SEC probes some Wall Street trades after 2008 meet with Henry Paulson: WSJ

NEW YORK, Fri Sep 14, 2012 – The U.S. Securities and Exchange Commission (SEC) is probing possible insider trading activities by Wall Street professionals who were present in a private meeting with the then Treasury Secretary Henry Paulson in 2008, the Wall Street Journal reported, citing people familiar with the investigation.

The SEC is trying to find out if Paulson suggested in the meeting that the government was willing to bail out struggling mortgage-finance companies Fannie Mae and Freddie Mac, the WSJ said.

Subsequently, the federal government took over Fannie and Freddie amid heavy losses less than two months after the meeting.

SEC recently sent subpoenas to parties who were present at the July 2008 meeting, the Journal said adding that Paulson hasn’t been handed one.

Parties present at the meeting included Taconic Capital Advisors, GSO Capital Partners, now part of Blackstone Group LP, Lone Pine Capital LLC, Och-Ziff Capital Management Group LLC and TPG-Axon Management LP, WSJ said.

Taconic confirmed the receipt of a subpoena and declined any wrongdoing, the Journal said.

Many Wall Street executives say wrongdoing is necessary: survey

NEW YORK, Tue Jul 10, 2012 – If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest many today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.
A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.
Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.
“When misconduct is common and accepted by financial services professionals, the integrity of our entire financial system is at risk,” Jordan Thomas, partner and chair of Labaton Sucharow’s whistleblower representation practice, said in a statement.
The survey’s release comes as the fallout from Barclays PLC’s Libor-rigging scandal continues and other banks including Citigroup Inc., HSBC Holdings PLC, Royal Bank of Scotland Group PLC and UBS AG await the outcome of an industry-wide probe.

Deal or no deal, Morgan Stanley commodity trade shrinks

NEW YORK, Thu Jun 7, 2012 – The hard core of Morgan Stanley’s commodities trading empire, once the mightiest on Wall Street famed for its powerful union of paper and physical deals, is shrinking.

Even as the bank is reported to be considering selling a stake in its billion-dollar commodities unit, its physical trading activity in key U.S. markets is contracting in the face of abruptly changing market dynamics as well as diminishing risk appetite due to growing regulations and capital constraints.

In the power markets, it is trading only one-fifth as much electricity as five years ago. In oil, its imports to the United States fell last year to the lowest since 2004, while exports remain negligible. It barely makes the top 100 list of U.S. natural gas traders, with activity slipping from 2010.

Even the bank’s prized subsidiary TransMontaigne, a Denver-based refined petroleum products supply and distribution company it bought for $630 million six years ago, hasn’t helped it cash in on the boom in domestic U.S. crude oil trading this year. Its 2011 revenues were $152 million, up just 16 percent from 2007.

The data, based on government figures, port intelligence, securities filings and market sources, casts in sharp relief a trend that commodity traders say has been apparent for some time: Morgan Stanley is losing its edge in the opaque, over-the-counter cash commodity markets it once ruled.