Aug. 14 (Bloomberg) -- Little more than a year before he was criticized for breaking ranks with regulators for being the first to accuse Standard Chartered Plc of laundering Iranian money, Benjamin Lawsky, New York’s top banking official, was insisting on his own brand of justice at a charity carnival game, Bloomberg News’ Greg Farrell reports.
In May 2011, just after he learned New York’s Democratic Governor Andrew Cuomo would nominate him to head the state’s fledgling Department of Financial Services, Lawsky brought his young child to the St. Mark’s fair in New Canaan, Connecticut, one of the New York area’s wealthiest suburbs.
Lawsky’s child approached a shooting gallery, which rewarded the best marksman with a selection of colorful stuffed toys. It soon became clear to Lawsky that the weapon his child had chosen was a dud, and that a different gun seemed to win every time, no matter who was at the trigger.
Rather than take the easy path of placing his child at the sure-fire rifle, Lawsky pointed out the imbalance to the game’s operator, who fixed it.
These days, Lawsky has a much larger challenge to right what he sees as a wrong, given the criticism leveled at him by Mervyn King, head of the Bank of England, and Peter Sands, chief executive of London-based Standard Chartered, which Lawsky accused of illegally laundering $250 billion in Iranian money.
On Aug. 6, Lawsky, whose office declined to comment or cooperate for the article, stunned both bank executives and federal regulators who have been investigating Standard Chartered’s wire-transfer activities for several years. In a formal order, he scheduled a hearing for tomorrow at which the bank must persuade him not to revoke its license to operate in New York state. One analyst estimated loss of the license could result in a 40 percent drop in earnings.
The order angered U.K. officials, who viewed Lawsky’s broadside as an attack on London’s status as a financial center. At home, U.S. regulators, including the Treasury Department, the Federal Reserve and the Manhattan District Attorney, complained privately in published reports that Lawsky’s order was a publicity stunt that disrupted their own probes of the matter.
Lawsky’s new role as the center of attention in an international-enforcement case has thrust him into an unusual position. In the past decade, the 42-year-old former prosecutor established himself as a no-nonsense law enforcer happy to allow superiors, such as Cuomo, bask in the attention generated by his work.
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OCC Chief Counsel Williams to Step Down Next Month
Julie Williams, chief counsel at the U.S. Office of the Comptroller of the Currency, will step down on Sept. 30 and plans to retire from government service at the end of the year, the agency said yesterday in a statement.
“In her 19 years at the OCC, her contributions to the agency and her role in the world of financial services regulation have been extraordinary,” Comptroller of the Currency Thomas J. Curry said in the statement. “In my few months as Comptroller, Julie played an integral role in my transition and has played an indispensable role in my leadership team.”
Williams twice served as acting Comptroller of the Currency, first from April 1998 through December 1998 and then from October 2004 through August 2005. She served as chief counsel for four different comptrollers -- Eugene A. Ludwig, John D. Hawke Jr., John C. Dugan and Thomas J. Curry.
Before working for the government, she was an attorney at the law firm now known as Fried, Frank, Harris, Shriver & Jacobson LLP in Washington from 1975 to 1983.
Deputy Chief Counsel Daniel P. Stipano will serve as acting chief counsel from Oct. 1 through the end of the year and Deputy Chief Counsel Karen Solomon will serve from Jan. 1 through March 31, while the OCC looks for the next chief counsel.
Philippine Panel Recommends 8 for Top Judge Post, Bars De Lima
A Philippine panel nominated eight people from whom President Benigno Aquino will select the nation’s next chief justice, according to congressman and Judicial and Bar Council member Niel Tupas.
The council nominated Supreme Court justices Antonio Carpio, Roberto Abad, Arturo Brion, Maria Lourdes Sereno and Teresita de Castro, Tupas told reporters yesterday. Also recommended were Solicitor General Francis Jardeleza, former Executive Secretary Ronaldo Zamora and lawyer Cesar Villanueva, he said. Justice Secretary Leila de Lima, who’s facing disbarment cases, was disqualified, Tupas said.
Aquino has until the end of the month to appoint the top judge, who will replace Renato Corona, whom the Senate ousted in May for illegally concealing his wealth.
Julius Baer Agrees to Acquire Merrill Non-U.S. Wealth Units
Julius Baer Group Ltd., the Swiss money manager established in 1890, agreed to pay about 860 million Swiss francs ($880 million) for Bank of America Corp.’s Merrill Lynch wealth management business outside the U.S.
Cleary Gottlieb Steen & Hamilton LLP is advising Bank of America Merrill Lynch. Linklaters LLP is advising Julius Baer.
Leading the Cleary Gottlieb team are New York partner Paul Shim and London partner Simon Jay.
Linklaters corporate partners Casper Lawson, Matthew Bland and Dan Schuster-Woldan worked on the deal.
Nina Epper is the in-house counsel at Julius Baer, Linklaters said in an e-mail.
The cost of the transaction is 1.47 billion francs, including 312 million francs of after-tax integration costs and incentives to retain Merrill bankers and 300 million francs to maintain regulatory capital, Zurich-based Julius Baer said yesterday. Julius Baer shares fell the most in three months.
Julius Baer, which is building its business as a crackdown on tax evasion pushes customers to repatriate funds from Swiss offshore accounts, said purchasing the Merrill units will boost assets by about 40 percent. While Julius Baer said it expects the acquisition to add to earnings from 2015, it said profit may be “somewhat volatile” over the next two years.
