By: Jared Sorin In my previous post, I wrote that statistics show that New York currently is the second largest market in the US for venture-capital financing transactions. Proverbial front-runner, California, continues to lead the nation, but New York has now surpassed Massachusetts, long the number two state, as the destination-of-choice for venture capital investment dollars. This is big news for New York City and the state, which have not been considered hotbeds of startup or entrepreneurial activity, until now. In the quarter ended September 30, 2011, New York-based companies raised over $800 million in 86 venture-capital deals. By contrast,…
Author: Online Managing Editor
By: Avi Strauss After the Greek bailout plan stalled amid talk of a referendum vote, the global financial market reacted with horror. The disastrous turn of events seemed like it could force Greece into bankruptcy and catapult it out of the Eurozone. But, while plans for the referendum were scratched and a glimmer of hope remains that Greece may yet recover in the long run, MF Global Inc., a global financial derivatives broker that invested $6.3 billion in European sovereign bonds, is headed for Chapter 11 Bankruptcy. The firm, under the helm of CEO Jon S. Corzine since March of…
By: Jordan F. Investors lent MF Global Holdings Ltd. $650 million over three months ago in a wager Jon Corzine, recently appointed CEO, would make the futures brokerage house into Goldman Sachs Jr. MF Global filed for bankruptcy before making its first interest payment on the debt. The futures broker sold $325 million worth of five-year, 6.75 percent unsecured notes that included a highly unusual key-man provision. The notes would have paid an extra percentage point if Corzine, who served as both governor and Senator of New Jersey after leaving Goldman Sachs, was named to a federal post and confirmed.…
By: David Mou Over the past few years, Judge Jed Rakoff, Federal District Court Judge for the Southern District of New York has been a champion against big banks and the Securities and Exchange Commission (SEC). Most recently, Citigroup and SEC lawyers have been called to court on November 9, 2011 to defend the terms of their $285 million settlement agreement. In September 2009, Judge Rakoff refused to approve a $33 million settlement between Bank of America and the SEC, in part because it forced shareholders to foot the settlement bill. Bank of America and the SEC eventually settled for…
By: Thomas Michael What does it mean to neither admit nor deny allegations? In one of the financial industry’s most recent magic tricks, banks have figured out how to buy “innocence” from the Securities Exchange Commission through settlement. On Wednesday, November 9th, 2011, Southern District of New York Judge Jed S. Rakoff held an hour long hearing to address concerns with a recent settlement agreement in the case U.S. Securities Exchange Commission v. Citigroup Markets Inc. The proposed settlement amounts to 285 million dollars and requires judicial approval. Matthew Martens and Brad Karp are the attorneys for the SEC and…
By: Ramona Ortega The tragedy that is MF Global seems to get worse by the minute. Just last week, the failed commodities broker fired 1,066 workers, sparking three class-action lawsuits under the Warn Act, a federal law requiring 60-days’ notice before mass layoffs. If plaintiffs prevail, the bankrupt company could be liable for wages employees would have earned during the period. The lawsuits fall among many claims stacking up in the bankruptcy court. This week, Bank of Montreal’s Harris Bank was served with a subpoena by the SEC as the enforcement unit attempts to recover $600 million in missing funds.…
By: Michael Capellupo Most investment advisers – essentially anyone that advises on investing in, purchasing, or selling securities for compensation – are required to register with the SEC and provide information about their trades and portfolios. In the past, investment advisers that had fewer than fifteen clients and acted in a private capacity were not required to register. On July 21, 2010, Congress changed that with the passage of The Dodd-Frank Wall Street Reform and Consumer Protection Act. Congress amended the statute that regulates the registration of investment advisers, 15 U.S.C. §80b-3, to require private investment advisers to register as…
By: Thomas E. Holber The credit default swap market continues to pose systemic risks to financial market participants. Over the past few weeks, these concerns have received attention in the financial press. Fearing the consequences of a potential Greek national debt default, protection buyers are seeking better capitalized counterparties willing to novate – or assume – protection sellers’ obligations. This blog post will address three sources of financial market instability related to credit default swaps (“CDS”): Bankruptcy Code provisions granting CDS counterparties special allowances, CDS contracts incorporating rating agency evaluations and the ongoing specter of a Greek national debt default.…
By: Jared Sorin Groupon, which sells discount coupons for local businesses and then takes a cut of the proceeds for brokering deals, is going public. To be sure, the market is huge and booming – rapidly growing into a multibillion-dollar industry. But, is Groupon the likely winner in an industry characterized by intense competition from the likes of Google and Amazon? Groupon’s much heralded IPO is about to price. Reports suggest that during the course of the “roadshow” that has been taking place over the last week or so Groupon CEO Andrew Mason and his team have created stronger-than-anticipated demand…
By: Jared Sorin Until recently, New York, the financial capital of the world, was not known for being a center of entrepreneurial activity or a hotbed of angel and venture capital investment. Each of Silicon Valley, the Route 128 Corridor, and Research Triangle among others, eclipsed New York. That has certainly changed. Today, New York’s startup, early stage and emerging growth company communities are thriving and have become an important part of the economic activity and growth for this region, fueled largely by ecommerce, digital media, mobile applications, social networking, software and financial technologies. Savvy investors have responded and New…