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DEBT MANAGEMENT PROGRAM
FCStone May Incur Up To 25 Million In Bad Debt Charges CattleNetworkcom ExBear Stearns exec now at Fed Washington Post
Tue, 04 Nov 2008 20:51:09 +0000
These losses driven by unprecedented volatility in the commodity and foreign exchange markets relate primarily to a significant energy trading account and to a lesser extent a renewable fuels account and a foreign exchange account. The estimated bad debt provision is expected at this time to be adequate for all known existing credit contingencies for the first quarter of fiscal . This estimated bad debt provision is based upon currently available information market conditions and account positions which could change before the end of the first quarter on November . The company experienced no material impacts from credit issues during the fourth quarter of our fiscal year ended August . In addition the company can report that it has no direct credit exposure relating to VeraSun Energy Corporation which filed for bankruptcy protection last week. These losses if realized on an after tax basis would be approximately million or . per share. For comparison purposes the company realized an average of . of net income per quarter from continuing operations through the first three quarters of fiscal for a total of . per share for the nine months ended May . FCStone has taken and is taking appropriate actions to mitigate these exposures. The company has taken specific steps intended to reduce the market risk associated with the trading position of the energy account. Nonetheless no assurances can be given that additional losses on this account will not be recognized. FCStone may recover a portion of the losses on the energy account from the introducing broker of that account under a sharing agreement between FCStone and the introducing broker but no assurances can be given as to the amount and timing of recovery that may be obtained under that agreement. More generally FCStone has added to its internal credit risk management staff and in addition to regular monitoring its clearing customers accounts it has concluded a complete review of those accounts. The company has also retained an external consultant to review all of the company s credit risk procedures processes and systems. The company believes that it has made appropriate adjustments to its monitoring system designed to substantially reduce the risk of failures of these types in the future. FCStone believes that its capital position and liquidity remain strong. It has credit lines for its operations totaling million which includes million in committed subordinated debt lines available for regulatory purposes million of committed revolving margin lines and million of available commodity repurchase financing lines evidenced by warehouse receipts and available for use in connection with our customer inventory financing program. Current outstanding balances under these facilities consist solely of million in subordinated debt and million in repurchase financing. As of May the company reported consolidated stockholders equity of million. The company s futures commission merchant subsidiary FCStone LLC had minimum regulatory capital requirements as of October totaling approximately . million. At that time the company had capital in excess of its regulatory requirement of . million access to additional capital obtainable by the elimination of haircuts on investments totaling . million and undrawn subordinated debt of million bringing the total available excess capital to . million. Pete Anderson president and CEO of FCStone stated We recognize that these charges are significant and we want to assure our customers industry participants and shareholders that we take this situation very seriously and will continue strengthening our credit risk procedures processes and systems. I want to assure everyone that FCStone s capital and liquidity positions remain strong and permit us to continue the growth of our core risk management business that our customers need and our shareholders expect. The need for the company s risk management services and products has never been greater than it is in these volatile times. Education Center Corid Timing Is Everything For Pasteurela Pneumonia Prevention Request More Information Baytril Approved By For Dairy Replacement Heifers Request More Information Express Fall Round Up Producer Bonanza Request More Information Roto Mix Roto Mix Hay Pro Request More Information Z Tags Livestock Tracking Systems Request More Information Revalor The Science