The transaction price equates to 1.2 percent of assets under management and assumes the transfer of 72 billion francs of client funds over a two-year integration period, Julius Baer said. That’s almost 89 percent of the 81 billion francs of assets managed by the Merrill units as of June 30.
Julius Baer, which canceled a proposed share buyback, plans a 750 million-franc rights offer to help fund the purchase of the Merrill business. The capital increase is subject to shareholder approval at an extraordinary meeting on Sept. 19, the bank said.
The cash and share deal will leave Bank of America with a stake of about 3 percent in the Swiss wealth manager, Julius Baer Chief Financial Officer Dieter Enkelmann said on a conference call. The two companies also entered a cooperation agreement under which Bank of America will provide global equity research and structured and advisory products to Julius Baer.
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Shearman Advises Sun Pharmaceutical on Takeover of Taro
Shearman & Sterling LLP is advising Sun Pharmaceutical Industries Ltd., India’s biggest drugmaker by market value, on its merger agreement with Taro Pharmaceutical Industries Ltd.
Upon completion of the merger, Taro will become a closely held company that will be wholly owned by affiliates of Sun Pharma, and its ordinary shares will no longer be traded on the New York Stock Exchange.
Willkie Farr & Gallagher LLP served as U.S. legal counsel to the special committee of Taro’s board. The deal was handled by partners Steven Seidman and Laura Delanoy. The special committee was also advised by Goldfarb Seligman & Co. as its Israeli legal counsel.
Shearman’s team for Sun included partner Peter Lyons.
Gibson, Dunn & Crutcher LLP represented Citigroup Global Markets Inc. as financial adviser to the Taro special Committee. The Gibson Dunn deal team was led by New York corporate partners Barbara Becker and Dennis Friedman.
The transaction will give Sun full control of a business selling prescription skin-care creams and ointments in the U.S. that’s more profitable than generic drugs.
The company directly owns 66.3 percent of Taro, according to data compiled by Bloomberg. Legal disputes have marred attempts by Dilip Shanghvi, Sun’s billionaire founder, to gain control of Taro since 2008.
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Milbank Adds Caddy as Leveraged Finance Partner in London
Milbank, Tweed, Hadley & McCloy LLP announced the addition of Neil Caddy as a partner in the firm’s global leveraged finance group, based in London. Caddy joins from Mayer Brown LLP, the firm said in a statement on its website.
“We are extremely pleased to welcome Neil as a partner into our practice as it continues to grow in line with client demand, particularly for bank -- bond and trans-Atlantic financing work,” Marc Hanrahan, head of Milbank’s global leveraged finance group, said in the statement.
Caddy is the third partner to join Milbank’s London office in the past two months, according to the statement.
Russell Jacobs, managing partner of Milbank’s London office, said the firm will continue to grow in that city “at partner and associate levels.”
Milbank has 575 lawyers in 11 offices in the U.S., Europe, Asia and Brazil.
Simpson Thacher Hires Ex-Goldman Sachs Derivatives Practitioner
Jonathan Lindabury, a former Goldman Sachs Group Inc. associate general counsel, joined Simpson Thacher & Bartlett LLP as a senior counsel in the firm’s New York office, where he will work in the global derivatives practice.
Lindabury has experience structuring and negotiating complex derivative and equity-linked capital market transactions, according to a statement on the law firm’s website.
“Jonathan’s background and extensive experience with equity derivatives and structured products complements our growing derivatives practice,” Art Robinson, head of the firm’s capital markets group, said in the statement.
Simpson Thacher, based in New York, has more than 850 lawyers in 10 offices.
Venable Adds Real Estate Finance Partner in New York
Venable LLP said Michael Peskowitz joined the firm’s New York office as a partner in its real estate practice group.
Peskowitz, previously a partner at Sidley Austin LLP, specializes in commercial real estate finance, representing borrowers and lenders in debt and equity investments related to the development, ownership and management of real estate projects, according to a statement on the Washington-based law firm’s website.
He and a Sidley associate are the 10th and 11th attorneys to join Venable’s New York real-estate group this year. Other arrivals this year include a six-person group from now-defunct Dewey & LeBoeuf LLP.
Goldman Sachs Demands Lawyers’ Fees for Helping Lehman Case
Goldman Sachs Group Inc., a creditor of a Lehman Brothers Holdings Inc. affiliate, said the estate should pay $3.3 million in “reasonable professional fees” incurred by its law firm, Cleary Gottlieb Steen & Hamilton LLP.
Goldman Sachs, part of a group that proposed a rival liquidation plan for the defunct investment bank, made a “substantial contribution” to the bankruptcy proceedings, Goldman Sachs said in a federal court filing in Manhattan.
Other creditors of Lehman affiliates have filed similar demands, saying that they shouldn’t have to pay their own lawyers just because they increased their own payout in making their contribution to the case.
Only the U.S. Trustee who supervises bankruptcy for the Justice Department has objected to the Lehman estate remunerating their lawyers, creditors of Lehman Brothers Treasury Co. told the judge.
The Lehman holding company Chapter 11 case is In re Lehman Brothers Holdings Inc., 08-13555, while the liquidation proceeding under the Securities Investor Protection Act for the brokerage operation is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, both in U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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