SUBHEAD: Somebody woke up at Justice and is taking the job seriously - at least as far as banks and telcos go.
Image above: Bank of America swallowed the scam artists at Country Wide in the 2008 collapse - a poison pill to be sure. From (http://econintersect.com/b2evolution/blog3.php/2011/08/24/bank-of-america-goes-after-blodget).
[IB Publisher's note: It seems were seeing the first salvo in Obama's strategy to get re-elected. Let Eric Holder use the Justice Department to get things done. Today two stories appeared in Bloomberg News that indicate the the gloves are off and Obama is going after corporations as the target. This on the heals of the IPS report (http://islandbreath.blogspot.com/2011/08/corporate-tax-dodging.html) about tp US corporations (like Ge and Verizon) paying no federal taxes and lavishing cash on CEO's and lobbtists. The game - let the corporations play the villains and watch the Republicans trip over each other to defend them. This could get interesting.]
Americans Bilked by Big Banks
By Jacob Greber on 1 September 2011 for Bloomberg
(http://www.bloomberg.com/news/2011-09-02/u-s-set-to-sue-banks-over-mortgage-securities-n-y-times-says.html)
More than a dozen large banks may be sued by the U.S. Federal Housing Finance Agency for misrepresenting the quality of mortgage securities sold at the height of the housing bubble, the New York Times said.
The agency, which oversees mortgage finance companies Fannie Mae and Freddie Mac, is likely to file the lawsuits in coming days and will seek billions of dollars in compensation, the newspaper said, citing three people briefed on the matter that it didn’t identify.
Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Deutsche Bank AG (DBK) are among firms that will be targeted by the suits, which stems from subpoenas issued by the agency a year ago, according to the Times report. The agency will argue that the banks failed to perform the due diligence required under securities law while assembling and selling the mortgage securities, and missed signs that borrowers’ incomes were inflated or falsified, the newspaper said.
The lawsuits may be filed today or on Sept. 6, before a deadline expires for the housing agency to file claims, the Times reported. Rather than demanding that firms buy back the original loans, the agency is seeking reimbursement for losses on the securities held by Fannie Mae and Freddie Mac, it said.
Bank of America, Goldman Sachs and JPMorgan declined to comment, the Times said. Frank Kelly, a spokesman for Deutsche Bank, told the newspaper the bank can’t comment on a suit it hasn’t seen or hasn’t been filed, according to the report.
Fannie Mae and Freddie Mac have operated under U.S. conservatorship since 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency.
A call to the federal agency after U.S. business hours wasn’t immediately returned.
Mark Bennewith, a spokesman for Deutsche Bank in Singapore, Rob Stewart, a Hong Kong-based spokesman for Bank of America and Edward Naylor, a spokesman at Goldman Sachs, declined to comment when contacted by Bloomberg News.
ATT & T-Mobile Deal Trashed
By Sara Forden & Jeff Bliss on 1 September 2011 for Bloomberg -
(http://www.bloomberg.com/news/2011-09-02/at-t-said-to-misread-u-s-signals-in-meetings-before-t-mobile-deal-blocked.html)
Image above: ATT as PacMan swallowing T-Mobile to pass Verizon as biggest cell-telco. From (http://tech.fortune.cnn.com/2011/03/20/att-mobile-att-buys-t-mobile-usa).
On the morning of Aug. 31, AT&T Inc. (T) Chief Executive Officer Randall Stephenson said in a television interview that he expected his company’s bid for T-Mobile USA Inc. to get government approval by the first quarter of 2012.
An hour later, his lawyers received a call from the U.S. Justice Department, according to a person familiar with the matter. The attorneys were told the government was suing to block the $39 billion transaction, the person said. The suit halted the biggest deal of the year and drew a line in the sand on antitrust policy that may affect other acquisitions in the pipeline.
The sudden turnaround occurred because the Justice Department came to a meeting the day before looking for AT&T to lay out a game-changing national remedy to eliminate what it saw as the anticompetitive defects in the proposed merger, and that didn’t happen, said another person involved in the meeting. AT&T was under the impression that it would have more time to present ideas that would assuage the government’s reservations about the deal, another person involved in the discussions said.
