DOCSLIB.ORG

IN RE the BEAR STEARNS COMPANIES, INC. SECURITIES, DERIVATIVE, and ERISA : Master File 4,14 Sv Ip • LITIGATION : 08 M.D.L

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
IN RE the BEAR STEARNS COMPANIES, INC. SECURITIES, DERIVATIVE, and ERISA : Master File 4,14 Sv Ip • LITIGATION : 08 M.D.L //arNi r ' UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK IN RE THE BEAR STEARNS COMPANIES, INC. SECURITIES, DERIVATIVE, AND ERISA : Master File 4,14 sv ip • LITIGATION : 08 M.D.L. No. 1963:-AAMS)* This Document Relates To: : CLASS ACTION Securities Action, 08-Civ-2793 (RWS) : JURY TRIAL DEMANDED : ECF CASE CONSOLIDATED CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS TABLE OF CONTENTS Page GLOSSARY OF DEFINED TERMS viii I. NATURE AND SUMMARY OF THE ACTION 2 II. JURISDICTION AND VENUE 5 III. PARTIES 6 A. Lead Plaintiff 6 B. Bear Stearns Defendants 7 1. The Bear Stearns Companies Inc. 7 2. Officer Defendants 7 C. Auditor Defendant 9 IV. FACTUAL BACKGROUND AND SUBSTANTIVE ALLEGATIONS 9 A. Bear Stearns’ Storied Past 9 B. The Boom in Debt Securitization 11 C. Bear Stearns’ Securitization Business 13 1. Bear Stearns’ Mortgage Origination and Purchasing Business 14 2. Bear Stearns’ RMBS Business 17 3. Bear Stearns’ CDO Business 17 D. Bear Stearns’ Business Practices Amplify its Risk Exposure 18 1. Bear Stearns’ Concentration in Mortgage-Backed Debt 18 2. Bear Stearns’ Leveraging Practices 19 3. Bear Stearns’ Backing of the Hedge Funds 20 E. Bear Stearns’ Misleading Models and Inadequate Risk Management 23 1. Bear Stearns’ Misleading Valuation and Risk Models 23 a. The Importance of Valuation Models 24 i b. Bear Stearns’ Valuation Models Were Misleading 25 c. The Importance of Value at Risk Models 27 d. Bear Stearns’ Value at Risk Models Were Misleading 30 2. Bear Stearns’ Impoverished Risk Management Program 31 F. Bear Stearns Hides its Mounting Exposure to Loss 33 1. Early Warnings 33 2. Bear Stearns’ Deception Begins 36 G. The Implosion of the Hedge Funds 45 H. Repercussions of the Hedge Funds’ Implosion 52 I. Bear Stearns’ Catastrophic Collapse 61 J. Post Class Period Events 69 K. Defendants’ Fraudulent Statements Adversely Impacted Current and Former Company Employees 71 1. The RSU Plan 71 2. The CAP Plan 72 3. Defendants’ Fraud Harmed Holders of RSU and CAP Plan Units 72 L. The SEC Comment Letters 73 M. Bear Stearns’ Practices Violated Accounting Standards 76 1. GAAP Overview 76 2. Fraud Risk Factors Present at Bear Stearns 79 a. Fraud Risk Factors Applicable to Depository and Lending Institutions 79 b. Risk Factors Applicable to Brokers and Dealers in Securities 81 3. Audit Risk Alerts 82 4. Bear Stearns Falsely Represented that its Internal Controls Over Financial Reporting Were Effective 84 ii a. Risk Management 88 b. Pricing Models and VaR Systems 89 5. GAAP Violations Relating to the Company’s Financial Statements 90 a. Bear Stearns Misstated Its Exposure to Loss from the Failed Hedge Funds 90 b. Bear Stearns’ Financial Statements Misrepresented its Exposure to Decline in the Value of RIs 94 c. GAAP Violations Related to Failure to Appropriately Determine the Fair Value of Financial Instruments 99 d. Bear Stearns Failed to Provide Adequate Disclosure About Risk and Uncertainties 104 e. Bear Stearns Failed to Provide Reliable Disclosures to Investors in Accordance with SEC Regulations 106 N. Bear Stearns’ Practices Violated