News Roundup: BofA/Merrill Layoffs; SEC Impostors; NYC Benefits Crumble; Madoff Clutches At Assets; AIG CEO Sues….AIG
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The ax began to fall at Bank of America/Merrill Tuesday morning, according to Dealbreaker. The layoffs weren’t expected to begin until tomorrow. Some claim that every business group will be hit. If you find yourself, suddenly, office-less, send us a line.
Now, here’s a trick question: Do you know an SEC employee when you talk to one? Don’t count on it. Con artists are popping up everywhere these days. The SEC issued a warning Monday to investors and financial firms that some fraudsters are using the names of actual SEC employees to trick people into revealing private information, giving them access to brokerage accounts and even sending them money and other assets. Sometimes they impersonate SEC examiners, calling and claiming to be conducting an “emergency” examination. Don’t fall for it! (The SEC suggests you ask for the caller’s name and identify him or her by calling this special “personnel locator” number: 202-551-6000. Ask to speak to the staff member.)
The market tried but failed to drag itself out of the hole left by Monday’s massive, scary selloff, which pushed the Dow to a low not seen since April, 1997. By 11 am, the Dow had climbed 25 points to 6,788 and the S&P 500 was up just 2 points to 703, but by noon both indices had tripped back into the red. (The initial bounce was attributed by some to Federal Reserve Chairman Ben Bernanke, who voiced support Tuesday for the government’s efforts to rescue the financial markets in his testimony before the Senate.)
With the market generally in the ditch, Social Security and Medicare wiped out (as we noted in our November cover story), and many employers unable to pay their pension and health insurance obligations, lots of older Americans don’t have much of a retirement to look forward to. Now, The City of New York is in talks to cut health and pension benefits for city employees and 271,000 retirees, says a story in the New York Post. If the market doesn’t turn around, the city will owe $9.9 billion in pensions and $3.2 billion in health benefits for municipal retirees by 2016.
Oh, and if you didn’t already suspect as much, Bernie Madoff has absolutely no shame. Though many of his victims are bankrupt or worse, the Ponzi purloiner apparently wants to hold onto some of his hard-earned assets—exactly $69 million worth, including his current luxurious digs, the $7 million penthouse where he is under house arrest, says a story in the New York Post. Madoff’s lawyers claim the apartment, plus another $61 million in assets, belong to his lovely wife: She’s got $17 million in cash stashed in a Wachovia bank account, and an additional $45 million in municipal bonds at COHMAD Securities Corp. which is co-owned by Mr. Madoff.
And finally, in an interesting twist, AIG CEO Maurice Hank Greenberg is suing his employer for securities fraud, saying that the company made "material misrepresentations and omissions" that led him to buy shares in the company at an inflated valued, according to Bloomberg.
