Cuomo's letter specifically demands: 1. "A description of all bonus pools for 2009, including a description of the process by which the pools were or will be established." 2. "A description of your bonus program to include cash, stocks and other incentive breakdowns, vesting periods, clawback provisions and any other provisions to tie compensation to performance."

Continue reading Cuomo Demanding Bank Payout Data

Cuomo Demanding Bank Payout Data originally appeared on BloggingStocks on Tue, 12 Jan 2010 13:20:00 EST. Please see our terms for use of feeds.

The latest litigation has Intel Inside.

The State of New York is going after Intel (NASDAQ: INTC) over antitrust allegations. State Attorney General Andrew Cuomo is accusing the largest chip manufacturer in the world that it is trying to secure a global monopoly for microprocessors.

For several years, Cuomo said that Intel has pushed the likes of Dell (NYSE: DELL) and Hewlett-Packard (NYSE: HPQ) to agree to the exclusive use of Intel's gear in exchange for billions of dollars in payments. The hefty cash outlays have given what Cuomo called a "stranglehold" on the market.

Continue reading Cuomo guns for Intel on antitrust

Cuomo guns for Intel on antitrust originally appeared on BloggingStocks on Thu, 05 Nov 2009 10:10:00 EST. Please see our terms for use of feeds.

Continue reading Bank of America execs facing charges

Bank of America execs facing charges originally appeared on BloggingStocks on Mon, 14 Sep 2009 17:00:00 EST. Please see our terms for use of feeds.

Brokerage house Charles Schwab & Co. (NASDAQ: SCHW) is facing the wrath of New York Attorney General Andrew Cuomo. The state's top attorney sent a letter to Schwab last Friday, warning that he plans to sue the firm for civil fraud in relation to its marketing and sales of auction-rate securities (ARS). Cuomo added that he is open to a possible settlement, although Schwab must be willing to repurchase ARS from its investors who are still holding them.

In response, Schwab is defending itself. "The Attorney General's allegations are without merit," stated the brokerage firm. "They unfairly lay blame on our company for an illiquid market and improper behavior by the large Wall Street firms."

Continue reading Charles Schwab faces fraud suit from NY Attorney General Andrew Cuomo

Charles Schwab faces fraud suit from NY Attorney General Andrew Cuomo originally appeared on BloggingStocks on Mon, 20 Jul 2009 12:20:00 EST. Please see our terms for use of feeds.

An outspoken group of Bank of America (NYSE: BAC) shareholders has been calling for CEO Kenneth Lewis's head lately, with investors none too pleased by the bank's near-disastrous acquisition of Merrill Lynch. However, testimony is hitting Wall Street today that indicates Lewis was simply following government orders by keeping hefty losses at Merrill under wraps.

Lewis testified under oath before New York Attorney General Andrew Cuomo in February, asserting "it wasn't up to me" to disclose Merrill's fourth-quarter losses toward the end of 2008.

According to Lewis, Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson pressured him to stay mum about Merrill Lynch's troublesome balance sheet. The regulators reportedly urged Lewis to proceed with the merger, warning that the deal's failure would "impose a big risk" to the nation's financial system.

Continue reading Was Bank of America's CEO intimidated by the feds?

Was Bank of America's CEO intimidated by the feds? originally appeared on BloggingStocks on Thu, 23 Apr 2009 11:00:00 EST. Please see our terms for use of feeds.

Wall Street is supposed to be a support function -- helping CEOs come up with cash to make investments. But since Ronald Reagan, Wall Street has become the tail that wags the economic dog.

Today, Paul Krugman highlighted this by pointing out that in the 1960s, Wall Street accounted for 4% of GDP -- a figure that rose to 8% by 2007. Reagan began a process of deregulating Wall Street and in 2004, the SEC let financial institutions borrow way too much. The result is an unprecedented economic catastrophe, including an American International Group (NYSE: AIG) bailout that will cost another $1.6 trillion.

Continue reading With $1.6 trillion to go in AIG's bailout, it's time to trim Wall Street's power

With $1.6 trillion to go in AIG's bailout, it's time to trim Wall Street's power originally appeared on BloggingStocks on Fri, 27 Mar 2009 13:30:00 EST. Please see our terms for use of feeds.

After days of rallying, the market decided that bank stocks had gone much too far. With no first quarter earnings out, the fact is that the current quarter could still be tough. Financial shares could still reset lower. The market reacted accordingly.