behind Revalor XS Request More Information Scour Bos Get More Prevention Tips Request More Information Alpharma Aureomycin Bovatec Request More Information Latest Stories Livestock Highlights Argentina Farm Values Canada Beef Exports Pfizer DRAXXIN What s Down Top Countries With The Most Beef Production Where Is Dusty Beef Exports Back Up After Three Poor Weeks Merial Cattle Health Some Parasites Sidestep Cold Weather Merial Help Dairy Calves Win Battle Against Cold Weather Beef Checkoff Producer Profile Zac Reich North Dakota More popular news Home World News Latest News Popular News Company News Cow Calf Cattle Breeds Cattle Feeding Cattle Processing Feeder Cattle Beef Retail Baby Calf Health Fly Control Functional Genomics Hot Topics Risk Management BVD Resources Cattle Features Cattle Identification Video News Preconditioning Cattle On Feed Feed Byproducts Product Spotlight Grains Energy Swine Poultry Charts Contact US Vance Publishing CattleNetwork AgNetwork CattleStore Drovers PorkMag DairyHerd Vance Publishing All Rights Reserved. My Portfolio Community VSE Alerts Front Page News Commentary Markets Mutual Funds ETFs Personal Finance Technology Tools Research My MarketWatch Community Video News Commentary Columnists First Take Special Reports How to Buy Trading Strategies The Heat is On Power Crisis Digital Home Dubai Blogs Podcasts Industry News Technology Health Care Retail Automobiles Economy Politics Fed The Election Newsletters Guru s Corner Directory Hulbert Financial Digest Election latest news PRESS RELEASE Credit Solutions Reaffirms Its Commitment To Debt Management s Leading Industry Association Last update a.m. EDT Oct. RICHARDSON Texas Oct BUSINESS WIRE As its nationwide customer base nears Credit Solutions has firmly anchored itself in The United States Organization for Bankruptcy Alternatives USOBA the leading debt negotiation industry association dedicated to consumer protection. We are pleased to have Credit Solutions join the shortlist of Charter Policy Partners that play an active role in shaping the future of debt management industry governance and that serve as a model of customer service excellence said Jenna Keehnen Executive Director of USOBA. As the debt settlement industry leader we continually seek ways to reassure potential clients that we are committed to the highest standards of professional conduct and business best practices said Credit Solutions CEO Doug Van Arsdale. Last month Credit Solutions Quality Management System was certified as compliant with USOBA s best practice standards in an independent audit by BSI Management Systems a division of The BSI Group the accredited global registrar that works with organizations to assess the implementation and administration of their management systems and business processes. Ten states have enacted laws impacting the debt negotiation industry this year and despite changes in bankruptcy legislation that made filing for bankruptcy more difficult record number of Americans has done so. USOBA members often are consumers last hope before bankruptcy. About USOBA USOBA is dedicated to providing its member companies with important industry related information including compliance requirements as well as advocating on behalf of its membership for fair and appropriate industry regulation that maintains the utmost in consumer protection. USOBA members are provided a USOBA State Law Summary guide the only one of its kind in the industry to better ensure and promote national compliance. This guide contains the laws and regulations state by state and has been reviewed by regulators and legislators. For further information please visit www.usoba.org . About Credit Solutions The nation s debt settlement industry leader Credit Solutions is recognized by American Business Awards for the Best Customer Services Department in Financial Services. A platinum level member of the International Association of Professional Debt Arbitrators Credit Solutions is a Charter Policy Partner of the United States Organization for Bankruptcy Alternatives USOBA and accredited through BSI Management Systems for compliance with USOBA Best Practice Standards. For more information about Credit Solutions and its debt management program visit http www.creditsolutions.com . SOURCE Credit Solutions Credit Solutions Bronwen Walsh presscreditsolutions.com Copyright Business Wire Top stories PM today U.S. stocks finish solidly higher after Election Day rally minutes ago Obama headed toward victory in Pennsylvania PM today Early results bode well for congressional Democrats Most Popular READ E