Posts belonging to Category Citigroup/Smith Barney

Are Wall Street Wirehouses ‘Killing the Goose that Laid the Golden Egg?’


The big four Wall Street wirehouses have lost market share since the financial crisis in part because of their role in the crisis and “customer distrust,” according to Bing Waldert, a director of Cerulli Associates Inc. (See “Wirehouse market share has shriveled since crisis,” InvestmentNews). Merrill Lynch Wealth Management, Morgan Stanley Smith Barney, UBS AG […]

The Number of Very Large Securities Arbitration Cases is on the Rise


The amount of dollars at stake in FINRA securities arbitrations has grown in recent years. Of the 7,000 claims currently pending, approximately 200 involve claims of $10 million or more. “The claims coming in now are substantially larger than what we had a few years ago,” Linda Fienberg, president of FINRA Dispute Resolution, was quoted […]

MAT/ASTA Cases Reveal the Seamy Side of Wall Street


Ordinarily, the evidence presented in a FINRA arbitration is kept “confidential” and secret from the public. That’s the way the securities industry likes it, because it really does not want the public to see the evidence against it. But in its zeal to try to overturn the largest amount ever awarded to individual investors in […]

Is Wall Street Evolving into an Illegal Monopoly?


Sixty-five years ago, the Justice Department filed an antitrust suit against 17 investment banks seeking to break them up for creating “an integrated, overall conspiracy and combination ‘ to eliminate competition and monopolize” the investment banking business. It failed. Today, the investment banking business is much larger and more profitable, and much more concentrated than […]

How Citigroup Met its Disclosure Obligations: a ‘Brain-Scrambling, Obfuscating Collection of Words’


After federal district court judge Jed Rakoff “forcefully rejected” a $285 million settlement between the SEC and Citigroup, Susan Beck bravely decided to read the prospectus for the Class V Funding III CDO at the center of the controversy, in order to see the disclosures that Citigroup says are adequate. What she found was a […]

Judge Rejects Citi’s Efforts to Buy Justice


Judge Jed S. Rakoff stunned the SEC and Citigroup by rejecting their proposed $285 million settlement of a case involving Citigroup’s sale to investors of a CDO that Citigroup allegedly “built to fail” and bet against. The judge’s decision made a dent in the SEC’s longstanding policy (“hallowed by history, but not by reason”) of […]

Morgan Stanley Bitten by ‘Built to Fail’ Structured Products


Morgan Stanley’s motion to dismiss a class action involving “built to fail” structured products has been denied as to the fraud claims against it, and the case will go forward. The plaintiffs ? a group of Singapore retail investors ? allege that Morgan Stanley committed fraud in selling them sold them $154.7 million of Pinnacle […]

Wall Street’s Job Cuts Continue


Citigroup plans to cut 3,000 or more jobs, about 1 percent of employees, and BNP Paribas plans to cut about 1,400 jobs, or 7 percent of its employees, according to the New York Times (“Citi to Shed 1% of Its Workers; BNP Paribas Plans to Cut 7%”). The NY Times was told unofficially that one […]

Citigroup and Deutsche Bank Pay $165 Million to Settle Mortgage Securities Claims


The National Credit Union Administration (NCUA) announced that it has reached settlements with Citigroup and Deutsche Bank regarding potential claims relating to the sale of residential mortgage-backed securities to five failed wholesale credit unions. NCUA said that it is the first regulatory agency to recover losses on behalf of failed financial institutions that resulted from […]

Securities Violations Increase


The Securities and Exchange Commission says it has stepped up its enforcement activities during the 2011 fiscal year ended September 30, filing a record 735 enforcement actions resulting in disgorgements and penalties totaling $2.806 billion, according to InvestmentNews (“SEC sets record in crackdown on advisers, B-Ds”). It reportedly filed 146 enforcement actions against investment advisers […]