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.

According to a Wall Street Journal report (subscription required) on Monday, Bank of America (NYSE: BAC) is set to choose an emergency chief executive officer (CEO) -- just in case Ken Lewis (the current CEO) is forced to step down thanks to legal issues. The decision was in the works before Lewis announced he would retire effective New Year's Eve, but the situation ramped up after New York Attorney General Andrew Cuomo hinted that he may file civil charges against Lewis.

Five people comprise the committee that was formed earlier this year, with Bank of America Chairman Walter Massey leading the way. The committee was originally created to respond to concerns raised by U.S. banking regulators, but it has now shifted its focus a bit. The committee will give the choice to the full board for approval, but then the U.S. banking regulators will have to approve the choice, basically allowing the government to hand pick their choice. Once this process runs its course, the plan will then be shuttered until it is needed.

Continue reading Bank of America choosing an 'emergency' chief executive, just in case

Bank of America choosing an 'emergency' chief executive, just in case originally appeared on BloggingStocks on Mon, 05 Oct 2009 10:00:00 EST. Please see our terms for use of feeds.

Bank of America (NYSE: BAC) CEO Ken Lewis has managed to survive a massive decline in shareholder value, two government bailouts, a raft of shareholder lawsuits, SEC investigations, civil fraud charges, and a wave of populist angst about the company's business practices.

But now CNBC reports that experts are questioning whether Lewis will be able to hang on as investigations of the company's acquisition of Merrill Lynch intensify. The FBI is reportedly taking a look, which suggests that criminal charges could follow.

Continue reading Will legal woes finally lead to the end of Ken Lewis' reign of terror?

Will legal woes finally lead to the end of Ken Lewis' reign of terror? originally appeared on BloggingStocks on Tue, 22 Sep 2009 13:10:00 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.

In order to end the two-year-old inquiry by New York Attorney General Andrew M. Cuomo into its pension business, the Carlyle Group has agreed to pay $20 million and make broad changes to its practices. Carlyle, one of the world's largest private equity firms, will no longer use intermediaries, known as placement agents, to secure investment business from public pension funds, and it will curb its campaign contributions to elected officials who oversee pension funds.

"This is a revolutionary agreement," Cuomo said Thursday. "I believe it totally changes the way people operate: It ends pay-to-play, it bans the selling of access, it puts the political power brokers out of business."

Continue reading Carlyle to pay $20 million to end New York pension probe

Carlyle to pay $20 million to end New York pension probe originally appeared on BloggingStocks on Fri, 15 May 2009 13:00:00 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.

It turns out that Charles Schwab (NASDAQ: SCHW) and TDAmeritrade (NASDAQ: AMTD) may have sold auction-rate securities by using misleading marketing about whether or not the instruments were "cash equivalents." According to The New York Times, the "point of sale" activity at the discount and retail brokerages is similar, they said, and some of the discount brokerage firms use financial advisers or may have improperly listed information on their websites.

Schwab argues that it was only an "agent" and did not slant the marketing of auction-rates one way or the other.

It is safe to predict that Andrew Cuomo, the New York State Attorney General, will get discount brokerage firms to buy the auction-rate paper back from their customers. Cuomo can probably find some marketing material where the nature of the securities was represented the wrong way.

But, Cuomo's actions have stepped over the line. In all probability, many discount brokerage customers bought the auction-rates on their PC without seeing any information about whether their liquidity could be undermined. Discount brokerage customer often do their own research.

Cuomo won't care. He won't try to find out which people got their auction-rates without being attracted to them by marketing. He will get the discount firms to buy all of the paper back. The companies do not want years of litigation.

Cuomo is running for governor, or perhaps the U.S. Senate. He does not have time to pause for such details.

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

Discount brokers may be caught up in auction-rate scandal originally appeared on BloggingStocks on Sat, 16 Aug 2008 11:40:00 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.

This week, state investigators from Massachusetts and New York revealed more pieces of the scam that was the $330 billion ARS market. Up until this week, it had been known that UBS AG (NYSE: UBS) had told its brokers to dump this toxic waste on its so-called private clients -- individual investors -- to keep UBS from needing to write it off from its own books.

But this week we learned that banks had been colluding for as long as two years to prop up the weekly auctions that were supposed to set the rates on these securities. It looked like there was good evidence that the banks were committing securities fraud when they sold ARS on the premise that they were cash-like and offered slightly higher yields than money market funds. Why the fraud? Because, their internal e-mails and behavior revealed that they were desperate to get rid of the toxic waste.

Moreover, those e-mails show that the banks' claim that the auctions suddenly failed in February 2008 is another fraud. As I posted, Merrill Lynch & Co. (NYSE: MER) e-mails reveal that the auctions started failing in January 2006. And it was public knowledge, according to Financial Week, that ARS auctions were failing last September -- 60 such auctions failed to the tune of $6 billion.

Continue reading Did banks collude to freeze the auction rate securities (ARS) market?

Did banks collude to freeze the auction rate securities (ARS) market? originally appeared on BloggingStocks on Sun, 03 Aug 2008 10:40:00 EST. Please see our terms for use of feeds.