That stock News

WASHINGTON – Securities and Exchange Commission attorneys wanted to bring a case swiftly against Bank of America for allegedly misleading shareholders when it acquired Merrill Lynch, and as a result omitted significant violations from their initial charges, according to an agency watchdog report released Tuesday.

The report by the office of SEC Inspector General David Kotz also found that the agency sought a relatively small penalty against Bank of America, $33 million, after investigators initially "relied substantially on case precedent" to arrive at the figure.

A federal judge threw out that settlement amount and the deal was revised early this year to include a $150 million penalty.

Kotz's report, however, found that the SEC staff operated "ably" under tight deadlines to investigate and bring the case against the biggest U.S. bank.

"The evidence did not show that SEC staff failed to diligently and zealously investigate potential securities-law violations," the report says.

SEC enforcement attorneys felt pressure to bring the case quickly because it was a high-profile issue, the IG's investigation found.

The SEC accused Bank of America of failing to disclose to shareholders before they voted on the Merrill deal that it had authorized Merrill to pay up to $5.8 billion in bonuses to its employees in 2008 even though the investment bank lost $27.6 billion that year. But because of the rush, the report says, the agency failed to also initially charge Bank of America for failing to disclose Merrill's huge losses in the fourth quarter of 2008.

Bank of America, which is based in Charlotte, N.C., was among the hardest-hit banks during the credit crisis. The $45 billion in bailout funds it received included $20 billion for Merrill, putting it among the largest recipients of government aid. It repaid the money last year.

Among the report's recommendations is that the SEC review the level of cooperation among law enforcement agencies on investigations and determine where it could be improved. The report said SEC attorneys expressed the view that the office of New York Attorney General Andrew Cuomo, which also conducted an investigation of Bank of America, failed to cooperate fully with the SEC and refused to share some information.

"We value the report's insights and look forward to addressing its recommendations," SEC spokesman John Nester said.

View the original article here

Jean-Claude Trichet, President of the European Central Bank. Photo: EPA

During a speech at the Conference of world politics in Marrakech, Mr Trichet said that "while a repeat of the experience of the 1930s is very fortunately not on the cards, there is certainly no room for complacency and vigilance must remain high".

Speaking about the issue of global economic governance in the wake of the financial crisis, Mr Trichet has a distinctive character of the decade before the crisis has been a "progressive and largely beneficial liberalization and integration", which had "benefited consumers worldwide."

He said that, during the crisis, protectionist and "beggar-thy-neighbour" policy could be expected to "these extreme circumstances and taking into account the political difficulties associated with their".

But the central banker has added that he had only increased moderately actual protectionist measures to restrict trade and an important outbreak of trade protectionism has avoided since the beginning of the crisis.

But he warned that "more protectionist pressures could be on the pipeline" and urges vigilance."Firstly, evidence investigation shows that public pressure for more economic protection not only has been editing since the mid-2000s, know well in advance of the crisis, but has intensified since its beginning, especially in the last months," he said.

His comments came as the decision of the Government of China struck the United States to launch an investigation into the charges subsidized producers of green technologies, saying the move sent a bad signal trade protectionism.

Speaking on moves the EU to put its house in order for his contribution to the economic and financial stability, Mr Trichet said that more ambitious reform of the EU budget rules are necessary for the eurozone as those proposed by the European Commission.

Referring to the Commission's proposals to strengthen economic governance, published on 29 September, Mr Trichet said: "a number of Commission proposals are going in the right direction, but for the euro area more ambitious reforms are necessary to ensure the smooth functioning of monetary union."

He added that all deadlines in the excessive deficit procedure should signifiacntly réduit.les sanctions should be applied to almost automatically and in some cases, the reduction of the debt must be more amibtious as proposed by the Commission.

Replying to a question about plans reserve US Federal, which opened the door to another series of relaxation of quantiative - Mr Trichet said that "no Central Bank considers appropriate trigger inflation at the present time.

He added that he was "totally against" changing target inflation of the eurozone, saying that livestock 2pc target would "dire consequences" for inflation expectations and increase volatility.

Mr Trichet went on saying that Governments must run balanced medium-term budgets for business and consumer confidence: "recovery comes confidence."

View the original article here

The U.S. Capitol: banks are in Washington this weekend of lobbying on the fringes of the meeting of the Fund currency International Photo: AFP/Getty Images

The group - led by Marcus Agius, Chairman of Barclays.John Varley, Barclays outgoing Chief Executive; and Sir Philip Hampton, Chairman of the Royal Bank of Scotland - are lobbying world leading regulatory agencies to achieve a workable solution that will not hamper British banks against their international counterparts.

They want to set out and agree on a standard international bonus to put an end to disparities in compensation for financial services regulators approach.

Lobbying is an admission the United Kingdom banks have progressed as much as they can on the subject as individuals and must now act collectively if change is produise.Le when, before the end of the year where premiums are defined, is the key that men are willing to avoid public reaction is likely to occur when the new year earnings levels are published.

It is known that trio held a number of conversations with George Osborne, the Chancellor on the subject, as well as counsel for the Board and also took the floor to Hector Sants, Executive Director of the Financial Services Authority.Chacun men is in Washington this weekend, lobbying on the sidelines of the meeting of the international monetary fund and are most likely the situation with Mr. Osborne.

Mr. Osborne threatened banks this weekend with a new tax bonus, a movement which has been described as "unnecessary" by a person with knowledge of the objectives of three men.

Although no workable solution has yet been taken, the goal is to provide a form any international Covenant which could ensure that banks and bankers operating the United Kingdom are not penalized.

At the same time, it would be the focus throughout the different international rules that determine what proportion of bankers allowance may be paid in cash.

The last push comes that the Committee of European banking supervisors of the unveiled rules mean actually based the United Kingdom bankers could receive 10pc just for their annual premiums after taxes and accruals accounting.

Senior banking source said: "" forging ahead with its proposals, the UK Europe will in its own way and they seem not all .c ' is all a bit of a mess. ""

Men are operated under the auspices of the Association of British bankers, which Mr. Agius is President actuel.Il refers to an establishment of a consensus between the banks of the United Kingdom that something must change on compensation, even if it is known that a number of major banks investment operations in London resistant to any form of is déplacer.Une key concern is the impact of the status quo will be the retention and recruitment industry.

A number of banks investment admitted in the Sunday Telegraph that it becomes difficult to recruit bankers based in Asia or the United States in positions in London, but for reverse moves are flooded with applications

New thrust to reach a form any conclusion on line compensation comes just a few days after Mr. Agius organized a poor bankers at the residence on the perception of the public house industry forum.

All parties have declined or made no comment.

Separately Deutsche Bank Director General Josef Ackerman said regulators should not shake banking rules on their own without consensus international.Prenant speaking at the annual meeting of the international Institute of finance, Mr. Ackerman, its President, said: "it will be undermining the process and increase the cost of regulatory reform."

Mr. Ackerman said Basel new rules for banks to double their capital base were "demanding" and it is "essential" industry should be given time to implement the changes so that they do not compromise "ability of credit banks."

View the original article here