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Obama Urges Tougher Laws on Financial Fraud

January 25, 2012 by Leave a Comment

In his State of the Union address, Mr. Obama also said he would ask the attorney general to establish a special financial crimes unit to prosecute cases of large-scale financial fraud.

It is not clear how that effort would differ from the Financial Fraud Enforcement Task Force, a cross-agency group that Mr. Obama established in November 2009. Its mission, as the White House put it then, was to “hold accountable those who helped bring about the last financial crisis and to prevent another crisis from happening.”

The two initiatives represent an attempt to give financial regulators a greater ability to police the financial markets. In addition, the proposals seek to acknowledge the continuing frustration among many Americans — exemplified by the Occupy Wall Street movement — that few financial executives have been prosecuted for their actions leading up to the crisis.

Given the election-year pressures and the continuing gridlock on Capitol Hill, neither measure is certain to win approval in this session of Congress.

The issue of how to deal with Wall Street firms that repeatedly violate securities laws has come into focus in recent months as the S.E.C. has stepped up its efforts to bring cases related to the financial crisis. Many of those cases involve financial companies that have violated the same laws many times before.

A New York Times analysis of S.E.C. enforcement actions over the last 15 years, published in November, found at least 51 cases in which the S.E.C. concluded that Wall Street firms had broken antifraud laws that, as part of settlements of earlier fraud cases, they had pledged never to breach. The 51 cases spanned 19 firms, including nearly all of the biggest financial companies — Goldman Sachs, Morgan Stanley, JPMorgan Chase Company and Bank of America among them.

Mr. Obama first outlined his plans to crack down on repeat offenders in an economic speech in December in Osawatomie, Kan. “Too often, we’ve seen Wall Street firms violating major antifraud laws because the penalties are too weak and there’s no price for being a repeat offender,” Mr. Obama said. “No more. I’ll be calling for legislation that makes those penalties count so that firms don’t see punishment for breaking the law as just the price of doing business.”

Mary Schapiro, the chairwoman of the S.E.C., similarly called on Congress in November to raise the maximum penalties the commission could assess for securities laws violations, and to allow it to assess greater fines for repeat violations of antifraud statutes.

Currently, the S.E.C. can try to bring contempt charges only if a company has broken previous vows not to violate the law. In a letter to members of the Senate Banking Committee, Ms. Schapiro said that enhancing the S.E.C.’s ability to crack down on repeat offenders would “substantially enhance the effectiveness of the commission’s enforcement program by addressing existing limitations that have resulted in criticism regarding the adequacy of commission actions against those who violate the securities laws.”

The S.E.C. has also been criticized recently for its practice of allowing companies to settle allegations of securities fraud while neither admitting nor denying the charges. That is a standard practice used for years by the S.E.C. as well as other regulatory agencies, but it has come under increasing scrutiny since the financial crisis.

Most recently, Judge Jed S. Rakoff of the Federal District Court in Manhattan rejected a proposed $285 million settlement in a case between the S.E.C. and Citigroup over a complex mortgage security that it marketed in 2007, as the housing market was beginning to crumble.

In his opinion, Judge Rakoff said the settlement’s “neither admit nor deny” terms left him with no conclusive evidence with which to determine whether the proposed punishment was just.

Judge Rakoff said such settlements, which often involve penalties of tens or hundreds of millions of dollars, were frequently viewed by the settling companies “as a cost of doing business imposed by having to maintain a working relationship with a regulatory agency, rather than as any indication of where the real truth lies.”

In the State of the Union address, Mr. Obama said that banks and financial companies should be held accountable for their actions and should face the same type of consequences as anyone else who has been charged with breaking the law.

Article source: http://feeds.nytimes.com/click.phdo?i=5e6da63076b1660faaf9a22cfa9f124f

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DealBook: Mark Haines, CNBC Anchor, Dies at 65

May 25, 2011 by Leave a Comment

Mark Haines, an anchor at CNBC who for years narrated the vicissitudes of the markets, died on Tuesday evening at his home in Marlboro, N.J., the network said on its Web site. He was 65.

CNBC did not disclose the cause of death.

A longtime TV news veteran who did stints in New York City and Philadelphia before attending law school, Mr. Haines joined the then-fledgling CNBC in 1989 and became one of the network’s most prominent faces.

