Saturday, 27 December 2014
Last updated 3 days ago
May 20 2008 | 11:49am ET
Another pair of banks posted big losses in a Citigroup hedge fund, bringing the total lost by banks to more than $1.6 billion.
Wachovia Corp. said yesterday that it took a $315 million write-down on its investments in the Falcon Strategies fund. The bank had more than $1 billion—or 7%—of its bank-owned employee life insurance portfolio in the Falcon fund.
That revelation comes on the heels of last month’s lawsuit by Cincinnati-based Fifth Third Bancorp, which showed a $612 million investment in Falcon, also from its employee life insurance assets. Fifth Third’s Falcon investment amounted to about one-third of its employee life portfolio; the firm is suing Transamerica Life Insurance Co. and Clark Consulting, the firms that arranged its Falcon investments, charging that they “utterly failed to properly manage and monitor” premiums invested in Falcon. Fifth Third is seeking $323 million in damages. Citi was not named as a defendant in the lawsuit.
A third, regional bank also had a “sizeable” investment in Falcon, The Wall Street Journal reports, although the newspaper did not offer any further details.
The Journal adds that the banks may press Citi to give some of their money back, after the banking giant last month agreed to spend $250 million to cover some of its retail investors’ losses in the Falcon funds.
The Falcon fund is down more than 75%, clobbered by the ongoing credit crisis.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.