Fund fees in Regulator's crosshairs

Worthwhile but missing the main target - the management and performance fees charged are the elephant in the room, esp with Hedge Funds and even morse so with 'Private' Equity where management takes out compensation that makes the pay debate at listed companies trivial by comparison.
(26-Sept-2017)
Financial News (Paid content)

Toys 'R' Us - the REAL Culprits are not mentioned

The 'Private' Equity firms that gamble with the Public's money on the basis of 'Heads we win, Tails you lose' are the real culprits. Rather than put real sweat money into a business they load it with tons of debt - to the max - and hope for the best (a rising market makes everyone a genius). Shame on KKR and Bain Capital, shame on the regulators that neglect the unfair advantages that 'Private' Equity firms get (tax, accounting, liability, employee relations).
(20-Sept-2017)
(Bloomberg)

Saudi Aramco IPO - suitable for Widows and Orphans?

Does it really matter where the listing takes place? The more important question must be - given the negligable influence of public shareholders, the uncertainty over the future energy scenario and the huge political risk surrounding the Middle East region, including Saudi Arabia itself, can regulators allow this IPO to end up in the portfolios of savers and pensioners? Of course, the financial intermediaries and Saudi Arabia's oligarchy would laugh all the way to the bank!
http://www.marketwatch.com/story/saudi-aramco-2018-ipo-plans-slowed-over-where-to-list-2017-06-14

Another step towards undermining Public Shareholder Model

Regulators stand by (what's new) when the latest step is taken to make Shareownership a get-rich scheme for the well-connected.
Stage-managed Earnings Call at Netflix

Binding Vote on Exec Pay - another Cop-out

Another slap in the face from our Political Class. It is absurd that the owners of a company do not have the right to control their agents, i.e. the management hierarchy. When will our sleepy fiduciaries (Asset Managers, Pension Funds, Insurance Companies and Private Banks) stand up and fight for the rights of their 'clients' (do they even know what the origin of this word is?)
(24-Mar-2017)
Stärkung der Aktionärsrechte: Hauptversammlung darf künftig über Vorstandsvergütung abstimmen | private-banking-magazin.de

Mark Tucker: From AIA, Goldman Sachs, and now HSBC

Given that regulators tried to improve the quality of senior managers in banking it is surprising that Tucker's appointment seems to be waved through by officials in London and Hong Kong. He never had a senior position in frontline banking. Being chief beancounter at HBOS in the period leading up to the Crash of 2007-09 is not exactly a badge of honor. What moral authority do regulators no have left? (13-March-2017)
Who is Mark Tucker: From AIA, Goldman Sachs, and now HSBC - Business Insider

Carlyle Private Equity practices under fire

Seeking profits is what drives private business. But there have to be moral and ethical rules to contain this powerful motive. When a narrow group of people and their anonymous backers in the financial investment community treat employees and the wider public in a way that raises questions they put the whole Private Equity business model under a cloud. After all, the business operates under rules set by legislation and these rules can and should be altered when the model produces one-sided results. (12-March-2017)

Carlyle's Final Screwing of Brintons' Family & Employees

CEO packages soaring in UK - Black Eye for CorpGov Crowd

While there are many arguments for and against high pay awards to CEO's the one for Sky's Jeremy Darroch merits a special comment. Given that Sky is operating in a heavily regulated environment is should be noted that only thanks to failed Government policies (no proper control on bundling of TV channels, no proper control of Sports Rights) the company can produce such strong earnings and therefore 'reward' its CEO so lavishly.
CEO pay packages get 10 percent boost despite shareholder, staff unrest (CNBC)
(8 August 2016)

What is Inside Information?

A prominent Fund Manager was recently quoted as saying that he has the mobile phone numbers of most of the CEO's and CFO's his fund is invested in.
I seems strange that the question of inside information has not yet received more scrutiny by regulators as well as the media and industry representatives.
One has to assume that any conversation would lead to at least SOME bit of new information about the business progress these companies are experiencing. This information is by definition not available to the rest of the shareholders, large ones as well as individuals. So it is clear that this state of affairs makes a mockery of the idea of a level-playing field for all investors. Oddly enough fund managers seem to boast of - and expect - access to senior managers. And one has to assume that they are not just discussing the weekend's sportive events.
Even more astounding is the long-established practice that so-called 'sell-side' firms, aka as stock brokers, are the self-appointed gatekeepers and allocate access to company managements to their favoured stock broking clients thus introducing another murky element into the situation.
(1 April 2016)

Premier Foods told Nissin of US Interest

Strange things happen in Corporateland. It will be interesting to see what regulators have to say about this situation. Was Nissin an Insider after being told of potential bid interest? I guess if Joe Blogs would have been told by his girlfriend in the mailroom at Premier before quickly buying some shares the regs would have come down on him like a ton of bricks. So come on chaps at the FCA and/or PRA (wherever you hang your hats in the revolving regulatory circus) and shed some light on this. And the concerned 'fiduciaries' in the investment management firms should have a word to say as well, not least about the off-board transaction when a 'Private' Equity firm (handling the money of the wider public but keeping a hefty share for itself) got a sweet deal selling a stake to Nissin.
(30 March 2016)

Proxy Advice - Should it be a business?