MAILED EDITOR S PICK U.S. stocks finish solidly higher after Election Day rally survival tips for the next four years if your candidate loses How to Obama proof your portfolio Obama stakes out to lead in several states U.S. stocks poised for opening Election Day rise General Electric orders China made jetliners Dollar yen fall vs. rivals as risk appetite returns What to look for once the votes are counted Gold gains more than as dollar weakens Apple iPod chief stepping down company taps IBM veteran survival tips for the next four years if your candidate loses How to Obama proof your portfolio Some on Wall Street want a return to fantasyland Halloween Indicator goes on a buy signal Election bailout bill add urgency to your year end tax planning Updating the checklist for a market recovery BMW posts drop in third quarter profit cuts outlook Supercharged ETFs with leverage slated to list this week General Electric orders China made jetliners U.S. stocks finish solidly higher after Election Day rally U.S. stocks finish solidly higher after Election Day rally Obama headed toward victory in Pennsylvania Early results bode well for congressional Democrats Yahoo has little remaining upside in Google deal analysts say Get the Latest MarketWatch News PARTNER CENTER Site Index Topics Archive Help Feedback Media Archive Premium Products Mobile RSS Podcasts Company Info Advertising Media Kit DJ Client Solutions The Wall Street Journal Digital Network WSJ.com Barron s Online BigCharts Virtual Stock Exchange All Things Digital MarketWatch Community RealEstateJournal.com Financial News Online WSJ.com Small Business Copyright MarketWatch Inc. All rights reserved. By using this site you agree to the Terms of Service and Privacy Policy . Credit Solutions Reaffirms Its Commitment To Debt Management s Leading Industry Association MarketWatch Intraday data provided by Interactive Data Real Time Services a division of Interactive Data Corp. and subject to terms of use . Historical and current end of day data provided by Interactive Data Pricing and Reference Data . More information on NASDAQ traded symbols and their current financial status. Intraday data delayed minutes for Nasdaq and minutes for other exchanges. Dow Jones Indexes SM from Dow Jones Company Inc. SEHK intraday data is provided by Comstock and is at least minutes delayed. All quotes are in local exchange time. Real time last sale data provided by NASDAQ. United Local Colleges NFL Arts Living Style Movies Travel Fashion Beauty Horoscopes Pets Television Books Home Garden Comics Entertainment News Food Dining Museums Theater Dance Crosswords Going Out Guide Find Restaurants Visitors Guide Find Movies Best Bets Find Bars Clubs Go Out List Find Local Events Going Out Gurus Jobs Find a Job Post a Job Get Expert Advice Employer Login Cars Buy a Car Sell a Car Experts Advice Dealer Specials Coupons Real Estate Buy a Home Sell a Home Property Values Commercial Properties Rentals Find a Rental Rent Your Place Shopping Shop New Deals Discounts Shopper Blog Shop Used Sell Your Stuff Pets SEARCH washingtonpost.com Web Search Archives washingtonpost.com Business Wires News Alert House Majority Leader Tom DeLay Indicted MARKET UPDATES Market Indices Most Actives Winners Losers Upgrades Downgrades Currencies Economic Calendar Earnings Calendar Your Portfolio Live Q PM WASHINGTON The former chief risk officer at investment bank Bear Stearns Cos. which nearly collapsed in March is now a senior official of the Federal Reserve division that supervises U.S. banks. Michael Alix who worked at Bear Stearns for years and was its senior risk manager since was named a senior vice president in the bank supervision group of the Federal Reserve Bank of New York according to an announcement by the Fed. The appointment is apt to raise questions because of the key role Alix played at Bear Stearns and given the Federal Reserve s role in Bear Stearns sale to JPMorgan Chase Co. after its breathtaking slide. In his new job at the central bank Alix will help oversee the financial safety and soundness of banks which are inspected by Federal Reserve examiners. That s incredible said James Cox a Duke University law professor and securities law expert. This is not reassuring. . What is there in this person s experience and skill package that qualifies him for the Fed position Cox and another expert said the selection of Alix might have made sense if he had sounded the alarm over Bear Stearns deteriorating financial situation. We don t know what his role was within the investment bank said Charles Elson