Banking Regulations 107 1. Overview of Capital Requirements 107 2. Bear Stearns Failed to Take Timely and Adequate Capital Charges 109 3. Inflation of Capital By Using Incorrect Marks 110 4. Misrepresentations to Regulators Relating to VaR 111 V. DEFENDANTS’ SCIENTER 112 A. James E. Cayne 112 B. Alan D. Schwartz 115 C. Samuel L. Molinaro, Jr. 116 D. Warren J. Spector 120 E. Alan C. Greenberg 121 F. Michael J. Alix 123 G. Jeffrey M. Farber 124 H. Corporate Scienter 125 iii VI. ADDITIONAL ALLEGATIONS SUPPORTING THE OFFICER DEFENDANTS’ SCIENTER 126 A. General Allegations of Scienter 126 B. Abnormal Profit Taking 129 VII. DELOITTE’S DEFICIENT AUDITS OF BEAR STEARNS’ FINANCIAL STATEMENTS 133 A. Overview of Allegations Against Deloitte 133 B. Deloitte’s Certifications 134 C. Overview of GAAS 135 D. GAAS Required Deloitte to Consider Risk Factors as Part of Audit Planning 136 1. Fraud Risk Alerts Relevant to Deloitte’s Audit of Bear Stearns 136 2. Audit Risk Alerts Relevant to Deloitte’s Audit of Bear Stearns 137 3. Deloitte’s Experience Auditing the Hedge Funds 138 E. Red Flags Recklessly or Deliberately Disregarded by Deloitte 139 1. Bear Stearns’ Misleading Fair Value Measurements 139 2. Bear Stearns’ Failures to Disclose Risks Inherent In Its Financial Statements 142 3. Bear Stearns’ Misleading Accounting Treatment of the Hedge Fund Bailout 143 4. Bear Stearns’ Failure to Disclose Critical Information Relating to the Company’s Valuation of Its Financial Instruments 144 5. Bear Stearns’ Inadequate Internal Controls 146 6. Bear Stearns’ Deficient Internal Audit Function 152 VIII. DEFENDANTS’ MATERIALLY FALSE AND MISLEADING STATEMENTS 154 A. Statements Relating to Fiscal Year 2006 and Fourth Quarter 2006 154 1. December 14, 2006 Press Release 154 iv a. December 14, 2006 Press Release Statements Regarding the Company’s Fourth Quarter 2006 Results 155 b. Press Release Regarding Fiscal 2006 Results 156 2. Fourth Quarter 2006 Earnings Conference Call 156 3. Form 10-K for Fiscal Year 2006 158 a. The Company’s Financial Results and Assets 159 b. The Company’s Risk Management Practices 159 c. The Company’s Exposure to Market Risk 162 d. The Company’s Compliance With Banking Regulations 162 e. The Company’s Internal Controls 163 f. Deloitte’s Certification 164 B. Statements Relating to Fiscal Year 2007 Results 164 1. First Quarter 2007 Results 164 a. First Quarter 2007 Press Release 164 b. First Quarter 2007 Conference Call 166 c. First Quarter 2007 Form 10-Q 168 2. Second Quarter 2007 Results 172 a. Second Quarter 2007 Press Release 172 b. Second Quarter 2007 Conference Call 173 c. June 22, 2007 Press Release 174 d. Second Quarter 2007 Form 10-Q 175 3. August 3, 2007 Press Release and Conference Call 180 4. Third Quarter 2007 Results 182 a. Third Quarter 2007 Press Release 182 v b. Third Quarter 2007 Conference Call 184 c. Third Quarter 2007 Form 10-Q 185 5. November 14, 2007 Write Downs 189 6. Fourth Quarter and Fiscal Year 2007 190 a. Press Release 190 b. Fourth Quarter 2007 Conference Call 192 7. Fiscal Year 2007 Form 10-K 193 a. The Company’s Financial Results 194 b. The Company’s Risk Management Practices 195 c. The Company’s Exposure to the Market Risk 197 d. Compliance With Banking Regulations 198 e. The Company’s Internal Controls 199 f. Deloitte’s Certification 200 C. Additional False and Misleading Statements in Calendar Year 2008 200 IX. LOSS CAUSATION 204 X. CLASS ACTION ALLEGATIONS 206 XI. PRESUMPTION OF RELIANCE 209 XII. INAPPLICABILITY OF STATUTORY SAFE HARBOR 211 CLAIMS FOR RELIEF 211 COUNT I For Violation of Section 10(b) of the Exchange Act and Rule 1 0b-5 Promulgated Thereunder (Against All Defendants) 211 COUNT II For Violation of Section 20(a) of the Exchange Act (Against the Officer Defendants) 214 COUNT III For Violations of Section 20A of the Exchange Act (Against Defendants Cayne, Schwartz, Spector, Molinaro, Greenberg, and Farber) 215 vi PRAYER FOR RELIEF 216 DEMAND FOR JURY TRIAL 218 vii GLOSSARY OF DEFINED TERMS 2008 OIG Report: A report entitled “SEC’s Oversight of Bear Stearns and Related Entities: The Consolidated Supervised Entity Program.” AAG: AICPA Industry Audit and Accounting Guides. AAM: AICPA’s annual Audit and Accounting Manual. ABS: Asset-backed securities. ABS CDOs: Asset-backed collateralized debt obligations-related investments. ABX: An index that tracked synthesized subprime mortgage performance, refinancing opportunities, and housing price data into efficient market valuation of subprime RMBS tranches. Advisers Act: U.S. Investment Advisers Act of 1940. AICPA: American Institute of Certified Public Accountants. Alix: Michael J. Alix, who served as the Company’s Chief Risk Officer from February 3, 2006 until the Company’s demise in 2008. Alt-A Mortgages: Mortgages made to borrowers who are considered less than prime because they are unable to document their income and assets, have high debt-to-income ratios, and/or have troubled credit histories. APB: Accounting Principles Board Opinions. ARAs: Audit Risk Alerts. ARB: AICPA Accounting Research Bulletins. AS: Auditing Standard. AU §: Sections of the Statements of Auditing Standards, which are codified by the American Institute of Certified Public Accountants. Basel II: Recommendations on banking laws and regulations issued in June 2004 by the Basel Committee on Banking Supervision, an institution created by the central bank governors of the Group of Ten Nations. Basel II Guidelines: Basel II. Basel Committee: Basel Committee on Banking Supervision, an international banking group that advises national regulators, such as the SEC. viii B&D AAG: AAG that was applicable to Brokers and Dealers in Securities. Bear Stearns: The Bear Stearns Companies Inc., Bear, Stearns & Co. Inc., and Bear Stearns Asset Management. Bear Stearns Defendants: The Bear Stearns Companies Inc.; James E. Cayne; Alan D. Schwartz; Warren Spector; Samuel Molinaro; Alan C. Greenberg; Michael Alix and Jeffrey Farber. BEARRES: Bear Stearns Residential Mortgage Corporation. Broker-Dealer Risk Assessment Program: A program requiring broker dealers that are part of a holding company structure with at least $20 million in capital to file with the SEC certain disaggregated information about their finances. BSAM: Bear Stearns Asset Management, a wholly-owned subsidiary of The Bear Stearns Companies Inc. CAP: Capital Accumulation Program. Captive Originations: mortgages originated by BEARRES and ECC that were sent directly into the securitization process at Bear Stearns. CAQ: Center for Audit Quality. Cayne: James E. Cayne, a director, Chairman of the Board and Chief Executive Officer of Bear Stearns during the Class Period. Cioffi: Ralph Cioffi, the Bear Stearns trader who started and managed the High Grade Fund, a Managing Director of B SAM and a Director of B SC.
