Wall Street Folly

Tags: Autos, Bailouts, Bonuses, Compensation, Galleon, George Soros, Greece, Insider Trading, Morgan Stanley, Raj Rajaratnam, recalls, Sovereign debt, Tax evasion, Toyota, UBS

• Goldman Sachs Still Shines for MBAs Who Ignore ‘Hype’
• Soros, Citadel Hire Hedge-Fund Analysts From Galleon
• UBS Lays Out Employee Ethics Code
• Murdered Merrill Banker’s Wife Appeals Her Conviction
• Ex-Merrill Banker Bayly Won’t Be Retried in Enron Barge Case Read the rest of this entry »

Tags: Citadel, Convictions, Enron, Ethics, Galleon, George Soros, Goldman Sachs, Legal, MBA, Revolving Door, UBS

• Senator Dodd Said to Not Seek Re-election in November
• Galleon founder faces more US charges
• TCW Pulling Out of PPIP
• Shumway Capital Sells Stake to Goldman Sachs’s Petershill Fund
• Citi’s Havens Got $9 Million for ‘09
• Hedge Fund AQR Goes ‘Mom & Pop’
• Ex-UBS Banker, Informant Birkenfeld Seeks Probe of Prosecutors
• Distress Calls Begin to Go Out Read the rest of this entry »

Tags: AQR, Citigroup, Galleon, Goldman Sachs, Hedge funds, Insider Trading, Lehman Brothers, Politics, PPIP, Raj Rajaratnam, Real Estate, UBS

• Dubai Shows Limits of Government Rescues, Roubini’s Das Says
• Mobius Says Dubai May Trigger Markets ‘Correction’
• Dubai Debt May Be Higher Than $80 Billion, UBS Analysts Say
• Dubai creditors have little option but to accept the hand they’ve been dealt
• Abu Dhabi Commercial Said Owed $1.9 Billion by Dubai
• Ex-UBS Banker Seeks Billions for Blowing Whistle
• Feinberg Stumping Helps Obama, Geithner Skirt Public’s Pay Ire
• UBS, Ernst & Young Call Claims in Madoff Case ‘Vague’ Read the rest of this entry »

Tags: Bernie Madoff, Compensation, Dubai, Marc Mobius, Pay czar, Sovereign wealth funds, UBS

• Judge tosses e-mail in Bear case
• Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm
• Lawyer: Heart Attack Killed Picower
• Goldman Sachs Tells SEC Dark Pools, Short Sales Help Cut Costs
• UBS Taps McCann to Lead U.S. Brokerage
• Cioffi ‘Upset’ When Told Bear Wouldn’t Permit Florida Loan Lien Read the rest of this entry »

Tags: AIG, Bear Stearns, Bernie Madoff, Goldman Sachs, Hedge funds, Lawsuit, UBS

That's what Swiss newspaper Sonntag is reporting according to Reuters.  UBS may shed another 8,000 jobs and is expected to take writedowns of  another $2 billion on illiquid assets.

UBS shares fall as more writedowns, job cuts seen – Reuters

Tags: firings, illiquid assets, job cuts, Revolving Door, UBS, writedowns

It's on: The battle to recruit brokers is underway at UBS, and they're gunning for new blood from Merrill Lynch, Morgan Stanley and Citigroup.  And as one can imagine, the competition isn't pleased.  With fat pay packages, the firm has apparently added 400 brokers recently, with over 100 thought to have come from Merrill alone.

UBS arm seeks to lure US brokers from rivals – Financial Times

Tags: Citigroup, Merrill Lynch, Morgan Stanley, Revolving Door

At least for now….

UBS’s decision to slash the bonus pool by 80 percent for 2008 fed
speculation it might dismantle the investment bank or replace Jerker
Johansson, its chief executive officer, said four bankers at the unit.
The division’s future is still under review and the situation could
change, said the people, who requested anonymity because the matter is
private.

After the bonus cuts, employees at the investment bank are waiting to hear from management on the outlook for compensation in 2009 and on UBS’s commitment to the division. A lack of clarity on those points when the company publishes full-year results tomorrow may prompt departures among top bankers, the bankers said.

UBS Said to Plan No Unwinding of Investment Bank as Cuts Loom – Bloomberg

More belt tightening is on the way at UBS with possibly thousands more getting the ax.  Sonntag reported on January 18 that as many as 5,000 jobs would be cut next month throughtout the bank. Now some of that is coming true, with cuts being made in fixed income.  Per Bloomberg:

Read the rest of this entry »

Tags: Revolving Door

Happy holidays, Your Fired!: Reuters reports that Swiss media is suggesting that more job cuts may be on the way in the near future at UBS.  Unnamed sources at Swiss newspaper SonntagsZeitung said that 4,500 might  in the next few weeks.  Another newspaper, Sonntag, said that 3,000 – 4,000 more might be axed, also not naming a source.

UBS could cut up to 4,500 more jobs – Swiss media – Reuters

Tags: Credit Crunch, Revolving Door

You should read the fascinating WSJ article on Morgan Stanley that details what what happened days after Lehman Brothers collapsed. It explores the massive piling on on all fronts that caused the almost fatal death spiral in its stock.

