FBI

Wall Street firms dodge a bullet

Jim Kim — Sun, 05 Oct 2008 09:42:49 -0400

The Washington Post reports that the Justice Department has decided it will not seek indictments against Wall Street firms, concentrating instead on individuals. So it seems unlikely that we'll see another Arthur Andersen, which was (in)famously dealt the corporate death sentence six years ago in the wake of the Enron scandal. But this certainly doesn't mean prosecutors are going easy. If anything, individuals ought to be more nervous. There will be more resources to take a look at such activity as false and misleading statements and insider dealing. The FBI has opened investigations at no fewer than 26 companies. You can bet that there will be some indictments. You can't have an implosion of this magnitude and not have indictments.

For more:
- here's the article

Illinois to sue Countrywide; tip of iceberg?

Jim Kim — Wed, 25 Jun 2008 07:31:02 -0400

We've noted before that prosecution and regulatory action always follow scandals. So the news that the state of Illinois will sue Countrywide and its CEO, Angelo Mozilo, come as no surprise. You can bet that other states are mulling similar action. The charges will be familiar: misleading marketing, perverse incentives to sell inappropriate mortgages, lack of disclosure, inflated income...those sorts of things.

So what effect this will have on Bank of America, which has committed to a purchase of the troubled mortgage company? This may be the tip of a very large mountain of regulatory action from a host of players, including the SEC and FBI. Bank of America--CEO Ken Lewis in particular--has a lot riding on this. Countrywide needs to clean up fast.

For more:
- here's a New York Times article

A turning point for investment banks

Mon, 19 May 2008 06:59:57 -0400

We've wondered a lot over the past year about what's next for Wall Street, as in what's the next big thing? The subprime boom, as it continues to wind down, will not reflate anytime soon. We have to assume that's permanent. That drove a lot of growth, which will moderate throughout the year. But what about 2009 and 2010? Well, Investors' Business Daily notes that there will be some easy year-over-year comparisons that likely will return the industry to double-digit growth. But then you get to 2010 and we're right back to single digits. Perhaps that's the most we can hope for, meaning maybe we should get used to manufacturing industry-like returns. Then again, perhaps something big product is on the drawing board as we speak. I'm reminded of the tech industry a few years ago. No one could see past PC operating systems. Then, the Internet came along.

For more:
- here's a look at earnings from Investors' Business Daily

ALSO NOTED: Does Lehman move suggest bigger equity derivative losses?;Lenders pressure Carlyle fund more; and much more...

Mon, 10 Mar 2008 07:59:50 -0400

Company News:
> Thornburg restate 2007 loss. Article
> Does Lehman move suggest bigger equity derivative losses? Article
> Lenders pressure Carlyle fund more. Article

Industry News:
> Risk managers getting no respect? Article
> Bank serving the underserved. Article
> Credit crisis ripples. Article
> Munis recovering? Article

Regulatory News:
> FBI looking at Countrywide. Article

And Finally... How to eat well at work. Article