Did we just find someone to take on the banks?

The Record

To see how the federal government has pursued money-laundering cases against big banks over their dealings with Iran and other countries under U.S. trade sanctions, consider what happened when Barclays Plc and the Justice Department were required to file reports describing the U.K. bank's cooperation under a settlement in 2010.

The deadline came and went. Barclays and the Justice Department failed to comply, infuriating U.S. District Judge Emmet Sullivan of Washington, who had ordered that the reports be filed. "I am amazed that with all the legal talent before the court that no one opened the order to read it," he said. A Justice Department attorney, Kevin Gerrity, told the judge he couldn't explain the lapse. Before approving Barclays' deferred-prosecution agreement, Sullivan called it a "sweetheart deal." Barclays paid $298 million, its core business was unscathed, and no executives were charged.

Standard Chartered Plc can only dream of having such a light touch for an adversary. Last week, the New York State Department of Financial Services threatened to revoke Standard Chartered's state banking license — far more serious than a mere fine — after accusing the U.K. bank of using its New York office to illegally launder $250 billion for Iranian financial institutions, including Iran's central bank.

Refreshing change

Although it's hard to imagine the department's superintendent, Benjamin Lawsky, carrying out his threat, it's refreshing to see anyone in a position of authority even go through the motions of fully enforcing the law against a big bank. Lawsky, 42, has every bit as much standing to pursue such a case as his counterparts in the federal government do.

Read More at... http://www.northjersey.com

Will Bank of America Cut the Bull?

By Roben Farzad on August 10, 2012 

Hold this truth to be self-evident: If in the late ’70s, FM acts Styx, Kansas, and Foreigner decided to form an arena supergroup, complete with a panoply of lasers and dueling keyboardists, they’d have sold out world tours well into Iran-Contra. Try pulling off the same thing today, however, and SKF & Co. would barely fill the auditorium at Staten Island High.

Where am I going with this? Financial conglomerating, of course. In earlier years, the notion of a Bank of America Merrill Lynch superbank would have been darn near irresistible: all those ATMs, Merrill’s famous “thundering herd” of brokers, permutations of cross-pollination. Investors would surely pay a premium for that kind of franchise.

But now the era of the financial supermarket model is so over—Citigroup (C) architect Sandy Weill just admitted as much—and BofA (BAC), which has its hands full dealing with the ongoing hit of the subprime crisis, isn’t exactly wowing investors with its ownership of the Merrill bull. Yes, BofA Merrill ranked No. 2 globally in net investment banking fees for the first half of 2012, according to Dealogic. And in the second quarter it was ranked tops globally in equity capital markets deal volume and was among the top three investment banks in high-yield corporate debt, leveraged loans, and asset-backed securities and syndicated loans. Merrill has been adding brokers for 12 straight quarters.

And yet Charlotte-based BofA is nearing an agreement to sell Merrill’s non-U.S. wealth management business to Swiss money manager Julius Baer, according to Bloomberg. An announcement could be made as early as Aug. 13, two people with knowledge of the matter told my Bloomberg colleagues. The operations outside the U.S. manage about $80 billion of assets for clients in Europe, the Middle East, and Africa, as well as high-net-worth customers in Latin America and Asia, outside Japan.

Could this trumpet the beginning of the end of BofA Merrill? When it signed on the dotted line to buy Merrill, BofA was trading at $27 and then rallied to nearly $40 within a month of the announcement. Today the shares are at less than $8. It took no time for then-BofA Chief Executive Officer Ken Lewis to publicly regret the mega-merger, claiming the feds pressured him to consummate despite Merrill’s deteriorating financials. This was the same man who in late 2007 confessed: “I’ve had about all the fun I can stand in investment banking.”

BofA, the product of BankAmerica’s 1998 merger with NationsBank, is no stranger to short-lived forays into investment banking. Robertson Stephens. Thomas Weisel Partners. Montgomery Securities. Those franchises never went much of anywhere under the map-covering mega-bank.

Source: Bloomberg Businessweek; 

READ MORE AT: http://www.businessweek.com/articles/2012-08-10/will-bank-of-america-cut-the-bull#r=read