2010年7月17日星債苦主記招新聞稿

(转)2010年7月17日星債苦主記招新聞稿
2010年7月17日新聞會講稿

(關於7月14日) 証監會及金管局與星展香港就雷曼相關Constellation 債券達成協議 (下稱協議)

是一份官商勾結, 互相卸責, 嫁禍於人的協議.

是一份不公開, 不公平, 不公正的三不公協議.


Constellation 債券受害苦主 (包括得到和解與得不到和解者)會繼續抗爭, 行動升級, 考慮對協議中某些條款進行司法覆核, 去信立法會. 請求第六次傳召星展作供. 并且追究星展銀行違反香港証監及期貨條例第107條, 欺詐地或罔顧實情地誘使他人投資金錢的罪行. 直至星展公開承認誤導, 退賠100%苦主, 100%本金.


1) 不公開

a) 協議稱: “星展香港在不承認任何責任下提出和解”, 有別於不承認任何錯失. 金管, 証監在調查過程中, 是否發現星展銀行”有錯”? 什麼錯? 必須公開.

b) 協議中, 証監會關注點的第1,2點, 可以理解為, 星展內部對星債評級有爭議, 一個評高, 一個評低. 現在看來, 評低的是錯, 評高的才對. 但錯在哪裡, 對在哪裡? 資料理據必須公開.

2) 不公平

a) 對被評為4級或5級風險類別客戶不公平

協議只說: “產品評為較高風險級別”. 但葉約德在証人陳述書14.10段寫明在2008年3月星展已將星債風險變為第5級高風險.第4級風險的客戶應該也不能買到第5級風險的產品，點解無得賠?

b) 即使被評為4或5級風險客戶，購買時見到產品風險是2而不是4或5, 難道他便不可以買低風險的產品嗎? 好像一個著名的賽車手，有一天他駕着一輛普通私家車時被其他車撞到，可否說他常常揸跑車，所以應該知駕車危險而不作賠償？當然不能，只要那宗交通意外不是他引致便有賠償。

c) 協議中証監會顧及：〝客戶若有較高的風險承受能力, 且具備衍生工具交易的經驗及知識，Constellation 債券可能本應是適合他們的投資產品”, 那麼有較高的風險承受能力, 但沒有衍生工具交易的經驗及知識的客戶便同是不適合購買星債，所以理應一樣獲得全賠。


d) 未見過有政府機構在嚴肅文件中, 採用”可能本應是”這種不定向的, 猜度的字眼, “可能是”, 亦可以”可能不是”, 50/50. 但協議則在這種靠估的前題下, 要執行一些真實的行動.太離譜.

3) 不公正


a) 單就產品風險一項而言, 星展在星債的申購表格, 白紙黑字標明: 產品風險程度2, 賣給客戶. 星展在交立法會迷你債券小經陳述書14.5段解釋原因時, 遺漏了星債掛勾公司”首先失責” (即一間死, 等於八間死晒) 為基準這一要項, 巳經違反証監及期貨條例298條, “披露虛假或具誤導性的資料以誘使進行交易的罪行. 葉約德在立法會答問, 回應債券掛勾多間公司, 說是分散風險, 也是遺漏星債”首先失責”條款. 協議又講 “星展香港另一部門曾將同一產品評為較高風險級別產品”. 是否顯示星展銀行高層自己都未明白產品結構和風險. 何況銷售員工? 不能做到”認識你的產品”, 星展巳屬違規, 如此明顯嚴重罪行, 不予揭露. 遣責, 處罰. 甚至起訴. 反而為星展開脫, 卸責, 并幫星展轉嫁損失, 轉嫁麻煩. 其實是証監知道星展有罪, 自己也難逃監管疏忽之責. 互相幫忙, 共同卸責. 對苦主太不公!


b) 星債產品風險定錯, 是銷售誤導. 理應通賠. 協議卻不賠予被星展香港列為較高風險級別客戶. (即4或5級), 要這些人經星展香港投訴處理程序逐一覆核, 真是豈有此理?! 這種先判你該死再要你自己舉証申訴方法, 不符合香港律法的”無罪推定”精神, 為此將考慮司法覆核.


c) 協議稱: 即使証監會成功對星展香港及/或其主管人員及僱員採取法律處分, 亦不能達到此協議取得結果. 講得冠冕堂皇, 其實是欺人之談. 只要金管, 証監判定星展 “失實陳述”. 根據香港法例284章, 苦主購買星債時所訂立的合約就有權撤銷. 撤銷合約, 苦主當然可以取回100%本金, 并可追討損害賠償. 百分之百苦主受惠.


d) 星展給客戶進行風險評級, 是以推銷產品為目的. 其中種種不良手法, 留待苦主向各位作証.

最後要說的是, 星展, 金管, 証監做出這樣協議, 非常不智.

(1) 時代不同了, 看一看美國政府告高盛, 高盛想和解. 除支付罰款, 還要認錯.

(2) 星展不賠給4或5級風險的客戶, 這些人會放過星展嗎? 星展有明顯的銷售誤導, 難道有人可以隻手遮天? 最後還是要賠. 不如就早點賠!


From: 2010年7月17日星債苦主記招新聞http://www.lbv.org.hk/content/pages/posts/2010E5B9B47E69C8817E697A5E6989FE582B5E88BA6E4B8BBE8A898E68B9BE696B0E8819EE7A8BF9236.php

證監會及金管局與星展香港就雷曼相關Constellation債券達成協議

2010年 7月 14日 新聞稿
證監會及金管局與星展香港就雷曼相關Constellation債券達成協議
(From: http://www.sfc.hk/sfcPressRelease/TC/sfcOpenDocServlet?docno=10PR80)


證券及期貨事務監察委員會（證監會）及香港金融管理局（金管局）今天公布，就星展銀行（香港）有限公司（星展香港）分銷與雷曼兄弟集團相關的Constellation債券（雷曼相關Constellation債券）的事宜，與星展香港達成協議（註1及2）。

繼證監會早前作出調查後，星展香港在不承認任何責任下，同意提出有關雷曼相關Constellation債券的和解計劃。根據有關和解協議：
星展香港將會向已購買雷曼相關Constellation債券的星展香港客戶，提出總額約6.51億元的付款建議，這些客戶必須是在購買該等債券時，獲星展香港按照其投資風險評估系統評為屬低至中級風險，即第1、2或3級風險類別的客戶（低風險客戶）（註3）；
星展香港將會向低風險客戶支付一筆款項（和解款項），金額相等於有關低風險客戶對雷曼相關Constellation債券的投資總額，加上這筆投資總額若在投資當日以定期存款形式存入星展香港，在投資當日直至今天日期為止，星展香港就該筆款項應付予有關客戶的利息，再減去迄今已支付予他們的票息後所得款項（註4）；
對於那些已經與星展香港達成和解協議的低風險客戶，星展香港將會向他們提出補發款項的建議，以達至這批客戶得以與其他低風險客戶享有相同待遇；
至於星展香港列入較高風險級別的客戶（即評定為第4或5級風險類別的客戶）所進行的雷曼相關Constellation債券的交易，星展香港將以加強的投訴處理程序逐一覆核有關這些交易的投訴（註5）；及
對於星展香港在今天日期前售出的雷曼相關Constellation債券以外的非上市結構性產品，星展香港將會採用加強的投訴處理程序，覆核有關這些產品分銷事宜的客戶投訴。

證監會在調查過程中提出以下關注：
星展香港將雷曼相關Constellation債券售予高風險級別及低風險級別這兩類客戶時，將雷曼相關Constellation債券評為低至中級風險產品（按照星展香港的風險評級制度，這些產品在1至5級的風險評級（低至高風險）中，獲評為2級風險）；
星展香港另一部門曾將同一產品評為較高風險級別的產品；
有關發行章程已述明，準投資者可能會損失全部或大部分對該等Constellation債券的投資；及
對於當時在客戶風險評級中，那些應選擇保守、穩健及均衡型投資的低至中級風險類別的客戶，雷曼相關Constellation債券未必適合他們。

這項協議的作用是，約2,160個帳戶的低風險客戶若接納上述和解計劃，便可以取回投資款項及利息並扣減作為債券持有人已收取的票息後的款項，而高風險客戶的投訴亦可獲星展香港根據加強的投訴處理程序，全面覆核有關個案。

證監會根據《證券及期貨條例》第201條達成此項協議，在考慮星展香港將提出的和解計劃時，已顧及到銷售雷曼相關Constellation債券與銷售雷曼兄弟迷你債券兩者之間多項不同之處，因此本個案的和解協議條款與迷你債券個案的不盡相同。證監會在考慮過程中顧及的重要因素包括：
有別於雷曼兄弟迷你債券，雷曼相關Constellation債券並沒有可分發予投資者的抵押品；
根據與16家銀行就迷你債券事宜達成的協議，分銷銀行同意交出從銷售迷你債券所得佣金，以成立追討基金，加快取回相關抵押品，但在本個案中，星展香港無需提供有關款項；及
有別於那些接納迷你債券協議所提出的回購建議的客戶，雷曼相關Constellation債券的持有人並無機會獲額外或補發款項或發還債款，換言之，星展香港的付款將會是低風險客戶唯一可獲付的款項。

證監會在考慮此協議的條款時，亦顧及到以下幾點：
客戶若有較高的風險承受能力，且具備衍生工具交易的經驗及知識，Constellation債券可能本應是適合他們投資的產品；
加強的投訴處理程序會處理涉及第4至5級風險類別客戶的每宗個案；對於獲星展香港投資風險評估系統評為風險承受能力較高的客戶，上述投訴處理程序應足以處理星展香港將雷曼相關Constellation債券分銷予這批客戶的過程中，可能出現的其他不規範情況；
星展香港承諾委聘獨立機構，檢討分銷制度及監控措施，確保星展香港日後以適當方式分銷非上市結構性產品；
此協議使本個案得到適當的解決，對星展香港及其客戶均有利；
即使證監會成功對星展香港及／或其主管人員及僱員採取紀律處分，亦不能達到此協議取得的結果；及
此協議取得的結果，可為雷曼相關Constellation債券的其他分銷商提供指引，從而解決已購買這些產品的客戶的投訴。

證監會及金管局認為，就它們向星展香港在監管方面提出的關注，星展香港提出的和解計劃屬合理及適當；協議亦符合公眾利益。

鑑於星展香港提出上述和解計劃，證監會將不會就雷曼相關Constellation債券的分銷事宜，對星展香港及其僱員採取進一步執法行動，但有關方面涉嫌犯有不誠實、欺詐、欺騙或屬刑事性質行為的情況除外。金管局已知會星展香港，對於那些接納星展香港和解建議的低風險客戶，金管局不打算就該等客戶的雷曼相關Constellation債券個案，對星展香港採取執法行動。

證監會行政總裁韋奕禮先生（Mr Martin Wheatley）表示："對於從星展香港購入雷曼相關Constellation債券的全部客戶而言，是次協議為他們取得成果；對於銷售這項產品的其他銀行及中介人，這項協議提供有用的指引，有助其解決較低風險客戶的相關投訴。"

他續說："中介人向客戶提供投資意見時，必須運用適當的專業知識和技能。證監會就雷曼相關的結構性產品個案進行的調查，清楚顯示證監會《操守準則》所訂的各項準則，是中介人行事的重要依據。認識產品、了解客戶的情況並向客戶提供清晰正確的資料，都是中介人必須履行的職責。這不但可以確保客戶的利益永遠居於首位，亦同時能夠保障銷售產品的中介人。"

韋奕禮先生指出："證監會一直竭力減低香港市場出現不當銷售的風險。今次這類和解計劃，使大家更清楚認識到，若我們將來未能妥善處理有關事宜，所有市場參與者將要為此付出高昂的代價。"

金管局副總裁阮國恒先生表示："金管局歡迎這項和解計劃。金管局相信，這項和解計劃既合適且合理，在考慮到各種情況下提供一個務實的解決方法，符合投資者的利益。"

完

備註：

1. 星展香港是根據《證券及期貨條例》獲發牌從事第1類（證券交易）、第4類（就證券提供意見）、第6類（就機構融資提供意見）及第9類（提供資產管理）受規管活動的註冊機構。

2. Constellation債券的發行商為Constellation Investment Ltd，安排人則為星展香港的有聯繫實體DBS Bank Ltd（星展銀行有限公司）。2004年至2007年間，星展香港向香港公眾分銷了以港元或美元計值的約77個系列的Constellation債券。

Constellation債券中，系列34至37、43至46、55至58、59至62、63至66、67至70、71至74及78至81債券屬信貸掛鉤票據，雷曼兄弟是上述系列的其中一家信貸參考機構（或稱"相關機構"）。星展香港向約3,400個客戶帳戶分銷雷曼相關Constellation債券，當中涉及約4,380宗交易，款額約13.16億元。

雷曼兄弟於2008年9月申請破產保護後，星展銀行有限公司宣布，受雷曼兄弟的信貸事件所影響，雷曼相關Constellation債券變得一文不值。

Constellation債券的其中一項主要特點是，投資者買入有關債券後，實際上要承擔的風險是，包括雷曼兄弟在內的信貸參考機構中，任何一家可能會出現破產等信貸事件。因應投資者承擔了這項風險，星展銀行有限公司在Constellation債券的投資期內，向投資者支付一項承擔風險款額。若債券到期時，信貸參考機構中並無信貸事件發生，投資者便可取回投資本金。然而，若發生信貸事件，投資者便可取回所謂"信貸事件贖回款額"，金額相等於雷曼兄弟的參考債項（或稱"相關債項"）的價值，但這些參考債項在雷曼兄弟申請破產後的買賣價已跌至接近零。雷曼兄弟在美國申請破產保護後，便出現上述的情況。

3. 星展香港分銷雷曼相關Constellation債券時，根據在星展香港投資風險評估問卷上所填寫的資料，將客戶列入五大級別，第1級為保守型，第2級為穩健型，第3級為均衡型，第4級為增長型，第5級為進取型。

另一方面，星展香港亦為其分銷的各項投資產品定下風險評級。產品風險評級分為五個級別，第1級為低風險，第2級為低至中風險，第3級為中風險，第4級為中至高風險，第5級為高風險。

若投資產品的風險評級低於或相等於有關客戶的投資風險評級，星展香港便會認為該產品適合該客戶投資。

4. 星展香港會以每名投資雷曼相關Constellation債券的低風險客戶的名義投資總值為基準，採用星展香港就不同到期日的定期存款所支付的最高利率，即向12個月定期存款戶所支付的利率，計算出由有關雷曼相關Constellation債券的發行日開始，直至今天日期這段期間的利息。根據星展香港計算，已付予每名低風險客戶的票息，與就有關投資的上述名義價值應支付的利息之間的差額，約為1,300萬元。

5. 加強的投訴處理程序由證監會制訂，旨在確保星展香港深入覆核高風險客戶的相關交易，確保星展香港以公平合理方式處理有關這些交易的投訴。有關程序與分銷銀行根據迷你債券協議所執行的投訴處理程序相同。

6. 請按此連結閱覽有關星展香港的建議和解計劃的問題解答。

腰斬迷債回購方案的司法覆核申請理何在？

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腰斬迷債回購方案的司法覆核申請理何在？

迷債回購方案的司法覆核不被批准進行決非是香港司法史上的小漣漪，而是對司法獨立的衝擊。
讓我們看看迷債回購方案的司法覆核是如何被腰斬的。

首先，迷債苦主代表的法律援助不被批准，理由竟然是該代表包括迷債購入成本在內的資產稍微超過援助標準的上限(17萬元)。 其實，迷債的價值就是算到了今天仍然無法從法律上確實，世界公認的會計審慎原則都只能將其列為損失。法律援助署的官員自己也承認此不批准理由會有很大的爭議，但這那是甚麼法律觀點的爭議，將無法確定的將來資產也列為現有資產，這猶如依據你持有明天開彩的彩券而確定你今天就是百萬富翁一樣，完全是荒唐的政治決定。

第二，綜合各媒體的報導，在申請司法覆核許可的的聆訊上，“法官指此案牽連甚廣，除了十六家分銷銀行外，更有二萬四千八百八十八名已接受回購方案的雷曼事主可能受影響，因為一旦申請人獲判勝訴，證監會的調查要繼續，另一答辯人香港金融管理局也可向銀行採取執法行動，已取回六成或七成本金的事主可能因而被銀行要求退款，法官質疑申請人是否足以代表其他事主，而其他事主也可能不想再受噩夢糾纏”。

眾所周知，司法覆核是就政府的公共事務的政策、決策所進行，必然是牽連甚廣， 甚至牽連到司法體制所涵蓋的全社會。進行司法覆核是對政治尋求法律層面的裁決，而不是政治裁決。其實香港早前已有非常著明的與整個香港社會牽連甚廣案例，就是港人內地出生子女居港權的官司。終審法院並沒有就官司結果是否會對香港社會的經濟帶來嚴重影響的角度去裁決，而是從本身對基本法的理解去作出裁決，雖然事件最後由政府提請人大釋法而推翻原終審法院的裁決而結束，但終審法院的原裁決正是體現了當時參與的法官對司法獨立的堅守。如果法官也考慮社會政治因素，那麼所謂司法獨立就無存在的必要，社會的爭議就交由政治家來解決好了，要麼是通過議會決議，要麼是用革命手段推翻政府，但這決非社會之福，司法與政治應是凱撒的歸凱撒，上帝的歸上帝。

法官憂慮，“一旦申請人獲判勝訴，證監會的調查要繼續，另一答辯人香港金融管理局也可向銀行採取執法行動”。但是次司法覆核正是要求推翻證監會與金管局停止調查的政治決定，尋求社會公義。停止調查無非是放棄對銀行違規違法行為的追究，這難道是公正正義社會的應有之義嗎？

