Thursday's Headlines: Bank of America agrees to support Lehman bankruptcy exit
Bank of America and its subsidiary Merrill Lynch have agreed to support Lehman Brothers' $65 billion bankruptcy exit plan, reducing their claims by a combined $7.5 billion, Reuters reports.
Bank of America will cut its derivatives claims by $4.5 billion while Merrill Lynch will cut claims by $3 billion. In addition, Bank of America will return $356 million in funds to Lehman Brothers that had been paid as part of a previous claim.
"The settlement is part of a larger effort by Lehman to resolve complex claims from big banks that were counterparties in various derivatives transactions totaling more than $20 billion," Reuters writes. "Lehman in May unveiled a framework for settling those disputes, and so far, eight of 13 banks have agreed to abide by the framework and pledge support for Lehman's plan," according to Reuters.
Citigroup CEO Pandit says Citi exposure to eurozone risk is "extremely manageable." [Bloomberg]
Santander CEO Saenz expects profits to improve over three years as Spain and Portugal recover. [MarketWatch]
SEC investigating whether RBS and Credit Suisse lied to shareholders about loan repurchase requests. [Financial Times]
U.S. investment banks struggle to raise funds in China due to exclusionary Chinese rules. [DealBook]
U.S. mortgage fraud reports jumped 88% in second quarter, regulator says. [Financial Times]
Goldman Sachs, TCW lawsuit brought by German state-owned bank over unprofitable derivative product dismissed. [Reuters]
France's Credit Agricole wants to reduce corporate and investment banking business, to cut net debt by 50 billion euros. [Financial Times]
UBS may lose top wealth manager spot after rogue trading loss as clients fret. [Bloomberg]
HSBC general insurance business sale likely to see bids from Allianz and AXA. [Reuters]
U.S. banks chasing profits in emerging markets face hardships and losses. [DealBook]
FBI investigating ex-Edward Jones brokers for raising money in alleged Ponzi scheme. [Investment News]
ABN Amro to buy German private banking business from Liechtenstein's LGT group. [Wall Street Journal]
New rules for financial sector could increase borrowing costs for European companies up to 50 billion euros, S&P says. [Financial Times]
Hedge fund manager found guilty of $100 million fraud is sentenced to 60 years in jail. [DealBook]
SEC bans former SAC Capital Advisors portfolio manager Donald Longuiel. [Hedge Fund Net]