a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware. On the face of it the appointment may raise an eyebrow he said. New York Fed spokesman Andrew Williams declined to comment Tuesday. In March with Bear Stearns on the brink of bankruptcy the Federal Reserve and Treasury Secretary Henry Paulson with the involvement of Chairman Ben Bernanke and New York Fed President Timothy Geithner orchestrated a buyout of Bear Stearns by JPMorgan. The deal was forged with a billion federal backstop from the Fed acting as central bank Federal prosecutors have been investigating the conduct of Bear Stearns managers before its blowup amid the collapse of the subprime mortgage market. Prosecutors have said they expect to bring additional criminal charges against two former Bear Stearns hedge fund managers who were accused last summer of lying to investors. The eventual implosion of the defendants hedge funds cost investors . billion and began a domino effect that pushed Bear Stearns itself to the brink. Alix who was appointed by the New York Fed s board officially assumed the senior vice president position Monday the announcement said. He will be a senior adviser to William Rutledge the executive vice president of the bank supervision division. Alix s appointment was first reported Tuesday by blogger Scott Rothbart. Before becoming Bear Stearns chief risk officer in Alix was the bank s global head of credit risk management from . Before that he was credit officer and vice president at Merrill Lynch Co. In late September the Securities and Exchange Commission ended a program of voluntary oversight for Wall Street investment banks that the SEC chairman said had not worked. Under the program the SEC had inspected the five biggest Wall Street banks Bear Stearns Goldman Sachs Group Inc. Lehman Brothers Holdings Inc. Merrill Lynch and Morgan Stanley. As the credit crisis deepened this fall Lehman Brothers buckled under bad mortgage debt and made the biggest bankruptcy filing in U.S. history. Merrill Lynch agreed to sell itself to Bank of America Corp. That left only two independent investment banks standing on Wall Street Goldman Sachs and Morgan Stanley. And both won approval from the Fed to change their status to bank holding companies in order to stay in business. The regulatory shift allowed the two firms to create commercial banks that can take deposits thereby bolstering their resources. More on washingtonpost.com More Business News washingtonpost.com placeholder Related Topics Web Content Web Wide News Alerts MyWebpost Get The Post s take on whatever you re reading anywhere on the Web. Sign Up Learn More From Our Partners Resources for anyone who runs a small business or wants to start one. Specter of Bankruptcy Haunts Manufacturing Sector Three Steps to Getting Funded by Investors Riding High on Customer Service Starting a Business Small Business on the Net Full Coverage Top Most Popular on washingtonpost.com More in Business Small Business Post.com s Sharon McLoone on the ins and outs of starting owning and managing your own business. Local Companies Post editors and writers keep you informed about the region s business community. Government Inc. The Post s Robert O Harrow Jr. shines a light on the good bad and sometimes unsettling world of federal contracting. The Associated Press Top Most Popular on washingtonpost.com Featured Advertiser Links Lawyers Mesothelioma Failed Cochlear Implants Asbestos Lawyers Lung Cancer Asbestosis Tradesmen Cool gadgets hot deals. Visit CircuitCity.com today ID theft is happening everywhere. Get Protected Earn . APY at ING DIRECT. No Fees and No Minimums. Start making real money with small business advice Tips from small business experts make more now FREE video tips from top small business experts Watch Voices on Leadership Sponsored by SAP Do You Own Vanguard s Worst Funds Secrets Your Credit Card Company Won t Tell You Take this opportunity to secure your money. dell ran Math.floor Math.random document.write News Politics Opinions Local Sports Arts Living Going Out Guide Jobs Cars Real Estate Rentals Shopping SEARCH washingtonpost.com Web Search Archives washingtonpost.com About Us Work for Us Advertisers Site Map Search Terms Topics Index mywashingtonpost.com Mobile RSS Widgets The Washington Post Subscribe Subscriber Services Advertisers PostPoints Electronic Edition Online Photo Store The Washington Post Store About The Post National Weekly The Washington Post Company Information and Other Post Co. Websites Copyright The Washington Post Company User Agreement and Privacy Policy Rights and Permissions Help Contact Us
