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Wall Street Hit Goes Beyond Hurricane Sandy

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In the US, where Barclays is now a major Wall Street player after acquiring much of Lehman Brothers' investment banking businesses, Diamond's departure was especially acute.

According to Bloomberg, Barclays said in earnings that the US Federal Energy Regulatory Commission is probing the bank's power trading unit and could levy penalties as soon as Wednesday. After competitor Standard Chartered was fined $200 million by New York regulators for its failure to comply with the Foreign Corrupt Practices Act, Barclays also disclosed a DOJ inquest that may have similar ramifications on Wednesday.

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Outside of prospective regulatory penalties, Barclays' earnings indicated Wall Street's animal spirits remain tame. The bank posted a 29% gain in third-quarter pretax profit of $2.8 billion; however, those earnings failed to impress investors who pushed shares sharply lower.

UBS, on the other hand, surged more than 13% as investors sent a clear signal that the bank was right to outline an exit of key Wall Street trading businesses that will cost 10,000 traders and bankers their jobs in coming years.

On Tuesday, UBS reported an unexpected pretax loss of $2.7 billion, on restructuring charges from a plan to cut 10,000 jobs across its global investment bank.

On Wednesday, Bloomberg reported JPMorgan is suing some of the traders responsible for supervising the bank's disastrous "London Whale" trading position at its Chief Investment Office, which has so far culminated in $6.2 billion in losses.

According to the Wednesday lawsuit, JPMorgan is suing Javier Martin-Artajo, the boss of trader Bruno Iksil, who is known as the London Whale. However Bloomberg reported few details from the complaint. Already, JPMorgan has clawed back two years of pay from executives and traders involved with the losing trade. The loss, disclosed through the summer, forced JPMorgan CEO Jamie Dimon to admit mistakes and curb the CIO, once one of Wall Street's largest traders, from taking big risks.

Taken as a whole, the negative news emanating from the likes of Barclays, UBS and JPMorgan signal that while the financial district was shuttered in recent days a once-in-a-century natural disaster did little to slow the retreat of Wall Street from the risk-taking that was once so profitable prior to the financial crisis.

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