法官質疑其他事主也可能不想再受噩夢糾纏，當然是懷有高尚的、悲憫的人文情懷，但法官也應該關懷那些受騙而又被迫接受六至七成回購方案的苦主的噩夢糾纏。其實公認的法律之神是蒙上了雙眼，只從法律中尋找答案，而不是貢獻滔滔的憐憫淚水。以個人感情代替法律判斷，也不是司法的應有之義。

法官也質疑申請人是否足以代表其他事主，當然是合理的懷疑，但法官也沒有展開正式的聆訊，他又是如何推斷其他事主“噩夢糾纏”之說？沒有足夠充分的證據，司法程序是允許主觀臆測斷案嗎？

迷債的回購方案是由兩方面的內容組成，一是證監與金管局為監管一方，16家銀行為另一方的協議，協議的主要內容是16家銀行願意以六至七稱成本金回購迷債，監管方停止對16家銀行的迷債銷售調查；二是16家銀行向迷債持有者回購迷債的商業協議。如果司法覆核正如法官所言，最後由苦主方取勝，那麼法官的頒令也只能影響到證監與金管局的政治決策，而要取消銀行與迷債持有者的回購迷債協議，應須按協議雙方的自願行事，如苦主一方不願的話，我們認為也只能通過司法的程序。實在不明白法官“已取回六成或七成本金的事主可能因而被銀行要求退款”而使苦主“噩夢糾纏”之言，難道銀行會要脅或強搶？還是銀行要與二萬多苦主逐個進行司法訴訟？監管當局與銀行只要付出願意承擔過失的誠意，以新鴻基及凱基證券與證監的和解協議為藍本，重新提出公平的回購方案，那麼，二萬多苦主、政府、銀行本身、以至香港社會才不會再噩夢糾纏。

迷債回購方案的司法覆核在一波三折下還未開始就被腰斬，法官在拒絕批出司法覆核許可的判詞中大致重覆了他在聆訊上所表述的上述觀點，這只能讓人相信，法官在許可聆訊之前就已有定案， 並且充分表露在他的聆訊發言中。法官並且認為苦主如仍不滿可再向監管機構投訴，法官大人確真是上帝派來的天使，充滿了爛漫的天真，只聽監管當局一面的美言，但卻不花一點時間了解一下監管當局因忌諱本身的監管過失，而在一年多來的所謂調查是如何袒護銀行、塞責敷衍。

法律援助署不批准我們的援助申請，使我們無財力上訴，法官的判詞也沒有使我們相信判決是合理的，而我們只能深信，迷債回購方案的司法覆核被腰斬是香港近年來大資本大財閥獨大的政治體制的結果，中低下階層的反抗雖愈趨激烈，但大多敗下陣來。是忍氣吞聲，還是愈挫愈戰，這是普羅大眾正面臨的選擇，也是雷曼苦主面臨的選擇。

Goldman Sachs Hudson CDO Said to Be Target of Second SEC Probe ， 高盛面臨美證監第二項調查

June 10 (Bloomberg) -- Goldman Sachs Group Inc.’s $2 billion Hudson Mezzanine collateralized debt obligation, sold in 2006, is the target of a probe by the Securities and Exchange Commission, according to a person with knowledge of the matter.

The inquiry into the CDO may not lead to any additional actions against the New York-based securities firm, said the person, who declined to be identified because the investigation isn’t public. Michael DuVally, a spokesman for Goldman Sachs, declined to comment, as did SEC spokesman John Nester. The Financial Times reported the probe yesterday.

The U.S. Senate’s Permanent Subcommittee on Investigations, led by Levin, released e-mails in April related to Goldman Sachs’s mortgage-linked deals, including the Hudson Mezzanine transaction. In one October 2006 e-mail, a Goldman Sachs employee describes how the Hudson deal might be viewed by investors as “junk.”

Hudson Mezzanine

The Hudson Mezzanine 2006-1 CDO contained credit default swaps that referenced $2 billion in subprime, BBB-rated residential mortgage-backed securities, according to the documents released by Levin’s committee. While Goldman Sachs selected the assets in the deal, the firm was also the only investor buying credit protection on the entire transaction , the documents show.

Goldman Sachs created and sold the Hudson CDO in late 2006, near the time documents released by Levin show senior executives wanted to reduce the firm’s exposure to subprime mortgages.

“The CDO imploded within two years. Your clients lost; Goldman profited,” Levin said in an April 27 hearing during which he questioned Goldman Sachs Chief Executive Officer Lloyd Blankfein about the Hudson deal and other CDOs. “To go out and sell these securities to people and then bet against those same securities, it seems to me, is a fundamental conflict of interest and is -- raises a real ethical issue.”

