JPMorgan, under pressure, gives up vote information

Monday, May 20th, 2013 | Finance News

By Karen Freifeld and David Henry

(Reuters) - JPMorgan Chase & Co , under pressure from New York officials, gave shareholders information about an upcoming vote that would increase oversight of Chairman and Chief Executive Jamie Dimon. But the ballot details may have come too late for some investors.

The bank's annual meeting is on Tuesday and by far the most controversial matter up for vote is whether Dimon should retain his chairman title.

Last week, the company that collects votes from investors, Broadridge Financial Solutions Inc , stopped telling shareholders how votes had been cast so far for this and other measures up for vote at the annual meeting. It was not clear why Broadridge stopped giving out the information. Investors that are lobbying other shareholders on proxy proposals use daily vote tallies to determine how to tailor their campaigns.

According to a source familiar with the situation, New York Attorney General Eric Schneiderman's office sent a letter late Friday to the bank's general counsel, Stephen Cutler, raising concerns about the cutting off of ballot information to shareholders.

Staff from Schneiderman's office held two conference calls with JPMorgan on Saturday, and the bank agreed to tell Broadridge to provide interim results to investors, the source said.

Broadridge, however, balked at providing the information, because it was not sure it had the legal authority to do so, the source said. But JPMorgan agreed to give the information directly to the sponsors of ballot measures as long as they signed a confidentiality agreement, the source added.

Receiving the information at this late stage is of limited use, said Dieter Waizenegger, executive director of the CtW Investment Group, which advises pensions that were voting against the bank in separate measures regarding the re-election of directors.

"We were cut off from the tallies during the crucial week leading up to the meeting," Waizenegger said.

JPMorgan was not immediately available for comment.

Melissa Grace, a spokeswoman for the New York Attorney General's office, said: "We appreciate that JPMorgan Chase was responsive to our concerns and has changed course on a decision that Attorney General Schneiderman believes was ill-advised under the circumstances."

Broadridge said on Monday that it follows U.S. Securities and Exchange Commission regulations, and there are no rules requiring that voting information be provided to proponents of proxy measures.

"Given concerns raised by multiple broker clients regarding the release of this voting, we have stopped releasing voting information to proponents," it said.

(Reporting by Karen Freifeld and David Henry; Editing by Dan Wilchins, Bernard Orr and Edmund Klamann)

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Sprint gets waiver from Softbank, permitting discussions with Dish

Monday, May 20th, 2013 | Finance News

(Reuters) - Wireless service provider Sprint Nextel Corp received a waiver from SoftBank Corp on various provisions of their merger agreement permitting it to engage in discussions with Dish Network Corp.

Satellite TV service Dish made a $25.5 billion counter bid last month for Sprint against SoftBank's October agreement to pay $20.1 billion for 70 percent of the U.S. company.

The waiver will permit Sprint and its representatives to furnish Dish with non-public information and to engage in negotiations with it regarding Dish's April 15 proposal.

SoftBank President Masayoshi Son had attacked Dish's bid, saying the satellite TV company would cripple Sprint with debt and was ill-prepared to run a wireless service.

Dish, run by billionaire founder Charlie Ergen, is working with Barclays Plc, Macquarie Group, Jefferies and the Royal Bank of Canada to help finance around $9 billion in debt needed for the offer.

Sprint said its recommendation in favor of the SoftBank agreement has not changed.

Sprint said its board of directors has not determined that the Dish proposal in fact constitutes a superior offer under the existing merger agreement, and there can be no assurance that the dish proposal will ultimately lead to a superior offer.

SoftBank said it remains committed to completing its transaction on the terms previously disclosed. The Japanese company anticipates closing the deal on July 1, 2013 or as soon as possible thereafter.

(Reporting by Chris Peters in Bangalore; Editing by Paul Tait and Stephen Coates)

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Lew taps government retiree pension fund

Monday, May 20th, 2013 | Finance News

WASHINGTON (AP) — Treasury Secretary Jacob Lew said late Monday he will begin tapping into two government employee retirement funds to buy more time before the U.S. Treasury is faced with the prospect of defaulting on the national debt.

In a letter to congressional leaders, Lew said that he would tap the civil service retirement and disability fund and a similar fund that covers retired postal workers. The law allows him to remove investments from these funds to clear room for more borrowing until Congress votes to raise the debt limit

Under the law, any investments diverted from the pension funds must be replaced with interest once Congress approves raising the debt limit.

Lew has said the various bookkeeping measures he is allowed to employ should provide enough maneuvering room to keep the government from defaulting on its debt until after Labor Day. Other estimates say Lew may be able to forestall a default until as late as November.

In January, Congress voted to temporarily suspend the debt limit but that suspension ended Sunday.

Before the suspension, the debt limit stood at $16.4 trillion. The government has borrowed $300 billion since the suspension took effect. On Sunday, the debt limit reset at the higher level of $16.7 trillion.

The government has run annual deficits of more than $1 trillion for the past four years. But the Congressional Budget Office last week estimated that this year's deficit will drop to $643 billion, an improvement that reflects increased revenue from a stronger economy and the effect of tax increases that took effect in January.

Republicans want to reduce future deficits by cutting back on spending. Democrats have proposed a mix of spending cuts and tax increases, which Republicans oppose. The dispute has led to the current budget impasse.

A standoff over budget issues in August 2011 pushed the country close to its first-ever default before President Barack Obama and Republicans reached a last-minute compromise. That battle prompted Standard & Poor's to issue the first-ever downgrade on long-term Treasury debt. The administration has vowed to prevent Republicans from using the need to raise the borrowing limit as leverage in the current budget battle.

"I respectfully urge Congress to protect America's good credit and avoid the potentially catastrophic consequences of failing to act by increasing the debt limit in a timely fashion," Lew said in his Monday letter.

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