subject to a cap and therefore lower than some higher number.
Second-quarter gross domestic product growth was revised up to a 3.3% gain, signaling that the U.S. economy is stronger than had first been thought.
Last month, the Department of Commerce had initially estimated that the GDP had risen 1.9% in the quarter.
Economists surveyed by MarketWatch and Reuters had been expecting an increase of 2.7%.
That compares with a weak 0.9% growth rate between January and March and a -0.2% contraction during the fourth quarter of 2007.
The U.S. division of Toronto-based Sun Life Financial Inc. has introduced a 6% bonus credit for customers of its Masters Extra variable annuity.
Previously, the credit awarded to new clients was 5%.
New customers and existing clients who are purchasing new products or adding money may receive the 6% bonus upfront.
Customers have the choice of allocating the boosted interest to fixed-income investments or to add it to equities, taking advantage of a down market, the insurer said in a statement.
There was no gray area in a memo recently issued by Citigroup: Make those copies in black and white.
That was just one of the cost-cutting measures outlined by the Wall Street giant as it tries to rebound from mounting losses from the credit crunch.
An Aug. 15 memo issued by John Havens, head of Citigroup’s institutional-clients group — obtained by The New York Times — urges employees to be much more conservative with their expenses.
The National Association of Insurance and Financial Advisors said that it will oppose the Securities and Exchange Commission’s proposal to regulate certain indexed annuities as securities.
“In our view, these [indexed-annuity] products do not meet the test for determining whether a product is a security,” Jeffrey J. Taggart, president of Falls Church, Va.-based NAIFA, said in a statement. “Unlike the case with investment products such as mutual funds and individual stocks, with an indexed annuity, the investment risk of a downturn in the related index rests with the issuer of the product, not the consumer.”
The Securities and Exchange Commission voted today to approve a road map for the use of International Financial Reporting Standards by U.S. companies allowing the possibility for some corporations to adopt the standard on an optional basis starting as early as the end of 2009.
A mandatory adoption could take place at the end of 2013, the SEC said in a meeting Wednesday morning.
About 110 of the largest U.S. companies by market capitalization, in 34 industries, would be eligible to adopt the IFRS standards on an optional basis at the end of 2009 for filings starting in 2010.
More securities fraud convictions have been thrown out in the federal government’s long-running prosecution of alleged improper trading among specialist firms at the New York Stock Exchange, according to published reports.
U.S. District Judge Sidney Stein yesterday vacated the May 2006 guilty pleas of Patrick McGagh and Joseph Bongiorno, both former traders at Brooklyn-based Van der Moolen Specialists USA LLC.
In a separate ruling, prosecutors also dropped criminal charges against Freddy DeBoer, a former trader at New York-based LaBranche & Co. Inc.
Confidence among advisers and consumers rose sharply in August as lower gas prices and a stronger dollar spurred greater confidence in the economy.
Adviser confidence in the economy and the stock market rebounded this month, according to Rydex AdvisorBenchmarking Inc.'s Advisor Confidence Index.
The index rose 13% in August to 97.06, from 86.27 in July.
Each of the four economic-outlook components measured by Rydex improved: the current economic outlook by 15.79%, the six-month economic outlook by 7.06%, the 12-month economic outlook by 19.15% and the stock market outlook by 19.15%.
In need of a new chief financial officer, UBS turned not to a number-crunching accountant with experience salvaging troubled balance sheets, but to a star dealmaker with a knack for buying and selling banks, according to Crain's Finanical Week.
John Cryan is perhaps best known for the $98 billion sale of Dutch banking giant ABN Amro to a consortium led by the Royal Bank of Scotland, a 2007 deal he helped oversee in his previous role as head of the financial industry group at the investment banking arm of UBS.
The Securities and Exchange Commission has distributed about $58 million to investors who were harmed by undisclosed market timing in mutual funds managed by Putnam Investments and Janus Capital Management LLC.
Under the terms of the settlement with Putnam, more than 600,000 investors who put money in funds managed by the Boston-based company will receive $40 million.
This is the first of several fair fund distributions that will return more than $150 million to more than 1.5 million affected investors in Putnam mutual funds.
The Financial Accounting Standards Board has indefinitely suspended deliberations on its project to improve the accounting for income taxes and merge U.S. standards with international ones in this area, according to Crain's Financial Week.