In the end, the Justice Department concluded the companies on the other side of the table weren’t responding to concerns that the deal would hurt competition and raise consumer prices in the wireless phone market, a person familiar with the decision said.
Skepticism in the antitrust division had been building for weeks as a technical review of national and local markets showed the merger to be highly anticompetitive, the person said.
Justice Department Talks
Against that backdrop, 40 people gathered around a wooden table in a third-floor conference room at the Justice Department on Aug. 30, the day before Stephenson’s televised prediction that the deal would be approved. They included representatives of AT&T, T-Mobile, a unit of Bonn-based Deutsche Telekom AG (DTE), the Justice Department and the Pennsylvania attorney general, the person said. Officials from several state attorneys generals’ officce, including California and New York, listened in by phone, two people said.
Their primary purpose was to brief the acting chief of the antitrust division, Sharis Pozen, said one of the people. The meeting was also called to review the merger’s effect on competition after previous sessions focused on so-called economic models, a person who attended said.
AT&T and T-Mobile’s position on the merger’s benefits was outlined by four people, while Justice Department lawyers interjected questions that they regarded as thoughtful rather than confrontational, one of the people said.
Possible Divestitures
AT&T and T-Mobile representatives said they wanted to discuss with a smaller group, at a later meeting, possible divestitures of customers, network and spectrum that might allow the deal to go forward, according to one person.
At the end of the hour-and-half presentation, Pozen said she was concerned that merging the two companies would leave local and national wireless markets too concentrated, the person said. She also expressed reservations about shrinking the market from four major companies to three -- AT&T-T-Mobile, Verizon Wireless and Sprint Nextel Corp., the person said.
AT&T’s Stephenson, his lawyers and others involved in the acquisition had no idea those reservations would lead to a lawsuit being filed the next day, the people familiar with their mindset said.
“We are deep into the analysis with the Department of Justice, and it’s all the questions and data gathering you might expect,” Stephenson had told CNBC’s “Squawk Box” at 8:39 a.m., about an hour before the company’s lawyers were advised of the complaint.
Caught by Surprise
“The news caught everybody by surprise,” said Steve Largent, president and CEO of CTIA-The Wireles Association, which hadn’t taken a position on the transaction. “AT&T was in the middle of explaining and detailing the merger that was being proposed when the Justice Department filed,” Largent said. CTIA includes AT&T, T-Mobile and Sprint Nextel Corp. (S) among its members.
Jessica Smith, a Justice Department spokeswoman, declined to comment on the details of the meeting or the decision as did Brad Burns, an AT&T spokesman in Dallas and T-Mobile spokeswoman Anna Friedges.
“As soon as they decided, they pulled the trigger,” said Harold Feld, legal director of Public Knowledge, a Washington- based consumer group that opposes the deal.
Pozen and her team made the final decision to sue after the Aug. 30 meeting, a person said. It was approved by Associate U.S. Attorney General Thomas Perrelli and Deputy U.S. Attorney General James Cole, the department’s second-highest ranking official. U.S. Attorney General Eric Holder has recused himself from the AT&T review, according to Justice Department spokeswoman Tracy Schmaler. She declined to elaborate on the reason.
‘Law Enforcement Action’
The White House was not involved in the decision, White House press secretary Jay Carney said yesterday at a news briefing. “This is a law enforcement action.”
Pozen said at a news conference on Aug. 31 after the filing that the department had consistently told AT&T it had serious concerns about the transaction.
“We have been in constant dialogue with the parties, exploring their arguments, exploring the materials they have provided, asking questions, engaging fully with them,” Pozen said.
AT&T, which said it will challenge the lawsuit, is seeking to meet again with Justice Department officials to propose remedies that might allow the deal to go through, according to three people familiar with the company’s position.
Pozen said at the news conference that the department’s “door is open” for further discussion.
“It is true that you can always settle a case, but the Justice Department doesn’t use litigation as a settlement tactic,” said Public Knowledge’s Feld. “This merger creates dangerous levels of concentration in 97 of the top 100 markets-- there isn’t a cure for that. It’s not like you can sell Chatanoooga and give up a few licenses in Milwaukee,” he said.
The case is U.S. v. AT&T Inc., 11-01560, U.S. District Court, District of Columbia (Washington).
