TARP GM Losses, FCA Disclosure, HFT Data: ComplianceCarla Main
The U.S. Treasury’s bailout fund lost $11.2 billion on the rescue of General Motors Co. with the government’s exit of the largest U.S. automaker, a report said.
The total includes $826 million that the Treasury wrote off in March for its remaining claim in old GM, the special inspector general for the Troubled Asset Relief Program said in a report to Congress April 30. In December, the government had put the loss at about $10.5 billion on its $49.5 billion investment.
The Treasury sold its remaining shares in GM in December. Bailouts from the George W. Bush and Barack Obama administrations helped GM avoid liquidation and reorganize in a 2009 bankruptcy.
FCA Lawyer to Probe How Price-Sensitive Information Is Disclosed
The U.K. markets regulator said Simon Davis, a litigation partner at Clifford Chance LLP, is investigating who authorized a March press briefing for a story that sent shares in insurance companies tumbling.
Davis, hired as an outside lawyer by the Financial Conduct Authority last month, will address how the regulator handles the disclosure of price-sensitive information, whether it realized the information would move the market, and how it reacted, the FCA said in a statement May 2.
The FCA was criticized by lawmakers and insurance companies for taking several hours to clarify a March 28 report from the Daily Telegraph that it would review 30 million life-insurance policies stretching back to the 1970s. U.K. insurers had as much as $4.2 billion wiped off their market value.
Shares recovered later that day when the watchdog said it only intended to review a sample of firms and wouldn’t apply current standards retroactively.
The regulator didn’t give a timeline for the report.
Exchange, Dark Pool Documents Said to Be Sought in HFT Probe
New York Attorney General Eric Schneiderman plans to subpoena exchanges and has requested information from private alternative trading platforms in a probe related to high-frequency trading, a person familiar with the matter said.
The subpoenas to exchanges will be issued within days, said the person, who asked not to be identified because the investigation isn’t public. Some private trading platforms, known as dark pools, have already received information requests, the person said.
Schneiderman has been investigating fairness in the markets and advantages secured by high-speed trading firms with special access to information. He announced in March that he was examining the sale of products and services that provide faster access to data than what’s typically available to the public.
Last week, his office reached a deal with PR Newswire in which the company agreed to try to prevent its information feed from being used unfairly by high-frequency trading firms. Earlier he made deals with Business Wire and Marketwired.
A spokesman for Schneiderman didn’t immediately respond to a phone message after regular business hours last week seeking comment.
Buffett Says SEC Pay Rules Fuel Envy, Harm Investors
Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said shareholders are harmed by rules that force companies to disclose the pay of top managers.
Executives who find that their colleagues are paid more may become envious and press for higher awards, Buffett said May 3 at Berkshire’s annual meeting in Omaha, Nebraska, where the company is based.
“That’s a good reason for us not publishing the salaries of, say, our top 10 managers,” the billionaire said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”
Buffett, Berkshire’s biggest shareholder, was responding to a question about the company would disclosure the pay of more executives. Publicly traded companies are required to make certain disclosures.
He said company leaders would be paid less if compensation data were kept private.
Comings and Goings
Treasury Said to Find Recruitment Violations, Reuters Says
The U.S. Treasury Department suspended recruitment by its anti-money laundering division after an investigation found hiring practices violated the federal employment code, Reuters reported, citing unidentified government officials.
The Office of Personnel Management, which oversees labor practices in the federal government, found Treasury’s Financial Crimes Enforcement Network had illegally screened candidates, aiming to hire only lawyers for certain jobs, the officials said, according to the Reuters report.
OPM has recommended further investigations by two other federal agencies into the division’s practices, Reuters cited the officials as saying.
The division has been forced to rescind 11 job offers, according to Reuters.