The U.S. standards-setter suspended deliberations on the income tax project on Aug. 12, saying that it may revisit the project after its international counterpart, the International Accounting Standards Board, further develops its replacement for IAS 12, the international standard for income taxes.
The Financial Planning Association will give P. Kemp Fain Jr. award to Don Pitti at its FPA Boston 2008 conference, to be held Oct. 4-7.
The award recognizes individuals in the industry who contributed to the financial planning profession through service to professional societies, academia and/or government.
Mr. Pitti has been a member of the Denver-based FPA and its predecessor organizations since 1969.
He served as the chairman of the Denver-based Society of Financial Counseling and president of its successor organization, the Atlanta-based International Association for Financial Planning.
Massachusetts Secretary of State William Galvin is urging Fidelity Investments of Boston to buy back auction rate securities it sold to customers before the market froze up.
In a letter dated Aug. 19 and sent to Edward “Ned” Johnson III, chairman of the mutual fund giant, Mr. Galvin expressed “grave concern regarding complaints we have received from Fidelity customers who have purchased auction rate securities that were presented to them as safe, liquid principal-protected investments and who now find themselves unable to sell those securities.”
Genworth Financial Inc. of Richmond, Va., today launched its wealth management division, Genworth Financial Wealth Management Inc.
The new company is the result of the merger of AssetMark Investment Services Inc. of Pleasant Hill, Calif., and Genworth Financial Asset Management, a Genworth Financial subsidiary.
Participating independent financial advisers will have access to a comprehensive fee-based investment management platform and may choose from an array of 11 portfolio strategists and a variety of investment management firms.
Financial advisers expect the Standard & Poor's 500 stock index to gain ground this year, according to a survey by Schwab Institutional of San Francisco.
The study found that 58% of registered investment advisers expected the S&P 500 to gain ground this year, compared with 46% who felt that way in January.
Despite the upbeat prediction, the majority of advisers — 77% — said it would be difficult to achieve clients' goals during the following six months, and 49% said their clients had requested more-conservative investment options.
Security and Exchange Commission chairman Christopher Cox today outlined the agency’s new vision for a successor to the regulator’s EDGAR corporate reporting system.
The new system will be called IDEA, short for Interactive Data Electronic Applications.
It will incorporate data technologies such as extensible business reporting language (XBRL) in order to make the system interactive in a way which EDGAR is not.
“EDGAR dates back to the era of mainframe computing. It is being strained and it is time to move forward,” Mr. Cox said during a webcast.
Investors Capital Holdings Ltd. has a new president and chief executive.
Timothy B. Murphy has replaced Theodore E. Charles, who will continue as chairman of the board and focus on assisting the firm in “strategic areas,” according to a statement by the firm.
Mr. Murphy, a longtime executive with the firm, is also now president and chief executive of the firm’s independent-contractor broker-dealer, Investors Capital Corp.
Prashant A. Bhatia, an analyst at Citigroup Inc. in New York, today cut third-quarter earnings estimates for three investment banks, with Lehman Brothers Holdings Inc. taking the largest hit.
He widened his projected quarterly loss for Lehman to $3.25 a share, from a previous forecast of a loss of 41 cents a share.
Mr. Bhatia expects New York-based Lehman to take fresh asset-related write-downs of $2.9 billion during the current quarter.
Evercore Partners Inc. said today that it is selling debt and warrants to secure a $120 million investment from Tokyo-based Mizuho Corporate Bank Ltd. in order to expand the firm’s investment management and strategic-advisory business.
Under terms of the agreement, a representative of Mizuho will become a member of Evercore's board, and the Japanese bank will be permitted to purchase Evercore class A common stock in the open market as long as its total voting interest doesn’t exceed 4.9% in the New York investment bank.
Situation:
The client is a resident of Kentucky for tax year 2008. Prior to moving to that state, she owned a personnel residence in Indiana. Due to certain circumstances, she filed for bankruptcy. The bankruptcy included consumer debt as well as the foreclosure on her principal residence.
The client asked her adviser whether the cancellation of debt has to be included in her gross income.
Solution:
Generally, under Internal Revenue Code Section 61(a)(12), income from discharge of debt is includible in gross income. This requirement affects taxpayers who lose their homes to foreclosures, default on consumer loans (e.g., automobile loans) or credit card debt.
