New York Fed Knew of Libor Problems in 2008; PFGBest Funds Missing in Mini-MF Global: Roundup

Libor-ated: Politicians on both sides of the Atlantic are asking why regulators didn’t stop the rate-rigging sooner. The New York Fed “received occasional anecdotal reports from Barclays of problems with Libor” as early as the spring of 2008, according to a statement, and shared reports with British authorities. “I was not aware of allegations of lawbreaking until the last few weeks,” Bank of England deputy governor Paul Tucker said during Parliament hearings yesterday. (We suppose he meant formal allegations, because otherwise, was he living under a rock?) Barclays chairman Marcus Agius, who will step down once the bank names a replacement for former CEO Bob Diamond, is an old-school banker. The firm, meanwhile, will let Mr. Diamond walk away with $3.1 million in spending money, about one-tenth of the exit pay to which he was entitled. The Libor scandal may scare companies away from syndicated loans.

A survey of 500 U.S. and U.K. banking executives found that 24 percent of respondents believe that finance pros must engage in illegal or unethical behavior to be successful.

Attempted suicide halts accounts: Futures broker PFGBest froze accounts yesterday after the firm’s owner attempted suicide and the National Futures Association discovered $220 million in missing client funds. The firm is one-tenth the size of MF Global, the broker-dealer that lost track of segregated client funds amid a disastrous bet on European sovereign debt, but the fallout from PFGBest may be greater, says Reuters, as investors lose confidence in the futures business. In February, PFGBest was fined $700,000 for failing to notice a $174 million Forex-trading Ponzi scheme run by a client.

What Duke did: North Carolina regulators will hear from Duke Energy CEO Jim Rogers today, after the merry-go-round in the gas and electric company’s executive suite saw Mr. Rogers step down as boss one day and back into the top position on the next. State officials have the power to rescind their approval for the merger between Duke and Progress Energy that lies at the heart of the matter, though The Times says that Draconian measure appears unlikely; regulators may also impose financial penalties or specify additional conditions for winning approval of the merger.

Spain aid: European governments will make 100 billion euros available to Spain to shore up the country’s enfeebled banking system, with the first 30 billion euros callable by the end of the month.

Job watch: European investment bankers may be in for another wave of job cuts, with UBS and Credit Suisse among the most vulnerable, Bloomberg reports.

Land grab slows: Chesapeake Energy’s governance problems may have ended a frenzied period of land acquisition in the U.S. energy business.

Gloves off: As the battle between Carl Icahn and Forest Laboratories turns personal, Forest CEO Howard Solomon took a swipe at Mr. Icahn’s son: “I note that you chose to elevate your son Brett – following his ‘movie making’ career – not only to executive positions within your organization, but also to positions of responsibility to shareholders as a director of public companies,” Solomon wrote in a letter to Mr. Icahn.

Now you tell us: A former head of structured finance at Standard & Poor’s is just now realizing that credit ratings are no longer trusted by investors.

Long reads: The Consumer Financial Protection Bureau proposed new rules for simpler mortgage documents; the proposal is 1,000 pages long. New York Fed Knew of Libor Problems in 2008; PFGBest Funds Missing in Mini-MF Global: Roundup