Newspaper wrap-up: Citigroup may have to repay some hedge fund losses

Posted May 20th 2008 8:00AM by Laurie Pasternack
Filed under: Newspapers, Magazines, Citigroup Inc. (C), Amer Intl Group (AIG), Barclays plc ADS (BCS), Lehman Br Holdings (LEH)

MAJOR PAPERS:

The Wall Street Journal reported that a federal judge said that the government had "sufficient evidence" for a jury to conclude that a conspiracy to fraudulently boost the financials of American International Group Inc (NYSE: AIG) began with former CEO Maurice R. "Hank" Greenberg. That led to a transaction that artificially inflated AIG's loss reserves.
Citigroup Incorporated's (NYSE: C) Falcon Strategies fixed income hedge fund is down 75%, the Wall Street Journal reported, bad news for the three U.S. banks that invested in it to help increase returns on employee life insurance. One of the banks, Fifth Third Bancorp (NASDAQ: FITB), is suing Transamerica Life and Smith Barney, both of whom helped to arrange the investment, and some are now questioning whether Citigroup will be forced to give back some of the investments as they have with individual investors.
After it stopped offering some mortgages last month because it was swamped by volumes of new applications, the Financial Times reported that First Direct, a unit of HSBC Holdings Plc (NYSE: HBC), has resumed lending to new customers. The bank said it has continued to receive "significant interest" in its mortgages from existing customers.

OTHER PAPERS:

In an effort to raise capital from shareholders, the Telegraph reported that Barclays Plc (NYSE: BCS) is considering a takeover bid for a rival in the U.S. or UK. Sources believe Barclays may attempt to acquire an investment bank, a struggling bank or a deal in a fast-moving economy. Potential names mentioned include UBS AG (NYSE: UBS) and Lehman Brothers Holdings Inc (NYSE: LEH).

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Reader Comments (Page 1 of 1)

5-20-2008 @ 12:16PM

erikaduh said...

AIG sucks. "AIG won't soon forget me". I'm suing them until they bleed money from every orfice. All you share holders will remember me to. I'm the person who is going to bring down AIG. Anyone wanting to jion my third lawsiut against AIG it being class action email me. It will be a badfaith suit. Don't buy any product from this company if you expect payment when a CLAIM is filed.