Load more

Recommended publications
  • The Corporate Governance Lessons from the Financial Crisis
    ISSN 1995-2864 Financial Market Trends © OECD 2009 Pre-publication version for Vol. 2009/1 The Corporate Governance Lessons from the Financial Crisis Grant Kirkpatrick * This report analyses the impact of failures and weaknesses in corporate governance on the financial crisis, including risk management systems and executive salaries. It concludes that the financial crisis can be to an important extent attributed to failures and weaknesses in corporate governance arrangements which did not serve their purpose to safeguard against excessive risk taking in a number of financial services companies. Accounting standards and regulatory requirements have also proved insufficient in some areas. Last but not least, remuneration systems have in a number of cases not been closely related to the strategy and risk appetite of the company and its longer term interests. The article also suggests that the importance of qualified board oversight and robust risk management is not limited to financial institutions. The remuneration of boards and senior management also remains a highly controversial issue in many OECD countries. The current turmoil suggests a need for the OECD to re-examine the adequacy of its corporate governance principles in these key areas. * This report is published on the responsibility of the OECD Steering Group on Corporate Governance which agreed the report on 11 February 2009. The Secretariat’s draft report was prepared for the Steering Group by Grant Kirkpatrick under the supervision of Mats Isaksson. FINANCIAL MARKET TRENDS – ISSN 1995-2864 - © OECD 2008 1 THE CORPORATE GOVERNANCE LESSONS FROM THE FINANCIAL CRISIS Main conclusions The financial crisis can This article concludes that the financial crisis can be to an be to an important important extent attributed to failures and weaknesses in corporate extent attributed to governance arrangements.
    [Show full text]
  • Goldman Sachs Presentation to Bank of America Merrill Lynch Banking and Financial Services Conference
    Goldman Sachs Presentation to Bank of America Merrill Lynch Banking and Financial Services Conference Harvey M. Schwartz Chief Financial Officer November 17, 2015 Cautionary Note on Forward-Looking Statements Today’s presentation and any presentation summary on our website may include forward-looking statements. These statements are not historical facts, but instead represent only the Firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Firm’s control. It is possible that the Firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the Firm’s future results and financial condition, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014. You should also read the forward-looking disclaimers in our Form 10-Q for the quarterly period ended September 30, 2015, particularly as it relates to capital and leverage ratios, and information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website: www.gs.com. The statements in the presentation are current only as of its date, November 17, 2015. Investing & Lending Segment Debt and Equity Forward Overview Loans Investments Outlook Average Firmwide Net Revenues 2010 to 2015YTD1 Investing & Lending Includes lending to clients across the firm as well as
    [Show full text]
  • The Federal Reserve's Catch-22: 1 a Legal Analysis of the Federal Reserve's Emergency Powers
    ~ UNC Jill SCHOOL OF LAW *'/(! 4 --/! ,.%'! " ! ! " *''*1.$%-) %.%*)'1*,&-. $6+-$*',-$%+'1/)! /)% ,.*".$! )&%)#) %))!1*((*)- !*((!) ! %..%*) 5*(-*,.!, 7;:9;8;<= 0%''!. $6+-$*',-$%+'1/)! /)%0*' %-- 5%-*.!%-,*/#$..*2*/"*,",!!) *+!)!--2,*'%)1$*',-$%+!+*-%.*,2.$-!!)!+.! "*,%)'/-%*)%)*,.$,*'%) )&%)#)-.%./.!2)/.$*,%3! ! %.*,*",*'%)1$*',-$%+!+*-%.*,2*,(*,!%)"*,(.%*)+'!-!*).. '1,!+*-%.*,2/)! / The Federal Reserve's Catch-22: 1 A Legal Analysis of the Federal Reserve's Emergency Powers I. INTRODUCTION The federal government's role in the buyout of The Bear Stearns Companies (Bear) by JPMorgan Chase (JPMorgan) will be of lasting significance because it shaped a pivotal moment in the most threatening financial crisis since The Great Depression.2 On March 13, 2008, Bear informed "the Federal Reserve and other government agencies that its liquidity position had significantly deteriorated, and it would have to file for bankruptcy the next day unless alternative sources of funds became available."3 The potential impact of Bear's insolvency to the global financial system4 persuaded officials at the Federal Reserve (the Fed) and the United States Department of the Treasury (Treasury) to take unprecedented regulatory action.5 The response immediately 1. JOSEPH HELLER, CATCH-22 (Laurel 1989). 