There were a handful of investment banking moves during Thanksgiving week, plus announcements from the Boston Stock Exchange and a further criminal investigation into insurance fraud.
Citigroup loses to Barcap, Schwab Soundview loses to Jefferies
Citigroup is believed to have lost more than a quarter of its credit derivates traders in New York to Barclays Capital. According to Reuters, there were eight defectors including managing director Doug Warren, directors Jonathan Koerner and Gregory Tell as well as Geoffrey Gentile, Ted Husveth, Aleksander Rabiner, Alex Salmon and Anthony Trears. The moves are in line with Barclays Capital's major expansion drive in the credit markets under its US-born chief executive Bob Diamond.
Jefferies & Co, the New York-based investment bank that specialises in mid-sized companies, has lured a further five executives away from Schwab Soundview Capital Markets. Jefferies has opened a Denver office for three of the five new equity research salespeople, including Jeffrey Andringa, Gregory Bjork, and Jeremy Huth. Additionally, Richard Bradt will be based in the firm's New York headquarters, and Gregory Weissman joins the firm's 42-person Boston office. Jefferies has recently hired four other executives from Schwab Soundview, taking its headcount of senior equity research analysts in the US to 31 and worldwide headcount above 100 research professionals worldwide.
International Assets Holding Corporation, a financial services group trading in equities, DCM, commodities and forex, announced changes in its board composition .Ed Cofrancesco resigned from his position as chief operating officer. Justin Wheeler was appointed to fill the board seat he vacated. Wheeler is an executive of Leucadia National Corporation, one of the company's largest shareholders. Brian Sephton was appointed the CFO. John Hinz was appointed group controller.
Outside New York, Scottsdale, Arizona-based Mellon Research, a boutique investment bank for private mid cap companies, announced the appointment of Barkev Kibarian as Chief financial officer and as a senior investment banker. Kibarian previously worked with Kidder Peabody and UBS Paine Webber.
Boston Stock Exchange chief to focus on options exchange
Boston Stock Exchange announced that its chairman, Kenneth R. Leibler, will stand down to concentrate solely on leading the Boston Options Exchange, BOX. BOX, which was established by Boston Stock Exchange, Bourse de Montreal and Interactive Brokers Group, started trading in February 2004, and provides an all electronic market for equity options. Michael J. Curran, the Boston Stock Exchange's CEO, will assume the additional role of acting chairman. Leibler joined the Boston Stock Exchange as Chairman and CEO in 2001. He previously served as President of the American Stock Exchange as well as President and CEO of Liberty Financial Companies. Curran joined the Exchange in 2001 as Chief Information Officer and was appointed CEO of the Exchange earlier this year. He formerly was a Partner at Coopers & Lybrand
Hank Greenberg under criminal investigation
Federal prosecutors are reported to have launched a criminal investigation into Maurice "Hank" Greenberg, chairman of American International Group, following allegations that he manipulated the insurance company's share price to save money on a big acquisition deal.
The news of the investigation comes as AIG agreed to pay $126m (€96m) to the Securities and Exchange Commission and the US Department of Justice, over allegations that it improperly helped two companies fraudulently inflate their earnings figures.
According to a statement from AIG, it will pay $46m to settle SEC allegations that it helped PNC Financial Group, the Pennsylvania-based bank, hide losses and increase profits. The firm will also pay $80m to settle allegations levelled against it by the Department of Justice that it sold an insurance policy to Brightpoint, the mobile phone distributor, which was designed to conceal losses.
AIG is being probed by Eliot Spitzer, the New York state attorney general, as part of a wide-ranging investigation into bid rigging and price fixing in the insurance sector.