It details who was trading the firm's CDS -  including JP Morgan, Merrill Lynch, UBS and Deutsche Bank on the banking side, and King Street Capital, Owl Street Capital on the hedge fund side.  There were those who were shorting the stock — including Dan Loeb's Third Point LLC and Millennium Partners. There were those making pitches to hedge funds, to steal prime broker business
away, including JP Morgan (which drew a rebuke from John Mack to Jamie
Dimon), Deutsche Bank, Credit Suisse and UBS.  There were those who were bailing on Morgan's prime brokerage business –  including Millenium Partners, Third Point, Owl Creek.  And there was the breakdown in the 20 year relationship between famed short seller Jim Chanos after John Mack groused to the SEC and employees, blaming the shorts (many of them MS clients) for attacking his stock.  Chanos pulled over $1 billion out of Morgan….

Read the rest of this entry »

Tags: Credit Crunch, Credit Suisse, Dan Loeb, Izzy Englander, Jamie Dimon, Jim Chanos, John Mack, JPM Chase, Merrill Lynch, Morgan Stanley

Protesters Block UBS Branch, Seek Return of Bonuses – Bloomberg

Tags: Bonuses, Compensation, Credit Crunch

More layoffs are on the way at UBS.  1,900 people will be axed from investment banking, equities and fixed income with the announcement said to be made at the upcoming October 2 annual meeting.  Support staff will also be among those getting pink slipped.  According to Bloomberg:

UBS is scaling back its investment banking unit, which it plans to separate from wealth and asset management after mounting writedowns prompted rich clients to withdraw funds for the first time in almost eight years. The job cuts would be on top of 7,000 already announced by UBS, which has taken writedowns and credit losses of $44.2 billion since the credit crisis began last year.

“It is unquestionably the worst hiring climate I’ve seen in 30 years in the City for the European markets,” said Shaun Springer, chief executive officer of Napier Scott Executive Search Ltd. in London.

UBS to Cut 1,900 Investment Bank, Equities, Fixed Income Jobs – Bloomberg

Tags: Credit Crunch, Revolving Door

Loss plagued UBS is still taking hits, this time from wealthy clients who are said
to have been pulling billions in funds for the first time in eight years from
UBS managers.  According to Bloomberg:

Read the rest of this entry »

Tags: Credit Crunch

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Tags: M&A

In the latest round of belt tightening indignities at Merrill Lynch, senior bankers won’t be able to use private jets unless they have really good reasons. The Financial Times reports that they’ll have to clear all private flight requests through the global head of investment banking and will have to be able to show that there’s no more efficient transportation available.  In addition to the new private jet restrictions, bankers will have to limit their use of limos, opting for taxis instead, and their dinner allowances have been cut.

Of course, Merrill isn’t the only firm reining in expenses.  At UBS, bankers can only fly business class in Europe for flights of three hours or longer, and five hours or longer in the U.S.  And at Goldman, the FT tells us that if staffers are at fault for breaking their Blackberries, they have to contribute to repairs.  Jeez, that’s harsh.

Read the rest of this entry »

Tags: Banking Culture, Goldman Sachs, Merrill Lynch

• Former UBS Banker to Plead Guilty in U.S. Tax Case
• Former EADS chief charged for insider trading
• Ernst & Young Ex-Partner Is Indicted

Read the rest of this entry »

Tags: Insider Trading, Lawsuit, Legal

Could be, according to the Daily Telegraph.  CEO Bob Diamond reportedly has ambitions to acquire an investment banking firm, and as part of a possible rights offering designed to shore up its capital base, the company is thinking of raising more to fund an acquisition. Culturally, we don’t think that either Lehman or UBS would work….

Barclays is considering making a daring
takeover bid for a rival as part of a move to raise capital from shareholders.

There has been intense speculation about
whether Barclays will follow Royal Bank of Scotland, HBOS and Bradford &
Bingley to raise capital to bolster its balance sheet but the bank itself has
remained enigmatic. Chris Lucas, Barclays’ finance director, told analysts last
week that "all options are open".

Guiding Barclays’ decision is understood to
be a consideration about whether to try to take advantage of rivals’ weakness by
launching a large rights issue with a double purpose: to improve its capital
ratio and to fund an acquisition.

Read the rest of this entry »

Tags: Barclays, Lehman Brothers

There’s no escape from the mortgage crisis, not even in the Hamptons, as the NY Post reports that some very tony homes are facing foreclosure, including one from a former UBS executive.

In the first three months of this year,
banks have launched preliminary foreclosure actions – known as lis pendens
proceedings – against a record 120 borrowers in East Hampton and Southampton
towns.

Twenty percent of those borrowers live in homes that are worth more than $1
million, according to figures from the Suffolk County clerk.

"This problem didn’t even exist
before," said John Brady, a broker with Coldwell Banker in East Hampton.
"They used to pop up once in a while, and you wouldn’t even pay attention.
Now you expect to see new ones every week."