2. See Turmoil in the Financial Markets: Testimony Before the H. Oversight and Government Reform Comm., llO'h Cong. -- (2008) [hereinafter Greenspan Testimony] (statement of Dr. Alan Greenspan, former Chairman, Federal Reserve Board of Governors) ("We are in the midst of a once-in-a century credit tsunami."); Niall Ferguson, Wall Street Lays Another Egg, VANITY FAIR, Dec. 2008, at 190, available at http://www.vanityfair.com/politics/features/2008/12/banks200812 ("[B]eginning in the summer of 2007, [the global economy] began to self-destruct in what the International Monetary Fund soon acknowledged to be 'the largest financial shock since the Great Depression."'); Jeff Zeleny and Edmund L.
    [Show full text]
  • Merrill Edge Select Funds1 Listing Created As of April 26, 2013
    Merrill Edge SelectTM Funds Merrill Edge Select Funds1 Listing created as of April 26, 2013. To help simplify your investing experience, Merrill Lynch investment professionals have developed a proprietary screening process based on quantitative analyses for mutual funds offered through Merrill Edge. Each quarter we take into account risk and performance measures to highlight up to five no-load and load waived funds with no transaction fees for each fund category. Generally, no one metric determines the outcome of any selection, and metrics may have different weights in the filtering process. The Merrill Edge Select Funds are ranked by information ratio and displayed alphabetically. Visit merrilledge.com for details on Merrill Edge Select Funds selection criteria. Domestic Equity Fund Name Security Symbol Asset Class Large-Cap Growth JOHN HANCOCK US GLOBAL LEADERS USGLX Domestic Equity GROWTH FD T ROWE PRICE BLUE CHIP GROWTH FD TRBCX Domestic Equity TCW SELECT EQUITIES FUND TGCNX Domestic Equity T ROWE PRICE GROWTH STOCK FUND PRGFX Domestic Equity ALGER SPECTRA FUND SPECX Domestic Equity Large-Cap Value T ROWE PRICE VALUE FUND TRVLX Domestic Equity NUVEEN DIVIDEND VALUE FUND FFEIX Domestic Equity AMERICAN CENTURY INCOME & GROWTH BIGRX Domestic Equity FD NLD JOHN HANCOCK DISCIPLINED VALUE FUND JVLAX Domestic Equity RIDGEWORTH LARGE CAP VALUE EQUITY SVIIX Domestic Equity FUND © 2013 Bank of America Corporation. All rights reserved. I ARD6A740 I 4/2013 Domestic Equity cont. Fund Name Security Symbol Asset Class Mid-Cap Growth HIGHMARK GENEVA
    [Show full text]
  • 525000000 Freddie Mac Citigroup Global Markets Inc. Bofa Merrill
    PRICING SUPPLEMENT DATED November 13, 2017 (to the Offering Circular Dated February 16, 2017) $525,000,000 Freddie Mac Variable Rate Medium-Term Notes Due August 21, 2018 Issue Date: November 21, 2017 Maturity Date: August 21, 2018 Subject to Redemption: No Interest Rate: See “Description of the Medium-Term Notes” herein Principal Payment: At maturity CUSIP Number: 3134GB4C3 You should read this Pricing Supplement together with Freddie Mac's Global Debt Facility Offering Circular, dated February 16, 2017 (the "Offering Circular"), and all documents that are incorporated by reference in the Offering Circular, which contain important detailed information about the Medium-Term Notes and Freddie Mac. See "Additional Information" in the Offering Circular. Capitalized terms used in this Pricing Supplement have the meanings we gave them in the Offering Circular, unless we specify otherwise. The Medium-Term Notes offered pursuant to this Pricing Supplement are complex and highly structured debt securities that may not pay a significant amount of interest for extended periods of time. The Medium-Term Notes are not a suitable investment for individuals seeking a steady stream of income The Medium-Term Notes may not be suitable investments for you. You should not purchase the Medium-Term Notes unless you understand and are able to bear the yield, market, liquidity and other possible risks associated with the Medium-Term Notes. You should read and evaluate the discussion of risk factors (especially those risk factors that may be particularly relevant to this security) that appears in the Offering Circular under “Risk Factors” before purchasing any of the Medium-Term Notes.
