Financial Sector Review: Volcker Rule Relief, Nomura Holdings Involved in Insider Trading

SLM Corp (NASDAQ:SLM): The second-ranking Senate Democrat, Richard Durbin (D-IL), called for new rules that would enable student debt to be erased during bankruptcy proceedings, according to The Washington Post. Durbin has sponsored legislation that would allow private student loans to be wiped out during bankruptcy, and has previously held town hall meetings on the issue, the newspaper noted.

The shares closed at $14.55, up $1.45, or 11.07%, on the day. Its market capitalization is $7.40 billion.

Assured Guaranty Ltd. (NYSE:AGO): Assured Guaranty released the following statement in response to the announcement by Moody’s Investors Service that it has placed the debt ratings of Assured Guaranty and its subsidiaries and the insurance financial strength ratings of Assured Guaranty’s insurance subsidiaries under review for possible downgrade. In its announcement, Moody’s cites constrained business opportunities for financial guaranty insurance and continued economic stress for U.S. municipal, mortgage, and European exposures. Dominic Frederico, President and CEO of Assured Guaranty, said: “We have been working with Moody’s for some time, emphasizing the improvements in our credit profile since their last review in 2009. As the current rating process is not yet complete, we are surprised that Moody’s decided it had enough information to place Assured Guaranty on review for a possible downgrade. In light of our improved financial strength over the last two years, Moody’s action was unjustified and unwarranted. Assured Guaranty has not just, as Moody’s writes, “survived” the financial crisis but has demonstrated its resiliency, resourcefulness and financial strength. While we have paid nearly $4B in claims since the onset of the mortgage crisis. Since our last rating assignment, we have achieved record operating income. Our business production continues to demonstrate a fundamental demand for our product. We believe we are firmly in the Aa rating category.”

The shares closed at $16.30, down $2.52, or 13.39%, on the day. Its market capitalization is $2.97 billion.

Nomura Hldgs., Inc. (NYSE:NMR): Nomura Holdings (NYSE:NMR) was involved in an insider-trading case connected to a 2010 share sale by Inpex, a source told Bloomberg. Bloomberg noted that Japan’s Securities and Exchange Surveillance Commission said Chuo Mitsui Asset Trust & Banking got non-public information from an employee of one of the lead underwriters on Inpex’s offering and that Nomura wrote on its website that Nomura expresses its regret, and will continue to cooperate fully in the investigation, without explicitly confirming its role in the case.

The shares closed at $4.61, down $0.27, or 5.53%, on the day. Its market capitalization is $16.89 billion.

Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC): Help for Wall Street banks concerned about the “Volcker rule” may be coming as Senators from both parties work to give regulators more time past the July 21 deadline to write the rule, the Wall Street Journal reports. Fed Chairman Bernanke said Europe must further strengthen its banks and that its financial and economic situation remains difficult, according to testimony prepared for delivery to U.S. lawmakers today, Bloomberg reports.

BAC shares closed at $9.82, up $0.01, or 0.1%, on the day. Its market capitalization is $105.39 billion. C shares closed at $37.80, down $0.28, or 0.74%, on the day. Its market capitalization is $110.78 billion. JPM shares closed at $45.12, down $0.26, or 0.57%, on the day. Its market capitalization is $172.24 billion. WFC shares closed at $34.02, down $0.3, or 0.87%, on the day. Its market capitalization is $179.55 billion.

Hartford Financial (NYSE:HIG): The Hartford has decided to focus on its property and casualty, group benefits and mutual funds businesses, each of which has a competitive market position, strong capital generating ability and lower sensitivity to capital markets. This sharper focus positions The Hartford to deliver superior performance and greater shareholder value. As a result, the company is placing its Individual Annuity business into runoff and is pursuing sales or other strategic alternatives for Individual Life, Woodbury Financial Services and Retirement Plans. This announcement is the result of management and the Board of Directors’ rigorous evaluation of the company’s strategy and business portfolio conducted over the past several quarters and concluded this week. The company will stop new annuity sales effective April 27 and expects to take a related after-tax charge of $15M-$20M in Q2 of 2012. This action is also expected to reduce annual run-rate operating expenses by approximately $100M, pre-tax, beginning in 2013. Starting in Q2 of 2012, financial results for the Individual Annuity segment, which consists of U.S. variable, fixed and fixed indexed annuities, will be reported in Life Other Operations.

The shares closed at $22.02, up $0.31, or 1.43%, on the day. Its market capitalization is $9.69 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com