The battering of the housing sector continued last month as the number of homes receiving foreclosure notices surged to 272,171, up 8% from June and up 55% from July 2007, according to a RealtyTrac Inc. report released today.
The report tracked foreclosure filings, which include default notices, auction sale notices and bank repossessions.
Bank repossessions, or REOs, saw the biggest increase in activity, rising 184% year over year.
The dollar continued its rise today, gaining more ground against the euro and rising to a nearly two-year high against the British pound.
The Euro fell to 0.68 against the dollar in trading this morning, falling more than 13 cents from its high July 15.
The dollar also posted strong gains against the pound, which was down to 1.862 against the dollar, from a value of 1.868 just yesterday.
The strengthening dollar —
The New York Stock Exchange and Nasdaq OMX Group Inc. of New York will have increased competition now that BATS Trading Inc. of Kansas City, Mo., has been given the go-ahead by the Securities and Exchange Commission to operate as a registered national securities exchange.
BATS, an acronym for Better Alternative Trading System, is expected to launch its new stock exchange two months after its transition from its current regulatory status of electronic communications network takes effect.
FundQuest of Boston said today that it will team up with Fintegra Financial Solutions to make the FundQuest Institutional Spectrum platform available to Fintegra’s advisers.
The platform offers a range of investment products and capabilities featuring eight types of managed accounts.
The product offerings also include five mutual fund managed accounts, a separately managed account, a unified management account and an adviser-directed account.
NYSE Regulation Inc., the regulatory body of NYSE Euronext Inc. of New York, fined Credit Suisse Group Inc. $350,000 for trading ahead of customer orders.
According to the complaint, the Zurich, Switzerland-based bank purchased or sold NYSE-listed stock while in possession of similar orders from clients.
Additionally, on 11 occasions the firm failed to obtain customer permission to trade ahead of or along with customer orders, and violated other exchange management and documentation rules.
The Financial Industry Regulatory Authority Inc. of New York and Washington has established a special process for resolving action rate securities cases in arbitration.
The new process, announced Aug. 7 by Finra, is similar to a pilot program announced earlier by the self-regulatory organization for other securities arbitration cases.
Qualifying investors will have the option of getting their claims heard by a three-person panel of arbitrators, none of whom would be affiliated with a firm that recently sold auction rate securities.
Two former brokers with Banc of America Investment Services Inc. won a total of $1.2 million in an arbitration case that focused on allegations the broker-dealer sullied their reputations and potentially damaged their future relationships with clients.
Both brokers, who are based in Las Vegas, left Banc of America Investment Services and became affiliated with Commonwealth Financial Network of Waltham, Mass., in October 2004.
Two former brokers with Banc of America Investment Services Inc. won a total of $1.2 million in an arbitration case that focused on allegations the broker-dealer sullied their reputations and potentially damaged their future relationships with clients.
Both brokers, who are based in Las Vegas, left Banc of America Investment Services and became affiliated with Commonwealth Financial Network of Waltham, Mass., in October 2004.
Investors redeemed an estimated $27 billion from stock mutual funds in July, according to a report released today by Strategic Insight Inc., a mutual fund consulting firm in New York.
The redemptions were triggered by an 8% drop in U.S. stock indexes in June, followed by further deterioration in July and rising economic anxiety, according to the firm.
Included money market and bond fund gains, mutual funds as a whole enjoyed net inflows in July of $52 billion.
Ameriprise Financial Inc. has chosen Donald Froude to be president of its U.S. Advisor Group.
Mr. Froude, a veteran of Legg Mason Inc., will lead the company’s 12,000 reps and advisers on various platforms and will report to chairman and CEO Jim Cracchiolo.
He will join the company in September.
In addition, Securities America Inc. of Omaha, Neb., Ameriprise’s independent-contractor broker-dealer, will report to Mr. Froude.
The Financial Industry Regulatory Authority Inc. and NYSE Regulation Inc. have announced an agreement with 10 U.S. exchanges to share centralized control over detecting insider trading .
If the new approach is approved by the Securities and Exchange Commission, it would replace the current system in which each equity exchange is responsible for surveillance of trading on its market and any investigations and enforcement actions involving its members.
Wilke and Associates, Inc.
Week 1: Identifying a ‘platinum’ level of service
Week 2: Delivering ‘platinum’ service
Week 3: Creating service levels for second- and third-tier clients
Week 4: Communicating your service levels to clients
The challenge: If your wealthiest clients account for the bulk of your revenue and deserve most of your attention, how do you best structure your practice and your work flow to provide clients with the service they need?