In 1995, he became the first host of “Squawk Box,” helping to develop the early-morning show into must-see viewing for Wall Street, leavening discussions about fast-moving stocks with banter about pop culture and personalities.

In 2005, he became the co-host of another CNBC morning show, “Squawk on the Street,” with Erin Burnett. (Earlier this month, Ms. Burnett left the network to join CNN.)

From the beginning, Mr. Haines did not fit the mold of a traditional TV anchor. (A 2000 article in Fast Company described his rumpled look as “a butcher forced to wear a business suit,” and colleagues remember his off-camera uniform often including sweatpants, mussed hair and bare feet.) But he became known as a curmudgeonly, if wry, emcee. He also developed a reputation as a sometimes sharp-tongued interviewer, bluntly battling with guest chief executives over their companies.

His CNBC colleague David Faber said that Mr. Haines’s beginnings as a reporter covering corruption in Providence, R.I. helped inform that rough-and-tumble approach.

“There were those unexpected moments in interviews when he would be relentless and ferocious and not take no for an answer,” Mr. Faber said in a telephone interview. He added that such skepticism helped establish a foundation of integrity in CNBC’s news coverage.

Mr. Haines’s demeanor helped model a kind of personality that appealed to financial executives, one that has since become less uncommon across the dial.

“If we don’t get people who watch, we’re out of business,” he told The Chicago Tribune in 1998. “At the same time, you have to have a core of people who understand business.”

Joe Kernen, who co-hosted “Squawk Box” with Mr. Haines, said that his colleague’s influence on CNBC stretched well beyond the morning, given his presence at the network from its inception.

“His fingerprints were on everything,” Mr. Kernen said in a telephone interview.

Mr. Kernen pointed to Sept. 11, 2001 as Mr. Haines’s single most important day as an anchor, when he calmly reported on developments about the terrorist attacks on the World Trade Center.

Jim Cramer, the CNBC host, sent this in an e-mail:

Mark Haines was our Huntley, our Brinkley, our Cronkite all rolled up into one giant of a business journalist. He was the first business journalist ever to ask a C.E.O. a hard question that I had ever seen. When I met him 15 years ago, I was scared to death of him. I was a guest co-host. He said to me when he shook my hand, “No free passes, to you or anyone else.” He stayed that way. Forever.

Mr. Haines was “the nicest gruff guy you will ever meet,” Jonathan Wald, formerly CNBC’s senior vice president of business news, wrote on Twitter on Wednesday morning. Mr. Wald added that the anchor “epitomized the brand, loved the news, cared deeply.”

Phil LeBeau, CNBC’s autos correspondent, also wrote on Twitter, “His wit and tough approach to handling interviews will be missed.”

Mark S. Haines was born on April 19, 1946 and grew up in Oyster Bay, N.Y. He graduated from Denison University in 1969 and from the University of Pennsylvania Law School in 1989.

He is survived by his wife, Cindy, and two children, Matthew and Meredith.

Below is the internal CNBC memo on Mr. Haines’s death:

It is with deep regret and a heavy heart that I let you know that Mark Haines passed away last night in his home.

I know all of you join me in sending our heartfelt condolences to Mark’s wife, Cindy, his son, Matt, and his daughter, Meredith.

Mark has been one of the building blocks of CNBC since the very beginning, joining us in 1989. With his searing wit, profound insight and piercing interview style, he was a constant and trusted presence in business news for more than 20 years. From the dot-com bubble to the tragic events of 9/11 to the depths of the financial crisis, Mark was always the unflappable pro.

Mark loved CNBC and we loved him back. He will be deeply missed.

When we have details on the arrangements, I will communicate them to you.

Evelyn M. Rusli contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=9d3328429715fb66b9202bd4f2718454

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Want a Piece of the Mets? It Helps to Fit the Profile

April 17, 2011 by Leave a Comment

He almost certainly works in finance, and he probably roots for the Mets.

Who is he? He is one of the men angling to buy a minority share of the Mets.

The general profile of the known bidders for the Mets is not surprising, but it lacks the diversity of team owners who built ships (George Steinbrenner), sold cars (Bud Selig), co-founded Home Depot (Arthur Blank), erected shopping malls (Herb Simon) or started Microsoft (Paul Allen) with Bill Gates.