The unofficial numbers for the day broke out like this:

Dow 7,278.38 -122.42 (-1.65%)
S&P 500 768.54 -15.50 (-1.98%)
Nasdaq 1,457.27 -26.21 (-1.77%)

TOP ANALYST CALLS

Continue reading Closing bell: End of bank rally brings the show down (AIG, EXPE, GM, MGM, XRX)

Closing bell: End of bank rally brings the show down (AIG, EXPE, GM, MGM, XRX) originally appeared on BloggingStocks on Fri, 20 Mar 2009 16:10:00 EST. Please see our terms for use of feeds.

A report today in the New York Post suggests that shareholders are anxious to oust Kenneth Lewis, CEO of Bank of America Corporation (NYSE: BAC). The paper says that a group of angry investors, spearheaded by Jerry Finger, has compiled a list of demands to present at the bank's next annual meeting. Finger and his irate mob will request that the roles of CEO and chairman be split, and the outspoken investor said it's safe to assume that a brand-new chief executive is also high on his wish list.

Finger made headlines last month by filing a class-action lawsuit against B of A, alleging that its merger with Merrill Lynch failed to protect shareholders' interests. New York Attorney General Andrew Cuomo is now investigating that very same matter, and reports say that the AG may demand the return of $4 billion in bonuses to Merrill employees that were rushed through prior to the merger's completion.

Continue reading Will Bank of America shareholders show CEO Kenneth Lewis the door?

Will Bank of America shareholders show CEO Kenneth Lewis the door? originally appeared on BloggingStocks on Mon, 02 Feb 2009 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Obama flips out over Wall Street bonuses

Obama flips out over Wall Street bonuses originally appeared on BloggingStocks on Thu, 29 Jan 2009 16:40:00 EST. Please see our terms for use of feeds.

Continue reading Memo to Obama: Mary Schapiro is not 'change' at the SEC

Memo to Obama: Mary Schapiro is not 'change' at the SEC originally appeared on BloggingStocks on Thu, 18 Dec 2008 11:11:00 EST. Please see our terms for use of feeds.

Continue reading Kudos to Andrew Cuomo for forcing AIG to suspend executive bonus pay

Kudos to Andrew Cuomo for forcing AIG to suspend executive bonus pay originally appeared on BloggingStocks on Wed, 22 Oct 2008 17:45:00 EST. Please see our terms for use of feeds.

• OPEC called an emergency meeting as oil slipped below $70 a barrel
• Small businesses are feeling the effect of the Wall Street layoffs
• According to the Wall Street Journal, lenders are eager for General Motors Co. (NYSE:GM) and Chrysler LLC.
• Companies are finding it difficult to get financing when they are in bankruptcy.
• New York Attorney General Andrew Cuomo reached a deal with American International Group Inc. (NYSE: AIG) to review compensation paid to former executives.

Before the Bell: Positive Buffett comments may not lift market originally appeared on BloggingStocks on Fri, 17 Oct 2008 07:55:00 EST. Please see our terms for use of feeds.

When an executive gets a bonus, he should be able to keep it, no matter what happens to his company later. It was given to him by his board of directors. It is their right. Most senior management people have employment contracts. It is all legal. Bonuses drive performance and help retain people who might take jobs elsewhere.

Andrew Cuomo, son of a former governor of New York State, and a man who would like that job, is the Attorney General of the Empire State. He looks at management bonuses a bit differently. He is going after AIG (NYSE: AIG) management compensation to make his point.

According to The New York Times, "The board awarded its chief executive officer a cash bonus of over $5 million and a golden parachute worth $15 million," Mr. Cuomo wrote in a letter to AIG's board. He proposes to take action against the insurance company if it does not relent, but it is not clear what that action would be.

No matter how much popular support there is for cutting huge executive compensation packages, Cuomo wants to undermine the rights of public company boards to use their own judgments on how to handle pay packages for their own senior managers. Cuomo wants to restrict corporate boards from exercising rights which they have had for decades. Will he want to decide how boards compensate management at steel companies or fast-food firms? Where does it end?

Cuomo is out of bounds.

Douglas A. McIntyre is an editor at 247wallst.com.

NY State wants all those AIG (AIG) management bonuses back originally appeared on BloggingStocks on Thu, 16 Oct 2008 10:15:00 EST. Please see our terms for use of feeds.

