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2. Michael Steinberg has a lot at stake in Chiasson case

It's certainly true that banks are rationalizing the sheer number of branches they support, especially in regions where the costs outweigh the returns. But banks are also investing in the branch experience, which has led to lots of design and technology enhancements.

By redesigning branches, banks are aiming to modernize the bank experience. This modernization has gone through many incarnations over the past decade. Banks have steadily moved away from the traditional branch with its long teller queues toward more of a retail store experience.

The inspiration these days tends to be Starbucks and Apple retail outlets. Umpqua Bank in Oregon, for example, offers free internet service, an espresso bar, and meeting space at some branches. Capital One plans to offer coffee in its "café" concept branches. Bank of America plans to open at least a dozen "flagship" branches, which will include "power bars" to allow people to plug in gadgets.

A Celent analyst has some additional ideas, which came to him on a recent field trip with his child to an Apple store, -- a great marketing concept in itself.

Use the branch as a training center. "Roll out the large square tables equipped with multiple iPads. Offer training sessions on how to use online/mobile banking, seminars on financial education, etc. This can be used as a method to boost digital banking adoption. Sessions can also emphasize solutions that have lower adoption rates (e.g. bill pay, PFM). In-branch training can also be geared to certain age groups. I would love to take my four year old on a field trip to the bank and have it be an educational and fun experience!"
Provide access to digital tools when training is not taking place. "Customers should be able to come up to the table and play around with the equipment. Let them open accounts, login to existing accounts, book an appointment, view interactive brochures, etc."

Perhaps kids will be taking field trips to bank branches soon -- and actually enjoy them.

For more:
- here's the item

Read more about: Bank of America, Bank Branches
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By Jim Kim

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3. JPMorgan getting real-time tally of shareholder voting

It was almost ho-hum news when it was announced that another convicted insider trading was getting a tough prison sentence.

After so many jury verdicts and big sentences of people like Raj Rajaratnam, such news has become progressively less shocking an less worthy of front-page treatment. But the sentencing of Anthony Chiasson, co-founder of Level Global Investors, to six and half years in prison, was way beyond newsworthy for Michael Steinberg. Formerly of SAC Capital, Steinberg was a close confidante of Steven Cohen and was charged with insider trading in connection with trading similar to that of Chiasson. The two allegedly traded Dell shares on inside information. Indeed, the judge in Steinberg's case is U.S. District judge Richard Sullivan, the same as Chiasson's.

So does this mean that Steinberg's position is deteriorating? Will it be harder for him to fight the charges?

We'll know starting on November 18, when his trial is scheduled to begin.

There's a lot to this story, and a recent Article in Vanity Fair offers an excellent blow-by-blow account of how Chiasson, Steniberg, Jon Horvath and others stumbled into trouble with the law.

In the end, one has to wonder if it is remotely possible that Steinberg will ultimately turn on Cohen. That would appear to be a remote possibility. What may be more likely is some sort of plea bargain that would call for jail time for Steinberg, but much less than six and a half years.

For more:
- here's the article

Read more about: insider trading, SAC Capital
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By Jim Kim

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4. Are these really great times for hedge funds?

The battle over the Chairman and CEO position at JPMorgan Chase is going down to the wire.

Or is it?

Right now, Broadridge is the firm that's really in the know on this, as it's been hired to count the vote. It's only sharing the data with its client right now, which means that JPMorgan directors know how they are faring as the votes come in, while the sponsor of the controversial resolution does not.

So the bank has the informational upper hand when it comes to tactics as it heads toward the end of the vote, which is scheduled for May 21 in Tampa.

A Broadridge executive told the New York Times that the firm was contractually required to give real-time results to the companies that hire them. In previous years, Broadridge gave that same information to proposal sponsors as a courtesy. But late last week, the company received a call from Sifma, "requesting that Broadridge cut off access to organizations that are sponsoring proposals."

This has not gone over well with supporters of shareholder resolutions. One pension executive was quoted saying, "They have changed the rules in the middle of the game and it has created an unfair advantage. It's like playing a game where only the home team gets to know the score."

The episode underscores the sensitivity of the issue. Obviously, the JPMorgan board is closely monitoring development. It will not likely tip its hand as to whether it's winning or losing. The earliest resolution sponsors will be able to find out is at the annual meeting, along with everyone else. It's possible that we could see a spate of director retirements if the voting is lopsided against them, but a lopsided vote doesn't seem likely. It's going to be close.

For more:
- here's the article

By Jim Kim

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5. Citigroup scales back use of Bloomberg chat

The conventional wisdom holds, somewhat grudgingly, that these are great times for hedge funds.

It's no secret that hedge funds are struggling again this year, which isn't surprising in light of the industry's 10-year performance picture. Over the past 10 years, they've underperformed against the Standard & Poor 500 index, even though they outperformed during the financial crisis. And yet despite these aggregate performance woes, the industry continues to attract inflows. Pensions continue to boost their allocation to hedge funds. So the industry can't lose. A recent New York Magazine article suggests that the industry would appear to be bullet proof, or at least made of Teflon.

But beneath the surface, the fact remains that times are tough for the majority of hedge funds. According to an estimate by SEI, just 5 percent of hedge funds will take in 80 to 90 percent of all hedge fund inflows this year. That's a stunning figure.

For most of the industry, what you have is a bitter fund-eat-fund marketplace in which growth is hard and assets are hard to come by. Over the course of several years, sustained greatness, or even "goodness", is hard to achieve.

The fact is that limited partners are empowered like never before, and they are increasingly keeping funds on a short leash. They will not think twice about yanking funds once performance heads south. Unsurprisingly, the failure rate for funds remains elevated.

This may be a golden era for some of the largest fund firms. They should enjoy it while they can.

For more:
- here's the New York article

Related Article:
The difficulty in hedge fund valuation

Read more about: Hedge Fund Performance
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By Jim Kim

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