Financial Mines

News and notes from the business reporters for the Connecticut Media Group.
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A refreshing find at Wall Street protest

Tuesday, September 27, 2011 by:Rob Varnon
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New York City– I checked in on The Occupy Wall Street protest on Monday to see what it was all about. Interesting collection of people who, whether you agree with them or not, do deserve some respect for leaving the comfort of home to effect some change.

As a reporter, one of the things I was most impressed with and actually delighted with is the availability of everyone there. They let anyone talk to the press. While some people have pointed this out as a potential weakness in their organization, that the lack of an official spokesperson or head creates a lack of focus, I found it to be quite convenient and a sign that the group believes in its cause. How much confident can you be in what you’re after when you let everyone be a spokesman or woman.

It’d be nice if some businesses allowed this. I was on site of a boat builder once and the public relations flak said if an employee said anything that wasn’t cleared by her to the media he could be fired.

Categories: General

Another fall in the quant world

Friday, September 23, 2011 by:Rob Varnon
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Although not quite Homeric, here is another tale in the securities trade in which human frailty – pride, arrogance, fear, insecurity and maybe all of them together– trumped the venerable quantitative formulas designed to protect us from risk.

Here’s the SEC order on the matter, that reads like a tragedy, just without all the death.

http://www.sec.gov/litigation/admin/2011/ia-3285.pdf

The SEC reported yesterday it has barred Barr M. Rosenberg, 68 of California, for life from working in the securities industry. He agreed to pay a $2.5 million fine.

His firm, AXA Rosenberg was using a quantitative model to guide investment, which contained an error, rendering the formula in effect blind to a certain risk. The errors was detected in 2007 by an employee who reported it to Rosenberg, who decided to to fix the problem. It was discovered in 2009 during an investigation by the SEC.

The firm has since agreed to repay the losses to clients and pay a $25 million penalty.

According to the SEC’s administrative order, “Rosenberg pioneered the use of quantitative techniques – embodied in BRRC’s Model – to implement investment strategies. The Model was comprehensive in its ability to capture and process a substantial amount of publicly available information, such as financial data for particular companies, news, and industry information, and to make investment decisions largely without human interaction.”

All this time and all these advances in mathematics, modeling and thinking, and still, like an Achilles or Ajax, men fall due to their own pride.

Of  course maybe a better lesson here is for investors to remember what old Will Shakespeare said about trying to account for all things, which might today, include risk.

“There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.”

Categories: General

UTC Goodrich deal already draws a legal fight

Thursday, September 22, 2011 by:Rob Varnon
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Just hours after United Technologies and Goodrich Corp. held a joint conference with analysts,the New York law firm of Levi and Korsinky announced it was looking into the matter to gear up for a possible suit on behalf of Goodrich investors.

The deal values Goodrich shares at $127.50, which Levi & Korsinsky says is $2.50 per share lower than at least one analysts target price.

Thinks do move fast these days.

To see the post on the potential legal action, visit:

http://www.zlk.com/goodrich-gr.html

Categories: General

Wave goodbye Windsor Locks? Hamilton to NC

Thursday, September 22, 2011 by:Rob Varnon
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As part of its proposal to buy Goodrich Corp. for $18 billion, United Technologies is proposing to merge its Hamilton-Sundstrand unit with Goodrich and form UTC Aerospace System and headquarter them in North Carolina.

It’s a huge break from tradition at UTC, which has historically headquartered its divisions in Connecticut, even when buying established companies from other parts of the globe.

Chubb, acquired in 2003, was formed in the 1800s in England, but its division headquarters, UTC Fire and Security is based in Farmington, Conn.

Hamilton has been in its present headquarters in Windsor Locks, Conn. since 1952. It moved there from West Hartford.

Categories: General

UTC shares pummeled as execs talk $18.4 B Goodrich deal

Thursday, September 22, 2011 by:Rob Varnon
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Shares of United Technologies Corp., led the Down Jones Industrial Average down Thursday morning as executives of the company answered questions about an $18.4 billion deal to buy Goodrich.

Shares in UTC were down more than 7 percent in morning trading and the Dow was off more than 300.

The markets in general will falling as a rash of reports detailing weakening global economic performance spread concerns. In the meantime, UTC’s plan to buy aerospace component maker using 75 percent debt and 25 percent equity raised concerns about exposure to defense budgets.

Defense budgets are being squeezed around the globe and in the U.S.. UTC’s helicopter maker Sikorsky Aircraft is laying off 419 workers at its Stratford factory, where it is primarily working on defense contracts.

