Goldman Roiled by Op-Ed Loses $2.2B for Shareholders. Related Goldman Sachs Group Inc.
(GS) saw $2.15 billion of its market value wiped out after an employee assailed Chief Executive Officer Lloyd C. Blankfein’s management and the firm’s treatment of clients, sparking debate across Wall Street. The shares dropped 3.4 percent in New York trading yesterday, the third-biggest decline in the 81-company Standard & Poor’s 500 Financials Index, after London-based Greg Smith made the accusations in a New York Times op-ed piece.
Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein, 57, and President Gary D. Former Federal Reserve Chairman Paul Volcker, 84, whose “Volcker rule” would limit banks like New York-based Goldman Sachs from making bets with their own money, called Smith’s article “a radical, strong” piece. The Goldman Sachs headquarters on March 14, 2012 in New York. The Goldman Sachs headquarters on March 14, 2012 in New York. Close Open Photographer: Mario Tama/Getty Images Goldman Sachs Disagrees. Ex-Mortgage CEO Sentenced to Prison for $3B Fraud. Wall Street's Sneaky New Way to Make Bank from Struggling Homeowners. December 12, 2010 | Like this article?
Join our email list: Stay up to date with the latest headlines via email. When Florida retiree Gladys Walker fell behind in paying taxes on her modest Pompano Beach home, she had no idea one of America's biggest banks and a major Wall Street hedge fund engaged in frenzied bidding for the right to collect her debt--all $768.25 of it. "I just couldn't come up with the money," said Walker, 67, a former hotel worker who makes do on a monthly Social Security check. Barely more than a year after a taxpayer bailout of major financial institutions, Bank of America and the hedge fund, Fortress Investment Group, spotted a fresh money-making opportunity - collecting the tax debts of tens of thousands of people like Walker.
In late May and early June, proxies for the two institutions quietly bought hundreds of millions of dollars in homeowners' property tax debts in Florida by bidding at a series of online auctions held by county tax collectors. Bank Overcharged Military Families On Mortgages. Hide captionJPMorgan Chase admitted to overcharging more than 4,000 active-duty military personnel on their home loans and said it foreclosed in error on 14 of them.
The company will send out $2 million worth of refunds to 4,000 active-duty customers who were affected. Chris Hondros/Getty Images JPMorgan Chase admitted to overcharging more than 4,000 active-duty military personnel on their home loans and said it foreclosed in error on 14 of them. The company will send out $2 million worth of refunds to 4,000 active-duty customers who were affected. The banking giant JPMorgan Chase is admitting it made some very big mistakes. Julia Rowles and her husband, Marine Capt. BofA Segregates Almost Half of its Mortgages Into `Bad Bank' Bank of America Corp.
(BAC), the biggest U.S. lender by assets, is segregating almost half its 13.9 million mortgages into a “bad” bank comprised of its riskiest and worst-performing “legacy” loans, said Terry Laughlin, who is running the new unit. “We are creating a classic good bank, bad bank structure,” Laughlin told investors at a meeting in New York today. He was promoted last month to manage the costs of resolving disputes stemming from the company’s 2008 purchase of Countrywide Financial Corp.
“We’re going to get after this, we’re going to do it the right way and we’re going to put it to bed in the next 36 months,” he said. The legacy portfolio will hold 6.7 million loans with outstanding principal balance of about $1 trillion, according to a presentation to investors today. “It’s a way to get investors focus on the good,” said Paul Miller, a former examiner with the Federal Reserve Bank of Philadelphia and analyst at FBR Capital Markets in Arlington, Virginia.
Arrest Over Trading Software Illuminates a Wall St. Secret. Wall Street May Break Pay Record. Wall Street is on track to pay its employees $144 billion this year, breaking a record for the second year in a row, the Wall Street Journal reports.
Despite financial reform intended to curb compensation, and a steep decline in trading volume, pay in the financial services industry has shown few signs of fading. Pay is expected to rise at 26 out of the 35 firms according to the WSJ. According to it's analysis, the $144 billion overall figure is a 4 percent increase over last year's $139 billion. Revenue on Wall Street grew only 3 percent this year, the WSJ says, but, unlike at some businesses outside the financial sector, employee compensation remains a high priority. The Dodd-Frank financial reform legislation, passed in July, gives regulators the power to write rules governing executive pay. When asked to name a threshold for an "inordinately large" payout, Federal Reserve general counsel Scott Alvarez declined.