The Star Online: Business
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- Soros: not a funder of Wall Street protests
- Fitch downgrades UBS, puts other banks on review
- Rajaratnam prison term follows sentencing trends
| Soros: not a funder of Wall Street protests Posted: 13 Oct 2011 05:56 PM PDT NEW YORK (Reuters) - George Soros isn't a financial backer of the Wall Street protests, despite speculation by critics including radio host Rush Limbaugh that the billionaire investor has helped fuel the anti-capitalist movement. Limbaugh summed up the chatter when he told his listeners last week, "George Soros money is behind this." Soros spokesman Michael Vachon said that Soros has not "funded the protests directly or indirectly." He added: "Assertions to the contrary are an attempt by those who oppose the protesters to cast doubt on the authenticity of the movement." Soros has donated at least $3.5 million (2.2 million pounds) to an organisation called the Tides Centre in recent years, earmarking the funds for specific purposes. Tides has given grants to Adbusters, an anti-capitalist group in Canada whose inventive marketing campaign sparked the first demonstrations last month. Vachon said Open Society specified what its donations could be used for. He said they were not general purpose funds to be used at the discretion of Tides -- for example for grants to Adbusters. "Our grants to Tides were for other purposes." Tides declined to comment. According to IRS disclosure documents from 2007-2009, the latest data available, Soros' Open Society gave grants of $3.5 million to Tides, a San Francisco-based group that acts almost like a clearing house for other donors, directing their contributions to liberal non-profit groups. Among others the Tides Centre has partnered with are the Ford Foundation and the Gates Foundation. IRS disclosure documents and reports from Tides also show that Tides gave Adbusters grants of $185,000 from 2001-2010, including nearly $26,000 between 2007-2009. The Vancouver-based Adbusters publishes a magazine with a circulation of 120,000 and is known for its spoofs of popular advertisements. It says it wants to "change the way corporations wield power" and its goal is "to topple existing power structures." Adbusters co-founder Kalle Lasn said the group is 95 percent funded by subscribers paying for the magazine. "George Soros's ideas are quite good, many of them. I wish he would give Adbusters some money, we sorely need it," he said. "He's never given us a penny." Adbusters may have sparked Occupy Wall Street but it is by no means in control of the disparate movement, with the protests now in their fourth week and spreading to cities across America. President Barack Obama, BlackRock Chief Executive Laurence Fink and Soros himself are among those who have expressed sympathy for the protesters' frustration with high unemployment. SHARED FRUSTRATION "I can understand their sentiment," Soros told reporters last week at the United Nations about the Occupy Wall Street demonstrations, which are expected to spur solidarity marches globally on Saturday. He declined to comment further. Soros, 81, is No. 7 on the Forbes 400 list with a fortune of $22 billion, which has ballooned in recent years as he deftly responded to financial market turmoil. He has pledged to give away all his wealth, half of it while he earns it and the rest when he dies. Like the protesters, Soros is no fan of the 2008 bank bailouts and subsequent government purchase of the toxic sub-prime mortgage assets they amassed in the property bubble. The protesters say the Wall Street bank bailouts in 2008 left banks enjoying huge profits while average Americans suffered under high unemployment and job insecurity with little help from Washington. They contend that the richest 1 percent of Americans have amassed vast fortunes while being taxed at a lower rate than most people. Soros in 2009 wrote in an editorial that the purchase of toxic bank assets would, "provide artificial life support for the banks at considerable expense to the taxpayer." He urged the Obama administration to take bolder action, either by recapitalizing or nationalizing the banks and forcing them to lend at attractive rates. His advice went unheeded. The Hungarian-American was an early supporter of the 2008 election campaign of Barack Obama, who will seek a second term as president in the November, 2012, election. He has long backed liberal causes - the Open Society Institute, the foreign policy think tank Council on Foreign Relations and Human Rights Watch. SLOW START Adbusters, which publishes a magazine and runs such campaigns as "Digital Detox Week" and "Buy Nothing Day," came up with the Occupy Wall Street idea after Arab Spring protests toppled governments in Egypt, Libya and Tunisia, said Lasn, the 69-year-old co-founder of the group. "It came out of these brainstorming sessions we have at Adbusters," Lasn told Reuters, adding they began promoting it online on July 13. "We were inspired by what happened in Tunisia and Egypt and we had this feeling that America was ripe for a Tahrir moment." "We felt there was a real rage building up in America, and we thought that we would like to create a spark which would give expression for this rage." Other support for Occupy Wall Street has come from online funding website Kickstarter, where more than $75,000 has been pledged, deliveries of food and from cash dropped in a bucket at the park. Liberal film maker Michael Moore has also pledged to donate money. The protests began in earnest on September 17, triggered by an Adbusters campaign featuring a provocative poster showing a ballerina dancing atop the famous bronze bull in New York's financial district as a crowd of protesters wearing gas masks approach behind her. Dressed in anarchist black, the battle-ready mob is shrouded in a fog suggestive of tear gas or fires burning. Some are wearing gas masks, others wielding sticks. The poster's message seems to be a heady combination of sexuality, violence, excitement and adventure. Former carpenter Robert Daros, 23, saw that poster in a cafe in Fort Lauderdale, Florida. Having lost his work as a carpenter after Florida's speculative construction boom collapsed in a heap of sub-prime mortgage foreclosures, he quit his job as a bartender and travelled to New York