    [Show full text]
  • Group Executive Committee
    Group Executive Committee External Website Milan, May 12 Existing EMC Head of Italy – Niccolò Ubertalli member Niccolò Ubertalli holds a bachelor's Degree in Material Engineering from the Politecnico of Torino and a Master's in Business Administration from the Owen Graduate School of Management at Vanderbilt University (USA). He started his career at Teksid Aluminum Foundry in 1997 as a process engineer. In 2000, he moved to Milan and worked at McKinsey as a senior associate, until 2002. He worked at UniCredit Clarima between 2002-2004, as a director in the sales area. From 2004-2006, Niccolò was First Vice President in MBNA (USA and UK). In 2006, he relocated to Bulgaria where he started UniCredit Consumer Financing as Chairman and Executive Director. In 2009, he moved back to Italy as Chief of Staff for Group CEO, followed by the role of Head of Group Consumer Finance between 2011-2012. Niccolò moved to Romania in 2012, where he assumed the position of Deputy CEO at UniCredit Tiriac Bank. During his time, he was a member of the UniCredit Tiriac management board as well as a member of the supervisory boards for Pioneer Investments, UniCredit Consumer Finance Bulgaria, UniCredit Consumer Finance Romania and Ergo Asigurari de Viata S.A. Romania. From 2015-2019, he continued his career in Yapi Kredi as executive director and Deputy Chief Executive Officer. In addition, Niccolò held board positions in various Yapi Kredi Group subsidiaries. In 2019, he was appointed co-CEO Commercial Banking, CEE. In May 2021, Niccolò is appointed Head of Italy. 2 Existing EMC Head of Germany – Michael Diederich member Michael Diederich holds a Diploma in Business Management at University of Applied Sciences.
    [Show full text]
  • Bear Stearns High Grade Structured Credit Strategies Fund
    Alter~(lv~ Inv<!'Stment M.I~i(,lIlenl AsSO<.iaUon AlMA'S ILLUSTRATIVE QUESTIONNAIRE FOR DUE DILIGENCE OF Bear Stearns High Grade Structured Credit Strategies Fund Published by The Alternative Investment Management Association Limited (AlMA) IMPORTANT NOTE All/any reference to AlMA should be removed from this document once any amendment is made of any question .or information added· including details of a company/fund. Only AlMA can distribute this questionnaire in its current form to its member companies and institutional investors on its confidential database. AlMA's Illustrative Questionnaire for Due Diligence Review of Hedge Fund Managers ~ The Alternative Investment Management Association Limited (AlMA), 2004 1 of 25 Confidential Treatment Requested by JPMorgan BSAMFCIC 00000364 AlMA's Illustrative Questio~naire for Due Diligence Review of HEDGE FUND MANAGERS This due diligence questionnaire is a tool to assist investors when considering a hedge fund manager and a hedge fund. Most hedge fund strategies are more of an investment nature than a trading activity. Each strategy has its own peculiarities. The most important aspect is to understand clearly what you plan to invest in. You will also have to: • identify the markets covered, • understand what takes place in the portfolio, • understand the instruments used and how they are used, • understand how the strategy is operated, • identify the sources of return, • understand how ideas are generated, • check the risk control mechanism, • know the people you invest wIth professionally and, sometimes, personally. Not all of the following questions are applicable to aU managers but we recommend that you ask as many questions as possible before making a dedsion.
