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Berkshire ups Goldman Sachs stake; Wells Fargo operational risk chief to resign

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Berkshire ups Goldman Sachs stake; Wells Fargo operational risk chief to resign

Insurance conglomerate Berkshire Hathaway Inc. increased its stake in investment banking giant Goldman Sachs Group Inc. by about 21% during the second quarter. Berkshire also increased its stake in U.S. Bancorp by about 11% and in Bank of New York Mellon Corp. by 4%, but trimmed its holdings in Wells Fargo & Co. by about 1%.

In litigation news, a federal judge in Manhattan said Goldman Sachs shareholders may again file a class-action lawsuit against the company for allegedly concealing conflicts of interest when it created subprime mortgage collateralized debt obligations before the 2008 financial crisis, The Wall Street Journal reports. A class-action lawsuit was certified in September 2015, but the Manhattan federal appeals court overturned it in January, saying the burden imposed on the company was too high.

In people news, Wells Fargo's chief operational risk officer, Mark D'Arcy, will leave the banking company on Aug. 21 to pursue outside opportunities, The Wall Street Journal reports. Mark Weintraub, who was head of audit for consumer banking, will succeed D'Arcy. In May, the bank hired Amanda Norton as its chief risk officer, replacing Michael Loughlin who retired. The changes in Wells Fargo's risk management leadership took place months after the Federal Reserve issued a consent order restricting the bank's asset growth and requiring it to submit a plan on improving its compliance and risk management processes, among others.

Gregory Guyett will resign as president and COO of Pasadena, Calif.-based East West Bancorp Inc. and East West Bank to pursue other interests, effective Aug. 24. Chairman and CEO Dominic Ng will assume the additional title of president of the company and the bank.

On the deal front, business development company Triton Pacific Investment Corporation, Inc. and investment company Pathway Capital Opportunity Fund are merging to create TP Flexible Income Fund Inc. The fund's investments are expected to consist mainly of syndicated senior secured first lien loans, syndicated senior secured second lien loans, and to a lesser extent, subordinated debt.

In regulatory news, the U.S. Securities and Exchange Commission slapped Lockwood Advisors Inc. with a $200,000 civil money penalty for its failure to ensure oversight and disclose "trading away" fees clients could be paying if trades were routed to broker/dealers not part of the investment manager's wrap program.

The SEC's proposed new "best interest" regulations for investment professionals are likely to be issued late 2018 or 2019, after the agency received more than 3,800 comment letters from the public, Barrons reports. Based on the comments, investor advocates view the proposed rules as ambiguous and weak, and unlikely to get rid of sales practices that cater to brokers' interests than clients'," the report adds.

In other parts of the world

Asia Pacific: Anbang eyes Dutch unit sale; India's Cosmos Bank hacked; IAG posts FY'18 results

Europe: RBS finalizes $4.9B US settlement; VTB buys majority stake in Vozrozhdenie

Middle East & Africa: Bank Leumi Q2 income up YOY; Ghana to prosecute execs of collapsed banks

Now featured on S&P Global Market Intelligence

Credit unions gain ground in mortgages as originations fall in 2017: While total mortgage originations among credit unions fell to $118.85 billion in 2017, the industry's share of the U.S. mortgage market increased to 6.2%.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was down 1.55% to 27,323.59, and the Nikkei 225 fell 0.68% to 22,204,22.

In Europe, around midday, the FTSE 100 was down 0.87% to 7,544.43, and the Euronext 100 slipped 0.58% to 1,055.11.

On the macro front

The Mortgage Bankers' Association's mortgage applications report, the retail sales report, the Empire State Manufacturing Survey, the productivity and costs report, the industrial production report, the Federal Reserve Bank of Atlanta's Business Inflation Expectations survey, the business inventories report, the housing market index, the Energy Information Administration petroleum status report and the treasury international capital report are due out today.

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Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.