A federal judge has approved Citigroup Inc.'s $33 million class action settlement with female brokers in its Smith Barney brokerage division.
Judge Phyllis Hamilton of the U.S. District Court in San Francisco approved the settlement at a hearing Wednesday; she granted preliminary approval in April (InvestmentNews, April 4) .
The class action, filed in 2005, involves 1,285 female brokers who accused Smith Barney of passing over women when assigning large accounts, promotions and raises, and of depriving women of the same training and sales support that their male counterparts receive.
Fortress Investment Group LLC has forked over a $300 million share grant to one of its star traders to keep him from bolting the publicly traded hedge fund, the Wall Street Journal reported today.
Adam Levinson, who has been with Fortress since 2002, will join five principals who hold around $3 billion (or 77%) of the stock in the Chicago-based hedge fund, which went public last year, the Journal said.
Mr. Levinson helps oversee a staff of 170 that place bets on a variety of global investments for the firm's $8.8 billion global macro hedge fund.
The Securities Industry and Financial Markets Association of New York and Washington today announced new leadership for the steering committee of its asset management group.
The group is the voice for the buy side within the securities industry, and was one of the three major business groups formed when the old Securities Industry Association merged with the Bond Market Association.
Richard Weil, chief operating officer of Newport Beach, Calif.-based Pimco was elected chairman of the asset management group.
The Securities and Exchange Commission has filed charges against Wextrust Capital LLC, its principals and four entities affiliated with the investment banking firm for an alleged Ponzi-type scheme going back to at least 2005.
The scheme, which raised roughly $255 million from about 1,200 investors, primarily targeted members of the Orthodox Jewish community, according to the SEC complaint filed yesterday in U.S. District Court for the Southern District of New York in Manhattan.
If someone were about to step in front of an oncoming bus, you would stop them, wouldn't you? Similarly, when clients are about to shove their retirement nest egg under a bus (in the figurative sense, of course), you feel obliged to protect them from their folly.
Here is a typical example: A couple in their early 60s comes into your office as a referral from a long-term client. The couple is about to retire and asks you to review their investments and create a portfolio that meets their two most important objectives: safety and income in retirement.
The Securities and Exchange Commission will distribute more than $48 million to 12,115 investors who were the victims of a fraudulent financial reporting scheme orchestrated by European media giant Vivendi Universal SA of Paris, the SEC announced today.
The settlement affects defrauded investors from 16 countries, including the United States, more than half of whom bought their Vivendi stock on foreign exchanges.
The SEC filed an enforcement action in December 2003 against Vivendi, its former chief executive, Jean-Marie Messier, and its former chief financial officer, Guillaume Hannezo, alleging violations of anti-fraud and other provisions of federal securities laws.
UBS AG has agreed to buy back $19.4 billion in auction rate securities on which the value collapsed in February, during the global credit crunch.
In a deal with federal and state regulators, UBS agreed to repurchase the securities from retail and institutional clients. The agreement comes a day after the Securities and Exchange Commission announced a preliminary settlement with New York-based Citigroup Inc. to immediately buy back, at par value, the $7.5 billion in auction rate securities it sold to investors (
A flurry of legal agreements and actions involving the sale of auction rate securities on Thursday was capped off when Merrill Lynch & Co. Inc. of New York said that it will offer to buy back the moribund securities at par value that it sold to its retail clients.
Merrill Lynch, the largest U.S. retail brokerage, has more than 30,000 clients who hold municipal, closed-end fund and student loan auction rate securities. Those clients currently hold more than $12 billion in auction rate securities, but the firm expects the value to be $10 billion when the buyback begins.
Productivity of businesses in the U.S. grew at an annual rate of 2.3% in the second quarter of 2008, according to a report released this morning by the Department of Labor’s Bureau of Labor Statistics.
While the data was not as strong as the 2.5% rate that had been predicted by economists polled by Thomson Reuters, the bureau did describe the growth as “solid.”
Unit labor costs, which are used as a gauge of inflation and profit pressures, rose 1.3%. The statistic is closely watched by the Federal Reserve and indicates the increasing inflationary pressures that the central bank’s monetary policy committee is facing.