Bloomberg News reports that Merrill Lynch & Co., Inc. (NYSE: MER) has extended its Auction Rate Securities (ARS) redemption offer in response to what I thought was pressure from New York Attorney General Andrew Cuomo who threatened to take Merrill to court. But what is interesting is that Massachusetts Secretary of State William Galvin was the one who announced the settlement.

While the politics of this intrigue me, those who held Merrill ARSs (pun intended) care about the terms of the settlement. Bloomberg reports that Merrill "will begin the buyback on October 15 for individuals, nonprofits and small business with $3 million or less on deposit. Redemptions for clients with $100 million or less start on January 15." This Merrill deal adds to the one it announced on August 7 -- a voluntary buyback of $10 billion worth of ARS. Merrill has a total of "30,000 clients who held an estimated $12 billion" according to Bloomberg.

This leaves many major ARS issuers lagging behind their peers. Here are four holdouts (with their 2007 municipal ARS issuance in parentheses):

• Goldman Sachs (NYSE: GS) ($4.3 B)
• Bank of America (NYSE: BAC) ($3.7 B)
• RBC Capital Markets ($1.2 B)
• Lehman Brothers (NYSE: LEH) ($1.1 B)

What are they waiting for?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Merrill caves to Galvin on Auction Rate Securities originally appeared on BloggingStocks on Thu, 21 Aug 2008 16:53:00 EST. Please see our terms for use of feeds.

The Wall Street Journal reports that Wachovia Corporation (NYSE: WB) is now the sixth major Auction Rate Securities (ARS) issuer to agree to buy back these long-term securities whose interest rates formerly reset in weekly auctions -- until those auctions failed in February. There seems to be a difference of opinion -- between New York's attorney general and the SEC and Missouri -- regarding the terms of Wachovia's deal.

Andrew Cuomo of New York thinks Wachovia will redeem $8 billion worth of ARS in November and will pay a $50 million fine. The SEC and Missouri Secretary of State Robin Carnahan said that Wachovia will buy back $5.7 billion by November 28th. The SEC said Wachovia will buy back an additional $3.1 billion in ARS in June 2009 according to the Journal. Wachovia seems to be leaning more to the two-step process outlined by Carnhan and the SEC.

Meanwhile, today's announcement leaves unredeemed the customers from the following top 10 municipal ARS issuers (their 2007 municipal ARS totals are in parentheses):

• Goldman Sachs ($4.3 B)
• Bank of America Corporation (NYSE: BAC) ($3.7 B)
• RBC Capital Markets ($1.2 B)
• Lehman Brothers Holdings Inc. (NYSE: LEH) ($1.1 B)

I don't know what they're waiting for.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Wachovia jumps on the Auction Rate Securities redemption bandwagon originally appeared on BloggingStocks on Fri, 15 Aug 2008 17:24:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal's "Fund Track" reported that some banks struggling to raise capital may sell their money management units. National City Corporation (NYSE: NCC) is selling its Allegiant Funds, Fifth Third Bancorp (NASDAQ: FITB) is considering selling its Fifth Third Asset Management, and KeyCorp (NYSE: KEY) will possibly sell its Victory Capital Management unit.
• The Wall Street Journal also reported that Andrew Cuomo, the New York state Attorney General, is preparing to file civil securities-fraud charges against UBS AG (NYSE: UBS), possibly as early as this week. Sources said the lawsuit may include allegations of malfeasance by senior UBS executives.

• Bloomberg reported that money manager John Paulson, the owner of Paulson & Co., is launching a hedge fund that will provide capital to financial firms which have been damaged by the housing crisis. Paulson, who wants to open the fund by December, used bets against the U.S. housing market to help him earn $3.7B in 2007.
• After U.S. lawmakers reached a deal on legislation to alleviate the housing recession, the House of Representatives will today vote on a rescue plan for Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE). Representative Barney Frank said that the package, which increases the likelihood Treasury Secretary Henry Paulson will get the authority to inject capital into the two, is "fully acceptable," Bloomberg reported.
• Oil trading losses forced SemGroup LP, which used to be America's 12th largest private company, to declare bankruptcy yesterday. Reuters noted that SemGroup LP's parent company is SemGroup Energy Partners LP (NASDAQ: SGLP).

Newspaper wrap-up: Some banks consider selling money management units originally appeared on BloggingStocks on Wed, 23 Jul 2008 08:50:00 EST. Please see our terms for use of feeds.

Dell (NYSE: DELL) is known for its terrific customer service and catchy ads but the New York State Supreme Court has found that some of those ads were fraudulent and misleading.

Judge Joseph Teresi wrote that the company "engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."