    [Show full text]
  • Hsi 12.31.20
    HSBC SECURITIES (USA) INC. Statement of Financial Condition December 31, 2020 2 HSBC Securities (USA) Inc. STATEMENT OF FINANCIAL CONDITION December 31, 2020 (in millions) Assets Cash................................................................................................................................................................... $ 285 Cash segregated under federal and other regulations ....................................................................................... 609 Financial instruments owned, at fair value (includes $9,072 pledged as collateral, which the counterparty has the right to sell or repledge)..................................................................................................................... 9,153 Securities purchased under agreements to resell (includes $4 at fair value)..................................................... 20,643 Receivable under securities borrowing arrangements....................................................................................... 11,758 Receivable from brokers, dealers, and clearing organizations.......................................................................... 4,154 Receivable from customers................................................................................................................................ 269 Other assets (include $13 at fair value)............................................................................................................. 295 Total assets.......................................................................................................................................................
    [Show full text]
  • Maneerut Anulomsombat, Senior Associate – Investment Banking, the Quant Group
    Maneerut Anulomsombat, Senior Associate – Investment Banking, The Quant Group. [email protected] Maneerut is a Senior Associate Director at The Quant Group – Investment Banking, she graduated magna cum laude in Industrial Engineering from Chulalongkorn University and an MBA from Stanford University. May 2008 Smackdown - The Fight for Financial Hegemony Last night I switched on the cable and World Wrestling Championship was on. I’ve never really watched wrestling before but for the five minutes that I did, it seemed like the fight was between two greasy large muscular male slamming their heads at each other surrealistically and theatrically slapstick. Amidst this fight another large muscular male came out from backstage, jumped into the ring and dropped-kick one wrestler who fell off the stage then turned around and slammed the other wrestler while the referee bounced around the ring ineffectively. Apparently this is a common scene on “Smackdown”. I don’t know what it is exactly but this made me think about the fights for the hegemony in global deal-making between the three giants: Private Equity Funds (PE), Hedge Funds (HF), and Sovereign Wealth Funds (SWF). And while the authorities and senate banking committees don’t always wear striped black and white referee shirts, they seem to be bouncing around not quite certain what to do as well. And here's how the giants compare by size. The Asset Under Management (AUM) of PE by the end of year 2007 was around US$1.16 trillion. The AUM of SWFs rose from US$500 Million in 1990 to US$3.3 trillion in 2007, overshadowing the US$1.7 trillion of AUM thought to be managed by HFs in year 2007 (up from $490 billion in year 2000).
    [Show full text]
  • 250000000 Merrill Lynch & Co. Morgan Stanley UBS Investment Bank
    File Pursuant to Rule 424b(2) Registration No. 333-133548 PROSPECTUS SUPPLEMENT (To prospectus dated May 4, 2006) $250,000,000 PUBLIC SERVICE COMPANY OF OKLAHOMA 6.625% Senior Notes, Series G, due 2037 ________________________ Interest on the Senior Notes is payable semi-annually on May 15 and November 15 of each year, beginning May 15, 2008. The Senior Notes will mature on November 15, 2037. We may redeem the Senior Notes either in whole or in part at our option at any time, and from time to time, at the redemption prices described on page S-4 of this prospectus supplement. The Senior Notes do not have the benefit of a sinking fund. The Senior Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness from time to time outstanding and will be effectively subordinated to all of our secured debt, to the extent of the assets securing such debt. We will issue the Senior Notes only in registered form in multiples of $1,000. ________________________ Per Note Total Public offering price(1) 99.253% $ 248,132,500 Underwriting discount 0.875% $ 2,187,500 Proceeds, before expenses, to Public Service Company of Oklahoma 98.378% $ 245,945,000 (1) Plus accrued interest, if any, from November 14, 2007. ________________________ INVESTING IN THESE NOTES INVOLVES RISKS. SEE THE SECTION ENTITLED “RISK FACTORS” ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT FOR MORE INFORMATION. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Senior Notes or determined that this prospectus supplement or the accompanying prospectus is accurate or complete.
