Tan Kin Lian's Blog: Citigroup and UBS Agree to Buy Back Risky Securities

Friday, December 12, 2008

Citigroup and UBS Agree to Buy Back Risky Securities

The regulator in USA look after the interest of consumers. I hope that the regulator in Singapore can follow the same example. Tan Kin Lian

http://www.nytimes.com/2008/12/12/business/12auctions.html?ref=business

December 12, 2008
By THE ASSOCIATED PRESS
WASHINGTON (AP) — Two banking giants, Citigroup and UBS, agreed on Thursday to buy back nearly $30 billion in risky auction-rate securities that regulators said the banks had marketed to customers as safe.

The Securities and Exchange Commission formally approved the settlements with the two banks after preliminary deals that were reached in August.

Securities regulators in Texas and New York also announced details of final agreements with the banks.

Tens of thousands of the banks’ customers bought the auction-rate securities before the $330 billion market for them froze in mid-February, the S.E.C. said in announcing the final accords.

The new settlements were the largest return of customer money in the agency’s history and all the investors will be made whole, the chairman of the S.E.C., Christopher Cox, said in a statement.

Citigroup and UBS of Switzerland neither admitted nor denied wrongdoing under the settlements.

Citigroup agreed to buy back about $7 billion in the securities from affected customers, while UBS’s repurchase totaled $22.7 billion.

The settlements require federal court approval. The banks agreed to refrain from future violations of securities laws.

20 comments:

Anonymous said...: The SEC has ruled there is violation of the laws by selling assets as safe
which are not.What about MAS?; December 12, 2008 1:46 PM
Anonymous said...: MAS - Do the RIGHT THING !!!; December 12, 2008 1:51 PM
Anonymous said...: MAS has clearly not been on top of things as a regulator. This is now the time to do what its duty entails and to resolve the issue quickly. The issue is really not that complicated.; December 12, 2008 2:13 PM
Anonymous said...: MAS wait and see what others do, then they decide. But don't be too optimistic. They may not follow what others do. And what can we do if they don't? Class action lawsuit, I suppose.; December 12, 2008 3:00 PM
Anonymous said...: I understand from Taiwanese TV programme that those mini-bonds bought after Sept 1 will be refunded 100%, is this true how Taiwan monetary authority handled it?; December 12, 2008 4:13 PM
breezy life said...: I have bought structured products which were mis-represented to me using my entire hard-earned savings. Now, I have failed to seek recourse with my FI and I am at my wits' end! Can MAS not hear our desperate cries for justice?; December 12, 2008 4:50 PM
Concerned said...: Obviously there is a lot of similiarities between the auction-rated securities and those structured products marketed here. Both are risky financial products marketed as low risk products to induce customers to purchase them. What is more appalling is that those purchasers of auction-rated securities are much more knowledgable than the local purchasers of credit linked products in terms of financial knowledge of the securities marketed and yet the SEC deemed it fit that customers should be fully compensated.

We saluted the Securities and
Exchange Commission and the Securities regulators in Texas and New York on their civility consciousness.; December 12, 2008 5:17 PM
Anonymous said...: Yes, MAS should step forward more positively. The ordinary investors like us will not be able to fully appreciate and understand complicated products like Minibond and the regulator must step in to safeguard their country men to prevent such products being sold in the market to the ordinary citizens.; December 12, 2008 6:55 PM
Anonymous said...: If we sue our banks/distributors here,can our lawyers use this ruling as a point to our advantage?; December 12, 2008 7:43 PM
Anonymous said...: Hi Mr. Tan,

Maybe there can be a poll on Mr. Tan for President?; December 12, 2008 7:44 PM
Anonymous said...: Then how about the Merrill Lynch Jubilee Series 3 Notes ?

Any News.; December 12, 2008 7:51 PM
Anonymous said...: In comparison, the amount here, even to be fully settled, is small, a drop in the ocean, but is this pill too bitter for the FIs to swallow? Certainly yes, as the FIs here are over-protected, spoilt. They need a big stick, not persuasion. Wait for further direction from Mr. Tan KL, wait for legal opinion from the experts.; December 12, 2008 7:53 PM
Anonymous said...: What can we say???
Sad!!!!; December 12, 2008 9:01 PM
Anonymous said...: It's an Asian thing, the Authority cannot "lose face" so they cannot admit mistake. So it's a waiting game, wait for Banks to admit and pay up. In Hokkien, they say you will have to wait for "Tan Ku Ku", my brother to show up.

Tan Chin Ku.; December 12, 2008 9:14 PM
Unknown said...: the reason for these buybacks is becos that is one of primary conditions they HAD to agree to if they are to be granted EVEN MORE bridging loans (or maybe other favorable sweeteners) to tie over the lull market

THINK "BANKER"

Which one would let go of that Dollar note in his right hand

UNLESS hes getting a Hundred Dollar note in his left!?; December 12, 2008 11:07 PM
Anonymous said...: Wayangnologist said...
the reason for these buybacks is becos that is one of primary conditions they HAD to agree to if they are to be granted EVEN MORE bridging loans (or maybe other favorable sweeteners) to tie over the lull market
Hey Wayang, UBS is not an american bank. Would US taxpayers allow their money to bail out UBS? Are you a member of any political party?; December 13, 2008 2:31 PM
Unknown said...: why does everyone start to any'o'how attach a political agenda once they run out of better explanation they CANT think of, is it they are using it as a mask they are NOT thinking hard enough or as a excuse they are STILL NOT thinking hard enough

the Banker might not need to be ANYTHING

in fact, the Right Hand doling out the Dollar note might not need to be THAT Banker's

Neither, the Left getting the Hundred

As long as the son or daughter or even distance cousin fulfill SOME charity, the Parent gets the cash. Comprehende?; December 14, 2008 12:02 AM
Anonymous said...: Unlike the Americans, MAS just keep shunning its responsibility on the matter. Why should individual investor pursue the claim with FI? It should be in the interest of MAS to be fully involved as clearly they have not been a disappointing failure in this case. How I wish if our former President Ong would be still around! Definitely we need change and Mr. Tan is our hope now!; December 14, 2008 3:18 PM
Chan J C said...: Hi

Could someone kindly share if this securities issued by Citigroup / UBS similar to CLN here?

Regards
JC; December 14, 2008 4:22 PM
Unknown said...: "Why should individual investor pursue the claim with FI?"

To be very very honest, some 'authorities' never HAD ANY REAL responsibility to begin with, if you catch what i mean.

From that basis alone, you can project the outcome by yourself isnt it; December 14, 2008 4:24 PM