SIFMA: News on the capital markets, securities and financial industry

Appetite uncertain for esoteric asset-backed securities
Demand for bonds backed by esoteric assets was growing before the global financial crisis hit in 2008, but issuance plunged after the meltdown and the market is just now starting to recover. Miramax Film NY is nearing a sale of bonds backed by movie licensing and distribution revenue. The sale is considered a test of investor demand for such securities. The Wall Street Journal (tiered subscription model)(11/19)

Pension funds sue banks over statements about MF Global
Two pension funds sued JPMorgan Chase and Goldman Sachs Group over claims that the banks made misleading statements about MF Global's exposure to European sovereign debt. The misstatements resulted in the collapsed brokerage's stock trading at "artificially inflated prices," the lawsuits say. "While the extent of MF Global’s exposure to European sovereign debt was concealed, the defendants were able to raise some $900 million in the offerings." Bloomberg(11/19)

Judge dismisses 2 of 3 claims in Virginia suit against BNY Mellon
A judge in Virginia dismissed two of three remaining claims against Bank of New York Mellon in a lawsuit concerning foreign-exchange transactions, the bank said. The Virginia attorney general's office, however, said the allegation remains that the bank violated the Fraud Against Taxpayers Act. Reuters(11/18), Bloomberg(11/19)

• Other News

Goldman Sachs appoints a smaller group of managing directors
Bloomberg (11/18)

Washington Roundup

Smaller budget might force CFTC to cut staff
The Commodity Futures Trading Commission, which is preparing to implement regulatory changes mandated by the Dodd-Frank Act, might have to reduce its staff under a budget approved by Congress that is significantly lower than what the Obama administration requested. Politico (Washington, D.C.)(11/20)

• Other News

Volcker rule could hit European asset managers, insider says
Financial Times (tiered subscription model) (11/20)

SEC orders B-D to pay nearly $2 million over repo fraud
The Securities and Exchange Commission has ordered FTN Financial Securities to pay almost $2 million over claims the broker-dealer allowed Sentinel Management, a registered investment adviser, to use reverse repurchase transactions to defraud its clients. The SEC claims that Sentinel was able to conceal its troubled financial position by engaging in the reverse repo deal. Securities Technology Monitor(11/18)