Posts filed under “Legal”

Should Ratings Agencies Disgorge “AAA” Fees on Junk ?

A new Bloomberg column on the rating agencies:

“Standard & Poor’s called for more regulation of credit-rating companies, recommending a global framework that would eliminate potential conflicts of interest, increase transparency and create an industry code of ethics.

New rules should ensure ratings are independently derived and unbiased, the methodologies used are disclosed, and regulators are given the authority to sanction companies if they fail to comply with “appropriate policies,” the unit of New York-based McGraw-Hill Cos. said today in a white paper outlining 10 goals for policymakers.

Ratings companies including S&P and Moody’s Investors Service, the two biggest, have come under fire from regulators and investors for the quality of their work. Flawed top ratings on securities that turned to junk lie at the root of the worst financial crisis since the Great Depression, Frank Raiter, a former S&P managing director, said last year. In the paper, S&P acknowledged assumptions haven’t held up in evaluating structured securities backed by subprime mortgages. . .

The U.S. Securities and Exchange Commission has criticized the ratings companies for conflicts of interest that may have led to excessively high bond ratings and a failure to warn investors about default risks. Financial institutions worldwide have taken almost $1.2 trillion in writedowns and credit losses since the beginning of 2007 as the subprime mortgage market collapsed, weakening the global economy.”

I call on Congress to investigate the fees the agencies charged for junk paper, payola rated AAA, and consider a full disgorgement of fees

Let’s start looking into the firms that started the credit crisis in the first place . . .

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Source:
S&P Calls for Greater Regulation on Credit Ratings
Bryan Keogh
Bloomberg, March 4 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6vbtRVWxOjc&

Category: Credit, Derivatives, Legal

Big Firm Conflict of Interest: The Penalty Box

Its fairly well known in the traditional retail investment world that the client and the advisor often have opposing, and sometimes contradictory, interests. I sometimes forget just how much so in my little world of boutique asset management (We charge about ~1%). A conversation with a couple of brokers from a large firm that I…Read More

Category: Investing, Legal, Markets

Interactive Bank Failure Map

Nice interactive map, via TheStreet.com: > > Source: Interactive Bank Failure Map Philip van Doorn TheStreet.com 02/17/09 – 11:20 AM EST http://www.thestreet.com/story/10464237/1/new-interactive-bank-failure-map.html

Category: Corporate Management, Credit, Legal, Regulation

Options for Auto Bankruptcy

> Sources: Bankruptcy Funding Solicited for Car Makers JEFFREY MCCRACKEN and JOHN D. STOLL WSJ, FEBRUARY 23, 2009, 1:16 A.M. http://online.wsj.com/article/SB123535613910745405.html

Category: Bailouts, Credit, Digital Media, Legal

Marijuana Inc.

Inside America’s Pot Industry

44:05

CNBC

Category: Legal, Video

Merrill Lynch Bonus Investigation

New York State Attorney General Andrew Cuomo is none too happy with $4 billion in recent Merrill Lynch bonuses! Enjoy: > AG Cuomo. MERpdf Publish at Scribd or explore others: Finance & Investing Business & Legal executive compensati

Category: Corporate Management, Digital Media, Legal, Markets, Wages & Income

Band-Aids for the Ailing Economy

Nice interactive timeline via Portfolio: This is 1935 – 2008; The earlier version 1865-1935 is also here

Category: Bailouts, Digital Media, Legal, Regulation

Foreclosures Exceed 250,000 For 10th Straight Month

Foreclosures Exceed 250,000 For 10th Straight Month in January; Analysis and Discussion with Realty Trac Executive Vice President Rick Sharga (First Word)


3:16
Bloomberg, February 12, 2009

Barney Frank disagrees

Category: Credit, Legal, Real Estate, Video

NYSE Floor Rumor: SEC to Overturn Mark-to-Market

> No proof if this is true or not, but its whats goosing the markets . . .

Category: Corporate Management, Credit, Legal, Regulation

Madoff 13,500 Client List

The following is the Madoff client list — released by the bankruptcy court — 160 pages, 13,500 clients. Madoff Client List Publish at Scribd or explore others: Court Filings Business & Legal madoff customers

Category: Digital Media, Legal