    [Show full text]
  • Bear Stearns Asset Management Collateral Manager Presentation
    on ~ .. ' ~ &. e:.. >-3 (ti ig ~ ~ ~ 0.- ~ ~ ~ - IJ:j ~ n o o o o o 0\ -.l >-' on ~ ~ &. e:.. >-3 (ti ig ~ ~ ~ Introduction 0.- ~ • Bear Stearns Asset Management Inc. ("BSAM") is a corporation formed under the laws of the State of New York, and is focused on lugh value added investment solutions that span traditional and alternative assets for ~ iIlstitutional and high net worth investors. BSAM is committed to providing clients with world-class ~ investment management and thorough communication of both risKs and returns. • BSAM manages the Bear Stearns High Grade Structured Credit Strategies Fund ("BSHG"), a hedge fund incorporated on September 8, 2003, as a Cayman Islands exempted company. The Ftmd seeks to generate total annual returns through "cash and carry" transactions and capital markets arbitrage. The Furid generally invests in hi~h quality floating rate structured finance securities. lypically, 90% of the Fund's gross assets are invested in A.AA or AA structured finance assets. In order to mitiO"ate mark-to-market and credit risk, the Fund tactically buys credit insurance, generally through credit default swaps ("CDS"), on corporate indices and/or individual names. Interest rate auration is targeted to be zero, with net leverage of approximately lOx. • The Senior Portfolio Management Team has over 93 years of combined experience in international fixed income markets and structured finance. • The entire Collateral Surveillance and Portfolio Management Team consists of 33 members with an average of over 10 years of experience each. • BSHG cmrently manages over 30 billion in structured credit assets, across the following sectors: RMBS, Cf'vlBS, and Home Equity ABS COOs, CDO"2s, CLOs, and High Yield CBOs Investment Grade COOs and Synthetic COOs • As experienced participants in the structured finance market, the portfolio management team has the knowledge, experience and resources to identify attractive assets and monitor the credit risk inherent in these assets.
    [Show full text]
  • US Broker-Dealers and the Financial Crisis
    The Value of Internal Sources of Funding Liquidity: N O . 9 69 U.S. Broker-Dealers and the M A Y 2 0 2 1 Financial Crisis Cecilia Caglio | Adam Copeland | Antoine Martin The Value of Internal Sources of Funding Liquidity: U.S. Broker-Dealers and the Financial Crisis Cecilia Caglio, Adam Copeland, and Antoine Martin Federal Reserve Bank of New York Staff Reports, no. 969 May 2021 JEL classification: G2, G21, G23 Abstract We use confidential and novel data to measure the benefit to broker-dealers of being affiliated with a bank holding company and the resulting access to internal sources of funding. We accomplish this by comparing the balance sheets of broker-dealers that are associated with bank holding companies to those that are not and we find that the latter dramatically re-structured their balance sheets during the 2007-09 financial crisis, pivoting away from trading illiquid assets and toward more liquid government securities. Specifically, we estimate that broker-dealers that are not associated with bank holding companies both increased repo as a share of total assets by 10 percentage points and also increased the share of long inventory devoted to government securities by 15 percentage points, relative to broker-dealers associated with bank holding companies. Key words: broker-dealers, shadow banking, liquidity risk, repo market _________________ Copeland, Martin: Federal Reserve Bank of New York (email: [email protected], [email protected]). Caglio: Board of Governors of the Federal Reserve System (email: [email protected].). The authors thank Johnathan Sokobin and Lori Walsh from the Financial Industry Regulatory Authority.
    [Show full text]