Citigroup (C) 01 (May 08 - Nov 08)

[kennynah]

Ishak, we were just horsing around. Hope u don't mind.

[ishak]

The regulators are really busy probing here and there. It bodes well for the financial sector in bringing back confidence.

Bank NY Mellon faces SEC auction-rate debt probe
Fri Aug 8, 2008 12:03pm EDT

NEW YORK, Aug 8 (Reuters) - Bank of New York Mellon Corp, the world's largest custody bank, said on Friday it is the subject of a U.S. Securities and Exchange Commission probe into auction-rate securities transactions.

In its quarterly report filed with the agency, the New York-based company said it told the SEC that its Mellon Financial Markets LLC unit placed orders on behalf of issuers to buy their own auction-rate debt. It said the Mellon unit is cooperating with the SEC.

Auction-rate debt has interest rates that reset through periodic auctions, typically held every seven, 28 or 35 days. The market seized up in February after Wall Street brokerages stopped supporting the debt.

Regulators are examining auction-rate practices of at least a dozen banks and brokerages. Citigroup Inc and UBS AG have agreed to buy back billions of dollars of the debt from clients as part of regulatory settlements.

Merrill Lynch & Co has also announced plans to buy back such debt from clients.

In an unrelated matter, Bank of New York Mellon said the Financial Industry Regulatory Authority may bring disciplinary action against former traders at its BNY Capital Markets Inc unit, now known as BNY Mellon Capital Markets LLC.

The company said the action concerns seven partial tender offers for publicly traded securities, and the supervision of the traders' activities. BNY Mellon Capital Markets expects to make a submission this month setting forth defenses.

In a third matter, Bank of New York Mellon said that in a review of Mellon Securities LLC customer accounts, it found evidence suggesting that employees did not comply with best execution rules concerning agency cross trades. It said it disclosed this matter to the SEC and FINRA, and is determining what steps to take.

Shares of Bank of New York Mellon rose 98 cents to $36.96 in late morning trading on the New York Stock Exchange. (Reporting by Jonathan Stempel; editing by John Wallace)

[ishak]

UBS Announces Comprehensive Settlement, in Principle, for All Clients Holding Auction Rate Securities at the Estimated Cost of USD 900 Million

NEW YORK, Aug 08, 2008 (BUSINESS WIRE) -- UBS announced today a settlement, in principle, with the New York Attorney General (NYAG), the Massachusetts Securities Division, the Securities and Exchange Commission (SEC) and other state regulatory agencies represented by North American Securities Administrators Association (NASAA) to restore liquidity to all remaining clients' holdings of auction rate securities (ARS).

Under the agreement in principle, UBS has committed to purchase a total of USD 8.3 billion of ARS, at par, from most private clients during a two-year time period beginning January 1, 2009. Private clients and charities holding less than USD 1 million in household assets at UBS will be able to avail themselves of this relief beginning Oct. 31, 2008. From mid-September, UBS will provide loans at no cost to the client for the par value of their ARS holdings.

In addition, UBS has also committed to provide liquidity solutions to institutional investors and will agree from June 2010 to purchase all or any of the remaining USD 10.3 billion, at par, from its institutional clients. Today's news is in addition to the firm's recently announced intention to repurchase USD 3.5 billion of tax-exempt Auction Preferred Stock.

"Today's solution provides further relief, beginning in September, to investors who have been understandably frustrated by the industry-wide failure of the ARS market. Our leading position in supporting the market and providing liquidity is clear, and now, we are the first firm to give all clients -- private, corporate and institutional the opportunity to be made whole," said Marten Hoekstra, Head of UBS Wealth Management Americas.

"Since the breakdown in the market, UBS clients have been offered multiple liquidity options. They have been able to borrow 100 percent against the value of their holdings. The solutions announced today provide our clients with the widest range of choices in the industry, including a two-year window during which clients can either continue to earn interest or redeem their ARS at any time," Hoekstra added.

The firm has also agreed to pay a fine of USD 150 million - USD 75 million to the state of New York and USD 75 million to other state regulatory agencies. UBS neither admits nor denies allegations of wrongdoing.

The full cost of the proposed settlement, taking into account the projected redemption patterns of clients, the difference between the purchase prices and the current market value of client ARS holdings, and the regulatory fine related to the settlements, is estimated to be in the range of USD 900 million on a pre-tax basis, to be booked in the second quarter results. This includes reimbursements to all clients for losses incurred from sales of ARS holdings between Feb. 13 and Aug. 8, 2008.

A provision for the costs of this settlement will be included in the firm's second quarter financial results, which will be announced on Aug. 12, 2008.

Results, including this settlement, for UBS AG for the second quarter will be consistent with guidance given by the firm on July 4, 2008.

UBS is one of the world's leading financial firms, serving a discerning international client base. Its business, global in scale, is focused on growth. As an integrated firm, UBS creates added value for clients by drawing on the combined resources and expertise of all its businesses.

UBS is the leading global wealth manager, a leading global investment banking and securities firm, and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.

UBS is present in all major financial centers worldwide. It has offices in 50 countries, with about 38% of its employees working in the Americas, 33% in Switzerland, 16% in the rest of Europe and 13% in Asia Pacific. UBS employs more than 80,000 people around the world. Its shares are listed on the Swiss Stock Exchange (SWX), the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).
SOURCE: UBS

Not the pretty singer, my favourite too. Its not BoA, its UBS now and likely followed by ML.

UBS will buy back bonds for $19.4b
Investors misled, regulators say; Announcement expected today
By Beth Healy, Globe Staff | August 8, 2008

State and federal regulators have reached a $19.4 billion agreement with UBS Financial Services Inc. to settle charges that the firm misled investors into buying bonds that were far riskier than advertised, according to people briefed on the talks.

