Wall Street: In the SEC’s sights
Goldman Sachs (GS), JPMorgan Chase (JPM), and Wells Fargo (WFC) have been warned by the U.S. Securities and Exchange Commission that they may face civil claims tied to sales of mortgage-backed securities. Almost four years after mounting mortgage defaults threatened the survival of a host of financial institutions, regulators are still examining how banks packaged and sold home loans to investors. The banks reported the warnings in filings with the SEC and said they are cooperating with the investigations. Regulators are examining whether the banks made proper disclosures to investors when bundling bonds backed by pools of mortgages.
Huawei: Nipping at Europe’s Heels
Huawei Technologies, China’s largest phone equipment maker, is closing the gap with European rivals. In 2011 the private company’s revenue grew an estimated 11 percent, to $32 billion, a board member says. That’s $2 billion less than Sweden’s Ericsson (ERIC) and double that of France’s Alcatel-Lucent (ALU). The company is adding cloud computing and business computing services to its offerings as it works toward a goal of generating $100 billion in sales. Huawei expects to double its workforce, to more than 20,000, this year.
News Corp.: Distancing the Heir Apparent
News Corp. (NWSA) Deputy Chief Operating Officer James Murdoch stepped down as executive chairman of the media company’s U.K. publishing unit, News International, almost eight months after the division was rocked by a phone-hacking scandal. News Corp. says Murdoch has moved to New York to focus on TV and international operations. U.K. authorities are investigating whether improper payments were made to public officials. Lawmakers are expected to release a report about Murdoch’s role in the scandal in a matter of weeks.
General Motors/Peugeot Citroën: A partnership in Europe
PSA Peugeot Citroën (UG:FP) and General Motors (GM) are planning an alliance that will include joint purchasing and vehicle development. To revitalize their European operations, the two are seeking about $2 billion in cost savings from the partnership. A portion of those lower expenses will be achieved through plant closures and job cuts, says a person familiar with the terms of the deal. To cement their collaboration, GM will buy about 7 percent of the French carmaker and take part in a €1 billion ($1.34 billion) rights offering by Peugeot.
JPMorgan Chase: Not all customers are created equal
JPMorgan Chase, the largest U.S. bank by assets, said new regulations to cap fees mean the bank will lose money on about 70 percent of its customers with less than $100,000 in deposits and investments. Consumer and business banking chief Todd Maclin told investors the bank sees its greatest profit opportunity with affluent customers who have more relationships with the firm. He said it’s possible that monthly fees on checking accounts may reach $20 at some point, which he said the bank would “celebrate.”