Results tagged “bearstearns”

Today, a federal jury found two Bear Stearns hedge fund managers not guilty of fraud related to subprime mortgages. Portfolio manager Ralph Cioffi and the funds' COO Matthew Tannin were accused of misleading investors—and losing $1.6 billion—were acquitted after a jury took less than a day to deliberate on charges.

New second quarter 2009 reports from the real estate firms indicate that the prices of Manhattan apartments has fallen about 25% since the same period last year. Sales were down, as much as 50% in one report and by 61% for new condos in another. Bloomberg News calls it the "Lehman effect" as "the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market." The NY Times reports, "The strongest activity was reported in smaller, less expensive apartments, often bought by renters buying their first homes" (who "benefited by low mortgage rates...and a federal tax credit available to many first-time home buyers") and that "sales of trophy apartments had shriveled during the downturn." The head of Corcoran, Pamela Liebman, says sellers shouldn't wait to sell, "Time does not necessarily equate to money here for the seller," while appraiser Jonathan Miller believes, "We will probably get a little worse before it is going to get better, because unemployment is likely to continue to rise after the recession ends this year."

A former Bear Stearns banker is suing his former firm and its new owners, JP Morgan Chase, for a bonus he feels is owed to him despite the firm's collapse last year. Now that the storm has settled over bonuses going out to employees of failed Wall Street giants, Gary Reback is suing for $2 million in bonus money and in additional $1.1 million for a severance offer he says was inexplicably pulled off the table in the eleventh hour. The Scarsdale man was one of the top twenty highest paid employees at Bear in 2007, when he earned a bonus of $4 million. His lawyer told the Post, "Gary had nothing to do with losses. He traded different products completely outside the subprime-mortgage mess. They offered him a severance and now they're reneging—it's shocking, bad faith behavior."

The Department of Education has hired a former Bear Stearns managing director to be the new CFO. George Raab has accepted the $180K/year job--which involves overseeing $20 billion--but the Sun says the the "appointment will not become official until a background check is completed." The Post points out that the DOE is "currently the only major agency not plugged into the city's electronic budgeting system" and gets a quote from District 1's Community Education Council president Lisa Donlan: "I assume this [hire] is in response to all the crap they've been getting about playing loose and fast with the budget and rewriting the rules for themselves."

White collar perp walk time: WNBC is reporting that the FBI arrested former Bear Stearns hedge fund managers Ralph Cioffi Jr. and Matthew Tannin this morning. Why? Because they allegedly reassured investors the hedge fund was a-okay "before the funds lost more than $1.5 billion in value."

The Federal Reserve Board may be sending distress signals about a “prolonged and severe economic downturn,” but ultrarich individuals like hedge fund manager Lee Tachman aren’t sweating it; the 38-year-old Tachman just spent $50,000 on a four day vacation to Miami with three of his bros. According to a ‘Happy Monday’ article in the Times, Tachman’s crew rolled with a “private jet, helicopter, Hummer limousine, Ferraris and Lamborghinis; stayed in V.I.P. rooms at Casa Casuarina, the South Beach hotel that was formerly Gianni Versace’s mansion; and played 'extreme adventure paintball' with former agents of the DEA.”

New York Federal Reserve Bank President Timothy Geither told lawmakers today, "What we were observing in U.S. and global financial markets was similar to the classic pattern in financial crises," as Federal Reserve officials defended why they helped JP Morgan rescue Bear Stearns from collapse. Fed chairman Ben Bernanke told the Senate Banking Committee, "Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

With JP Morgan now offering $1.2 billion for troubled Bear Stearns, it's expected the deal will close on April 8. JP Morgan needed 50% of Bear Stearns shareholder approval, and the new $10/share price would give them 45% yes votes (5% is expected from bondholders); an analyst told USA Today the revised deal "virtually guarantees a yes vote at $10 per share, vs. an almost certain no vote at $2."

The NY Times reports "JPMorgan Chase was in talks on Sunday night for a deal that would quintuple its offer for Bear Stearns...in an effort to pacify angry Bear shareholders." Over a week ago, JP Morgan had agreed to pay $2/share for Bear Stearns stock, for a total payout of $236 million, but the new talks would raise the price to $10/share, making it a billion-dollar deal.

Although the stock markets didn't tank yesterday (the Dow was up 21 points), it was a volatile day as Wall Street reacted to the bargain basement sale of Bear Stearns to JP Morgan. Naturally, this means the first lawsuit has been filed on behalf of shareholders who claim the investment bank "made false statement about the firm's financial condition."

This is going to be a tough morning on Wall Street. World financial markets fell and are falling after yesterday's news that JP Morgan had purchased Bear Stearns for $2 a share, a grand price of $236 million for a company valued at $3.54 billion on Friday. Tokyo's Nikkei 225 index fell 3.7%, and Hong Kong's Hang Seng fell 5.25%. Currnetly, London's FTSE 100 has fallen 2.2%, France's CAC 40 has fallen 2.5% and the German DAX has fallen 3.3%.

It's the New York banking equivalent of the Enron meltdown: Bear Stearns has agreed to sell itself to JP Morgan Chase at a fire sale price. When Bear Stearns' 14,000 employees left work Friday afternoon, the bank's stock had already plunged almost 50% in value, closing at $30 a share. But today they found out something much, much, much worse: their company has been purchased for a piddling $2 a share. That's $236MM for a company that was "worth" $3.54 billion on Friday. That's a 93% discount on Friday's closing price, and a 99% discount off January 2007's price of $170/share. Given that Bear Stearns' midtown headquarters had been valued as high as $1.5 billion, the firm's liabilities must have been enormous.