...

[ishak]

SEC now conducting formal probe into Countrywide
Securities regulators ratchet inquiry into Countrywide; Lender responds to subpoenas
AP, Friday August 8, 2:10 pm ET

LOS ANGELES (AP) -- Bank of America Corp. says the Securities and Exchange Commission has escalated its scrutiny of Countrywide Financial Corp. into a formal investigation.

Bank of America, which finalized its acquisition of Countrywide last month, disclosed the development in a regulatory filing Thursday.

The bank also said Countrywide has responded to subpoenas from the SEC. The filing did not specify what aspect of the lender regulators are focused on.

The Los Angeles Times reported Friday that the SEC probe centers on whether Countrywide Chairman and CEO Angelo Mozilo's stock trades violated the law and whether the lender's financial disclosures misled investors.

The newspaper based its report on unnamed persons close to the investigation.

My mistake, should spell out in full or use its proper symbol instead,

Btw, nice picture, saved as my desktop wall picture for now.

Bank of America subpoenaed on auction-rate securities
The Business Journal of the Greater Triad Area
Friday, August 8, 2008 - 11:15 AM EDT

...

According to the filing, the SEC probe follows media reports that Countrywide is subject to an investigation by the FBI in connection with its mortgage-business practices.

...

[ishak]

XLF
8-Aug-08 ---- 176,616,200 - 21.94
7-Aug-08 ---- 188,973,500 - 21.21
6-Aug-08 ---- 141,946,200 - 22.31
5-Aug-08 ---- 181,017,600 - 22.54
4-Aug-08 ---- 141,102,300 - 21.45
1-Aug-08 ---- 189,349,800 - 21.63
31-Jul-08 ---- 169,315,100 - 21.63
30-Jul-08 ---- 271,696,000 - 21.83
29-Jul-08 ---- 249,956,300 - 21.50
28-Jul-08 ---- 169,887,400 - 19.89
25-Jul-08 ---- 196,090,300 - 20.87
24-Jul-08 ---- 272,445,800 - 20.95
23-Jul-08 ---- 356,420,100 - 22.46
22-Jul-08 ---- 331,263,300 - 22.49

Volume does not suggest funds moving into financials, will wait for two more weeks for a clearer trend.
Continue to hold SKF @ 115
Price Close @ 080808
XLF: 21.94
UYG: 22.42
SKF: 115.15
C: 19.39

[ishak]

C @ 20.12
XLF @ 22.48
UYG @ 23.63
SKF @ 109.27

Hope my story on the short sale of financial stocks ending mid week could change things around is correct.

[kennynah]

sorry...lost....so in short, u are expecting a tumble of financial shares across the board to maybe back to Jul's low...and in C's case, ~$15? thanks.

[ishak]

Yes, the problems could not have gone away just like that. I still expect another dip towards the end of the year. But i would give up if the loss is out of my budget.

Oil is coming down too fast, not good indicators to my story.

[kennynah]

ok...5 months time line u are looking at...ok...i thought u mean like this mid week, u r anticipating a capitulaton....got it..

[ishak]

After C, UBS, MER is next to fall in line with SEC

Merrill Lynch to Buy Auction Rate Securities Positions From Its Retail Clients
WEBWIRE – Tuesday, August 12, 2008

NEW YORK. — Merrill Lynch (NYSE: MER) today announced that effective January 15, 2009, and through January 15, 2010, it will offer to buy at par auction rate securities sold by it to its retail clients.

"Our clients have been caught in an unprecedented liquidity crisis" said John A. Thain, chairman and chief executive officer. "We are solving it by giving them the option of selling their positions to us"

"We have made tremendous strides in working with issuers during the last five months; over 40 percent of our clients’ auction rate holdings have been liquidated" said Robert J. McCann, president of Global Wealth Management. "But we are not satisfied with this pace, even though the marketplace continues to move forward and we expect issuer redemptions to accelerate with time. With this offer, we continue to put the interests of our clients first"

Merrill Lynch acknowledges the important role being played by the Securities and Exchange Commission; the New York state attorney general, Andrew M. Cuomo; the Massachusetts Securities Division and the North American Securities Administrators Association on these issues. Merrill Lynch also will continue to work closely with and encourage auction rate securities issuers in their restructuring efforts to resolve the outstanding liquidity issues for all of Merrill Lynch’s retail and institutional clients.

Merrill Lynch’s action creates liquidity for more than 30,000 clients who hold municipal, closed-end funds and student loan auction rate securities. Merrill Lynch retail clients currently hold an estimated $12 billion in auction rate securities, which Merrill Lynch expects to be reduced to under $10 billion by January 2009 as a result of announced and anticipated issuer redemptions. In addition to its offer to buy auction rate securities, Merrill Lynch will continue to actively provide clients with attractive loan arrangements to give them needed liquidity.

Under the plan announced today, retail clients of Merrill Lynch would have a year, beginning on January 15, 2009, and ending January 15, 2010, in which to sell Merrill Lynch their auction rate securities, if they so wish. Retail clients include individuals, charitable institutions and many family-owned and small businesses. Auction rate securities that are the subject of pending issuer redemptions or successful auctions will not be eligible for purchase by Merrill Lynch.

The auction rate securities that are owned by Merrill Lynch’s clients are predominantly rated AAA and are not credit-impaired. Merrill Lynch does not expect its redemption of auction rate securities in 2009 through 2010 to have a materially adverse impact on its capital ratios, liquidity, or consolidated financial performance.

Merrill Lynch is one of the world’s leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world’s largest publicly traded investment management companies, with more than $1.4 trillion in assets under management at June 30, 2008.

Sorry K, hope the window dressing helps.