Andrew Cuomo

Huh? Wall Street execs invited to contribute to Cuomo's campaign

Jim Kim — Thu, 20 Nov 2008 13:34:29 -0500

New York state attorneys general have a grand tradition of using the position as a stepping stone to greater political glory. But such ambitions can make for some odd moments. New York AG Andrew Cuomo has sent out invites for a big bash in two weeks, a combination birthday party and fundraiser for his Andrew Cuomo 2010 organization. The problem, according to the New York Post, is that some Wall Street executives received invitations, and a few are outraged. It certainly looks bad for the AG to be soliciting contributions from executives in the industry that he's pounding right now over executive pay practices. He has sought information about pay practices at nine companies that received TARP funds. He issued a press release asking Citi executives to not accept bonuses for 2008. The art work on the invitations apparently featured the scales of justice.

For more:
- here's the New York Post article

What will Citigroup do about executive bonuses?

Jim Kim — Mon, 17 Nov 2008 21:21:14 -0500

This would appear to be a no-brainer. After four straight quarters of massive losses, the elimination of 53,000 jobs, the unsuccessful and embarrassing attempt to buy Wachovia, and the spurning of Goldman Sachs, you would think Citi CEO Vikram Pandit would be firmly in favor of foregoing exec bonuses for 2008. By even keeping this as an option, he has stumbled into yet another PR mistake. The bank's desire to forego a decision on exec bonuses until the new year now has the New York AG Andrew Cuomo issuing press releases stating that "it seems only fair that top executives should shoulder their fair share in these difficult economic times. It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers and, now, Citigroup's own employees suffer." To be fair, the AG also mentions AIG. If UBS and Goldman execs deem that their execs do not deserve 2008 bonuses--and Goldman may end the year profitable--it would be hard to argue that Citi execs deserve them.

For more:
- here's the Cuomo statement

Cuomo looks into Fidelity-Goldman Sachs link

Jim Kim — Wed, 27 Aug 2008 14:10:13 -0400

Goldman Sachs has already agreed to buy back about $1.5 billion in auction rate securities held by customers and pay a $22.5 million fine. But the New York Attorney General is still looking into the bank regarding the ARS market. The AP reports that Andrew Cuomo's office is probing whether Fidelity Investments was given various incentives to sell ARSs underwritten by Goldman Sachs in the form of other services. If so, it could well be interpreted as a disclosure issue. This is not unlike advisers hawking mutual funds from companies with which the adviser's firm had a marketing relationship with big-time incentives--a clear no-no. There is some intrigue given that Fidelity had received a letter from Massachusetts' top securities regulator urging the firm to buy back frozen auction-rate securities. Fidelity apparently left the door open to "possibly being helpful on the auction-rate securities matter," William Galvin, secretary of the commonwealth, said.

For more:
- here's the AP article

NY AG says Citi destroyed documents

Jim Kim — Sun, 03 Aug 2008 10:17:13 -0400

At first glance, the news that the New York state attorney general is prepared to charge Citi with fraud regarding its auction rate securities practices is similar to news of charges against Merrill Lynch and UBS. But the twist is that Andrew Cuomo's office says that Citi destroyed evidence--tapes and documents--that were under subpoena. The AG also says the bank failed to notify regulators of the destroyed evidence once it knew about it. According to the AP, Citi said that it routinely "recycles tapes" and that their destruction was inadvertent. The bank said that it has since "suspended all recycling of tapes and preserved all existing tapes." There may be an industrywide global settlement that eventually emerges. It's doubtful that the AG will overlook the evidence issue entirely. The bank may be singled out. Another headache for Vikram Pandit.

For more:
- here's the AP article

States gets aggressive on auction rates securities

Jim Kim — Thu, 31 Jul 2008 13:08:38 -0400

States are getting busy when it comes to auction rate securities. Missouri raided the St. Louis office of Wachovia Securities in its probe. New York Attorney General Andrew Cuomo has charged UBS with illegally promoting auction rate securities as safe investments when executives knew they were anything but. Now Massachusetts has gotten in on the act: It similarly charged Merrill Lynch with promoting auction rate securities as much safer than they were, the AP reports. Once again, email forms the main evidence. One from a Merrill Lynch executive in November read, "Market is collapsing. No more $2k dinners at CRU." Interestingly, the complaint also charges that Merrill Lynch somehow got its research department in on the act, allowing the sales staff to push for research that would endorse "the safety and high quality" of auction-rate securities. Sleazy if true.

For more:
- here's the AP article

New York sues UBS over auction rate securities

Jim Kim — Fri, 25 Jul 2008 07:59:21 -0400

UBS has once again found itself the target of federal charges. This time, New York Attorney General Andrew Cuomo has charged the Swiss bank with illegally promoting auction rate securities as safe investments when executives knew they were anything but. According to the AP, investigators have identified seven UBS executives who sold personal stakes in auction rate securities to the tune of $21 million. Their emails paint of picture of worried execs. "I want to get out of arcs. Let's talk Monday," one executive wrote to his investment adviser, after receiving a company email warning of potential problems in the market. This will likely be the first of several actions against banks. We'll see more than one state get involved. As usual, email will likely be the main evidence.

For more:
- here's the article

Grasso wins! Former NYSE chief can keep money

Jim Kim — Wed, 02 Jul 2008 07:54:47 -0400

Dick Grasso's career seemed to be ending on a very sour note: the State of New York was making him something of a poster boy for his gargantuan pay over the years. In an ugly battle, then-New York Attorney General Eliot Spitzer went after Grasso for the $139.5 million he was paid. Along the way, there were hardly flattering portrayals of Grasso, who came across as embittered. But a judge has dropped the few remaining charges against him. So Grasso gets to keep the money after all, which he vowed to do all along. Andrew Cuomo, Spitzer's successor, said he will not pursue the issue.

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

Grasso finally vanquishes Spitzer

Jim Kim — Wed, 25 Jun 2008 21:11:56 -0400

Truth be told, former NYSE chairman Dick Grasso's battle against former New York State Attorney General Eliot Spitzer was looking better, even before Spitzer imploded amid revelations that he used an escort service. This week, yet another nail was driven into Spitzer's public-life coffin: The New York State Court of Appeals agreed with a lower court ruling that chucked four of six counts brought by Spitzer against Grasso that would have forced the latter to pay back $187.5 million of compensation he amassed during his time at the Big Board. As of now, the New York Times reports, a ruling that Grasso breached his duties and must pay back $100 million still stands. Regardless, this has to count as a big, satisfying win for Grasso, whose enmity toward Spitzer is well known. You now have to wonder if Andrew Cuomo will seek a settlement to end the saga once and for all.

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

Charges in subprime mess coming?

Jim Kim — Tue, 03 Jun 2008 21:10:53 -0400

Does this portend something big? The New York Times reports that credit ratings agencies are close to announcing a deal with New York Attorney General Andrew Cuomo that would revamp some of their business practices. In particular, the deal might make changes to fee practices designed to make it harder for banks to play firms against one another to obtain a desired rating. We'll have to see how far-ranging this is. However, the news is intriguing for another reason: The deal likely will grant immunity to these firms in exchange for cooperation in the AG's wider probe of the subprime mess, the article reports. Already, Cuomo has garnered the cooperation of Clayton Holdings, which reviews loans for banks. All this suggests that we might yet see some sort of charges. It would not be surprising; just about all meltdowns or scandals lead to prosecutorial activity.

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