Earlier today, a squash tournament kicked off inside Grand Central Terminal. Yes, inside! The Bear Stearns Tournament of Champions Squash 2008 started matches today, and the tourney continues through next Wednesday. Over 150,000 commuters are expected to watch the top squash players compete.

• Today on the Gothamist Newsmap: a bank robbery on 1st Ave. in Manhattan, a possible abduction at 183rd St. and Webster Ave. in the Bronx, and a homicide on Cedarcroft Rd. and Home St. in Queens.
• A student at Stony Brook University was arrested for falsely reporting to police that he had been robbed at knife point on the Suffolk County school's campus.
• The newborn found by skateboarding teens on a Queens dumpster has been found a foster home for Christmas by the Administration for Children's Services. 'Christina Noel' was three hours old when discovered naked and stuffed in a paper bag with her umbilical cord still attached.
• Former State Attorney General and current Governor Eliot Spitzer issued the first pardon of his tenure in order to prevent the deportation of a man who was convicted and served time for robbing a payroll office. Gov. Pataki only issued one pardon his entire 12 years in office, and that was to comedian Lenny Bruce, after Bruce was dead.
• A stenographer reading back testimony in the case of a black man accused of killing a teenager he feared was going to lynch him or his son, had to leave a court room in tears. Deliberations in the racially charged trial continue with the jury saying it is deadlocked and the judge is threatening to to hold over the 12 through Christmas day.
• Dozens of buildings have to be re-inspected because city officials found that there were cracks in a pair of plumbers' resumes. The two men overstated their qualifications to install life-saving sprinkler systems.
• Profits may be down because of the sub-prime mortgage meltdown (excluding Goldman Sachs) and investment firm stocks may be in the toilet, but Wall St. bonuses are up 14% from last year. Bear Stearns CEO Jim Cayne didn't even bother showing up for an investor conference call, however, after he gave up his bonus for the firm's not-so-hot performance.
• The lawyer who is auctioning off one of the Knight Rider cars identified as KITT, suspended the auction because he found the interest overwhelming. Tasked with ameliorating the car's owner's debts, it was his first foray with eBay.

The financial markets may be taking a hit lately, but Wall Street is still planning about $38 billion in bonuses this year. Bloomberg News reports that the money was thanks to "a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds." This translate to an average Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers or Bear Stearns worker getting over $200,000 in bonuses....

The Securities and Exchange Commission charged 14 people in an insider trading ring that involved coded text messages on disposable cell phones, information from a Morgan Stanley lawyer, and secret meetings at the Oyster Bar. Wonder if they also shared information via the Whispering Gallery, too.

Animal New York takes issue with Matthew Long, the firefighter hospitalized for almost six months after being injured during the transit strike and finally went home with much fanfare last week. Long was injured while biking to his stationhouse and a private bus (chartered by Bear Stearns for its employees) hit him; he is now suing the Transport Workers Union as well as Bear Stearns, and the van company. Animal New York says Long should be "discussing just how dangerous the streets of NYC are when it comes to cycling" instead, noting that Long admitted he doesn't usually bike in the city. Animal New York has photographs of the road where Long was hit - a stretch of East 52nd Street riddled with potholes. Hmm, maybe Long will have a case against the City of New York and the Department of Transportation as well?

Matthew Long, the man who was seriously injured during last December's transit strike (a private bus hit him as he biked to the stationhouse), has finally been released from the hospital. He's had 15 operations in the past five months and was only given a 1% chance of surviving: A doctor said, "He should be dead. Even the nurses in the ER thought what we were doing was an act in futility.". Long now spends most of his time using a wheelchair, though he's been walking with crutches; Long used to compete in triathlons. Long is suing the Transport Workers Union as well as Bear Stearns (which chartered the private bus) and the private bus company.

If you're going to protest going to jail after leading an illegal transit strike for three days, then you might as well with the Reverend Al Sharpton, teachers union head Randi Weingarten, and about a thousand other supporters. And according to plan, many members of various unions are starting to view Roger Toussaint as a martyr, versus the main guy who inconvenienced the city (well, it's him and MTA Chairman Peter Kalikow). Toussaint headed off for his ten day jail stand in a big way: Rally outside the Brooklyn courthouse where he was sentenced and a rousing march over the Brooklyn Bridge. Some of what Toussaint told his supporters (and the news crews):

"Jail has no terror for me compared to the shame I would have felt if we would have simply swallowed the authority's miserable prestrike offer!"

Continue reading "Toussaint Goes to Jail After Brooklyn Bridge March"

It's not just the government who is mad at the transit union - it's the firefighter who was hit by a bus during the transit strike who is annoyed as well. Matthew Long is suing the Transport Workers Union, plus Bear Stearns and the charter bus companies it hired to shuttle workers. Long was hit by a shuttle bus that "suddenly and without warning violentaly made a right turn over multiple lanes" at Third Avenue and 52nd Street, and Long's lawyer claims that since the union "put this entire thing into motion," they are responsible for the fact that Long's life will never be the same - Long was a triathlete but has had nine operations since being hit. Bear Stearns did not comment, except to offer their thoughts to Long and say, "This is a tragic situation."