(From Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=aSNYXMe69Kh8&pos=3)

信報 2010年6月11日: 高盛面臨美證監第二項調查

面臨多項調查的高盛據報正面對美國證監第二項調查，調查目標是該行二○○六年出售的二十億美元「赫德森夾層」債務抵押債券（Hudson Mezzanine CDO）。

涉「赫德森夾層」ＣＤＯ

彭博社昨天引述知情人士報道，美國證券及交易委員會（ＳＥＣ）進行相關調查工作後，未必會向高盛採取進一步行動。

《金融時報》引述知情人士報道，ＳＥＣ最近數周正收集「赫德森夾層」ＣＤＯ交易的資料。

報道引述內部文件指出，高盛出售這些金融產品之際，亦同時沽空「赫德森夾層」ＣＤＯ，以保障這批ＣＤＯ的全部價值。

法律專家預期，「赫德森夾層」ＣＤＯ交易的調查將集中查明，高盛是否向投資者透露足夠的資料。高盛在推廣文件中表明，其利益與投資者利益相同，因為高盛購入這些ＣＤＯ。

這項調查是ＳＥＣ針對華爾街有關ＣＤＯ活動的更廣泛調查的一部分。《華爾街日報》昨天報道，ＳＥＣ同時調查摩根士丹利等主要大行的多宗按揭相關交易。

根據參議員萊文（Carl Levin）領導的參議院常設調查小組委員會的文件，高盛這批二○○六年一級「赫德森夾層」ＣＤＯ包含一批信貸違約掉期（ＣＤＳ），這些ＣＤＳ涉及合共二十億美元的BBB級次按抵押證券。

ＳＥＣ四月十六日提出起訴高盛在二○○七年出售名為Abacus的ＣＤＯ時涉嫌欺詐後，高盛股價已下跌百分之二十六。

遭澳洲對沖基金索償

在該訴訟中，ＳＥＣ表示，高盛及其一名職員沒有向投資者透露，對沖基金Paulson & Co.在設計該ＣＤＯ及對賭那些ＣＤＯ的角色。

另外，澳洲對沖基金Basis Capital周三入稟紐約曼哈頓聯邦法院，向高盛索償十億美元，指該公司購入高盛的次按證券後，被迫清盤。

Basis Capital的代表律師表示，高盛以明知錯誤的賣點推銷，強迫投資者把有毒證券的風險從賬目中撇除，是欺詐行為■

Moody's 'Gave Up Its Analytical Distinctiveness,' Ex-Employee Says

Moody's 'Gave Up Its Analytical Distinctiveness,' Ex-Employee Says

BUSINESSJUNE 2, 2010, 9:33 A.M. ET

By AARON LUCCHETTI

A former Moody's Corp. lawyer who worked in the ratings firm's structured-finance group for a decade planned to tell a congressional panel that the company "gave up its analytical distinctiveness," partly by intimidating analysts who were too tough or angered influential investment bankers .

In written testimony to the Financial Crisis Inquiry Commission, Mark Froeba accused Moody's managers of having "deliberately engineered a change to its culture intended to ensure that rating analysis never jeopardized market share and revenue."

Mr. Froeba is one of three former Moody's employees set to testify Wednesday at a hearing by the bipartisan commission into the credibility of credit ratings, the investment decisions based on those ratings and their role in the financial crisis.

The New York hearing also will include billionaire Warren Buffett, whose Berkshire Hathaway Inc. has long owned a stake in Moody's. Mr. Buffett, who provided no prepared testimony before the hearing, was subpoenaed by the Financial Crisis Inquiry Commission after declining an invitation to appear voluntarily.

The 10-member panel, led by former California Treasurer Phil Angelides, is required to submit a report on its findings by Dec. 15. Four previous hearings have zeroed in on investment banks, subprime mortgages and regulatory oversight of Wall Street, financial firms and government-sponsored entities such as Fannie Mae and Freddie Mac.

Wednesday's hearing is set to begin at 8:30 a.m. ET. Mr. Buffett is expected to testify at about 11:30 a.m. with Moody's Chief Executive Raymond McDaniel, who has led the ratings firm since 2005.

Mr. McDaniel, in his written testimony, told the panel how the firm has improved its internal procedures. He also emphasized the limitations of credit ratings, which focus on the risk of default on debt payments.

