FINANCIAL FIRMS IN THE SPOTLIGHT: Raymond James Gives RIA’s Access to Alternative Investments, Citigroup’s $730M Bondholder Settlement is Approved, JPMorgan Deals with China-Related Hirings Inquiry, & Merrill Lynch’s Future as an Entity is Uncertain

Affiliated RIAs of Raymond James to Get Access to Firm’s Alternative Investments
The Raymond James Alternative Investment Group will give its affiliated registered investment advisers access to hedge funds, private real estate, managed futures, private equity, and alternative mutual funds beginning next month. The move is part of Raymond James’ (RJF) attempt to strengthen its RIA platform.

Already, it has added more support services for investment advisers in the areas of marketing, practice marketing, and succession planning. The financial firm also brought in four regional director for recruiting and existing practices while cutting equity ticket charges and waving certain individual retirement account fees.

Citigroup’s $730M Bondholder Settlement is Approved by a Federal Judge
U.S. District Judge Sidney Stein in Manhattan has approved the $370 million bondholder settlement reached with Citigroup Inc. (C) over claims that before the financial crisis the bank hid its exposure to toxic mortgage assets worth billions of dollars. According to court papers, the agreement is with investors that purchased Citigroup bonds and preferred stock in four dozen offerings between 5/06 and 8/08 and involved the bank raising over $71 billion dollars.

The plaintiffs contended that Citigroup played down its exposure to about $160 billion in CDOs and structured investment vehicles backed by high-risk assets, overstated the assets’ qualities, and understated reserves to offset loans. However, while Judge Stein said that the $370 million recovery is substantial and adequate, it wasn’t the “best possible” one for them, seeing as experts believe actual losses sustained was about $3 billion.

US Investigates JPMorgan Over Hiring of Chinese Officials’ Children
Federal authorities in the US are looking into whether JPMorgan Chase & Co. (JPM) hired Chinese officials kids in order to gain business in that country. According to The New York Times, a confidential US government document alleges that China Everbright Group retained the firm after the latter hired the son of Tang Shuangning, the company’s chairman. JPMorgan provided a number of services, including advice on investment banking over a stock offering. The document also says that the firm hired the daughter of the ex-deputy chief engineer of China’s railway ministry in 2007, which is about the same time that JPMorgan was awarded a contract to take China Railway Group public.

What Does Merrill Lynch’s Future Look Like?
According to an article in Investment News, over four years after its acquisition by Bank of America Corp. (BAC), Merrill Lynch (MER) could soon stop existing as a legal entity. An August 2 filing notes that although Bank of America will retain the Merrill brand for its investment bank and retail brokerage, the subsidiary will be dissolved, possibly in the fourth quarter of this year.

Merrill would keep doing business under Merrill Lynch Pierce Fenner & Smith Inc. and this restructuring would reportedly not impact its advisers. Meantime, Bank of America would take on all of Merrill’s debt and obligations.

Raymond James to Offer Alternative Investments to Custodial Clients, Financial Planning, August 14, 2013
Judge Approves Settlement Between Citigroup, Investors, The WSJ, August 20, 2013

JP Morgan faces hiring inquiry, Guardian/Program Business, August 20, 2013

Merrill out to pasture?, Investment News, August 18, 2013

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FINRA NEWS: Goldman Sachs Appeals Vacating of Securities Award, Non-Customers of Brokerage Firm Can’t Compel Arbitration, & Three Governors Named To FINRA Board, Stockbroker Fraud Blog, August 21, 2013
Former Broker Claims He is the Reason FINRA’s Regional Director Resigned, While Ex-JP Morgan Broker Files Arbitration Claim Against His Former Employer, Institutional Investor Securities Blog, June 28, 2013
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