NEW YORK, Thu Aug 30, 2012 – After initially criticizing Nasdaq OMX Group for its response to Facebook’s botched initial public offering, trading firm Knight Capital Group Inc said it accepted the exchange’s latest plan to pay back brokers a portion of their losses.
Knight’s support comes after Nasdaq increased the payback fund to $62 million in cash from an earlier $40 million made up mostly of trading rebates, the market-making firm said in a letter to the U.S. Securities and Exchange Commission, dated Aug. 29.
Knight, which facilitates trades for other firms, had called Nasdaq’s earlier plan “inadequate,” and said it was considering legal action over the May 18 IPO.
“Although we would have preferred that the accommodation pool cover all losses sustained by Nasdaq members, we do support Nasdaq’s proposal to increase the accommodation pool from $40 million to $62 million,” Knight said in the letter obtained by Reuters.
Knight and other retail market-making firms and brokers together lost more than $500 million in the IPO.
Some firms, like UBS AG, which disclosed it lost more than $350 million, and Citigroup’s Automated Trading Desk, which is said to have lost up to $35 million, have rejected the plan, saying Nasdaq should be responsible for all of the losses, because it acted in a for-profit manner in the IPO.
WASHINGTON, Wed Apr 4, 2012 – Regions Financial Corp. has repaid $3.5 billion to the U.S. Treasury Department that it received under the bank bailout program and is now fully out of the financial crisis-era program, the Treasury said on Wednesday.
The Treasury said that after the latest payment, the overall positive return on bank investments made under the Troubled Asset Relief Program, or TARP, has reached $18 billion.
A total of $245 billion was invested in banks under TARP’s bank programs and some $263 billion now has been returned in the form of repayments, dividends, interest and other income.
When Treasury put money into a bank during the 2007-2009 financial crisis, it received preferred shares and banks repay the funds by buying back the preferred stock. The Treasury still holds warrants to buy common shares in Regions Financial and could earn an additional return on those.
So far, taxpayers have recovered about 81 percent, or $337 billion, out of the total $415 billion that the government disbursed across all TARP programs.
TARP was set up as a $700-billion program at the height of the 2007-2009 financial crisis and was used as a mechanism for propping up struggling financial institutions that are regaining strength as economic conditions improve.
About 350 banks, mostly smaller ones, still have not paid back the TARP money that they received.