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Posts Tagged ‘Global Financial Crisis’

EU, Merkel Urge Swap Regulation as Greece Takes Plea to U.S.

March 10th, 2010

Before You Invest

(Bloomberg) — The European Union’s top regulatory official said the bloc will consider banning “purely speculative” credit-default swaps as German Chancellor Angela Merkel called for a crackdown on derivatives trading to prevent a rerun of the Greek financial crisis.

European Commission President Jose Barroso said today the 27-nation region will “examine closely the relevance of banning purely speculative naked sales on credit-default swaps.” Merkel, speaking before Greek Prime Minister George Papandreou meets President Barack Obama in Washington today, said the EU must take the lead in curbing derivatives.

“We’re of the opinion that a quick implementation of actions in the area of CDS has to happen,” Merkel told reporters in Luxembourg.

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Tags: Angela Merkel, Barack Obama, Chancellor Angela Merkel, Credit Default Swaps, Depository Trust, European Commission President, Executive Arm, Financial Regulator, Fiscal Crisis, George Papandreou, German Chancellor Angela Merkel, Global Financial Crisis, Global Regulation, Greek Bonds, Greek Prime Minister, Jose Barroso, Lender Of Last Resort, Regulatory Official, Speculative Action, Utter Disregard

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Citigroup plans to sell hedge fund business

February 26th, 2010

Before You Invest

Citigroup is in talks with SkyBridge Capital to sell its hedge fund business worth $4 billion.

An unnamed source told the Wall Street Journal that the investment banking group is thought to be in “advanced talks” with the organisation, which is run by two former traders from Goldman Sachs.

Assets in the fund include $2.5 billion which Citi advises on, $500 million in capital tied to hedge fund stakes and $1 billion worth of hedge fund investments.

Details of the deal, including how much SkyBridge would be willing to pay, have yet to be disclosed, the news provider reported.

Citigroup announced during 2009 that it would be looking to offload $715 billion worth of assets in a bid to reduce its exposure to risk and the bank is thought to still have more than $500 billion to shift.

According to the news provider, Citigroup has sold a number of assets including stakes in the Japan-based Nikko Cordial securities and Nikko asset-management businesses.

The sale of its Smith Barney brokerage business and consumer finance businesses in Portugal, Italy and Norway have also taken place as the bank attempts to recover in the wake of the global financial crisis.

Fund-of-fund investments in Citigroup increased in 2009 by more than 20 per cent, the news provider stated.

Posted in Finance Fraud

Tags: 1 Billion, Asset Management, Assets, Brokerage Business, Business Worth, Citigroup, Consumer Finance, Crisis Fund, Finance Businesses, Fund Business, Fund Investments, Global Financial Crisis, Goldman Sachs, Hedge Fund, Investment Banking Group, Nikko, Smith Barney, Unnamed Source, Wall Street, Wall Street Journal

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GEO hedge fund shut down by Goldman Sachs

January 26th, 2010

Before You Invest

Goldman Sachs has closed its Global Equity Opportunities (GEO) Fund.

The hedge fund, which was once deemed the organisation’s flagship investment vehicle, is thought to have shut during December of last year, an unnamed source told the Financial Times.

At its peak, GEO attracted up to $7 billion of investment but the sum dwindled to $200 million by the time it was closed by the bank, the newspaper reported.

GEO suffered during the start of the global financial crisis, losing an estimated $1.5 billion in the first two weeks of August 2007.
The fund traded in algorithms which were impacted by the subprime mortgage crisis of 2007.

Goldman Sachs, CV Starr & Co, Perry Capital LLC and real estate business man Eli Broad were among the investors who put together a $3 billion rescue package to keep the fund afloat.

The investment was eventually recouped but the fund never attracted the same level of interest following the losses of that period.

Meanwhile, Goldman Sachs recently unveiled results for the fourth quarter.

Profits of $4.8 billion were recorded by the bank in the period, which took annual earnings to $13.4 billion.

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Tags: Algorithms, Amp, Business Man, Capital Llc, Cv, Earnings, Eli Broad, Equity Opportunities, Estate Business, Financial Times, Flagship, Fourth Quarter, Global Equity, Global Financial Crisis, Goldman Sachs, Hedge Fund, Investment Vehicle, Quarter Profits, Subprime Mortgage Crisis, Unnamed Source

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SEC Charges Ex – New Century Execs In Subprime Case

December 9th, 2009

Before You Invest

Reuters- Three former executives at now-bankrupt lender New Century Financial Corp were charged with fraud by U.S. securities regulators on Monday, the latest government effort to pursue wrongdoing in the subprime mortgage market.

The U.S. Securities and Exchange Commission accused the three executives of trying to disguise New Century’s rapidly deteriorating performance from investors while releasing weekly internal reports entitled “Storm Watch.”

The 2007 failure of New Century, one of the largest independent providers of home loans to people with poor credit, rippled across the U.S.

