Police say a 29-year-old Merrill Lynch equity trader brutally murdered two women and stashed their bodies at his expensive apartment complex in Hong Kong, where he's currently facing murder charges.
If you are unfamiliar with the specifics of the Penn State scandal, you may be under the impression that the real victims are the children who were allegedly raped and otherwise abused by assistant coach Jerry Sandusky. But you couldn't be more wrong! The real victims are Penn State alumni. More specifically: Penn State alumni brokers.
Former Merrill Lynch CEO John Thain is no friend of Ken Lewis, the outgoing chief executive of Bank of America. Thain worked with Lewis last year to engineer the merger of Merrill and BofA, but was kicked to the curb shortly after the deal was complete and almost instantly turned into the fall guy for the messy merger, at least in the version of events that Lewis recounted to analysts, reporters, and government officials.
So much for Bank of America's sweetheart settlement with the Securities and Exchange Commission. At a hearing yesterday, Judge Jed Rakoff declined to approve the deal that the bank struck with the SEC a few weeks ago, allowing it to pay a mere $33 million to settle charges that it had failed to disclose Merrill Lynch's plans to pay out billions of dollars in bonuses on the eve of their merger.
That sure was quick. This morning, the SEC filed suit against Bank of America, accusing it of lying to investors when it announced that newly-acquired Merrill Lynch wouldn't pay out any year-end bonuses. (In fact, Bank of America had already signed off on $5.7 billion in Merrill payouts.) Now the bank has settled the charges—"without admitting or denying the allegations," of course—for a modest $33 million. [NYT]
• Just in case you've missed the excitement on TV, Ben Bernanke appeared on Capitol Hill today to testify about Bank of America's acquisition of Merrill Lynch. Lawmakers grilled him, Bernanke played defense: quality entertainment as usual! [NYT, WSJ]
• Financier Allen Stanford appeared in court today and pleaded not guilty to charges he swindled investors out of $7 billion. [WSJ]
• The job market hasn't improved: The number of Americans filing jobless claims rose last week to the highest level in more than a month. [CNN]
• Good news! AIG is reducing its debt with the Fed by $25 billion. [NYT]
• Andrew Cuomo is recusing himself from the investigation into the hedge fund that handed his finances and is now tied to Cuomo's kickback query. [BN]
• Employees at Goldman Sachs can expect the "biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year." [Guardian]
• Banks like Merrill Lynch, UBS and Citigroup are "hiking pay for their top investment bankers in an attempt to stop an exodus of talent." [FT]
• Bill Gross of Pimco has "emerged as one of the nation's most influential financiers." How do we know this? Tim Geithner has him on speed-dial. [NYT]
• Russian-American billionaire Len Blavatnik is suing JPMorgan for allegedly mismanaging an investment account with $1 billion in assets. [NYT]
• Jack Welch is lending his name to a new online MBA program. [WSJ]
• Warren Buffett auctions off lunch every year for charity. The bidding is open, but it's not expected to rake in the fortune it did in years past. [Guardian]
• Bank of America chief Ken Lewis and several federal officials will be asked to testify under oath as part of an investigation into whether BofA was pressured by the government into completing its deal with Merrill Lynch. [WSJ]
• The stress test tally thus far: Of the 19 big banks under review, six don't need to raise capital, seven others need to come up with some cash, and it remains to be seen what category the other six will fall into. [WSJ]
• General Motors, which faces a June 1 deadline to sort out its troubles or file for bankruptcy, reported a $6 billion loss for the first quarter. [NYT]
• The number of people filing initial claims for unemployment benefits fell last week, and to their lowest level in more than 3 months, too. [CNN]
• After a two-month wait, the nation's 19 largest banks will start to hear today how they did on those stress tests conducted by Washington regulators. [NYT]
• If the test indicates Citigroup will need more money to stay afloat, Vikram Pandit can probably kiss his job as the bank's CEO goodbye. [NYP]
• Andrew Cuomo is urging federal regulators to investigate allegations that Hank Paulson and Ben Bernanke applied pressure to Bank of America chief Ken Lewis to go ahead with the acquisition of Merrill Lynch. [WSJ, NYT, CNN]
• Chrysler is preparing to file for Chapter 11 as soon as next week. [WSJ]
• Bank of America CEO Ken Lewis testified under oath that Fed chairman Ben Bernanke and former Treasury Secretary Hank Paulson pressured him to keep quiet about BofA's plans to buy Merrill Lynch. [WSJ, CNN]
• Credit Suisse reported a profit of $1.7 billion for the first quarter. [BN]
• Executives from a bunch of credit card companies will face off against President Obama today over possible limits on fees and interest rates. [BN]
What do you do when your career on Wall Street has come to an ignominious end and you need to keep busy lest you end up spending the rest of your days playing bridge or golf? Take a job in academia! Greg Fleming, the former president of Merrill Lynch, is now a member of the Yale Law School faculty: This semester, he's teaching a class that will explain the "economic events of the past year," which should also help Fleming shed some light on what exactly he was doing as the man in charge of risk management at Merrill Lynch the past few years. Fleming isn't the only one.