Retirement planning was a top priority for 42% of 1,305 independent advisers polled by Curian Capital LLC, and a full 90% said they felt that a sizeable portion of their clients — nearly 80% — would not have adequate funds during retirement to meet their expected standard of living.
Forty percent said the biggest threat to clients’ retirement income plan was lack of sufficient time to build wealth.
Retirement-income-planning tools such as online calculators and other tools provided by firms were considered helpful by 97% of the respondents.
The age at which workers can receive full Social Security benefits should be increased to help reduce the looming insolvency of the system, the American Academy of Actuaries said today.
“The sooner policymakers act, the more options they will have,” Thomas Terry, vice president of the Washington-based academy and chairman of its Pension Practice Council, said at a press conference this morning.
He is also chief executive of JPMorgan Compensation and Benefit Strategies, a unit of JPMorgan Chase & Co. of New York.
Investors who bought auction rate securities are the latest victims of Wall Street’s oldest ploy.
Actually, let me clarify that point, since “victim” and “ploy” carry connotations, respectively, of innocence and guilt. In the case of the ARS mess, I am afraid that the true picture is grayer than it is black or white.
The unfortunate holders of auction rate securities certainly warrant sympathy. Each owner is stuck with thousands, or hundreds of thousands, of dollars (or more) of securities that were billed as being as good as cash but are now floating in limbo or are worth less — in some cases much less — than their face value.
Gabelli Entertainment and Telecommunications Acquisition Corp. of Greenwich, Conn., plans to raise $200 million through an initial public offering to buy a financial services, media or telecommunications company, according to a filing with the Securities and Exchange Commission.
The so-called “blank check” company is headed by Mario Gabelli, who also is chairman of Gamco Investors Inc. of Rye, N.Y.
Gabelli Entertainment has up to 30 months to find and purchase a business or be liquidated, according to terms of the S-1 form filed with the government.
The pending-home-sales index rose 5.3% in June, after hitting a six-year low in May, according the National Association of Realtors.
The index, which measures signed sales contracts, increased to 89 from 84.5 in May, but remains 12.3% below the June 2007 level.
June’s reading was the highest for the index since October, when it hit 89.8.
Contract signings increased 9.3% in the South, 4.6% in the West, 3.4% in the Northeast and 1.3% in the Midwest.
The European Central Bank — the central bank for the Eurozone currency area — today decided to leave its three key benchmark interest rates unchanged.
The Frankfurt, Germany-based ECB has left its “minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility” unchanged at 4.25%, 5.25% and 3.25%, respectively, according to a statement from the ECB.
Samuel Israel III, founder of hedge fund company Bayou Group LLC, pled guilty to charges related to his attempts to jump bail and flee on the day he was to begin a 20-year sentence for orchestrating a $400 million fraudulent hedge-fund scheme.
“I plead guilty,” Mr. Israel said in a White Plains, N.Y, federal court, before U.S. Magistrate Judge Lisa Margaret Smith, who refused to accept the plea and suggested that he enter the plea before the U.S. District Court for the Southern District, in New York City, according to published reports.
The Securities and Exchange commission moved yesterday to stop an allegedly fraudulent scheme operated by Paul G. Merklinger and his company, Encore Associated Leasing LLC of Novi, Mich.
The SEC alleges that Mr. Merklinger and his son, Brian, raised more than $7.2 million from investors who thought they were investing in a tire-shredding and recycling business.
However, the SEC claims that the tire-shredding equipment was not operational, and that there was “no reasonable basis” for Mr. Merklinger’s income.
Ambac Financial Group Inc. of New York settled one of its largest collateralized debt obligations Friday, paying $850 million to Citigroup Inc.
The payment terminates the insurance contract Ambac had with the New York-based bank, covering AA Bespoke, a $1.4 billion AA-rated CDO of asset-backed tranches composed of mortgage-related securities, most of which have been downgraded to below investment-grade, Ambac said in a statement.
Members of the New York Mercantile Exchange are threatening to block CME's bid unless they're offered an additional $408 million, Nymex members' second threat to end the deal, according to ChicagoBusiness.com
Mercantile Exchange members are threatening to block CME Group Inc.'s $8.7 billion takeover bid unless they get an extra $408 million from the Chicago firm.
"There is a big lobbying effort going on here," says Stanley Meierfeld, a former Nymex director. The dissidents were circulating a petition last week among the exchange's 816 members, soliciting votes against the deal. Just 205 votes are needed to kill it.