But a Goodrich executive said his company’s exposure was about 30 percent and its parts are on systems, including helicopters ,that are unlikely to see big hits in a defense spending cut.

Other concerns raised by analysts was whether customers and regulators here and in Europe would be as excited about the merger.

Categories: General

Former RBS Securities executive to serve one year for embezzlement

Thursday, September 8, 2011 by:Rob Varnon
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James Glover, of West Harrison, N.Y. was sentenced Thursday to serve one year and a day in prison for embezzling nearly $625,000 from a former employer. Glover paid the money back in full before pleading guilty in June to the crime.

The U.S. District Attorney once again declined to name the company and accuser in this case, from whom Glover stole, but he was a 30-year veteran of RBS Securities w\Greenwich Capital who lost his job during the time frame of the scandal.

Glover was also suspended in July of 2010 by the Financial Industry Regulatory Authority.

After serving his time, he will have to spend two years on probation and has been ordered to perform 120 hours of community service.

Here’s the formal release from the U.S. Attorney with details of how Glover set up a fake vendor to pay himself.

FORMER FINANCIAL SERVICES COMPANY EMPLOYEE
SENTENCED TO FEDERAL PRISON FOR STEALING COMPANY FUNDS
The United States Attorney for the District of Connecticut announced that JAMES GLOVER, 54, of West Harrison, New York, was sentenced today by United States District Judge Robert N. Chatigny in Hartford to 12 months and one day of imprisonment, followed by two years of supervised release, for embezzling from his employer.  GLOVER also was ordered to perform 120 hours of community service while on supervised release.
According to court documents and statements made in court, GLOVER was the Managing Director-Settlements and Reconciliations of a Stamford-based financial services company (the “Company”).  GLOVER’s responsibilities included transferring funds from the Company to customers to settle or reconcile the customers’ securities transactions.  From approximately January 2009 to January 2010, GLOVER caused nine separate transfers of funds, which totaled approximately $625,000, to be sent from the Company to a bank account in New Jersey in the name of “CPS Funding.”  In transferring the funds, GLOVER caused fraudulent instructions to be placed into the Company’s operating system to make it appear that the New Jersey bank account was held by an actual customer that was entitled to receive Company funds to settle securities transactions.  However, the interstate transfers were not authorized and were not part of any legitimate securities transaction of the Company or its customers.  GLOVER then accessed the CPS Funding account and used some of the funds for his own use.
In January 2010, GLOVER was confronted by the Company regarding the fraudulent interstate transfer of funds.  He has since returned the stolen funds to the Company.
On June 1, 2011, GLOVER waived his right to indictment and pleaded guilty to one count of interstate transportation of money obtained by fraud.
This matter was investigated by the United States Secret Service with the assistance of the victim company.  The case was prosecuted by Senior Litigation Counsel Richard J. Schechter.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to ctsecuritiesfraud@ic.fbi.gov.
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Categories: General

Kaman buys assets of Mass.-based motion control distributor

Tuesday, September 6, 2011 by:Rob Varnon
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Bloomfield-based Kaman Corp. said Monday its subsidiary Kaman Industrial Technologies Corp. acquired the assets of Target Electronic Supply Inc. of Westwood, Mass.

The  value of the deal was not announced, cut Kaman expects Target to have sales of about $19 million next year. Target, a leading motion control distributor in the New England has 17 employees with operations in Massachusetts, Connecticut and New Hampshire.

Shares of Kaman were down 1.39 percent to $31.15 in the first half hour of trading on the Nasdaq Monday.

Target will become part of Kaman’s Minarik subsidiary.

” Target nicely complements the resources of Minarik and Kaman to offer the Northeastern markets superior motion, automation, and power transmission products and systems with unequalled application support and service,” Andy Reid, Kaman’s Area VP Minarik, said in a press release.

Categories: General

Irene gives some federal tax payers more time

Friday, September 2, 2011 by:Rob Varnon
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The Internal Revenue Service announced it is granting taxpayers whose preparers were affected by Hurricane Irene until Sept. 22 to file returns normally due Sept. 15. The taxpayer’s preparer must be located in an area that was under an evacuation order or a severe weather warning because of Hurricane Irene, even if the preparer is located outside of the federally declared disaster areas.  This relief, which primarily applies to corporations, partnerships and trusts that previously obtained a tax filing extension, is available to taxpayers regardless of their location.

This relief, which primarily applies to corporations, partnerships and trusts that previously obtained a tax filing extension, is available to taxpayers regardless of their location.

Source: IRS news release.

Categories: General
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