Teamsters Request SEC Review YRC Credit-Default Swaps (Update3) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Pierre Paulden and Shannon D. Harrington

Dec. 22 (Bloomberg) — International Brotherhood of Teamsters President James Hoffa is asking the U.S. Securities and Exchange Commission and New York State Attorney General Andrew Cuomo to review “questionable promotion” of credit- default swaps tied to trucking company YRC Worldwide Inc.

Hoffa sent letters to the regulators and members of Congress, the Teamsters said today in a statement distributed by PR Newswire. YRC, the biggest U.S. trucking company by sales, is seeking a debt-for-equity exchange to avert bankruptcy.

YRC, which has pushed back the deadline for the swap three times this month, must complete the tender by Dec. 31 to avoid a $19 million payment of interest and fees that would leave the trucker in an “unsustainable” position, the Overland Park, Kansas-based company said Dec. 17 in a regulatory filing.

Facing a slump in freight demand, YRC is locked in a struggle with a group of bondholders who own derivatives that would pay out if the company defaults, two people familiar with the situation told Bloomberg News last week. The deadline for the tender offer is 11:59 p.m. tomorrow in New York.

“The stakes are so high and the consequences potentially so imminent that we believe it is imperative that your office begin an immediate inquiry at its earliest opportunity,” Hoffa wrote in a letter addressed to Cuomo.

Goldman Sachs Group Inc., Deutsche Bank AG, TD Bank Financial Group, Barclays Capital and UBS AG “have a history of making markets in these types of derivative financial products,” Hoffa said in the letter.

Minimum Participation Rate

Goldman Sachs spokesman Michael DuVally reiterated comments from last week that the New York-based bank “neither has a position in, nor makes markets in, YRC corporate bonds or credit-default swaps.”

TD spokeswoman Susan Webb declined to comment on the letter, saying the bank “adheres to all regulations and is in compliance with all government oversight.”

Deutsche Bank spokeswoman Michele Allison and Barclays spokesman Mark Lane declined to comment. UBS spokesman Doug Morris said he couldn’t immediately comment. Spokesman Richard Bamberger said Cuomo’s staff was reviewing the letter.

YRC received approval from its bank lenders and the Teamsters allowing an amendment to the exchange offer that lowers the minimum participation rate to 80 percent from 95 percent, the company said today in a regulatory filing.

Letter to Blankfein

Last week, Hoffa wrote a letter to Goldman Sachs Chief Executive Officer Lloyd Blankfein saying the firm was creating derivatives trades that would benefit from a bankruptcy.

DuVally has confirmed the bank received that letter and said in an interview on Dec. 17 that the New York-based bank was “actively exploring ways to help” YRC.

Goldman Sachs sent e-mails to debt investors on Dec. 16 offering pricing levels on YRC bonds and credit-default swaps and saying that $25 million of the bonds and swaps were “trading here,” according to people familiar with the matter who declined to be identified because the negotiations aren’t public.

YRC’s $150 million of 8.5 percent notes due in April fell 0.75 cent on the dollar to 59 cents as of 11:29 a.m., according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The shares rose 25 cents, or 28 percent, to $1.14 on the Nasdaq Stock Market.

Credit-default swaps are financial instruments based on bonds and loans that are used to hedge against losses or to speculate on a company’s ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

To contact the reporters on this story: Pierre Paulden in New York at ppaulden@bloomberg.net; Shannon D. Harrington in New York at sharrington6@bloomberg.net

http://www.zerohedge.com/article/will-last-person-please-burn-building-down-it-time-end-farce-sec?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+zerohedge/feed+(zero+hedge+-+on+a+long+enough+timeline,+the+survival+rate+for+everyone+drops+to+zero)

http://www.faulkingtruth.com/Articles/LettersToEditor/1012.html

Cohen’s desperate moves….

DOJ vise clamping down tighter…. beads of sweat rolling down his smug mug, bulging jugular……

Wail, Stevie boy, wail…….

Reuters kills hedge fund story after pressure

December 21st, 2009
TALKING BIZ NEWS EXCLUSIVE

Reuters editors last week killed a story by investigative reporter Matthew Goldstein about hedge fund trader Steven Cohen after Cohen complained to top Thomson Reuters executives that he was being persecuted by the news agency’s reporting, sources at Reuters said.

Goldstein’s story was an “incremental” advance in the reports swirling around Cohen that he engaged in insider trader during the 1980s, Reuters sources said. There have been reports that Cohen is next in the sights of the SEC following the Galleon case, which featured SEC wiretapping the conversations of hedge fund manager Raj Rajaratnam.

Goldstein’s story was based on documents, and was approved by Reuters lawyers. After Goldstein contacted Cohen for the pro forma no comment before the story ran, Cohen repeatedly called Devin Wenig, CEO of the Thomson Reuters Markets Division and the No. 2 executive at Thomson Reuters, to complain about the story.

Wenig passed on the complaints to Reuters Editor in Chief David Schlesinger, who asked editors to look into them. Reuters editors debated the story for three days before finally killing it.

A Reuters spokeswoman, when contacted by Talking Biz News, commented, “We make decisions on whether or not to run stories purely on journalistic grounds.”

The decision has hit morale at the news agency, where reporters had been encouraged by the formation of an enterprise team in recent months, the hiring of a former New York Times Sunday business editor Jim Impoco to head that effort, and Goldstein moving over from a columnist position to investigative reporting.

The enterprise team also was allowing Reuters reporters to write longer analytical pieces which had been anathema at the news agency for years. In its first few months, the team had coordinated several hard-hitting pieces including one questioning the investment decisions of giant California pension fund Calpers, and a piece about China that caught the eye of the White House and led to an interview with President Obama.

“If Reuters wants to have credibility in enterprise reporting, its editors need to stand by reporters and resist pressure from people like Cohen,” said one Reuters insider.

http://weblogs.jomc.unc.edu/talkingbiznews/?p=12478

http://www.huffingtonpost.com/2009/12/21/andrew-ross-sorkin-morgan_n_399332.html

http://www.thesanitycheck.com/

http://www.huffingtonpost.com/2009/12/18/trading-profits-up-11-per_n_397281.html

For example of the proof of the above statement see link above. Why should they lend if they can use our money to trade and manipulate the market to make big bucks. Lending to small business’ is not a large em=nough profit marging for these guys.Also check out this video from Dylan.

http://www.msnbc.msn.com/id/31510813/#34430524

This possibility had not even entered my mind, until I heard it spoken. This statement has the sound of truth in it.

The expert stated that banks may not be loaning money to small businesses, because they can make more money for the bank through trading.

I assume this person was referring to trading such as, Stock market trading and FOREX trading.

This may be another reason we need the Glass–Steagall Act law brought back again to separate banking from investment banking.

http://www.projectcensored.org/top-stories/articles/18-little-known-stock-fraud-could-weaken-us-economy/

In 2005, naked shorting was already the 18th top censored story. By 2009, Wallstreet thievery was number 1.

Thank you for the link to the story:

1. US Congress Sells Out to Wall Street
#1 in Top 25 Censored Stories for 2010/2009

http://www.projectcensored.org/top-stories/articles/1-us-congress-sells-out-to-wall-street-sources/

The Pattern of Criminal Activity by the Banking / Wall Street gang is becoming more and more clear… Along with the Pattern of Congress Assisting and Enabling the Banking / Wall Street Crimes against the American Citizens.

One important thing missing from this article is a reference to Former FED Chairman Alan Greenspan’s guiding principal that Fraud does NOT need to be regulated.

I would like for someone to write a DEAR MR ALAN GREENSPAN open letter to expose his criminal neglect during his terms of office.