Dell will be prohibited from engaging in such conduct in the future and may also have to pay an as yet undetermined amount of restitution to consumers.

Continue reading Dell found guilty of fraudulent advertising

Dell found guilty of fraudulent advertising originally appeared on BloggingStocks on Wed, 28 May 2008 12:35:00 EST. Please see our terms for use of feeds.

The Independent reports that Citigroup's (NYSE: C) Smith Barney took the $100,000 entrusted to it by a 76-year old mother and put it in now-illiquid Auction Rate Securities (ARS) -- bonds whose interest rates are supposed to reset in weekly auctions -- without her understanding. After she died earlier this year, her son discovered that what she had told him was "in an easy-to-sell money market fund" was in fact frozen in ARSs.

Since February, when I first posted on the $330 billion ARS market, a forum has gathered with 3,924 comments from people who have much of their savings frozen. This widow, like many of the people who comment there, had their money moved into ARSs without their knowledge or with the assurance that the money would be safe and would offer a higher than average return. One key question: Did ARS purchasers receive prospectuses or know of their risks?

But last year, an accounting rule change caused demand for ARSs to evaporate since companies could no longer account for them on their balance sheets as "cash equivalents." So the banks started to bid on the auctions themselves to keep the market going. But thanks to the credit crunch, banks no longer had sufficient capital to prop up the market. So the auctions failed and thousands of people, like this widow, have found that they can't get their money.

Continue reading Smith Barney reportedly wipes out 76-year old mother's $100,000

Smith Barney reportedly wipes out 76-year old mother's $100,000 originally appeared on BloggingStocks on Tue, 20 May 2008 09:07:00 EST. Please see our terms for use of feeds.

Auction-rate securities, which traded regularly since 1985 and were sold to many investors as "cash equivalents", hit a pocket which no one expected. The banks which ran the auctions shut them down because they did not want any of the underlying securities on their balance sheets. Now companies and individuals who bought the paper cannot readily get their money back.

Ultra-aggressive NY State Attorney General Andrew Cuomo, clearly hoping to become the state's governor one day, has launched a huge probe into why the banks killed the market. According to The Wall Street Journal, "Mr. Cuomo's office sent subpoenas to 18 institutions on Monday and Tuesday seeking information on their auction-rate-securities." Firms including Merrill Lynch (NYSE:MER) and Citigroup (NYSE:C) have been asked for documents.

Two legal issues face big banks and brokerages involved in the auction-rate market. The first is whether they had an obligation to keep a market open which had operated successfully for over two decades. They fundamentally left their clients holding the bag.

The second potential charge is much more significant. Did brokerage houses represent to clients that the paper was virtually the same as cash, redeemable at any time? If so, buyers of the securities may make a series of claims involving fraud. Several suits have already been filed.

In a market which was over $300 billion dollars, the potential liabilities are substantial. It is just the kind of case than can get a guy elected to higher office.

Douglas A. McIntyre is an editor at 247wallst.com.

NY's Cuomo goes after auction-rate market (MER) (C) originally appeared on BloggingStocks on Fri, 18 Apr 2008 10:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that New York state's attorney general, Andrew Cuomo, has launched an investigation into auction-rate securities and is seeking information from some of Wall Street's biggest institutions including UBS AG (NYSE: UBS), Citigroup Incorporated (NYSE: C) and Merrill Lynch & Co Inc (NYSE: MER), a person familiar with the matter said.
• According to the Financial Times, Deutsche Bank AG (NYSE: DB) and other investment banks are working on plans to develop a clearing house for the credit derivatives markets. In an attempt to reduce counterparty risk, the banks are trying to develop a system that would only allow institutions with strong capital bases and credible trading histories to clear trades in the credit default swap markets with a central counterparty.

• The news that The Royal Bank of Scotland Group Plc (NYSE: RBS) is planning a rights issue of between GBP5B and GBP12B received mixed reviews from British analysts and investors, the Telegraph reported. The analysts expect the bank to cut its dividend.

• DigiTimes reported that Nvidia Corporation (NASDAQ: NVDA) is planning to launch the GeForce 9600 GSO GPU in May to compete with Advanced Micro Devices' (NYSE: AMD) Radeon HD 3830, according to sources at graphics card makers.

Newspaper wrap-up: Mixed views of Royal Bank rights issue originally appeared on BloggingStocks on Fri, 18 Apr 2008 09:15:00 EST. Please see our terms for use of feeds.