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Today's Top News1. Heidi Miller speaks about women on Wall Street
By some measures, the ranks of women on Wall Street have been thinning. At the very top, the financial crisis has been famously unkind to the rare females in line to become CEO of a top firm. Several were knocked off track. For women who are still bent on a long Wall Street career, advice from the likes of Heidi Miller can be invaluable. She was a long-running top executive under JPMorgan CEO Jamie Dimon; retiring in January as head of the international business. Previously, she served as the head of JPMorgan's Treasury & Security Services from 2004 through 2010. Before that, she was CFO at Bank One and Citigroup. As noted by Deal Journal, here are the areas where Miller says women have fared well: "Research still has a lot of women. Staffing areas like HR, audit, compliance. At Bank of America's retail (unit), women are running branches." In contrast, "there are a handful of women in investment banking, fewer women in trading. 'Why is that?' she wondered. 'There's a little bit of self-selection… the trading floor tends to be more of a frat. Investment banking is a 24/7 job. You're working every weekend. Some women realize that odds of being a successful big swinger are not high. The investment banking pipeline is equal, but the attrition rates are really high for midlevel women.' " It's a tough road to the top. A rare few will really soar, and someday I hope one will soar into the CEO's office. Miller would've been terrific. For more: Read more about: jobs, Women on Wall Street
2. Should Wells Fargo buy CIT Group?
So how should Wells Fargo really spend its money? Not long ago, the idea that Wells Fargo should merge with Discover Financial generated media attention, as an analyst from Susquehanna said the fit was sound. The company publically pooh-poohed the idea, but that hasn't stopped analysts from pondering the deal issue. Recently, Stifel Nicolaus issued a report arguing that "Wells Fargo should consider CIT," according to Deal Journal. CIT Group, run by John Thain, is apparently on the block. "Wells Fargo could spent $10.5 billion on such a deal in cash and stock, assuming a hefty premium of 33.5% over CIT's Friday closing price of $38.95." The report was quoted saying that, "Wells Fargo does need earning assets at attractive yields, given the low loan-growth environment and the Fed's approach to make most every low-risk investment as unattractive as possible." The idea that Wells Fargo should make some big purchases has turned into a parlor game in part because the bank seems open to purchasing other lenders. As for the fit with CIT, "Wells has been pursuing the kind of customers CIT traditionally has a close relationship with: middle-market and small businesses that need merger-and-acquisition advice, trade finance, and lending. Wells does all of the above, and has been expanding its middle-market lending and financial-advisory business. CIT is also a big aircraft-leasing company, a business Wells Fargo considered buying when Royal Bank of Scotland sold its aviation-leasing business earlier this year to Sumitomo Mitsui Financial for $7.2 billion." If Wells Fargo were to merge with CIT Group, one of the biggest questions will be what happens to Thain, who would like a job with the combined company. Would he settle for anything less than the CEO office? For more: Related articles: Read more about: mergers, Wells Fargo 3. Hack attacks on U.S. banks originate in Iran
The slowdown that the Bank of America and JPMorgan Chase web sites have suffered recently have revived the debate over the security threats that American banks face from sophisticated state actors. So-called Advanced Persistent Threats (APTs), which are savvy fraud acts funded and guided by government entities, have stepped up significantly, and the conventional wisdom is that banks are a top target. Reuters reports that the attacks began in late 2011 and escalated this year, mainly in the form of denial of service attacks that aim to harm web sites by flooding them with traffic, rendering them barely operable. Some have suggested the attacks were a diversion by thieves bent on probing networks for a way to actually steal funds, but others are convinced there is "evidence suggesting the hackers targeted the three banks in retaliation for their enforcement of Western economic sanctions against Iran. Whether the hackers have been able to inflict more serious damage on computer networks or steal critical data is not yet known. Iran has beefed up its cyber capabilities after its nuclear program was damaged in 2010 by the Stuxnet virus, widely believed to have been developed by the United States. Tehran has publicly advertised its intentions to build a cyber army and encouraged private citizens to hack against Western countries." While the attacks originated inside Iran, it's unclear whether the government of Iran was involved. It has denied any involvement. For more: Read more about: banks, Hackers 4. Another SAC manager caught in insider trading probe
One of the big questions about the historic insider trading investigation that has racked up so many high-profile government victories is whether there's another big fish out there to be nabbed. The government has already won convictions of Raj Rajaratnam, who is serving an 11 year prison term, and his one-time friend, former Goldman Sachs director Rajat Gupta. So who's left? Lots of speculation has swirled around SAC Capital, founded by the once-reclusive Steven Cohen. Bloomberg reports that another hedge fund manager at SAC Capital, Michael Steinberg, is an unindicted co-conspirator "in a $62 million insider trading scheme tied to technology stocks." The news "emerged in court papers filed by the U.S. in the securities-fraud case of Jon Horvath, a former technology analyst at Cohen's $14 billion hedge fund who Steinberg supervised. Steinberg, who hasn't been charged with a crime, is the fifth person to be tied to insider trading while employed at SAC." The big issue is whether any of this will ensnare Cohen himself. While the government says there are more unindicted co-conspirators in the case, there's no way of knowing whether they have any evidence against Cohen himself. It would certainly be the next trial of the century if they did, barring some settlement. At this point, charges against would not appear to be forthcoming, but you never know. For more: Related articles: Read more about: insider trading, SAC Capital 5. Aleynikov wants Goldman Sachs to pay legal bills
The saga of former Goldman Sachs software developer Sergey Aleynikov stands as exhibit No.1 for employees who are even thinking about taking some proprietary code their own use. I've discussed this quite a bit over on FierceFinanceIT. Pilfering even small snippets of code is not a good idea. Recall that Aleynikov was sentenced to eight years in prison for allegedly making off with the proprietary high frequency trading source code, which federal prosecutors said he wanted to use at his new employer. He spent nearly a year in jail before he was set free by an appellate panel that threw out his conviction. He barely had time to celebrate before the state of New York picked up where federal prosecutors left off, filing fresh charges in state court. This week, Aleynikov sued Goldman Sachs in Federal District Court in New Jersey, seeking to compel the bank to pay his legal bills. He specifically wants the bank to cover nearly $2.4 million in costs. That may seem audacious, but DealBook notes that Aleynikov's lawyers are relying on Goldman's bylaws, which they say "requires the firm to indemnify employees charged in criminal or civil proceedings in connection with their status as an officer or director of the bank. The firm has paid a large portion of the legal fees for a former director, Rajat K. Gupta, who was convicted of leaking boardroom talks to the hedge fund magnate Raj Rajaratnam. It has done the same for Fabrice Tourre, the subject of a securities fraud lawsuit by the Securities and Exchange Commission." As of now, Aleynikov is said to be destitute and unable to pay for counsel. For more: Related articles: Read more about: Goldman Sachs, Proprietary Code Also Noted
SPOTLIGHT ON... Hedge fund's strategy may backfire Mason Capital thought it had hit upon an ingenious way to profit from the fact that Telus had two classes of stock, one voting and one non-voting. The hedge fund structured a trade that called for it to buy up voting shares. The purchase was financed in part by setting up a short position on the nonvoting shares. The trade is a bet that Telus's plans to converge the two classes, which would collapse the price differential, will fail. But the issuer is fighting back in interesting ways, and according to DealBook, the winner is far from certain. Article Company News:
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Thursday, September 27, 2012
| 09.27.12 | Should Wells Fargo buy CIT Group?
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