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FCStone May Incur Up To 25 Million In Bad Debt Charges CattleNetworkcom ExBear Stearns exec now at Fed Washington Post
Tue, 04 Nov 2008 20:51:09 +0000
These losses driven by unprecedented volatility in the commodity and foreign exchange markets relate primarily to a significant energy trading account and to a lesser extent a renewable fuels account and a foreign exchange account. The estimated bad debt provision is expected at this time to be adequate for all known existing credit contingencies for the first quarter of fiscal . This estimated bad debt provision is based upon currently available information market conditions and account positions which could change before the end of the first quarter on November . The company experienced no material impacts from credit issues during the fourth quarter of our fiscal year ended August . In addition the company can report that it has no direct credit exposure relating to VeraSun Energy Corporation which filed for bankruptcy protection last week. These losses if realized on an after tax basis would be approximately million or . per share. For comparison purposes the company realized an average of . of net income per quarter from continuing operations through the first three quarters of fiscal for a total of . per share for the nine months ended May . FCStone has taken and is taking appropriate actions to mitigate these exposures. The company has taken specific steps intended to reduce the market risk associated with the trading position of the energy account. Nonetheless no assurances can be given that additional losses on this account will not be recognized. FCStone may recover a portion of the losses on the energy account from the introducing broker of that account under a sharing agreement between FCStone and the introducing broker but no assurances can be given as to the amount and timing of recovery that may be obtained under that agreement. More generally FCStone has added to its internal credit risk management staff and in addition to regular monitoring its clearing customers accounts it has concluded a complete review of those accounts. The company has also retained an external consultant to review all of the company s credit risk procedures processes and systems. The company believes that it has made appropriate adjustments to its monitoring system designed to substantially reduce the risk of failures of these types in the future. FCStone believes that its capital position and liquidity remain strong. It has credit lines for its operations totaling million which includes million in committed subordinated debt lines available for regulatory purposes million of committed revolving margin lines and million of available commodity repurchase financing lines evidenced by warehouse receipts and available for use in connection with our customer inventory financing program. Current outstanding balances under these facilities consist solely of million in subordinated debt and million in repurchase financing. As of May the company reported consolidated stockholders equity of million. The company s futures commission merchant subsidiary FCStone LLC had minimum regulatory capital requirements as of October totaling approximately . million. At that time the company had capital in excess of its regulatory requirement of . million access to additional capital obtainable by the elimination of haircuts on investments totaling . million and undrawn subordinated debt of million bringing the total available excess capital to . million. Pete Anderson president and CEO of FCStone stated We recognize that these charges are significant and we want to assure our customers industry participants and shareholders that we take this situation very seriously and will continue strengthening our credit risk procedures processes and systems. I want to assure everyone that FCStone s capital and liquidity positions remain strong and permit us to continue the growth of our core risk management business that our customers need and our shareholders expect. The need for the company s risk management services and products has never been greater than it is in these volatile times. Education Center Corid Timing Is Everything For Pasteurela Pneumonia Prevention Request More Information Baytril Approved By For Dairy Replacement Heifers Request More Information Express Fall Round Up Producer Bonanza Request More Information Roto Mix Roto Mix Hay Pro Request More Information Z Tags Livestock Tracking Systems Request More Information Revalor The Science behind Revalor XS Request More