Weekly Financial Biz Recap: Nasdaq and NYSE in ACTION, Barclays FUMBLES, 4th Place for This Bank


Six weeks after the Legendary Facebook (NASDAQ:FB) IPO, relations between the company and NASDAQ (NASDAQ:NDAQ) are still strained, as the latter became the entity of choice to be blamed for all that went awry. Executives at FB have not stopped holding the exchange responsible for the IPO’s trade-execution problems, say sources to The New York Times, and some accounts have it that FB might yet switch to the New York Stock Exchange (NYSE:NYX). NASDAQ CEO Robert Greifeld assured participants in a conference call that the execution errors didn’t affect the share prices, but that doesn’t seem to fix things.

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Dod-Frank might have forced reductions on certain fees that banks charge, but many of the companies, including Wells Fargo (NYSE:WFC), are now adding fees where they are allowed. WF intends to initiate a $5 per month charge on checking accounts that do not maintain a balance of $1.500, or otherwise make the bank cast a disapproving eye.

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The Libor Scandal in the U.K. becomes EastEnders on Tuesday, as Bob Diamond reverses his vow to “fight back” and also to spill possibly embarrassing nuggets concerning regulators, by resigning as Barclays’ (NYSE:BCS) CEO and director, with immediate effect. At the same time, outgoing Chairman Marcus Agius, who resigned as Chairman Monday, will now (Tuesday) serve as full-time Chairman, and will also lead the search for a new CEO. Observers are naturally wondering why the events have turned on themselves, and a source commented that it was “A case of the governor getting his way by the inflection of his eyebrows,” meaning that it was the Bank of England’s Governor King’s way of hinting that Bob Diamond needed to be sacked as CEO of Barclays. Perhaps Diamond wasn’t just blowing smoke when he implied that he ‘knows where the bodies are buried’?

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The Federal Energy Regulatory Commission has twice subpoenaed JPMorgan (NYSE:JPM) as it investigates whether the bank used certain bidding strategies in order to extract higher energy prices in California and several markets in the Midwest. The contentious issue at this point is to see if JPMorgan can keep secret key emails that it considers privileged hidden.

Blackstone (NYSE:BX) is purchasing as much as $250 million worth of foreclosed single-family homes with the intention of renting them out, say sources. The move is part of a trend, in which well-heeled investors are making a major asset class out of what used to be a cottage industry by much smaller entrepreneurs.

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The Libor scandal in the United Kingdom rages on unabated, as Barclays (NYSE:BCS) chairman Marcus Agius steps down amidst the bank’s Libor scandal, saying that “the buck stops with me” for the “unacceptable standards of behaviour within the bank”, according to CNBC. Gary Gensler of the Commodity Futures Trading Commission remarked that the firm was ‘manipulating Libor to make markets think the bank was in better shape than it was and to make a profit for their trading desks around the world’, while Prime Minister David Cameron launches a joint parliamentary inquiry into the banking industry, through which to reveal the truth behind the Libor scandal.

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A new report says that JPMorgan (NYSE:JPM) took only fourth place in the race for top worldwide bank profits in 2011, while its counterparts in China comprised almost one third of total profits. The Industrial and Commercial Bank of China, Ltd. took first place with pretax earnings of $43.2 billion, next came China Construction Bank with $34.8 billion, followed by Bank of China with $26.8 billion. Many of the Chinese gains came from market share losses by their European peers; HSBC (NYSE:HBC) came in fifth.

EverBank Financial (EVER) purchases GE Capital’s (NYSE:GE) Business Property Lending division for $2.51 billion; the move is part of the latter company’s strategy of shrinking the overall size of its property portfolio. The acquired firm originates and services loans for real-estate that is owned or leased by small- and mid-size companies.

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The United Kingdom’s Libor Scandal shows no signs of abating, as on Thursday, Barclays (NYSE:BCS) standalone outlook was lowered from stable to negative by Moody’s, because pressure from politicians and its shareholders might push the company away from I-banking. Barclays now faces the quite formidable task of not only replacing thre top executives, but also to recruit a new CEO who possesses I-banking expertise, and also sufficient credibility to quickly take on a Libor blowup gone viral. Meanwhile, shareholders are left in a quandary: the liabilities that Barclays faces from the Libor inquiry are unknown, and shares fell by 16 percent the day following the bank’s being surprised by a $451.4 million regulatory fine. Upwards of a dozen banks are being investigated, providing minimal disclosures, and worse, are likely to be insufficient funds in reserves for the inevitable penalties. Further, Bob Diamond told U.K. legislators on Wednesday that he only learned of the Libor accusations very recently, but reports about Barclays’ involvement with potential manipulation of the rate go back at least to March 2011.

On Wednesday Maple Group’s $3.8 billion acquisition of TMX Group (TMXGF.PK) was okayed by Canada’s top regulator. Maple Group is a consortium consisting of 13 of Canada’s leading banks and pension funds.

JPMorgan (NYSE:JPM) shares fall way off on the day that the firm gets sued by the Federal Energy Regulatory Commission, for emails that pertain to the energy regulator’s investigation of JPM’s alleged manipulation of energy markets in California and in the Midwest. A federal judge has ordered the bank to explain why certain emails were held back from authorities, according to Jake Beckman.


The New York Stock Exchange (NYSE:NYX) is ready to start offering retail investors stock quotes in increments of less than one cent, according to the Wall Street Journal, as part of a strategy aimed at helping the exchange compete with banks and electronic-trading firms moving into its business.

The Bank of New York Mellon (NYSE:BK) will take a second quarter charge of $210 million, perhaps to set aside for settlement costs arising from a class action lawsuit which involves securities linked to Sigma Finance.

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Wells Fargo (NYSE:WFC) seems poised to report the strongest second quarter earnings of the big banks, says Credit Suisse. A refinancing boom thanks to the newly-revised Home Affordable Refinance Program, is picking up steam, and WFC is the 800 lb. gorilla in the domestic mortgage market.

The Libor investigation crosses the Channel and zaps Deutsche Bank (NYSE:DB). Germany’s Big Bank is thought by some as the country’s Barclays, as a wider inquiry into manipulation of the rate takes its toll.

A seven-year lawsuit that was brought by retailers against MasterCard (NYSE:MA) and Visa (NYSE:V) might be settled soon. The charges centered around allegations that the two credit-card major players fixed swipe fees, according to a Bloomberg report. Details of the resolution have not been released, but Visa has set aside $4.28 billion to cover litigation, MasterCard took a $495 million charge in the fourth quarter.

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On Thursday the European Central Bank reduced its deposit rate to 0 percent, and in reaction JPMorgan (NYSE:JPM) ceased accepting new money in several money market funds in response, and later in the day was joined by Goldman Sachs (NYSE:GS) and BlackRock in cutting off new investment into certain European money market funds. “The European market environment is in uncharted territory with such historically low – or even negative – yields for high-quality issuance” commented a Goldman spokesperson.

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