Still, the CEO is likely to face tough questions about why the Moody's Investors Service unit of Moody's and its two biggest rivals, the Standard & Poor's unit of McGraw-Hill Cos. and Fimalac SA's Fitch Ratings, gave Triple-A marks to thousands of mortgage-related securities that later plummeted in value and suffered sharp downgrades. The three companies generated combined revenues of $3.6 billion on bond ratings last year.


Last month, Moody's disclosed it had received notice from the Securities and Exchange Commission that the ratings firm may face an enforcement action for allegedly misleading regulators in a 2007 license application. Moody's has said it fixed issues related to the SEC's concerns and has described the problem as isolated.

In his written testimony, Mr. Froeba cited as an example of undue efforts by Moody's to preserve the firm's market share a rating of European collateralized debt obligations that was one or two notches higher than justified. Mr. Froeba is particularly critical of former Moody's President Brian Clarkson, who carried out orders from Mr. McDaniel and the company's board to make the firm more friendly and responsive to bond issuers, according to the written testimony.

Under Mr. Clarkson, analysts were forced to explain even tiny slips in market share on deals, the former Moody's lawyer told the Financial Crisis Inquiry Commission in his written testimony. Such pressure was a repudiation of the independence long cherished by the firm, Mr. Froeba wrote in his prepared remarks for the panel.

"I reject any suggestion … that Moody's sacrificed ratings quality in an effort to grow market share," Mr. Clarkson said in his prepared remarks submitted to the Financial Crisis Inquiry Commission. Mr. Clarkson left Moody's in 2008 and is set to make his first public comments about the financial crisis when he testifies Wednesday afternoon.

In his prepared remarks, Mr. Clarkson told the congressional panel that he was "disappointed" in the performance of Moody's ratings. But the firm's assumptions and methodologies "were overwhelmed by the magnitude and velocity of the unprecedented economic deterioration."

Mr. Clarkson said rating firms and investors need better disclosure from issuers about structured-finance bonds, suggesting that regulators look into stronger rules for mortgage brokers and underwriters.

Ratings firms face the likelihood of toughened oversight under financial-overhaul legislation being debated this month by a conference committee of the House and Senate. The proposals include measures to make rating firms more transparent and effective, while removing some of their market clout and stripping bankers of the ability to shop around for the firm that will give the highest rating.

At Wednesday's hearing, former Moody's rating executive Gary Witt is expected to describe how he removed a legal analyst from collateralized debt obligations, or CDOs, created byGoldman Sachs Group Inc. after the securities firm asked that the analyst "not be assigned to further Goldman Sachs CDOs for the next year," according to Mr. Witt's written testimony.

Mr. Witt told the panel that he worried Goldman would complain to his superiors if he failed to do what the firm wanted, potentially costing the analyst his job. After discussing the matter with the Moody's analyst, "we both agreed that the best course of action was to comply with Goldman's request," according to Mr. Witt's testimony.

—Erik Holm in New York contributed to this article.
Write to Aaron Lucchetti at aaron.lucchetti@wsj.com

Related stories:

S & P: "We’d Do a Deal Structured by Cows" And Other Rating Agency Dirty Linen

Employees at Moody’s Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or “sold our soul to the devil for revenue,” according to e-mails obtained by U.S. House investigators.

“The story of the credit rating agencies is a story of colossal failure,” Committee Chairman Henry Waxman, a California Democrat, said at the hearing. “The result is that our entire financial system is now at risk.”…

Former executives from S&P and Moody’s told lawmakers today that credit raters relied on outdated models in a “race to the bottom” to maximize profits.

Bank probes expanding with new investigation

2010-05-13



Bank probes expanding with new investigation


(Reuters) - U.S. authorities are expanding their probes of past mortgage securities deals, with New York's attorney general opening an investigation into whether eight banks misled rating agencies, a source familiar with the matter said.


New York Attorney General Andrew Cuomo's office on Wednesday served subpoenas on four U.S. banks and four European lenders, the source said.

Cuomo is targeting Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs Group Inc, Morgan Stanley, UBS and Merrill Lynch, now owned by Bank of America, the source said.

The investigation comes as Wall Street and major banks around the world are attracting scrutiny from regulators stemming from transactions that occurred in the run-up to the subprime mortgage meltdown and financial crisis.

The Wall Street Journal on Wednesday reported that U.S. federal prosecutors, working with securities regulators, were conducting a preliminary criminal probe into whether four banks misled investors about their roles in mortgage bond deals.

The banks under early-stage criminal scrutiny are JPMorgan Chase, Citigroup, Deutsche Bank and UBS, the newspaper reported on its website, citing a person familiar with the matter.