Information Scour Bos Get More Prevention Tips Request More Information Alpharma Aureomycin Bovatec Request More Information Latest Stories Livestock Highlights Argentina Farm Values Canada Beef Exports Pfizer DRAXXIN What s Down Top Countries With The Most Beef Production Where Is Dusty Beef Exports Back Up After Three Poor Weeks Merial Cattle Health Some Parasites Sidestep Cold Weather Merial Help Dairy Calves Win Battle Against Cold Weather Beef Checkoff Producer Profile Zac Reich North Dakota More popular news Home World News Latest News Popular News Company News Cow Calf Cattle Breeds Cattle Feeding Cattle Processing Feeder Cattle Beef Retail Baby Calf Health Fly Control Functional Genomics Hot Topics Risk Management BVD Resources Cattle Features Cattle Identification Video News Preconditioning Cattle On Feed Feed Byproducts Product Spotlight Grains Energy Swine Poultry Charts Contact US Vance Publishing CattleNetwork AgNetwork CattleStore Drovers PorkMag DairyHerd Vance Publishing All Rights Reserved. My Portfolio Community VSE Alerts Front Page News Commentary Markets Mutual Funds ETFs Personal Finance Technology Tools Research My MarketWatch Community Video News Commentary Columnists First Take Special Reports How to Buy Trading Strategies The Heat is On Power Crisis Digital Home Dubai Blogs Podcasts Industry News Technology Health Care Retail Automobiles Economy Politics Fed The Election Newsletters Guru s Corner Directory Hulbert Financial Digest Election latest news PRESS RELEASE Credit Solutions Reaffirms Its Commitment To Debt Management s Leading Industry Association Last update a.m. EDT Oct. RICHARDSON Texas Oct BUSINESS WIRE As its nationwide customer base nears Credit Solutions has firmly anchored itself in The United States Organization for Bankruptcy Alternatives USOBA the leading debt negotiation industry association dedicated to consumer protection. We are pleased to have Credit Solutions join the shortlist of Charter Policy Partners that play an active role in shaping the future of debt management industry governance and that serve as a model of customer service excellence said Jenna Keehnen Executive Director of USOBA. As the debt settlement industry leader we continually seek ways to reassure potential clients that we are committed to the highest standards of professional conduct and business best practices said Credit Solutions CEO Doug Van Arsdale. Last month Credit Solutions Quality Management System was certified as compliant with USOBA s best practice standards in an independent audit by BSI Management Systems a division of The BSI Group the accredited global registrar that works with organizations to assess the implementation and administration of their management systems and business processes. Ten states have enacted laws impacting the debt negotiation industry this year and despite changes in bankruptcy legislation that made filing for bankruptcy more difficult record number of Americans has done so. USOBA members often are consumers last hope before bankruptcy. About USOBA USOBA is dedicated to providing its member companies with important industry related information including compliance requirements as well as advocating on behalf of its membership for fair and appropriate industry regulation that maintains the utmost in consumer protection. USOBA members are provided a USOBA State Law Summary guide the only one of its kind in the industry to better ensure and promote national compliance. This guide contains the laws and regulations state by state and has been reviewed by regulators and legislators. For further information please visit www.usoba.org . About Credit Solutions The nation s debt settlement industry leader Credit Solutions is recognized by American Business Awards for the Best Customer Services Department in Financial Services. A platinum level member of the International Association of Professional Debt Arbitrators Credit Solutions is a Charter Policy Partner of the United States Organization for Bankruptcy Alternatives USOBA and accredited through BSI Management Systems for compliance with USOBA Best Practice Standards. For more information about Credit Solutions and its debt management program visit http www.creditsolutions.com . SOURCE Credit Solutions Credit Solutions Bronwen Walsh presscreditsolutions.com Copyright Business Wire Top stories PM today U.S. stocks finish solidly higher after Election Day rally minutes ago Obama headed toward victory in Pennsylvania PM today Early results bode well for congressional Democrats Most Popular READ E MAILED EDITOR S PICK U.S. stocks finish