SEC Expected to Approve Civil Charges Against Mozilo

SEC Expected to Approve Civil Charges Against Mozilo
Wall Street Journal

The Securities and Exchange Commission is expected to approve civil fraud charges against former Countrywide Financial Corp. executives as soon as today, including founder and former chief executive Angelo Mozilo, people familiar with the matter say.

Joblessness Hits 9.4%, but Losses Slow
New York Times

The rate of job losses in the United States slowed significantly in May, the government reported Friday, lifting hopes that the country’s plummeting labor market was on its way to stabilizing. Some 345,000 jobs were lost last month, a stark figure, but one that represented the smallest number of monthly job losses since last September, the Labor Department reported. Economists said the figures showed the government’s efforts to prop up the economy were beginning to have an effect. But in a sign of the recession’s worsening toll, the unemployment rate climbed to 9.4 percent, its highest point in 26 years. The rate — a measure of jobless people looking for work — rose more than expected, partly because more people were resuming the hunt for a job.

HSBC Faces Round Two of Subprime Punishment
Wall Street Journal

When the subprime-mortgage crisis hit in the U.S., global banking giant HSBC Holdings PLC was among the first to get clobbered. Now it could be headed for round two. Through its subsidiary, HSBC Finance Corp., HSBC is a big holder of risky U.S. consumer loans, a toxic portfolio on which it has already taken more than $40 billion in impairment charges. This year, HSBC raised $18.5 billion in fresh capital and said it would wind down most of HSBC Finance, moving to close a bad chapter in the parent bank's 144-year history. But because economic and housing data suggest many more U.S. consumers are likely to default, analysts are wondering how many billions of dollars more the bank may lose on loans it currently records as good. "There is the potential there for a large loss," says Adam Steer of research firm CreditSights.

FDIC Pushes Purge at Citi
Wall Street Journal

The Federal Deposit Insurance Corp. is pushing for a shake-up of Citigroup Inc.'s top management, imperiling Chief Executive Vikram Pandit, people familiar with the matter said. The FDIC, under Chairman Sheila Bair, also recently pressed a fellow regulator to lower the government's confidential ranking of Citi's health — a change that would let regulators control the firm more tightly. The FDIC's willingness to take an increasingly tough position toward one of the nation's largest and most troubled financial institutions is setting up a bitter clash between regulators -- some of whom disagree with the FDIC's position — and between the FDIC and Citigroup, whose officials have argued that Ms. Bair is overstepping her authority.