It makes sense that rich native Long Islanders would want a piece of the Mets despite their recent dismal on-field record and hefty financial losses. About one-quarter of the Mets’ fan base comes from the New York suburbs of Nassau and Suffolk Counties. A locally bred fan in the prime of his career — with lots of money — might be more willing than an outsider to accept a stake in the team that gives him no control. And in an economy in which Wall Street is faring better than most industries, a New York team can attract cash from financial executives.

“New York is where you’d think the money would come from,” said Rob Tilliss, the founder of Inner Circle Sports, a sports investment bank and adviser. “There are enough local buyers around the New York metropolitan area with substantial money.”

The sale for a limited partnership is nearing its final stage as the owners look at three offers for up to 49 percent of the Mets. Fred Wilpon, the Mets’ principal owner, was 43 when he bought a small piece of the team in 1980. He is from Brooklyn, whence people fled farther east; lives on the wealthy North Shore of Nassau County; put the headquarters of his company, Sterling Equities, in Great Neck; and made his money in real estate. His former partner in the Mets, Nelson Doubleday, was also a wealthy Long Islander, who published books.

More than 30 years later, Steven A. Cohen fits the parameters of the modern, updated profile. Cohen, a billionaire hedge fund manager in Connecticut, is 54. He runs SAC Capital Advisors, a powerful $12 billion hedge fund in Stamford, where the former Mets manager Bobby Valentine is the public safety director, and lives in Greenwich, Conn., where Tom Seaver lived before turning to winemaking. Cohen, who is from Great Neck, has a suite at Citi Field.

Anthony Scaramucci, also a hedge fund manager, is the profile personified. He is 47. He grew up in Port Washington. He lives in Manhasset. He delivered Newsday as a youngster. He took the Long Island Rail Road to Shea Stadium to watch the Mets. And Valentine gave him a blurb for his book, “Goodbye Gordon Gekko.”

Scaramucci still appears to be in the running to pay up to $200 million for less than half of the Mets, along with a neighbor in Manhasset, James F. McCann, whose son, Matt, works for Scaramucci.

McCann is 59, from Rockaway, Queens (a borough that is still a geographic part of Long Island), and while not a Wall Street Master of the Universe, runs a business, 1-800-Flowers.com, from Carle Place on Long Island.

McCann has a direct connection to the Mets through his sponsorship of the team.

Steven Starker, another Wall Streeter, is from Brooklyn (also geographically part of Long Island) and was a founder of BTIG, a global trading firm. Two of his bidding partners also have Long Island roots. Kenny Dichter, a co-founder of Marquis Jets, and Doug Ellin, who created the HBO series “Entourage,” are 1986 graduates of Kennedy High School in Merrick, which last year inducted them into its hall of fame. The status of their offer for the Mets has not been determined. But it is typical of a process like the one being run by the investment firm Allen Company to ask finalists to improve their bids.

David Heller and Marc Spilker epitomized the investor profile, too, but they are out of the bidding. They are fabulously rich Mets fans, in their 40s, from Long Island. Spilker graduated from W. C. Mepham High School in Bellmore. Heller is a global co-leader of Goldman Sachs’s securities division. Spilker was a Goldman executive but is now president of Apollo Global Management, a private equity firm.

One of the first men in his 40s to voice an interest in the Mets was Mike Repole, the owner of the Kentucky Derby hopeful Uncle Mo. He is 42, grew up in Middle Village, Queens, lives on Long Island and made his wealth when Coca-Cola paid $4.1 billion for the company he co-founded, Glacéau, the maker of Vitaminwater. He balked at bidding without getting any control over the team.

Still another bidder, about whom little has been heard, is Jason Reese. He is in the financial world, as chairman of an investment bank called Imperial Capital in faraway Los Angeles. Still, he is a native Long Islander who played goal on the West Babylon High School lacrosse team and later for Yale.

One pair of bidders who have dropped out barely fit the profile. Leo Hindery, a media investor, and Marc A. Utay, managing partner of a private equity firm, work in Manhattan. But Hindery is from Washington State and Utay from Glenview, Ill.

The current profile of the Mets’ bidders resembles, to some degree, that of Joan Whitney Payson — an heiress whose main home was in Manhasset, and who, in her late 50s, became the first owner of the Mets, and their most ardent fan.

Peter Lattman and David Waldstein contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=818090feb93a2841afa6b4421d741835

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