solidly higher after Election Day rally survival tips for the next four years if your candidate loses How to Obama proof your portfolio Obama stakes out to lead in several states U.S. stocks poised for opening Election Day rise General Electric orders China made jetliners Dollar yen fall vs. rivals as risk appetite returns What to look for once the votes are counted Gold gains more than as dollar weakens Apple iPod chief stepping down company taps IBM veteran survival tips for the next four years if your candidate loses How to Obama proof your portfolio Some on Wall Street want a return to fantasyland Halloween Indicator goes on a buy signal Election bailout bill add urgency to your year end tax planning Updating the checklist for a market recovery BMW posts drop in third quarter profit cuts outlook Supercharged ETFs with leverage slated to list this week General Electric orders China made jetliners U.S. stocks finish solidly higher after Election Day rally U.S. stocks finish solidly higher after Election Day rally Obama headed toward victory in Pennsylvania Early results bode well for congressional Democrats Yahoo has little remaining upside in Google deal analysts say Get the Latest MarketWatch News PARTNER CENTER Site Index Topics Archive Help Feedback Media Archive Premium Products Mobile RSS Podcasts Company Info Advertising Media Kit DJ Client Solutions The Wall Street Journal Digital Network WSJ.com Barron s Online BigCharts Virtual Stock Exchange All Things Digital MarketWatch Community RealEstateJournal.com Financial News Online WSJ.com Small Business Copyright MarketWatch Inc. All rights reserved. By using this site you agree to the Terms of Service and Privacy Policy . Credit Solutions Reaffirms Its Commitment To Debt Management s Leading Industry Association MarketWatch Intraday data provided by Interactive Data Real Time Services a division of Interactive Data Corp. and subject to terms of use . Historical and current end of day data provided by Interactive Data Pricing and Reference Data . More information on NASDAQ traded symbols and their current financial status. Intraday data delayed minutes for Nasdaq and minutes for other exchanges. Dow Jones Indexes SM from Dow Jones Company Inc. SEHK intraday data is provided by Comstock and is at least minutes delayed. All quotes are in local exchange time. Real time last sale data provided by NASDAQ. United Local Colleges NFL Arts Living Style Movies Travel Fashion Beauty Horoscopes Pets Television Books Home Garden Comics Entertainment News Food Dining Museums Theater Dance Crosswords Going Out Guide Find Restaurants Visitors Guide Find Movies Best Bets Find Bars Clubs Go Out List Find Local Events Going Out Gurus Jobs Find a Job Post a Job Get Expert Advice Employer Login Cars Buy a Car Sell a Car Experts Advice Dealer Specials Coupons Real Estate Buy a Home Sell a Home Property Values Commercial Properties Rentals Find a Rental Rent Your Place Shopping Shop New Deals Discounts Shopper Blog Shop Used Sell Your Stuff Pets SEARCH washingtonpost.com Web Search Archives washingtonpost.com Business Wires News Alert House Majority Leader Tom DeLay Indicted MARKET UPDATES Market Indices Most Actives Winners Losers Upgrades Downgrades Currencies Economic Calendar Earnings Calendar Your Portfolio Live Q PM WASHINGTON The former chief risk officer at investment bank Bear Stearns Cos. which nearly collapsed in March is now a senior official of the Federal Reserve division that supervises U.S. banks. Michael Alix who worked at Bear Stearns for years and was its senior risk manager since was named a senior vice president in the bank supervision group of the Federal Reserve Bank of New York according to an announcement by the Fed. The appointment is apt to raise questions because of the key role Alix played at Bear Stearns and given the Federal Reserve s role in Bear Stearns sale to JPMorgan Chase Co. after its breathtaking slide. In his new job at the central bank Alix will help oversee the financial safety and soundness of banks which are inspected by Federal Reserve examiners. That s incredible said James Cox a Duke University law professor and securities law expert. This is not reassuring. . What is there in this person s experience and skill package that qualifies him for the Fed position Cox and another expert said the selection of Alix might have made sense if he had sounded the alarm over Bear Stearns deteriorating financial situation. We don t know what his role was within the investment bank said Charles Elson a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware. On the