The Securities and Exchange Commission yesterday voted unanimously to propose measures to help investors find free and complete financial information about municipal bonds on the Internet.
As it stands now retail investors have little access to such information without paying fees and must generally receive the information in paper form.
The rule amendments proposed by the SEC would designate the Municipal Securities Rulemaking Board of Alexandria, Va., as the central repository for ongoing disclosures by municipal issuers.
In the past two years, 53% of registered investment advisers bought or considered buying another advisory firm, according to a new study from Pershing Advisor Solutions LLC.
The Jersey City, N.J., firm is a subsidiary of the Bank of New York Mellon Corp.
According to the study, “Real Deals 2008: Definitive Information on Mergers and Acquisitions for Advisors,” which was jointly released today with Moss Adams LLP of Seattle, the average number of mergers and acquisitions deals in the past two years rose 37%.
IndyMac Bancorp Inc. of Pasadena, Calif., today filed for Chapter 7 bankruptcy, a move which will liquidate its remaining assets.
Once the second-largest mortgage lender in the country, Indymac has been under the control of federal regulators since July 11, after a run on the bank significantly reduced its liquidity.
According to the filing, the bank has outstanding liabilities of $100 million to $500 million and fewer than 50 creditors.
While U.S. marshals were hunting down convicted hedge fund fraudster Samuel Israel III, their agency was busy recovering most of his firm's remaining assets.
In one of its lesser-known roles, the U.S. Marshals Service helped recover $115 million by selling Stamford, Conn.-based Bayou Group LLC's failed investments.
Most of the assets, which included stocks and bonds, were liquidated by Kroll Inc. of New York and passed along to the victims, said David Turner, spokesman for the Marshals Service.
Putnam Investments of Boston announced today that it has been selected by New England Electrical Workers Money Purchase Plan & Trust to manage its $98 million defined contribution plan.
The plan’s investment offerings include funds from 10 different fund families, as well as some of Putnam’s Retirement Advantage target retirement funds, the firm noted in the announcement.
The plan has more than 2,500 participants based in New England.
Financial regulators today pledged to act quickly on recommendations to make financial statements more useful and transparent.
The final report of the 17-member Advisory Committee on Improvements to Financial Reporting recommended improved disclosures about fair value and historical cost accounting.
The committee did not try to resolve which type of accounting was preferable.
“Certain types of assets and instruments are appropriately valued at historical costs, and certain at fair value,” Robert Pozen, chairman of the advisory committee and chairman of Boston-based MFS Investment Management Inc., said at a press conference at the SEC in Washington this morning.
Credit rating agencies should improve their disclosures and standardize their rating methods for different types of securities, the Securities Industry and Financial Markets Association recommended today in a report.
The 37-member Credit Rating Agency Task Force issued the report to “rebuild investor confidence in the rating process,” Securities Industry and Financial Markets Association chief executive Tim Ryan said in a telephone press conference this morning.
The economy grew at an annual rate of 1.9% in the second quarter, up from an increase of 0.9% in the first quarter, but a slower growth rate than had been expected.
The data on real gross domestic product were released today by the Commerce Department’s Bureau of Economic Analysis, which credited the rise to a decrease in imports and an increase in exports, as well as acceleration in personal-consumption expenditures.
Investment bank Merrill Lynch & Co. announced late Monday that it will record yet another huge write-down as it sells off most of its troubled asset-backed securities and terminates hedging positions linked to bond insurers in an effort to shed its riskiest businesses, according to Crain's New York Business.
With the sales, Merrill Lynch expects to record $5.7 billion pre-tax writedowns in the third quarter.
The Manhattan-based firm also said it plans to raise $8.5 billion by selling shares in a public offering. Temasek Holdings, Singapore’s sovereign wealth fund, has agreed to purchase $3.4 billion of Merrill’s common stock as part of that exercise.
A Democratic bill that would impose limits on institutional investments in energy commodities failed to pass a procedural vote in the Senate this morning, but aides to Democratic and Republican Senate leaders said they would continue working through the weekend toward a compromise that could clear the way for a full vote, according to Pensions & Investments.
The legislation, introduced by Senate Majority Leader Harry Reid, D-Nev., and other Senate Democrats on July 15, has been stalled by a dispute between Senate Democrats and Republicans about what other provisions besides speculation limits should be included in the bill.
