A U.S. rule meant to protect futures industry customers’ money in a collapse like MF Global Holdings Ltd.’s may drive clients from the market and brokerages out of business, some of the affected firms said. Brokerages including Rosenthal Collins Group and R.J. O’Brien & Associates, both headquartered in Chicago, and the Futures Industry Association, a Washington-based lobbying group, say the proposal by the Commodity Futures Trading Commission would tie up too much capital. One section of a 105-page proposal requires brokers to set aside additional money to cover customers’ collateral deficits. More on Bloomberg [...]
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Unsecured creditors of MF Global UK may receive up to 40 per cent of their claims, double previous expectations, the administrator to the failed futures broker said on Wednesday. The increased forecast from KPMG comes weeks after a US court approved a three-way deal between the trustees representing the US broker’s estate, which was agreed to avoid a lengthy and costly court case settling the ownership of MF Global’s assets. More in the Financial Times [...] R. Allen Stanford’s former chief accounting officer, Gilbert Lopez, 70, was sentenced to 20 years in prison for helping to conceal Stanford’s $7 billion Ponzi scheme. U.S. District Judge David Hittner imposed the sentence today in Houston. Also set for sentencing today was Stanford’s former controller, Mark Kuhrt, 40. The men were convicted in November of conspiring to hide the fraud. The fraud was built on bogus certificates of deposit at Antigua-based Stanford International Bank Ltd., prosecutors said. Lopez and Kuhrt were the last two Stanford executives to be criminally tried for their roles in the scheme. More on Bloomberg [...] The trustee for Bernard L. Madoff Investment Securities Inc. said he will make an additional distribution of $505 million to customers, bringing the total to more than $5.4 billion, or almost 43 percent of approved claims. The distribution, announced today, will be the third by Irving S. Picard, the trustee. Including $806 million provided by the Securities Investor Protection Corp., Picard previously distributed just under $5 billion to customers. The bankruptcy court in New York will hold a hearing on March 13 to approve the new distribution to victims of Madoff’s $20 billion Ponzi scheme, the largest in U.S. history. Read Bloomberg report [...] Covenant quality on North American high-yield bonds declined to its lowest-ever level in January, mostly due to a spike in issuance of high-yield-lite bonds, Moody’s Investors Service said on Tuesday. High-yield-lite bonds provide investors with fewer protections than full covenant bonds on payment terms and collateral. The Moody’s Covenant Quality Index declined to 3.89 in January from 3.79 in December. The index measures covenant protection on a scale of 1 to 5 with 5 being the weakest. Moody’s has tracked the CQI since January 2011. Unsecured creditors of MF Global Holdings Ltd.’s U.K. unit may receive an interim payment of as much as 40 percent of their claims, the company’s administrators said. The payment had been estimated at 20 percent last month, KPMG LLP said in a statement. Former customers of the firm’s U.K. arm will get a distribution of about 60 percent after settling a dispute with the company’s U.S.-based units. More on Bloomberg [...] Most investors in Bernie Madoff’s epic Ponzi scheme initially assumed they had lost everything. But a new distribution announced Tuesday by court-appointed trustee Irving Picard will bring the total amount returned to investors past $5 billion for the first time. In all, Picard and his team have recovered some $9.3 billion. That is more than half the $17.5 billion in principal Madoff investors lost—something few thought possible when the scam came to light in December, 2008. But even now, new information about the fraud is coming to light. More on CNBC [...] It was the ultimate insult! JPMorgan Chase is being accused of unleashing a “smear campaign” on a former employee by comparing him to infamous fraudster Bernie Madoff after he left to join another firm, according to a new $3 million defamation lawsuit filed in Manhattan Supreme Court. Mark Kolta worked for the financial giant as a securities broker in its Astor Place offices for three years through 2011. At his peak the broker pulled in $100,000,000 in business investments for the bank, he claims in the lawsuit. Read New York Post report [...] SCOTT COHN: All right. Let’s start out with this milestone that we’ve reached today. Tell me about the distribution that you’re announcing and where we stand. IRVING PICARD: Well, we’re announcing a distribution of a little over $500 million. It’s as a result, primarily, of– settlement funds that we received– late last week of about– over a billion dollars from the Tremont settlement. And– that distribution will be– the $500 million distribution will be about $0.047. More on CNBC [...] A German hedge fund founder convicted in his home country of running a Ponzi scheme faces U.S. charges along with an accomplice over frauds that cost investors more than $300 million, the U.S. Department of Justice said on Thursday. K1 Group founder Helmut Kiener, a 53-year-old trained psychologist, was indicted on six counts of wire and bank fraud and three counts of money laundering over alleged schemes to defraud Bear Stearns Cos, Barclays Plc and BNP Paribas SA. Co-defendant John Tausche, a 61-year-old resident of Blowing Rock, North Carolina, was charged with one count each of bank fraud and money laundering, prosecutors said. More on Reuters [...] |
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