Archive for January, 2009

Citigroup names Parsons as Chairman (Reuters)

Wednesday, January 21st, 2009 | Finance News

NEW YORK (Reuters) –
Citigroup Inc (C.N) named former Time Warner CEO Richard Parsons as its chairman in the latest personnel change to shake the U.S. bank that has been clobbered by the credit crunch.

Parsons, who is already on the board, succeeds Sir Win Bischoff, who will retire from Citigroup later this year.

Bischoff was seen as a surprise choice when he was brought in as chairman of the bank in December 2007. He became chairman when Vikram Pandit was named Chief Executive.

Parsons previously served as president, chief executive officer and chairman at Time Warner Inc TWX.N>, where he led the company's turnaround after its merger with America Online in 2000. He also served as chairman and chief executive officer of Dime Bancorp Inc.

Since January 2008, Citigroup has posted more than $10 billion of losses as it has written down everything from subprime mortgage bonds to loans funding leveraged buyouts.

Citigroup executives have struggled to right the ship. The bank last week said it was shifting the assets it wishes to sell or wind down into a separate unit.

The bank also said it was selling a controlling stake in its Smith Barney retail brokerage unit.

Bischoff, 66, will stay on the bank's board until its annual meeting later this year.

Bischoff's departure follows the exit of Robert Rubin, a former U.S. Treasury Secretary who also does not plan to seek reelection to the board. Rubin earlier this month resigned from his role as senior counselor at Citigroup.

(Reporting by Dan Wilchins; editing by Carol Bishopric)


Bank of America CEO buys 200,000 shares, stock soars (Reuters)

Wednesday, January 21st, 2009 | Finance News

NEW YORK (Reuters) –
Bank of America Corp Chief Executive Kenneth Lewis spent about $1.2 million to buy 200,000 common shares on Tuesday, four days after the largest U.S. bank posted its first quarterly loss in 17 years.

The share purchases by Lewis and five directors suggest confidence in prospects for the bank, which last week posted a $1.79 billion fourth-quarter loss and took a $20 billion infusion from the government's Troubled Asset Relief Program to help it absorb Merrill Lynch & Co.

Bank of America bought Merrill on Jan 1, and has now taken $45 billion of TARP funds. As part of the latest package, the government agreed to share in losses on $118 billion of debt.

According to a Wednesday filing with the U.S. Securities and Exchange Commission, Lewis paid between $5.98 and $6.06 for his shares, well above the Tuesday closing price of $5.10.

Following the transactions, Lewis directly owned 1,460,997 common shares, worth $7.45 million based on the closing price. Lewis also indirectly held 542,235 bank shares through various trusts, and last Nov 4 bought 86,000 preferred shares.

The directors who bought shares on Tuesday include lead director O. Temple Sloan, who bought 41,800 common shares and then gifted 11,000 of them, a separate SEC filing shows.

Lewis, 61, has been criticized for overpaying for Merrill, and for hastily agreeing to the roughly $19.4 billion merger without fully examining its risks.

Shares of Charlotte, North Carolina-based Bank of America have lost more than three-fourths of their value since the purchase was announced Sept 15.

In afternoon trading, Bank of America shares were up $1.62, or 31.8 percent, at $6.72, retracing much of Tuesday's decline. Much of Wednesday's gain came after the share purchases were disclosed. The shares closed last week at $7.18.

(Reporting by Jonathan Stempel)


SEC Probes Apple’s Reports on Steve Jobs’ Health (NewsFactor)

Wednesday, January 21st, 2009 | Finance News

Apple's reporting on the health of CEO Steve Jobs will be the subject of an inquiry by the Securities and Exchange Commission, according to news reports.

Bloomberg News, among others, is reporting that the SEC wants to ensure that investors weren't misled, and said the opening of an inquiry doesn't indicate evidence of wrongdoing. Bloomberg's reporting is based on an anonymous source "familiar with the matter."


Jobs, whose customary keynote address at Macworld was long the occasion for new product releases, declined to appear this year. Jobs showed up for an Apple event in June, but looked very thin.

As Macworld opened early this month, Apple sought to dispel rumors of a serious health problem by releasing a statement that the computer pioneer was suffering from a treatable hormone imbalance. The imbalance, Jobs said at the time, "has been robbing me of the proteins my body needs to be healthy." But about a week later, the company said Jobs would take a five-month leave of absence because of "more complex" health matters.

Jobs had been in a successful treatment for pancreatic cancer since 2004, so speculation initially centered around whether the cancer had reappeared. Apple said it had not, but Bloomberg recently reported that Jobs is contemplating a liver transplant because of complications relating to his treatment.

The back-and-forth about Jobs' health has given Apple's stock price some bumpy rides. After the medical leave was announced, the stock fell more than eight percent. Apple COO Timothy Cook is running Apple during Jobs' absence, although Jobs has said he intends to be involved in strategy decisions.

'Inside Baseball'

Given the importance of Jobs to Apple's image and product launches, his health has a more-than-usual importance to the company. Apple's board, which includes former Vice President Al Gore and Google CEO Eric Schmidt, has declined to comment.

Although some observers suggest the board has done its legal duty by telling investors Jobs will be on medical leave, the SEC has been under fire for not being vigilant enough in monitoring the stock-trading activities of some companies.

While Apple's stock prices have followed reports of Jobs' health, one question is whether the reports will have an impact on the sales of its products.

Michael Gartenberg, vice president for consumer strategy at Jupitermedia, said it is all "technology's version of inside baseball."

For the most part, he said, consumers care about Jobs' health the way they might care about the health of any celebrity. But, he added, "at the end of the day they're focused on whether products meet their needs, regardless of who's running the company."