Archive for December, 2008

Madoff probe extends into offshore funds: report (Reuters)

Wednesday, December 31st, 2008 | Finance News

(Reuters) –
Federal prosecutors investigating Bernard Madoff's $50 billion fraud are starting to look into the role played by offshore fund operations, the New York Times reported.

Investigators are especially interested in whether Madoff and some of his investors used funds based in offshore tax havens to evade American taxes, the paper said, citing a person who was briefed on the investigation and remained anonymous.

The paper said, according to the person, the likelihood of charities improperly allowing their donors to shift money offshore and foreign banks withholding American taxes on Madoff accounts were also being scrutinized.

Regulatory filings indicate the involvement of at least a dozen offshore entities with Madoff's firm, the paper said.

According to the paper these include funds linked to the Fairfield Greenwich Group, which lost $7.4 billion of its investors' money to Madoff, Tremont Group Holdings, which had $3.3 billion invested, and several Swiss banks.

Fairfield Greenwich Group and Tremont Group Holdings could not immediately be reached for comment.

Confessed swindler Bernard Madoff faces a Wednesday deadline to tell regulators how much he is worth and where his money and other assets are, but it may be longer before his investors learn the tallies.

Madoff is under house arrest in his Manhattan apartment on $10 million bail and he has not appeared in court to formally answer the charges.

(Reporting by Eric Yep in Bangalore; Editing by David Cowell)


Dell preparing senior management changes: report (Reuters)

Tuesday, December 30th, 2008 | Finance News

(Reuters) –
Dell Inc's president of global operations, Michael Cannon, and chief marketing officer, Mark Jarvis will leave their roles in moves expected to be announced soon, the Wall Street Journal said, citing people briefed on the matter.

The people told the paper that they expect Jarvis to leave Dell, while Cannon will likely stay on in a different capacity.

Other changes are expected to focus on cutting costs and gaining tighter control over the company's global operations, the people told the paper.

Two people with knowledge of the situation told the paper that Dell may also make cuts to its lower executive ranks.

The impending changes are intended to make managing Dell's world-wide business more efficient, people briefed on the matter told the Journal.

Operations now divided by geography will be consolidated into international business units, a shift Dell made earlier this year with its consumer division, the paper said.

A Dell spokesman declined to comment to the paper on any changes, but said Dell has "been in a two-year process of positioning the company best for customers and long-term growth."

Dell could not be immediately reached for comment by Reuters.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Kim Coghill)


Paulson says U.S. lacked tools to tackle crisis: report (Reuters)

Tuesday, December 30th, 2008 | Finance News

SINGAPORE (Reuters) –
Outgoing U.S. Treasury Secretary Henry Paulson said the U.S. government had to battle the financial crisis without the tools needed to do the job effectively, the Financial Times newspaper reported on Wednesday. Paulson also said any future regulatory overhaul needed to ensure that financial system infrastructure could allow for the failure of large institutions.

In one of his last interviews before leaving office, Paulson said, "We've done all this without all of the authorities that a major nation like the U.S. needs."

He said even after Congress in October approved the $700 billion troubled asset relief program, the U.S. still lacked tools such as an adequate special bankruptcy regime for non-bank financial firms.

"We're dealing with something that is really historic and we haven't had a playbook," he said.

"The reason it has been difficult is first of all, these excesses have been building up for many, many years. Secondly, we had a hopelessly outdated global architecture and regulatory the U.S.," the newspaper quoted him as saying.

Paulson said any regulatory overhaul should emphasize "better and more effective" regulation and needed to make sure that infrastructures and powers were robust enough to allow large institutions to fail.

"The organizations (financial firms) cannot be too big or too interconnected to fail," he said.

Paulson said he was surprised by the ferocity of the crisis but believed he grasped from August how severe it was as problems at home funding companies Fannie Mae (FNM.N) (FNM.P) and Freddie Mac (FRE.N) (FRE.P) threatened to coalesce with a dangerous September results season for financial institutions.

"If you asked me six months ago... if I was surprised by the magnitude of the challenge, the answer is 'yes'," he said.

"But we have been for some time in the frustrating situation of understanding much more than the public or even the Congress understood in terms of the magnitude of what we are facing."

Asked what the past year has been like personally, he said: "It has been unusually intense." He said the U.S. Treasury had been going "all out" since July.

Paulson praised his successors, saying "They have got a great team and they don't need advice. I really believe that."