Credit Suisse to Pay $536 Million Settlement on Iran

Swiss bank Credit Suisse provided financial services to sanctioned countries, Iran, Libya, Sudan and Burma. They will pay a $536 million settlement fine. BBC reported:

US government papers filed in the latest case said: "Credit Suisse's internal communications showed a continuous dialogue about evading US sanctions spanning approximately a decade."

Dealing with terrorist regimes? This brings back memories of the Chiquita banana settlement. Chiquita hired Colombian terrorists of right and left wing stripes. They paid a $25 million fine.

Another Swiss bank, UBS had a continuous dialogue about evading US tax laws. They also settled with Uncle Sam. In a strange move, Swiss law guides non-investigations of UBS senior management. This is in direct contrast to the Credit Suisse situation. The BBC reported:

The US government has the power to take proceedings against foreign financial institutions - even for actions involving other countries - if they do some of their business in America.

Yet, the same US government will not go after UBS executives, not even ones living in America. They won't have to pull out their checkbook, much less go to jail for any crimes committed.

Team Health IPO Prices Below Expectations

Team Health's IPO priced at $12 per share vs. an expected $14 to $16. Team Health is a provider of hospital based physicians, including emergency room doctors, radiologists, and hospitalists.

The IPO provided $146.5 million. Proceeds will primarily be used to reduce debt. Team Health is owned by The Blackstone Group, a private equity underwriter (PEU). PEU's levered debt for acquisitions, especially during the go-go years of 2005-2008. Bloomberg reported Team Health has $612 million in debt. It acquired the company in November 2005 for roughly $1 billion.

This is the second IPO this week to price well below the expected range. Carlyle Group's Cobalt International Energy did likewise. Wall Street is getting finicky.

Abu Dhabi SWF Sues Citigroup for Fraud

Abu Dhabi Investment Authority, a United Arab Emirates sovereign wealth fund (SWF), sued Citigroup for fraudulent misrepresentation regarding its multi-year investment agreement, executed in 2007. ADAI is obligated to purchase "a total of $7.5 billion of common equity on specified dates in 2010 and 2011." The claim seeks rescission of the agreement or damages in excess of $4 billion.

Citigroup is a ward of the state, like AIG. Will Uncle Sam make Abu Dhabi whole like it did Goldman Sachs et al? And where do sovereign wealth funds sit in financial reform?

Not long ago, Sen. Evan Bayh carried their water. This is from Lou Dobbs interview with the good Senator on foreign investment in the U.S.:

BAYH: Number two, with regard to these sovereign wealth funds there needs to be some kind of rules that guarantee that their investments are made solely on economic grounds rather than for political reasons.

And you know what, Lou, I -- when we get accused of being Sinophobes or protectionists or that kind of thing.

DOBBS: Right.

BAYH: That has nothing to do with it. I would be having these same concerns if our own government were trying to get five seats on the board of CSX.

DOBBS: The same people who would be accusing you and me of being Sinophobes or whatever are the ones railing about Abu Dhabi buying the Chrysler building.

Who care? It's not a strategic asset.

BAYH: Right.

DOBBS: Buy it as you wish.

DOBBS: We thank you very much. It's also nice to see a few dollars come back for the country.

Senator Evan Bayh, thanks for being here. Good luck.

The Senator is now front and center defending for-profit health insurers. Surely oil rich Arabs are as compelling as health insurance executives to the people of Indiana. How many billions will America give Abu Dhabi? Uncle Sam already gave billions to Citigroup, directly and indirectly. How might that make its way to the UAE?

Cobalt International Energy Prices below Expected Range

Pricing for Cobalt International Energy came in below expectations. Reuters reported:

The Houston-based company sold 63 million shares for $13.50, each, and raised roughly $850.5 million. It had expected to sell shares for between $15 to $17. The funds backing the company are affiliated with Goldman Sachs & Co, and private equity firms Riverstone Holdings LLC and The Carlyle Group.

Riverstone and Carlyle settled "pay for play" investigations with the New York attorney general Andrew Cuomo for a combined $70 million.

Cobalt's underwriters are led by Credit Suisse and Goldman Sachs & Co.

Credit Suisse may pay $536 million for illegal financial dealings with Iran. IPO's and fines: who knew they went together?

Carlyle Group's China Register Ringing

Three of The Carlyle Group's Chinese affiliates went public in Hong Kong and New York. Carlyle's press release stated proceeds totaled $780 million. The affiliates are:

China Forestry Holdings Co., Ltd.
Kaisa Group Holdings Ltd.
Concord Medical Services Holdings Ltd.

China Pacific Insurance is next up, expecting $3.8 billion in proceeds. While Carlyle isn't selling any shares, it could benefit from any special dividend distributions, like one planned for affiliate Booz Allen Hamilton.

Cobalt International Energy will conduct a $1.1 billion IPO this week. At this rate Carlyle won't have any presents left to open on Christmas morn.

Next stop on Santa's corporate train? Indonesia.

Editor & Publisher: Journalism Watchdog Closed

The Nielsen Company will close Editor & Publisher immediately. The journal chronicled the newspaper industry for over a century. The news came as a surprise to editor Greg Mitchell.

"We knew that something big was happening but we didn't think the aftermath was that we wouldn't be sold and it would be folded."

Mitchell hopes Editor & Publisher will return in another form.

"I would hope because of our special history and our role as a watchdog in journalism that it would be more likely in this case that there will be someone that's going to say, `Hey, we're not going to let this die."'

Another journal owned by Nielsen was sold:

Editor Elizabeth Guider said The Hollywood Reporter is still profitable, "just not as profitable as we'd like to be, or clearly that Nielsen wanted us to be."

The Carlyle Group purchased a chunk of Nielsen in June 2006, during the go-go buyout period. Many of those deals unraveled, with the company cramming down debt holders or declaring bankruptcy. Returning to the profit theme:

Nielsen spokesman Gary Holmes said his company is still reviewing its properties to make sure the company is focused on businesses with "the highest potential for growth."

A Carlyle Group affiliate pulled the plug on a journalism watchdog for profit's sake. It might help the politically connected private equity underwriter (PEU) maintain their good name, a key aspect of Carlyle's mission.

The news does a poor job of showing how PEU's infect global business. They are bloated Lyme disease ticks on Washington D.C.'s and the taxpayer's crotch. One mainstream media (CBS News) did enough "research" to call the Carlyle Group a "consulting firm."

Private equity underwriters are shadow bankers. Profits are the be all and end all. People, history and mission be damned. Editor & Publisher is gone, thus it can't hold newspapers accountable for PEU's free passes. It's likely a spin off benefit, but one just the same.

Financial Reform: Just Plain Trying

ZeroHedge quoted Rep. Barney Frank

"The legislation will send a message that we’re trying to respond to what got us into this economic meltdown and trying to set up mechanisms to prevent future economic meltdowns”

Securitization was restarted on the taxpayer's dime. TARP leaked. The House reform bill has:

No breakup of too big to fail, not until they become "a risk"
Big loopholes for derivatives
Backstopping shadow bankers
Federal Reserve can perform secret rescues

Trying to respond?
Trying to set up?
It's just plain trying.