City with just a sleeping bag and the hope of joining the protest movement. Daros was one of the first people to arrive on Wall Street for the so-called occupation on September 17, when protesters marched and tried to camp on Wall Street only to be driven off by police to Zuccotti Park - two acres of concrete without a blade of grass near the rising One World Trade Centre. "When I was a carpenter, I lost my job because the financier of my project was arrested for corporate fraud," said Daros, who was wearing a red arm band to show he was helping out in the medic section of the Occupy Wall Street camp. Since its obscure beginnings, the campaign has drawn global media attention in places as far-flung as Iran and China. The Times of London, however, was not alone when it called the protests "Passionate but Pointless." Adbusters' co-founder Lasn dismisses that, reeling off specific demands: a tax on the richest 1 percent, a tax on currency trades and a tax on all financial transactions. "Down the road, there will be crystal clear demands coming out of this movement," he said. "But this first phase of the movement is messy and leaderless and demandless." "I think it was perfect the way it happened." Full content generated by Get Full RSS. |
| Fitch downgrades UBS, puts other banks on review Posted: 13 Oct 2011 05:54 PM PDT NEW YORK (Reuters) Fitch Ratings downgraded UBS AG on Thursday and placed seven other U.S. and European banks on credit watch negative, citing challenges in the economy and financial markets, as well as the impact of new regulations. The ratings agency lowered UBS's long-term issuer default rating to A from A+. Fitch is also reviewing ratings for Barclays Bank Plc , BNP Paribas , Credit Suisse Group AG , Deutsche Bank AG , Societe Generale , Bank of America Corp , Morgan Stanley and Goldman Sachs Group Inc for further possible downgrades. The cuts would in most cases be one notch and in some cases two notches, Fitch said. A lower bond rating can make debt more expensive to issue and lead to higher collateral requirements. Earlier on Thursday, Fitch also lowered its ratings on Royal Bank of Scotland and Lloyds Banking Group PLC two notches to A from AA-. Exposure to the European debt crisis and concern about the business model of pure-play investment banks were catalysts for most of the ratings actions, Joo-Yung Lee, a managing director in Fitch's financial institutions group, told Reuters. "Some of these banks have greater reliance on wholesale funding and greater reliance on what we view as volatile trading earnings," Lee said. "That's particularly true of Goldman Sachs and Morgan Stanley in the U.S. They are less diverse than their global universal bank peers." In the case of Bank of America, its exposure to mortgage-related litigation was a driver for Fitch's review. Competitors like Wells Fargo & Co and JPMorgan Chase & Co were not targeted because they have diverse business models, steady funding streams and no company-specific issues that put them at serious risk, Lee said. Fitch does not have a specific deadline to finish its review, but Lee said it hopes to resolve the matter quickly to reduce market uncertainty. (Additional r Full content generated by Get Full RSS. |
| Rajaratnam prison term follows sentencing trends Posted: 13 Oct 2011 05:52 PM PDT NEW YORK (Reuters) - The 11-year prison term handed down on Thursday to Raj Rajaratnam is the latest example of an inside trader receiving a lighter sentence than suggested by federal guidelines. U.S. District Judge Richard Holwell said that under the federal guidelines, the Galleon Group hedge fund founder had faced a minimum of 19-1/2 years in prison. In opting for a substantially lighter sentence, Holwell took a number of factors into consideration. Among other things, he cited Rajaratnam's charitable works and "impending kidney failure" due to advanced diabetes. The U.S. Sentencing Guidelines, which went into effect in 1987, were meant to bring more consistency to sentencing. After a U.S. Supreme Court decision in 2005, the guidelines became advisory, giving judges greater flexibility. Judges, in fact, often find reasons to depart downward, according to a Reuters analysis of sentences imposed in 2009 and 2010. That analysis looked at 15 insider-trading cases brought by the U.S. Attorney in New York. Of the 15 sentences handed down in that time period for insider trading, 13 were lighter than the terms prescribed by the guidelines. Compare that record to the sentences handed down for all cases considered by New York federal judges over roughly the same time period. Sentences in that period were lighter than suggested in 57 percent of cases, according to U.S. Sentencing Commission statistics. The trend has continued in 2011. Out of the 17 individuals sentenced this year in insider-trading cases brought by the U.S. Attorney in New York since August 2009, only four defendants received sentences within the guidelines. But while sentences are lighter than guidelines suggest for inside trading, defendants are still facing significant jail time. In 2011, 15 out of 17 defendants were sentenced to prison, and many of them received prison sentences very close to the guidelines. Zvi Goffer, a former Galleon employee, for example was sentenced to 120 months, or 10 years. The guidelines called for a minimum sentence of 121 months. Given the high-profile nature of the Rajaratnam case, some were expecting a sentence that would fall closer to the guidelines. "I think there clearly is a difference between the way judges are willing to sentence someone convicted of insider trading and what they're willing to sentence people convicted of other kinds of securities fraud," said Michael Perino, a professor at St. John's University School of Law. Perino said Rajaratnam's sentence was less than half the 25 years handed down to former WorldCom CEO Bernard Ebbers and the 24 years for former Enron executive Jeffrey Skilling for their roles in accounting frauds at those companies. "Maybe judges see far greater injuries arising from accounting fraud cases than they do from insider trading cases," he said. "They can see all the investors who have lost so much money. That's hard to see in an insider trading case." Full content generated by Get Full RSS. |
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