In an unprecedented move, the SEC warned S&P that it might be suing it over its rating of a mortgage-backed bond. It’s the first warning a credit rating firm has gotten over its behavior leading up to the financial crisis.
Senate Commerce Committee Chairman Jay Rockefeller has come up with a new tactic to push companies like Sony to disclose hack attacks and data security breaches more promptly: He’s asked the Securities and Exchange Commission to require companies to treat attacks as time-sensitive information that must be provided to investors.
Johnson & Johnson Settles With SEC & DOJ For $70 Million For Bribing Doctors Overseas, Paying Kickbacks To Iraq
Johnson & Johnson may have been eliminated from the Worst Company In America tournament, but the company’s craptastic year continues, as J&J has settled with the Securities and Exchange Commission and Dept. of Justice over allegations that it violated the Foreign Corrupt Practices Act by illegally bribing doctors in Europe and paying kickbacks to Iraq… At least it wasn’t another product recall.
The owner of the oil rig that exploded in the Gulf issued an apology after calling 2010 its “best year” ever in safety. Transocean did not comment on the safety bonuses it awarded top execs for meeting and exceeding internal safety goals, even considering the disaster at the rig run by BP resulting in 11 workers dead and 200 million gallons of oil spilled.
After the Securities and Exchange Commission accused IBM of bribing officials in Asian countries to secure government contracts over an 11-year period, the company agreed to pay a $10 million settlement.
Officials today announced they can trace May’s stock market flash crash to a single transaction. On May 6, 2010, at 2:32 pm, Waddell & Reed Financial of Kansas initiated the sale of 75,000 E-Mini Standard & Poor’s 500 futures contracts. A sale of this size, about $4.1 billion worth, would usually happen over five hours, but instead the trading algorithms sold them within 20 minutes “without regard to price or time.” At 2:42 pm, markets starting plunging 5% in five minutes.
As of yesterday’s 3-2 SEC ruling, the little guy just got a little more power in the boardroom. When shareholders want to nominate people to the board, the company now has to include those names on the regular ballots passed out to everyone before the annual meeting, even if the company doesn’t like them.
To avoid a costly and extended legal process and staunch further image degradation, Goldman Sachs is talking to the SEC about tying up their big probe and all their little probes in a little bow.
While some SEC employees were up to their eyeballs in porn during office hours in recent years, apparently some have continued to do their job, as Dell announced today that it is nearing a settlement to a prolonged SEC investigation that could cost the computer company upwards of $100 million.
Might there be more to last week’s crash than a “fat fingered” trade, or someone mistakenly entering a “billion” instead of a “million?” An online stock trader has a video showing an unusual spike in trading volume, followed by a very quick sell-off, by funds at large investment firms BlackRock and Vanguard and some other funds 30 to 15 minutes before the big crash. Prescience? Watch the video, check the logs, and decide for yourself.
Treasury Secretary Tim Geithner will meet with federal regulators and top officials from the NYSE and other exchanges to dicuss whatever the hell happened last Thursday that caused the stock market to completely freak out.
The AP says that a computerized selloff that may have been caused by a typo (the theory is that someone typed $16 billion when they meant $16 million) caused the biggest ever drop during a trading day. How could one typo result in such massive turmoil? The idea is that the erroneous trade triggered other computers to sell.
Bond markets slammed Goldman Sach this week, making the firm pay more for cashizzle then even the bailed-out Citigroup. Goldman’s yield rose to 2.79 percentage points over Citigroups’ 2.29. At the end of March, before the legal and regulatory headaches began, Citigrouop’s spread was wider than Goldman’s by .45 percentage points. Higher yields on debt usually indicate a higher risk of default or other negative credit events. Concerns continue to mount over how long and how deep the firm will be tainted by the SEC’s civil lawsuit and the investigation by federal prosecutors, and what other skeletons the scrutiny might shake out.
The Washington Post is reporting that the porn-lovin’ employees of the SEC have not been fired. Here’s the breakdown:
When the SEC announced its fraud complaint against Goldman Sachs, people noted that the penalties involved would involve money, not jail time. But an attorney writing for seekingalpha.com argued over the weekend that John Paulson, the hedge fund manager who worked with GS to create “synthetic derivatives,” accessed FICO scores to create his financial product and therefore violated the Fair Credit Reporting Act (FCRA)–which could mean a penalty as high as $1 billion, and even jail time if the FTC or Justice Department decides to go after him.
It’s not exactly Bernie Madoff’s $65 billion, but the Securities And Exchange Commission has charged a Florida businessman with operating a $900 million Ponzi scheme, telling people they were investing — risk-free and at interest rates upward of 26% — in his grocery business, when in fact he was just using the money to fund his lavish lifestyle.
“Waterfall” provisions of asset backed securities are the rules that explain the flow of funds in the transaction, and they are are very hard to read. Blogger/professor Jayanth Varma calls them “horrendously complicated,” leading trustees to make mistakes or pull stunts that investors never expected. To remedy this, the SEC is proposing that the provisions be written in a programming language, filed on EDGAR, and made available as downloadable Python source code.