face of it the appointment may raise an eyebrow he said. New York Fed spokesman Andrew Williams declined to comment Tuesday. In March with Bear Stearns on the brink of bankruptcy the Federal Reserve and Treasury Secretary Henry Paulson with the involvement of Chairman Ben Bernanke and New York Fed President Timothy Geithner orchestrated a buyout of Bear Stearns by JPMorgan. The deal was forged with a billion federal backstop from the Fed acting as central bank Federal prosecutors have been investigating the conduct of Bear Stearns managers before its blowup amid the collapse of the subprime mortgage market. Prosecutors have said they expect to bring additional criminal charges against two former Bear Stearns hedge fund managers who were accused last summer of lying to investors. The eventual implosion of the defendants hedge funds cost investors . billion and began a domino effect that pushed Bear Stearns itself to the brink. Alix who was appointed by the New York Fed s board officially assumed the senior vice president position Monday the announcement said. He will be a senior adviser to William Rutledge the executive vice president of the bank supervision division. Alix s appointment was first reported Tuesday by blogger Scott Rothbart. Before becoming Bear Stearns chief risk officer in Alix was the bank s global head of credit risk management from . Before that he was credit officer and vice president at Merrill Lynch Co. In late September the Securities and Exchange Commission ended a program of voluntary oversight for Wall Street investment banks that the SEC chairman said had not worked. Under the program the SEC had inspected the five biggest Wall Street banks Bear Stearns Goldman Sachs Group Inc. Lehman Brothers Holdings Inc. Merrill Lynch and Morgan Stanley. As the credit crisis deepened this fall Lehman Brothers buckled under bad mortgage debt and made the biggest bankruptcy filing in U.S. history. Merrill Lynch agreed to sell itself to Bank of America Corp. That left only two independent investment banks standing on Wall Street Goldman Sachs and Morgan Stanley. And both won approval from the Fed to change their status to bank holding companies in order to stay in business. The regulatory shift allowed the two firms to create commercial banks that can take deposits thereby bolstering their resources. More on washingtonpost.com More Business News washingtonpost.com placeholder Related Topics Web Content Web Wide News Alerts MyWebpost Get The Post s take on whatever you re reading anywhere on the Web. Sign Up Learn More From Our Partners Resources for anyone who runs a small business or wants to start one. Specter of Bankruptcy Haunts Manufacturing Sector Three Steps to Getting Funded by Investors Riding High on Customer Service Starting a Business Small Business on the Net Full Coverage Top Most Popular on washingtonpost.com More in Business Small Business Post.com s Sharon McLoone on the ins and outs of starting owning and managing your own business. Local Companies Post editors and writers keep you informed about the region s business community. Government Inc. The Post s Robert O Harrow Jr. shines a light on the good bad and sometimes unsettling world of federal contracting. The Associated Press Top Most Popular on washingtonpost.com Featured Advertiser Links Lawyers Mesothelioma Failed Cochlear Implants Asbestos Lawyers Lung Cancer Asbestosis Tradesmen Cool gadgets hot deals. Visit CircuitCity.com today ID theft is happening everywhere. Get Protected Earn . APY at ING DIRECT. No Fees and No Minimums. Start making real money with small business advice Tips from small business experts make more now FREE video tips from top small business experts Watch Voices on Leadership Sponsored by SAP Do You Own Vanguard s Worst Funds Secrets Your Credit Card Company Won t Tell You Take this opportunity to secure your money. dell ran Math.floor Math.random document.write News Politics Opinions Local Sports Arts Living Going Out Guide Jobs Cars Real Estate Rentals Shopping SEARCH washingtonpost.com Web Search Archives washingtonpost.com About Us Work for Us Advertisers Site Map Search Terms Topics Index mywashingtonpost.com Mobile RSS Widgets The Washington Post Subscribe Subscriber Services Advertisers PostPoints Electronic Edition Online Photo Store The Washington Post Store About The Post National Weekly The Washington Post Company Information and Other Post Co. Websites Copyright The Washington Post Company User Agreement and Privacy Policy Rights and Permissions Help Contact Us
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