Read the rest of this entry »

Tags: Credit Crunch, Hamptons, Real Estate

That’s what the Justice Department is looking into.  UBS banker Martin Liechti isn’t charged with anything — at least not yet — but is being held “under a ‘material witness’ warrant” in connection with the DoJ
investigation and would remain in the US “pending discussions with the
US authorities regarding resolution of his status as a witness”.  UBS is cooperating in the probe.

Martin Liechti, the Zurich-based head of
North and South America for UBS’s international wealth management business,
was held in connection with a US justice department investigation into
investment advice that UBS gave its American private banking clients between
2000 and 2007.

The Swiss lender confirmed on Tuesday that
it was also being investigated by the US Securities and Exchange Commission over
whether UBS client advisers “engaged in activities in relation to their
US-domiciled clients that triggered an obligation for UBS Switzerland to
register with the SEC as a broker-dealer and/or investment adviser”.

Top UBS banker detained by US – Financial Times

Tags: Legal

The company is cutting 5500 jobs, not the up to 8000 speculated yesterday….

UBS AG, battered by $17.3 billion of first-quarter losses at its investment-banking unit, plans to cut 5,500 jobs, or about 7 percent of the workforce.

The reductions will include as many as 2,600 positions at the securities division, the company said in a statement today. The bank also said it plans to exit the municipal bond business and sell $15 billion in distressed assets to a newly created fund managed by BlackRock Inc. UBS had a net loss of 11.5 billion francs ($10.9 billion) in the first quarter.

“If the damage from investment-banking losses to the UBS brand name is high, it’s very likely that there will be cost measures also at the private bank,” said Paul Vrouwes, a fund manager at ING Investment Management who helps oversee about $23 billion, including UBS shares. “In the coming quarters and potentially even years, the securities industry will have to live with lower transactions and lower commissions.”

UBS Set to Cut 5,500 Jobs After First-Quarter Loss – Bloomberg

Tags: Credit Crunch

It’s not gonna be a good week for thousands of UBS workers as the company is readying plans to announce new job cuts….
 

UBS AG may cut as many as 8,000 jobs as
  it grapples with the biggest credit writedowns of any European bank and a 12
  billion-franc ($11.4 billion) first-quarter loss.
 
  Switzerland’s biggest bank, which had a 3 billion-franc profit a year earlier,
  is set to spell out plans for layoffs when it reports detailed results
  tomorrow. The company will probably say it’s eliminating between 2,500 and
  3,000 jobs in its investment bank, more than 10 percent of the division, two
  people familiar with the matter said May 2.
 
  “UBS is scaling down investment banking,” including reducing trading bets
  and giving up off-balance sheet units, said Frankfurt-based Landsbanki Kepler
  analyst Dirk Becker, who advises clients to “reduce” holdings of UBS. It is
  “realistic” to estimate that the company will fire one tenth of its 83,000
  employees overall, he said.

UBS May Cut 8,000 Jobs After SF12 Billion First-Quarter Loss - Bloomberg

Tags: Credit Crunch, Revolving Door

Investment bankers at UBS might want to polish up their resumes in the off chance that they haven’t already done so.  Even more job cuts are on the way next month…

UBS warned of further big job losses in
investment banking as the biggest European casualty of the US subprime crisis
outlined plans to shrink the operations that contributed to its losing more than
$37bn on US credits since last summer.

Addressing shareholders in Basel, Marcel
Rohner, chief executive, said further job cuts would be detailed next month. The
announcement, which is expected to see bigger cuts than the 1,500 jobs lost
since the subprime crisis, will accompany the group’s first-quarter results on
May 6.

Mr Kurer said UBS would resist calls to
break up its “integrated” model of investment banking, private banking and
asset management, but he noted pointedly that wealth management was
“ultimately our core franchise”.

UBS warns of more job cuts - Financial Times

Tags: Credit Crunch, Revolving Door

Is UBS looking to raise more cash?  Sounds like that’s in the cards according to Swiss newspaper
Sonntag’s sources. They may ask shareholders to approve raising as much as
$16 billion.  Meanwhile, Merrill Lynch has lowered earnings estimates and
is saying that they may have another $11 billion in write downs.  (Merrill also lowered estimates for
Credit Suisse) ….

Read the rest of this entry »

Tags: Credit Crunch

The competition is rolling out the red carpet: Bear Stearns brokers are already getting picked off according to Bloomberg.  This week, Morgan Stanley hired a group of 12.  Others are also looking for talent and are apparently willing to pay up:

As more than 14,000 Bear Stearns Cos.
employees watch the value of their stock sink and brace for firings, some of the
company’s 550 brokers who handle individual investors’ accounts are receiving
job offers from competitors promising windfalls of $2 million or more.

Merrill Lynch & Co., Morgan Stanley, UBS AG and Citigroup Inc.’s Smith
Barney unit are offering Bear Stearns brokers packages that include signing
bonuses of two times the revenue they bring in annually, said Mindy Diamond,
president of Diamond Consultants LLC, a Chester, New Jersey-based executive
search company. Someone generating $1 million in commissions and fees could
receive $1.5 million up front and the rest over three years, she said.

Read the rest of this entry »

Tags: Bear Stearns, Citigroup, Credit Crunch, JPM Chase, Merrill Lynch, Morgan Stanley, Revolving Door