The Guardian reports that Barclays' plan to pay executives and senior staff bonus awards in 'cocos' (contingent convertible bonds) has hit a snag, as institutional shareholders are said to have expressed concerns that the structure could end up being lucrative for the bankers, but cost investors too much money.
Shareholders are to vote on the pay change proposal at the bank's annual meeting next month, and it remains unclear whether any of Barclays' largest shareholders are concerned enough to vote against the proposal.
In the meantime, Reuters reports that Lehman Brothers Holdings has sued Citigroup for $1.3bn, seeking to recover cash and assets which it claims Citi had no right to retain. Citi has said that the assets were set-off against other Lehman obligations, and describes the lawsuit as 'unjustified and without merit'. $1bn of the claim is said to relate to a deposit Citi demanded in the wake of Lehman's bankruptcy in September 2008 in return for continuing to provide FX settlement arrangements for the firm.
And the news agency also reports that Rajat Gupta, the former Goldman Sachs main board director who has been accused of leaking price sensitive information to Raj Rataratnam, has sued US regulator The Securities and Exchange Commission, claiming that the agency is trying to unfairly deprive him of a jury trial as it is merely pursuing an administrative action, rather than a traditional court action against him.
The Financial Times reports that Goldman has appointed Brook Entwistle Chairman of its south-east Asia businesses, and Bloomberg reports that the firm has named Sonjoy Chatterjee as Chairman of its India operations.
And The New York Post reports that HSBC is said to have been warned by auditors KPMG that entrusting $8bn in client funds to Bernie Madoff opened it up to 'fraud and operational risks'. A 66-page report issued in September 2008 is said to have cited 28 Madoff-related risks, and repeated the warnings the auditor detailed in a 2006 report also issued to the bank.
HSBC insists, however, that it 'did not know that a fraud was being committed, and lost $1bn of its own assets as a victim'.
Finally, Bloomberg reports that Morgan Stanley's strategy of targeting mid-market private equity firms for M&A work is starting to pay off. The firm created a group of bankers to focus on the private equity sector, and unit Managing Director Joe Purcell said in an interview this month: 'It's often considered lower profile than covering the largest sponsors, but middle-market private equity can be very profitable for us'. The firm is said to have worked on seven closed or pending deals this year involving private equity firms with less than $5bn in assets.