One can erect any number of 'Chinese Walls' in order to prevent conflicts of interest but I still wonder if the something as important as good corporate governance should really be handled by a profit-oriented entity, in particular one owned by a Private Equity firm which may or may not be in it for the long haul. What do you think?
(22 July 2014)

Top shareholders back Alibaba's controversial corporate structure

Alibaba's 28 partners, mainly founders and senior executives, want to keep control over a majority of the board, even though they own only around 13 percent of the company. (Reuters)
It is quite amazing that the authorities in Hong Kong, traditionally not known for strict corporate governance, make a stand and bloc this move while other, much older , financial centres with a reputation to lose are in a race to offer more 'flexibility' in order to chase the IPO business.

This raises a number of questions
1 - is there a race to the bottom in regulatory affairs, contrary to all intentions proclaimed by global regulators?
2 - what is the role of board - should Management pick directors (effectively controlling itself)?
3 - should different voting rights be allowed, and if so under what circumstances?
4 - what obligations - if any - do the financial 'advisors' facilitating the IPO have? are they responsible to shareholders or do they only have to look after their own narrow financial interests?
27-Sept-2013

Change of UK takeover rules - more complexity for little gain?

New rules regulating UK takeovers have been devised by the cartel is run by industry insiders and while rule is piled upon rule there is little change to the basic flaw in the set-up: the Takeover Panel is dominated by industry insiders that have little or no interest to stop the merger merry-go-round that does little to inculcate British business with a more long-term outlook to business management. In a perverse fashion some participants in the merger game are already plotting to suggest their clients make meaningless 1p bids in order to circumvent the spirit of the new regulations. One has to wonder what the investor's fiduciaries, the major investment institutions that are the overall paymasters of the managements of listed companies will do to prevent such abuses from happening.
(31/10/11)

$687 Mio Dollar 'fee' for an M+A adviser

We often have reiterated that the business or mergers and acquisitions needs to be more closely supervised. Not only do corporate laws and market regulations a good overhaul but the fiduciaries that control most of the major listed equities also need to review their practices. One can say that the top 20 to 30 investing institutions could at the stroke of a pen revolutionise corporate governance as their holdings constitute in effect a controlling bloc in most company registers. When it is disclosed that Olympus paid nearly a third in 'advisory fees' during the acquisition of a British company one is left in disbelief as this is certainly a highly unusual - and extreme - case of corportate governance gone AWOL. Is it beyond the Japanese regulators to clean up their act and once and for all drag corporate practice in Japan into the 21st century? Or is it necessary for international and national regulator to ringfence the Japanese Market in order to protect non-Japanese investors?
(21/10/2011)

Cavalier attitude towards pensioners

The provision of pensions for ordinary citizens (not the executives and politicians who allow themselves gold-plated schemes) is becoming more pressing by the day in most western 'democracies'. That relying on government-sponsored regulators offers little hope - and even less help - is demonstrated by instances where venture (vulture?) capitalists or those whose primary activity is shuffling around corporate assets can escape from their obligations toward their past and present workers in order to maximise their personal profits.
(03/06/2011)

Insider Dealing brought to light

The detection of a year-long insider scam by the US authorities may well serve as a deterrent to those tempted to perpetrate such a scheme. But the fact that wire-taps play such an important role in helping to uncover illegal insider transactions is also worrisome. When criminals stop using telephones to communicate with each other it may become more difficult to detect illegal schemes. High-risk sectors of the financial industry are another area where prosecutors find it hard to uncover illegal transactions as they can easily be hidden behind a smokescreen of large numbers of unrelated transactions.
(7/04/2011)

Pension Risk transfers - who monitors the Risk?

A report by Hymans Robertsons documents the trend in the United Kingdom towards shifting the risk borne by companies offering final salary pensions to insurance companies and banks. One can only hope that these companies are ready to survive the next financial tsunami. While they may be more stable in the long run than the companies that originally stood behind the pension obligations one has to wonder who really has the interest of the pensioners at heart. The companies on both sides of these transactions will above all be interested in the short-term boost to their profits, the managements will focus on the boost to their bonuses and will long be gone if ever one of these transfers runs into trouble. And the regulators? I think we all know the answer.
(23/03/2011)

EU to curb influence of major Accounting firms

Like the rating agencies the big four accounting firms so far have escaped any major regulatory reform. So we welcome the announcement that the European Union plans to present a draft law curbing major auditing firms. While we are no friend of regulation - especially from the EU - we have for a long time argued that the way that listed companies select their auditing firms needs closer scrutiny. The party that really should supervise their activities are the shareholders. Management should have the right to be presented with their findings but should rely on the internal audit departments for their own purposes. Shareholders also should have more influence in deciding which firm is appointed to carry out the regular outside audit. Audit firms should also be changed at regular intervals and not be allowed to carry out non-audit work for their clients.
(12/02/2011) 

Banking Pay: US Watchdog had no bite

'The government's restrictions on pay at bailed-out banks had little lasting impact because officials soft-pedaled some issues and did much of their work out of the public's view, a congressional panel says. (Associated Press)
(10/02/2011) 

Are stock exchanges offering fair play?

A small order I placed in an ETF on the London Stock Exchange today showed that even for small orders the markets offer an uneven playing field for the unwary. The second my order had been entered there appeared an offer that was just placed 1 pence inside my limit order. Given that the spread in this 'liquid' ETF was a quite wide 1 per cent between bid and offer there was obviously room for the 'market maker' to offer an improved price compared to my order. While the behaviour of the dealer can certainly no be called front running it still leaves the question why he has not put the better price on the system in the first place. Having my order behind his offered price gives him the opportunity to cover any sale made at his new price by 'lifting' my offer. Given the proliferation of competing dealing platforms also makes it difficult - if not impossible - for the retail investor to be sure that no transaction takes place at the limit price (or above it) which should have included the limit order.
(08/02/2011)