.
Image above: Bank of America swallowed the scam artists at Country Wide in the 2008 collapse - a poison pill to be sure. From (http://econintersect.com/b2evolution/blog3.php/2011/08/24/bank-of-america-goes-after-blodget).
[IB Publisher's note: It seems were seeing the first salvo in Obama's strategy to get re-elected. Let Eric Holder use the Justice Department to get things done. Today two stories appeared in Bloomberg News that indicate the the gloves are off and Obama is going after corporations as the target. This on the heals of the IPS report (http://islandbreath.blogspot.com/2011/08/corporate-tax-dodging.html) about tp US corporations (like Ge and Verizon) paying no federal taxes and lavishing cash on CEO's and lobbtists. The game - let the corporations play the villains and watch the Republicans trip over each other to defend them. This could get interesting.]
Americans Bilked by Big Banks
By Jacob Greber on 1 September 2011 for Bloomberg
(http://www.bloomberg.com/news/2011-09-02/u-s-set-to-sue-banks-over-mortgage-securities-n-y-times-says.html)
More than a dozen large banks may be sued by the U.S. Federal Housing Finance Agency for misrepresenting the quality of mortgage securities sold at the height of the housing bubble, the New York Times said.
The agency, which oversees mortgage finance companies Fannie Mae and Freddie Mac, is likely to file the lawsuits in coming days and will seek billions of dollars in compensation, the newspaper said, citing three people briefed on the matter that it didn’t identify.
Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Deutsche Bank AG (DBK) are among firms that will be targeted by the suits, which stems from subpoenas issued by the agency a year ago, according to the Times report. The agency will argue that the banks failed to perform the due diligence required under securities law while assembling and selling the mortgage securities, and missed signs that borrowers’ incomes were inflated or falsified, the newspaper said.
The lawsuits may be filed today or on Sept. 6, before a deadline expires for the housing agency to file claims, the Times reported. Rather than demanding that firms buy back the original loans, the agency is seeking reimbursement for losses on the securities held by Fannie Mae and Freddie Mac, it said.
Bank of America, Goldman Sachs and JPMorgan declined to comment, the Times said. Frank Kelly, a spokesman for Deutsche Bank, told the newspaper the bank can’t comment on a suit it hasn’t seen or hasn’t been filed, according to the report.
Fannie Mae and Freddie Mac have operated under U.S. conservatorship since 2008, when they were seized amid subprime mortgage losses that pushed them toward insolvency.
A call to the federal agency after U.S. business hours wasn’t immediately returned.
Mark Bennewith, a spokesman for Deutsche Bank in Singapore, Rob Stewart, a Hong Kong-based spokesman for Bank of America and Edward Naylor, a spokesman at Goldman Sachs, declined to comment when contacted by Bloomberg News.
ATT & T-Mobile Deal Trashed
By Sara Forden & Jeff Bliss on 1 September 2011 for Bloomberg -
(http://www.bloomberg.com/news/2011-09-02/at-t-said-to-misread-u-s-signals-in-meetings-before-t-mobile-deal-blocked.html)
Image above: ATT as PacMan swallowing T-Mobile to pass Verizon as biggest cell-telco. From (http://tech.fortune.cnn.com/2011/03/20/att-mobile-att-buys-t-mobile-usa).
On the morning of Aug. 31, AT&T Inc. (T) Chief Executive Officer Randall Stephenson said in a television interview that he expected his company’s bid for T-Mobile USA Inc. to get government approval by the first quarter of 2012.
An hour later, his lawyers received a call from the U.S. Justice Department, according to a person familiar with the matter. The attorneys were told the government was suing to block the $39 billion transaction, the person said. The suit halted the biggest deal of the year and drew a line in the sand on antitrust policy that may affect other acquisitions in the pipeline.
The sudden turnaround occurred because the Justice Department came to a meeting the day before looking for AT&T to lay out a game-changing national remedy to eliminate what it saw as the anticompetitive defects in the proposed merger, and that didn’t happen, said another person involved in the meeting. AT&T was under the impression that it would have more time to present ideas that would assuage the government’s reservations about the deal, another person involved in the discussions said.
In the end, the Justice Department concluded the companies on the other side of the table weren’t responding to concerns that the deal would hurt competition and raise consumer prices in the wireless phone market, a person familiar with the decision said.
Skepticism in the antitrust division had been building for weeks as a technical review of national and local markets showed the merger to be highly anticompetitive, the person said.
Justice Department Talks
Against that backdrop, 40 people gathered around a wooden table in a third-floor conference room at the Justice Department on Aug. 30, the day before Stephenson’s televised prediction that the deal would be approved. They included representatives of AT&T, T-Mobile, a unit of Bonn-based Deutsche Telekom AG (DTE), the Justice Department and the Pennsylvania attorney general, the person said. Officials from several state attorneys generals’ officce, including California and New York, listened in by phone, two people said.
Their primary purpose was to brief the acting chief of the antitrust division, Sharis Pozen, said one of the people. The meeting was also called to review the merger’s effect on competition after previous sessions focused on so-called economic models, a person who attended said.
AT&T and T-Mobile’s position on the merger’s benefits was outlined by four people, while Justice Department lawyers interjected questions that they regarded as thoughtful rather than confrontational, one of the people said.
Possible Divestitures
AT&T and T-Mobile representatives said they wanted to discuss with a smaller group, at a later meeting, possible divestitures of customers, network and spectrum that might allow the deal to go forward, according to one person.
At the end of the hour-and-half presentation, Pozen said she was concerned that merging the two companies would leave local and national wireless markets too concentrated, the person said. She also expressed reservations about shrinking the market from four major companies to three -- AT&T-T-Mobile, Verizon Wireless and Sprint Nextel Corp., the person said.
AT&T’s Stephenson, his lawyers and others involved in the acquisition had no idea those reservations would lead to a lawsuit being filed the next day, the people familiar with their mindset said.
“We are deep into the analysis with the Department of Justice, and it’s all the questions and data gathering you might expect,” Stephenson had told CNBC’s “Squawk Box” at 8:39 a.m., about an hour before the company’s lawyers were advised of the complaint.
Caught by Surprise
“The news caught everybody by surprise,” said Steve Largent, president and CEO of CTIA-The Wireles Association, which hadn’t taken a position on the transaction. “AT&T was in the middle of explaining and detailing the merger that was being proposed when the Justice Department filed,” Largent said. CTIA includes AT&T, T-Mobile and Sprint Nextel Corp. (S) among its members.
Jessica Smith, a Justice Department spokeswoman, declined to comment on the details of the meeting or the decision as did Brad Burns, an AT&T spokesman in Dallas and T-Mobile spokeswoman Anna Friedges.
“As soon as they decided, they pulled the trigger,” said Harold Feld, legal director of Public Knowledge, a Washington- based consumer group that opposes the deal.
Pozen and her team made the final decision to sue after the Aug. 30 meeting, a person said. It was approved by Associate U.S. Attorney General Thomas Perrelli and Deputy U.S. Attorney General James Cole, the department’s second-highest ranking official. U.S. Attorney General Eric Holder has recused himself from the AT&T review, according to Justice Department spokeswoman Tracy Schmaler. She declined to elaborate on the reason.
‘Law Enforcement Action’
The White House was not involved in the decision, White House press secretary Jay Carney said yesterday at a news briefing. “This is a law enforcement action.”
Pozen said at a news conference on Aug. 31 after the filing that the department had consistently told AT&T it had serious concerns about the transaction.
“We have been in constant dialogue with the parties, exploring their arguments, exploring the materials they have provided, asking questions, engaging fully with them,” Pozen said.
AT&T, which said it will challenge the lawsuit, is seeking to meet again with Justice Department officials to propose remedies that might allow the deal to go through, according to three people familiar with the company’s position.
Pozen said at the news conference that the department’s “door is open” for further discussion.
“It is true that you can always settle a case, but the Justice Department doesn’t use litigation as a settlement tactic,” said Public Knowledge’s Feld. “This merger creates dangerous levels of concentration in 97 of the top 100 markets-- there isn’t a cure for that. It’s not like you can sell Chatanoooga and give up a few licenses in Milwaukee,” he said.
The case is U.S. v. AT&T Inc., 11-01560, U.S. District Court, District of Columbia (Washington).
.
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