The banks have also received civil subpoenas from the U.S. Securities and Exchanges Commission as part of a sweeping investigation of banks' selling and trading of mortgage-related deals, the report said.

A spokesman for JPMorgan told the Journal the bank had not been contacted by federal prosecutors and was not aware of any criminal investigation. The other banks either declined comment or were not immediately available.

美檢察機關對華爾街數家投行展開刑事調查

《紐約 時報》引述消息人士稱，紐約司法部門正調查8間銀行，是否向評級機構，提供誤導資料，提升次按產品評級。

消息人士稱，紐約檢察總長安德魯已向8間華爾街大行，發出傳票，進行調查，涉及銀行包括高盛、摩根士丹利 、花旗、瑞信、德銀、美林 、瑞銀及東方匯理等。

美國 證券交易委員會已民事起訴高盛，涉嫌隱瞞資料，誤導客戶。而紐約今次的調查則擴大至8間銀行，不單只涉及銀行與客戶的交易，而是涉及銀行與評級機構的關係。

當局將集中調查銀行在樓市大跌前，如何向評級機構提供資料，影響他們的按揭產品評級。市場一直批評評級機構，未能正確評價有關次按產品，令投資者受損。 涉及的標級機構包括標普、穆迪及惠譽國際。

'Out of thin air': Synthetic CDOs, inflated the credit bubble

From Marketwatch:
http://www.marketwatch.com/story/out-of-thin-air-synthetic-cdos-pumped-bubble-2010-04-26,

SAN FRANCISCO (MarketWatch) -- The securities at the crux of the Securities and Exchange Commission's case against Goldman Sachs Group Inc. inflated the credit bubble, leaving even more losses when it popped, structured-finance experts and investors said in the wake of the recent civil-fraud charge against the investment bank.

"Derivatives and synthetic securities have been used to create imaginary value out of thin air," George Soros, chairman of $27 billion hedge-fund firm Soros Fund Management, wrote in a column posted on his Web site last week.

"More triple-A CDOs were created than there were underlying triple-A assets. This was done on a large scale in spite of the fact that all of the parties involved were sophisticated investors," he added. "The process went on for years, and culminated in a crash that caused wealth destruction amounting to trillions of dollars. It cannot be allowed to continue."

"Synthetic CDOs should be abolished," Janet Tavakoli, a structured-finance specialist who wrote a book about CDOs in 2003, said in a recent interview. "They're too complex and provide no real benefit. They only existed to game the system or hide losses."

The SEC alleged that Goldman Sachs (GS 147.20, +5.23, +3.68%) didn't tell investors in a synthetic CDO called Abacus 2007-AC1 that hedge-fund firm Paulson & Co. helped structure the deal, and also was betting against it. Goldman and Paulson have denied wrongdoing.

Because they weren't based on real assets, such investments were tricky to value. When the housing market collapsed, the existence of such hard-to-value securities in the financial system caused havoc as counterparties struggled to find out who had lost money.

Fabrice Tourre, the Goldman banker named in the SEC's case, described such problems in a January 2007 email, just as the subprime-mortgage meltdown was gaining steam.

"I'm trading a product which a month ago was worth $100 and which today is worth $93 and which on average is losing 25 cents a day," Tourre wrote, according to recent Goldman disclosures.

"When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: 'Well, what if we created a 'thing', which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?') it sickens the heart to see it shot down in mid-flight," Tourre added in the email.

Packaging

Synthetic CDOs sat at the end of a long chain of boom-time transactions that began with the origination of mortgages and other loans. These assets were packaged up by investment banks and sold as asset-based securities, including residential mortgage-backed securities, or RMBS.

CDOs were created by taking pieces of RMBS and other securities, packaging them up again and reselling them.

Demand for such investments was so strong during the credit boom that there weren't enough underlying assets to build new ones. So Wall Street came up with a way of creating CDOs that didn't need actual assets.

The result was synthetic CDOs. These are formed by writing credit-default swaps on bits of RMBS and other asset-backed securities. (These swaps pay out in the event of default.) Once enough of these derivatives contracts were written, investment banks bundled them up into new CDOs and sold them.

More than $110 billion worth of synthetic CDOs were sold in 2006 and 2007, according to Thomson Reuters data.

Raynes, who used to work at Moody's Investors Service (MCO 22.29, +0.53, +2.44%) and co-authored a book on structured finance, said the rating agency put AAA ratings on many parts of CDOs, giving investors the confidence they needed to buy the products.

"You needed a third party to analyze the structures," he added. "That's what provided the value for these deals."