Citi CEO Still Under Pressure
The regulator is thought to believe that Pandit is not the man to take the business forward, as he is basically an investment banker / hedge fund manager, while Citi needs someone from a more traditional (read 'boring') background to stabilize and turn the ship around. And the newspaper reports that Jerry Grundhofer, the ex-CEO of US Bancorp, has already been sounded out about the role. The New York Times reports, however, that Citi's current management team has been given a vote of confidence by Chairman Richard Parsons. Parsons said that the team had made 'significant progess' in righting the ship.
In other news, FT Alphaville reports that US regulator The Securities and Exchange Commission has now finalized settlement with the few remaining Auction-Rate Securities holdout firms. The industry was accused of selling the securities by de-emphasizing the risks to investors. Citi, UBS and Wachovia settled months back, but Bank of America ($4.5bn), Deutsche Bank ($1.5bn) and Royal Bank of Canada ($800m) have now caved.
And Reuters reports that Bank of New York Mellon CEO Robert Kelly said last week that he was keen to look at boosting the firm's asset management profile by acquisitions.
While The New York Times reports that Lazard is to start a private wealth management unit, which will be based in New York. And Financial News reports that several current and former Lazard executives raised a combined $104m by selling shares in the firm, which Goldman sold in a public offering.
Finally, Bloomberg reports that the state of New Hampshire has alleged that UBS sold 'unsuitable investments' to clients who purchased securities underwritten by Lehman Brothers. The state has filed a cease-and-desist order against the Swiss bank, claiming that 'the safety of these products was exaggerated'. UBS says that it is not guilty of any wrongdoing, and that it will defend itself against any lawsuit.