JPMorgan spokesman Brian Marchiony said the largest U.S. She also said that unlike the fine, which Bear Stearns was required to treat as a penalty for tax purposes, the $140 million served a "compensatory" rather than a punitive goal. Insurers, including Lloyd's of London, Travelers and Vigilant, said the $140 million did not represent client gains under the policies, and that public policy made the amount uninsurable.Ĭhief Judge Janet DiFiore, however, wrote for Tuesday's majority that the insurers failed to show that Bear Stearns could have reasonably believed its policies precluded coverage. Market timing involved rapid trading in violation of funds' rules and at the expense of ordinary investors, while late trading involved illegal after-hours trading at stale prices.īanks, mutual fund firms and individuals paid billions of dollars to settle regulatory probes of the practices, which were first highlighted in 2003 by then-New York Attorney General Eliot Spitzer.īear Stearns, which JPMorgan bought in 2008, had sought insurance coverage for $140 million of the disgorgement, excluding $20 million of revenue it had generated from the improper trading. Reversing a lower court ruling, the Court of Appeals ruled 6-1 that the $140 million derived from estimates of wrongful customer profits and investor harm, and was not a "penalty" that would excuse JPMorgan's insurers from providing coverage.īear Stearns had agreed in 2006 to pay a $90 million civil fine and give up $160 million of ill-gotten gains to resolve SEC charges it let favored hedge fund customers conduct market timing and late trading from 1999 to 2003. Securities and Exchange Commission settlement with the former Bear Stearns Cos over improper mutual fund trading. Chinese securities companies and banks have also tapped the booming markets to raise tens of billions of dollars.NEW YORK, Nov 23 (Reuters) - New York's highest court ruled on Tuesday that JPMorgan Chase & Co (JPM.N) is entitled to insurance coverage for $140 million of a U.S. China's main state-run banks, having shed huge piles of bad loans, now rank among the highest valued and most cash-rich in the world, while securities companies like Citic Securities are benefiting from a multiyear bull run in China's stock markets. The deal highlights the growing clout of China's financial sector, which only a few years ago was isolated and financially weak. Last week, officials at Citic Bank denied any intention to invest in Bear Stearns in the near term, days after a Chinese regulatory official said that Citic Bank had "bid" for a stake in the U.S. have been flooded with rumors of a Bear Stearns deal with Citic Bank Corp., a unit of the Beijing financial conglomerate Citic Group, of which Citic Securities is also a part. In recent weeks, markets in both China and the U.S. in China and fifth overall in Asia, according to Thomson Financial.įor Bear Stearns, the deal is a welcome bright spot amid a difficult year, during which two internal hedge funds collapsed, costing investors $1.6 billion and the firm hundreds of millions of dollars. So far this year, it has underwritten 16 offerings valued at $10.8 billion, ranking second only to China International Capital Corp. Cayne, Bear Stearns' chairman and chief executive, said the combination of his firm's Asian operations with Citic's "will greatly benefit Bear Stearns' global client base and generate substantial new revenues and growth opportunities for the firm over the long term."Ĭitic is already one of the industry's biggest players. At the same time this partnership will improve our clients' access to global investment opportunities." The investment highlights China's increasing financial prowess on the global stage and the eagerness with which Western firms are hoping to penetrate the insular Chinese financial sector, which is undergoing unprecedented growth.Ĭitic Chairman Wang Dongming said, "This alliance will enable us to build out our existing business and provide new financial products and services to our domestic clients. Bear Stearns will seek Chinese regulatory approval to buy a similar stake through for nearly $1 billion through a 6-year convertible-debt securities and 5-year options. Citic could increase its stake to as much as 9.9%. As part of the joint investment, Citic will buy some $1 billion of 40-year convertible trust preferred securities that would convert to about a 6% stake of Bear Stearns.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |