July 7, 2008 Issue Posted June 26, 2008, 5:00PM EST

News You Need to Know

Cuts on the Street…

The sound of investment bankers pounding the pavement is getting louder. On June 23, The Wall Street Journal said that Citigroup (C) will chop 10% of its investment banking division, roughly 6,500 jobs, and the Financial Times said Goldman Sachs (GS) also will axe 10% of its investment bankers. Citi CEO Vikram Pandit has pledged to prune the bank's entire operation to bounce back from more than $15 billion in losses over the past two quarters. But the pain apparently isn't over: Citi CFO Gary Crittenden warned of "substantial" writedowns in the coming quarter.

—Edited by Harry Maurer & Cristina Lindblad

…And More Ahead

Financial houses have chopped some 83,000 jobs since last July, but they're just getting started. By this time next year, head count could be down by as much as 175,000. New York City expects to lose 33,000 jobs, London more than 19,000. Add it all up, and the carnage will be worse than the bloodletting after the tech bust.

Bloomberg

—Edited by Harry Maurer & Cristina Lindblad

Facing More Charges?

Former hedge fund managers Ralph Cioffi and Matthew Tannin, indicted on June 18 on charges they lied to investors in the once-giant Bear Stearns (BSC) funds, may be hit with new accusations. BusinessWeek has learned that federal prosecutors in Brooklyn, N.Y., are focusing on misleading comments the duo may have made to banks that either loaned money to the funds or were trading partners. Cioffi and Tannin have pleaded not guilty to the original charges.

—Edited by Harry Maurer & Cristina Lindblad

Oil Speculators Beware

As oil prices flirt with $140 per barrel, Congress is hunting speculators. On June 23 and 24 legislators grilled officials of the commodities exchanges, and on June 24, Senator Byron Dorgan (D-N.D.) added to the list of bills to beef up oversight of the pits. Business is certainly feeling the pain: Citing fuel prices, UPS (UPS) on June 24 chopped its second-quarter earnings forecast, and Dow Chemical said it will jack up prices by as much as 25%, having already hiked them by 20% on June 1.

—Edited by Harry Maurer & Cristina Lindblad

Everglades Bonanza?

Greens could hardly believe their ears on June 24 when the state of Florida announced an agreement with U.S. Sugar under which the biggest cane grower in the nation will sell 187,000 acres—nearly 300 square miles—to the state for $1.75 billion and will phase itself out of business within six years. Florida has long been trying to buy the land to spur the recovery plan for Everglades National Park, and environmentalists have attacked U.S. Sugar for, among other alleged sins, polluting the waters running through the River of Grass.

—Edited by Harry Maurer & Cristina Lindblad

Samueli's Guilty Plea

The owner of the Anaheim Ducks hockey team has landed himself in the penalty box. Broadcom (BRCM) co-founder Henry Samueli pleaded guilty to one charge of lying to federal investigators on June 23, the latest twist in the options back-dating scandal at the tech giant. Broadcom has written off $2.2 billion in profits as a result of the revelations. If the judge approves Samueli's plea agreement in August, he'll pay $12 million in penalties and be subject to five years of probation. The NHL suspended him indefinitely from any involvement with the Ducks. In other legal news on June 25, the Supreme Court slashed damages in the Exxon Valdez case from $2.5 billion to about $500 million, and a New York appeals court upheld the dismissal of the bulk of the state's case against former NYSE Chairman Richard Grasso.

—Edited by Harry Maurer & Cristina Lindblad

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