• Stocks dropped at the opening bell this morning following the Commerce Department's report that retail sales fell 1.1 percent last month. [WSJ]
• The SEC is looking into whether Bank of America broke the law by not telling shareholders about Merrill Lynch's plan to pay out billions in bonuses. [FT]
• President Obama is expected to tap Fannie Mae chief Herb Allison to head up the government's $700 billion financial rescue program. [WSJ]
• From Dick Fuld to Tim Geithner, Steve Rattner to former AIG chief Bob Willumstad, the big guns of finance have a friend in Michael Bloomberg. [NYT]
• Lehman Brothers "is sitting on enough uranium cake to make a nuclear bomb as it waits for prices of the commodity to rebound." No, this is not a joke. [BN]
• The Treasury is expected to announce in the next few days that it will be extending bailout funds to a handful of life insurance companies. [WSJ]
• Brian Moynihan, who took over Merrill Lynch after John Thain was ousted, is emerging as a potential successor to Bank of America chief Ken Lewis. [WSJ]
• Not that Lewis necessarily needs to be replaced, at least according to Meredith Whitney, who (bizarrely) says Lewis has "done a great job." [BN]
• Blackstone, KKR, and Carlyle are in the running to acquire the mobile phone operations that Verizon Wireless is selling now that it's acquired Alltel. [BN]
• Looks like Jim Cramer has a new enemy. Nouriel Roubini is calling the CNBC star "a buffoon," and Cramer has since responded in kind, of course. [NYP]
• A half-dozen bidders have emerged for AIG's asset management unit, although efforts to sell it have been "complicated," not surprisingly. [WSJ]
• Congressman Dennis Kucinich has asked the SEC to determine if Bank of America violated the law by not disclosing Merrill Lynch's bonus plan. [DB]
• GM is speeding up preparations for a possible bankruptcy filing. [BN]
• Quadrangle Group has halted fundraising for its next fund. [Crains]
• The Tokyo office of Merrill Lynch Global Private Equity has been closed. [DB]
• RBS may eliminate an additional 9,000 jobs. [BN]
• It's never been a better time for a hostile takeover. [NYP]
• What's Hank Paulson doing with his money these days? He's backing his son's effort to bring Major League Soccer to Portland, Oregon, that's what. [BN]
• The unemployment rate jumped to 8.5 percent in March, the highest since 1983, after a total of 663,000 jobs were eliminated. [NYP, BN]
• At the G-20 summit in London. world leaders agreed to pump $1 trillion into the world economy to help bail out developing countries. [NYT]
• Bank of America chief Ken Lewis says it may take a few quarters to pay bank the $45 billion it received in bailout money. Also: He says Countrywide and Merrill "will prove to be two of the best acquisitions we've ever made" [DB]
• Related: Another top Merrill banker is ditching the firm. [WSJ]
• It appears it's the end of the line for Daniel Zwirn's hedge fund. [DB]
• Hedge fund managers are paying more attention to customers after sustaining heavy losses. So they're, like, wearing ties to work and stuff. [BN]
• A Florida accountant became the first U.S citizen to be arrested as part of the investigation into Americans who hid assets with help from UBS. [AP]
• This can't bode well: American Airlines is in talks to raise cash from its credit card partner, Citigroup, by selling frequent flyer miles. [Reuters]
• It's not as fun being on top these days: The median salaries and bonuses for the CEOs of 200 big companies fell 8.5% to $2.24 million in '08. [WSJ]
• President Obama will meet with 15 big banking CEOs in Washington today, including Vikram Pandit of Citigroup, Jamie Dimon of JPMorgan Chase, and Lloyd Blankfein of Goldman Sachs. Obama plans to "quiz" them "about developments in the economy and their businesses." Sounds like fun. [CNN]
• Hedge fund managers can expect a lot more oversight in the future, which isn't something they're too excited about, not surprisingly. [Reuters, NYP]
• Andrew Cuomo says he now plans to widen his investigation of AIG. [DB]
• Many of the AIG execs charged with preventing the insurance giant from taking on too much risk still have jobs at the company for some reason. [WSJ]
• The exodus of Merrill bankers from Bank of America continues. [DJ, DB]
• Swiss private banks are banning top execs from traveling abroad for fear they will be detained as part of a crackdown on bank secrecy. [Reuters]
• Hong Kong billionaire Li Ka-Shing says it's time to start buying stocks and real estate again. Make of that what you will. [NYT]