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Posted in Finance Fraud

Tags: Angelo Mozilo, Brad Morrice, Civil Fraud, Civil Penalties, Countrywide Financial, Disgorgement, Dramatic Increases, Forerunner, Global Financial Crisis, Government Effort, Insider Trading, Loan Defaults, Mortgage Lender, Mortgage Lending, New Century Financial, New Century Financial Corp, Patti Dodge, Reuters, Securities And Exchange Commission, Subprime Mortgage Market

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Regulating derivatives could do more harm than good

October 23rd, 2009

Before You Invest

Rep. Eric Cantor, R-Va., writes that lawmakers are focusing on an easy target — the derivatives market — rather than identifying and tackling the root causes of the global financial crisis. Cantor, the Republican whip, warns that new regulations being considered by Congress could do irreparable damage to businesses and consumers. “Rather than the tool for gross financial manipulation it is portrayed to be, the derivatives market plays a very important role in solidifying the competitiveness of American businesses,” Cantor writes.

more at http://www.investors.com/NewsAndAnalysis/Article.aspx?id=509198

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Tags: American Businesses, Competitiveness, Congress, Consumers, Derivatives Market, Easy Target, Eric Cantor, Global Financial Crisis, Investors, Irreparable Damage, Lawmakers, Manipulation, Plays, Republican Whip, Target Market, Tool

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Citigroup chief agrees $100m bonus was excessive

September 18th, 2009

Before You Invest

The chief executive of banking giant Citigroup has admitted that the $100 million bonus paid to one of its traders was too much for one year’s work, particularly given the overall performance of the company.

Andrew Hall, who was born in the UK, helped to generate substantial returns for the finance organisation as head of its Phibro energy trading division, but Vikram Pandit told an audience in New York this week the payout was excessive in light of Citi’s problems.

Last year, the bank was forced to turn to the US government for $45 billion of aid in order to survive after being hit hard by the global financial crisis.

The state does have powers to reduce the amount of money paid in compensation deals but it may not be able to take action in this case given that Mr Hall’s contract was signed ahead of the February 11th cut-off date.

Earlier this month, it was announced that Mr Pandit has ceased using his corporate jet for private use.

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Tags: 100 Million, Ahead, Amount Of Money, Andrew Hall, Audience, Bonus, Chief Executive, Citi, Citigroup, Corporate Jet, Energy Trading, Finance, Giant, Global Financial Crisis, Pandit, Phibro Energy, Substantial Returns, Us Government

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Downturn creates “unique opportunity” for money launderers

June 1st, 2009

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The global financial crisis has presented organized crime syndicates with a “unique opportunity” to penetrate the financial system by buying up assets ranging from real estate to casinos, the head of the United Nations Office on Drugs and Crime (UNODC) has warned.
Speaking ahead of a meeting of G8 interior ministers in Rome, Antonio Maria Costa told Reuters that the freeze in interbank lending meant crime gangs were the “only ones left holding large amounts of cash”.

In 2005, he said organized crime syndicates held an estimated $322 billion in cash and last year, a raid on a suspected drug trafficker’s home in Mexico City recovered $206 million in bank notes – thought to be the largest cash seizure in history.

“We are talking about … syndicates which have become a threat to security in a number of regions,” he stated.

Mr Costa said regulatory reform presented an opportunity to expand anti-money laws beyond financial transactions to cover “vulnerable” sectors such as real estate, gambling and the hotel industry.

UNODC was established in 1997 by the merger of the Centre for International Crime Prevention and the United Nations Drug Control Programme.

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Tags: Antonio Maria, Crime Gangs, Crime Syndicates, Downturn, Drug Trafficker, Drugs And Crime, Financial Transactions, Global Financial Crisis, Hotel Industry, Interbank, Interior Ministers, International Crime Prevention, Maria Costa, Mexico City, Money Launderers, Regulatory Reform, Reuters, United Nations Drug Control, United Nations Office, Unodc

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Massive Ponzi Scheme Halted

May 26th, 2009

Before You Invest

The Securities and Exchange Commission has obtained an emergency court order halting a $68 million Ponzi scheme involving the sale of fictitious high-yield certificates of deposit (CDs) by Caribbean-based Millennium Bank.

The SEC alleges that the scheme targeted U.S. investors and misled them into believing they were putting their money in supposedly safe and secure CDs that purportedly offered returns that were up to 321 percent higher than legitimate bank-issued CDs.

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Tags: Advertising Campaigns, Angeloni, Cd Program, Certificates Of Deposit, Client Satisfaction, Correspondent Banking, Extensive Training, Geneva Switzerland, Glaring Omissions, Global Financial Crisis, High Net Worth Individuals, High Yield Certificates Of Deposit, Legitimate Bank, Millennium Bank, Ponzi Scheme, Privacy And Confidentiality, Satisfaction Record, Securities And Exchange Commission, Services Professionals, United Trust Of Switzerland

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Electronic Foreign Exchange: Booming in Crisis

April 23rd, 2009

Before You Invest

In the midst of the global financial crisis, electronic foreign exchange experienced a boom in 2008, with overall e-forex trading volume surging 37% year-on-year.

Foreign exchange markets the world over have been lifted by historic levels of volatility and by the inflow of investors seeking liquid markets and “plain vanilla” assets.

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