Sunday, December 8, 2013
5:24 AMSEC widens probe into hiring practices at banks
- Goldman Sachs (GS), Deutsche Bank (DB) and Credit Suisse (CS) have reportedly joined JPMorgan (JPM) on the list of banks being investigated for their hiring practices in China. Morgan Stanley and Citigroup are also being scrutinized.
- The SEC is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business.
- The probe into JPMorgan has uncovered an email from a senior JPMorgan executive in Hong Kong saying that the bank's recruitment program for family members of senior government and other officials - called Sons and Daughters - had an almost "linear relationship with winning assignments to advise Chinese companies." A spreadsheet tracks JPM's record for converting hires into business deals.
- However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy.
5:15 AMFreezing weather hits airlines, freight companies
- Airlines have canceled over 1,000 flights, while freight companies and online retailers have delayed deliveries, due to severe winter weather across the U.S., particularly in the south.
- American Airlines (AAMRQ, LCC) has been especially affected after more than 400 flights from Dallas/Fort Worth, American's largest hub, were scrapped.
- FedEx (FDX) and UPS (UPS) have also felt the impact of the weather, while eBay (EBAY) has warned of shipment delays.
- Meanwhile, ice storms have cut power to over 200,000 homes from Texas to Tennessee.
- More freezing weather is predicted for tomorrow.
- It's likely to take a while for the economic cost of the storm to be calculated. Insurer Aon (AON) reckons that the losses from the tornadoes and thunderstorms that hit the U.S. last month will top $1B. Allstate (ALL) may take a large hit after towns in Illinois, where it is the second-biggest insurer, were among those to feel the full wrath of the storms.
- ETFs: KIE, IAK, KBWP, KBWI
4:35 AMJudge OKs $500M BofA deal with pension funds over mortgage bonds
- District Court judge Mariana Pfaelzer has approved a $500M class-action settlement between Bank of America (BAC) and pension funds related to problematic mortgage bonds sold by Countrywide from 2004-7.
- BofA said that following the deal, the bank will have resolved up to 75% of its exposure to MBS claims resulting from its purchase of Countrywide in 2008.
- Judge Pfaelzer authorized the deal over the objections of the FDIC.
- The agreement follows a $404M settlement that BofA struck with Freddie Mac over mortgage-repurchase claims, which was announced on Monday last week.