Cox Pushes Change/SEC Exit Nears, New Citi CCO

SEC proposals, foreign trading restrictions and on credit ratings, in waning months of Bush administration. WSJ (reg req'd for full art.) Fed Steps Bolster Banks-Easier for private-equity to invest

Citigroup said Cindy Armine is its new CCO.
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Fed took unprecedented step of barring it from “significant acquistions.” Citi’s image tarnished from Enron, WorldCom and conflicted research. Bond traders upset European regulators. Weak AML practices nearly got it booted from Japan. Bolstering compliance staff led to management bloat. Armine must find balance between policies and profit, also must work closely with legal and regulators, who stepped up scrutiny of risk after more than $40 billion in write-offs. Marisa Lago, who led compliance i-bank and alternative investments, left “to pursue other interests.”

Fed, SEC Deal to Redraw Regulation; Citi and Goldman Brace for Layoffs

FED-SEC information to be shared include data regarding settlements, trade and positions. Links to Reuters via NYT and WSJ(Subscription Needed)

Agreement could be announced this week, aim is to fill gaps and increase cooperation in wake of Bear. SEC will get information from Fed on bank short-term financing. Fed would be able to see investment bank trading positions, leverage and capital requirements. SEC chief under fire as Fed seeks bigger Wall St role WSJ link via Daily Herald

Hundreds of Citi investment bankers and traders, including many senior, expected to begin losing jobs as bank completes 2,000 layoffs announced in March.

Even Goldman acknowledging reality:Last wk began cutting bankers,expected to cut up to 10% of M&A and corporate fundraising staff. Banks swinging axe with harder force, total announced dismissals over 83,000 and more expected. It is unclear where the bottom of this market will be. History of Wall St Layoffs

Cox to Fast-Track Fund Regs

SEC's Cox thinking legacy as term winds down: Working on soft dollar interp guidance, 12b-1 fees and portfolio valuation. Also more streamlined SRO rule approval and new muni database. WSJ

Pasternak, Leighton cleared of SEC charges

Attorneys not involved in case said it's rare for SEC to lose a case it takes to trial. Attorney and former deputy chief counsel with NASD enforcement, said 90% of SEC enforcement actions settle. Fordham law prof said, "Going to trial is a crap shoot." Wall Street Journal Blogs and all 9 news articles » NITE

S.E.C. Proposes Tighter Credit-Rating Rules

6/25 WSJ article - Proposed rules that may diminish the longstanding importance of credit ratings across various markets - may make it possible for money-market funds to invest in short-term debt without regard to ratings put on those securities by firms such as Moody's and S&P.

Proposed new rules intended to stem conflicts of interest, expand disclosure for credit rating industry and flag ratings of more complex securities. Seeking to make ratings more open while also encouraging new firms enter. Three firms that dominate the $5 billion-a-year industry — S&P, Moody’s and Fitch—widely accused of failing to identify risks in subprime mortgage investments. AP via NYT»
WSJ: Plan Would Bring Greater Disclosure; Key Firms Back It

Supporters Of Fed Window Could Use Regulations To Gain Competitive Advantage-Dealbreaker

Front-Running Evidence, Financial Regulation Debate, BofA exits Prime Brokerage

Bank of America Bids Good-Bye to Prime Brokerage
Deal to sell to BNP Paribas. Not a premier player BA ranked in second or third tier, chasing Morgan Stanley and Goldman. Had about 500 hedge fund clients,nothing to sneeze at. With demise of Bear, landscape changing:opportunities for newcomer to carve niche. (Ex: Citi recently carved specialty as a stock lender). Identifying niche not easy, given competition.

More-FINalternatives article

Citi's Pandit Calls for Debate on Financial Regulations

Merrill Chief Campaigns for Reserve Window

Evidence of Front-Running on Wall St. at portfolio.com

N.Y. Fed Chief Calls for More Fed Authority

N.Y. Fed Chief Calls for More Fed Authority - Bloomberg via NY Sun

The president Federal Reserve Bank of New York, Timothy Geithner, called for greater central bank authority over banks so the financial system can better withstand shocks and recover from the credit crisis. the Fed's lending programs to commercial and investment banks will remain "until conditions in money and credit markets have improved substantially," Mr. Geithner wrote in an op-ed article for the Financial Times. His remarks were excerpted and adapted from a speech to be delivered yesterday in New York.