Goldman, Citi among banks on list for Hyundai Oilbank's $2bln IPO

Other banks on the list include, BofA-Merrill , BNP Paribas, Woori Investment & Securities and Daewoo Securities .Hyundai Oilbank is said to seek the Seoul exchange listing sometime in May or June of next year, in what sources say will be the largest South Korean IPO since the giant $4.4 billion offering by Samsung Life Insurance last year.The world’s largest shipbuilder Hyundai Heavy Industries Co Ltd that owns a 91.1 percent stake in Hyundai Oilbank is running the public float process.A Hyundai Heavy spokesman declined to comment. All the banks mentioned either declined to comment or could not immediately be reached.


The Black Keys are a band I’ve been dying to shoot for some time now and I finally got my chance to last week at Roseland Ballroom.

Be sure to check out my full recap (along with more photos) from the show over HERE.

CITIGROUP is lucky that Muammar el-Qaddafi was killed when he was. The Libyan leader’s death diverted attention from a lethal article involving Citigroup that deserved more attention because it helps to explain why many average Americans have expressed support for the Occupy Wall Street movement. The news was that Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.

It doesn’t get any more immoral than this. As the Securities and Exchange Commission civil complaint noted, in 2007, Citigroup exercised “significant influence” over choosing $500 million of the $1 billion worth of assets in the deal, and the global bank deliberately chose collateralized debt obligations, or C.D.O.’s, built from mortgage loans almost sure to fail. According to The Wall Street Journal, the S.E.C. complaint quoted one unnamed C.D.O. trader outside Citigroup as describing the portfolio as resembling something your dog leaves on your neighbor’s lawn. “The deal became largely worthless within months of its creation,” The Journal added. “As a result, about 15 hedge funds, investment managers and other firms that invested in the deal lost hundreds of millions of dollars, while Citigroup made $160 million in fees and trading profits.”

Citi to rebuild broker ranks, ends RIA plan

Citi said in a statement it cut 80 of its personal wealth management investment consultants in the United States as part of the move. The firm instead plans to expand the internal brokerage and wealth advisory services it already offers and, over the next year, add 30 financial advisers to the pool of 270 it already has.The company will also expand its premium Citigold banking accounts, a program that refers customers to the bank’s financial advisers. Citi also said it will improve financial planning, retirement and insurance offerings, but did not give any details in its statement.”They’ve been all over the map,” said one brokerage recruiter, who asked to remain anonymous because he sometimes does business with Citi. “It appears they’re going back to a more traditional approach to this business.”Citi declined to comment beyond the statement.This is Citi’s latest attempt to build a retail wealth management business since massive credit losses in 2008 sent Citi shares plunging and compelled two government bailouts.In January 2009, Citi sold its 11,000-broker Smith Barney unit to Morgan Stanley for $2.7 billion in cash and a 49 percent stake in the resulting Morgan Stanley Smith Barney joint venture. Roughly 600 branch-based brokers remained at Citi when the deal was closed in June 2009.In October of that year, Deborah McWhinney, who joined Citi in March 2009 after seven years heading Charles Schwab Corp’s investment adviser business, shook things up when she said brokers would no longer receive commissions and would become fee-based advisers.She also introduced a plan to refer sophisticated customers to outside registered investment advisers and encouraged advisers to work in teams.”The RIA plan was a quick fix,” Aite Group research director Alois Pirker said.It was designed to help Citi rebuild a wealth management business without a lot of upfront expenses, Pirker added.The strategy echoed one McWhinney oversaw at Schwab, an online brokerage that also sells custody services to RIAs. Brokerage clients are referred to select RIAs.Hundreds of Citi brokers left and the wealth management sales force was nearly halved within a year of McWhinney’s arrival. The referral program did not get off the ground, analysts said.In February, McWhinney left Citi wealth management to head up digital merchant acquiring in the bank’s payments business. Citi had about 400 wealth advisers at that time.The latest announcement comes on the heels of similar initiatives at rivals such as Bank of America Corp, Wells Fargo & Co and JPMorgan Chase & Co. The banks are beefing up financial advice offerings for branch customers.”The bank gets to be more strategic about what it wants, now that it has more breathing space,” said Aite’s Pirker, who took issue with Citi’s RIA referral plan. “You don’t want to delegate the advisory role to an external party. That’s where the value in these relationships lies.”Citi, which has about 1,000 branches in North America, does not have much time to sort out its retail wealth management plans. Morgan Stanley can acquire full control of the brokerage venture from Citi by 2014, according to the agreement.The bank’s efforts are dwarfed by rivals such as Wells Fargo, which has the third largest retail brokerage and nearly 4,000 branch-based advisers. Bank of America, which employs 16,000 Merrill Lynch brokers, also is expanding Merrill Edge, which offers online brokerage and soon will have more than 1,000 advisers located in branches and call centers.

Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time. He showed that again yesterday when he shat all over the SEC’s latest dirty settlement with serial fraud offender Citigroup, refusing to let the captured regulatory agency sweep yet another case of high-level criminal malfeasance under the rug.

The SEC had brought an action against Citigroup for misleading investors about the way a certain package of mortgage-backed assets had been chosen. The case is very similar to the notorious Abacus case involving Goldman Sachs, in which Goldman allowed short-selling billionaire John Paulson (who was betting against the package) to pick the assets, then told a pair of European banks that the “designed to fail” package they were buying had been put together independently.  

This case was similar, but worse. Here, Citi similarly told investors a package of mortgages had been chosen independently, when in fact Citi itself had chosen the stuff and was betting against the whole pile.

This whole transaction actually combined a number of Goldman-style misdeeds, since the bank both lied to investors and also bet against its own product and its own customers. In the deal, Citi made a $160 million profit, while its customers lost $700 million.

Goldman, in the Abacus case, got fined $550 million. In this worse case, the SEC was trying to settle with Citi for just $285 million. Judge Rakoff balked at the settlement and particularly balked at the SEC’s decision to allow Citi off without any admission of wrongdoing. He also mocked the SEC’s decision to describe the crime as “negligence” instead of intentional fraud, taking the entirely rational position that there’s no way a bank making $160 million ripping off its customers can conceivably be described as an accident.

“Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?” And this: “How can a securities fraud of this nature and magnitude be the result simply of negligence?”

Rakoff of course is right – the settlement is nuts. If you take Citi’s $160 million profit on the deal into consideration, what we’re talking about then is a $125 million fine for causing $700 million in damages. That, and no admission of wrongdoing.

Just imagine a mugger who steals $70 from some lady’s wallet being sentenced to walk free after paying back twelve bucks. Magritte himself could not devise a more surreal take on criminal justice.

It gets worse.

After reviewing bids, Citi looks to sell EMI in pieces: sources

The British music company is reviewing competing offers for EMI Publishing from BMG Music, a joint venture between Bertelsmann and private equity firm Kohlberg Kravis Roberts, and Sony/ATV — a joint venture between Sony Corp and the estate of Michael Jackson, these people said.BMG-KKR and Sony have submitted the highest offers for EMI’s publishing business, the people said. One of them added that the two bids came in close to each other.Vivendi SA’s Universal Music Group and Len Blavatnik’s Warner Music Group are vying for the recorded music side of EMI, people familiar with the matter said.U.S. bank Citigroup, which took control of EMI in February, is expected to pick winning bidders for the businesses by the end of next week, the people said.While Warner Music has also been interested in buying all of EMI, significant anti-trust hurdles on the publishing segment, as well as challenges in lining up financing in a volatile market, makes such a deal unlikely, the people said.Moreover, Blavatnik, whose Access Industries bought Warner Music in May for $3.3 billion, has privately expressed reluctance to bid aggressively so soon after winning Warner Music, according to two of the people close to the transaction process. WMG Chairman Edgar Bronfman Jr. has long coveted EMI, and losing out on the chance to buy it once again is certain to hasten his departure from the company.EMI Chief Executive Roger Faxon has publicly argued against splitting the business, saying that each side benefits the other. Since the former head of EMI’s publishing operation took over leadership of the entire company, he has pushed to more closely integrate both divisions, making it potentially more difficult to split the company.But the chances of selling EMI as a whole were hurt by the tightening of credit markets in recent weeks, which have prompted banks to stiffen lending terms, thereby making deals more expensive, the people familiar with the matter said.EMI, whose artist roster includes the Beastie Boys, the Beatles and Keith Urban, is seen as one of the last remaining attractive assets in the music industry. The company said in June that it was exploring strategic alternatives and has since been running an auction, which two sources said has been code named “Project Nile.”Dividing EMI will likely generate richer bids for Citi, which is hoping to collect as much as $4 billion from the auction, said people familiar with the matter.EMI’s publishing unit is the stronger of the two assets and has attracted bids of roughly $2 billion from Sony/ATV Music Publishing and BMG Music Rights, according to two people. Sony/ATV is run by Marty Bandier, who is best known in the music business for building EMI Publishing into the industry’s premiere publishing operation over 16 years before leaving in 2006.BMG, which is a joint venture of German media giant Bertelsmann and private equity firm KKR, has made a string of music publishing acquisitions in the last year. The venture does not have a recorded music arm.Universal Music Group is currently the frontrunner for EMI’s recorded music division, which includes the Capitol and Virgin labels, one of the people said.A Citi spokeswoman declined comment. A representative for EMI was not immediately available for comment. All bidders have declined to comment throughout the sale process.