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Shareholders re-elect Wells Fargo directors, some just barely

Thu, 27 Apr 2017 18:22:47 UT

Wells Fargo shareholders re-elected all 15 of the company’s directors at the company’s annual meeting in Florida Tuesday, despite calls that some should be jettisoned for not acting sooner to prevent the fraudulent-account scandal that has engulfed the San Francisco bank since September. The individual directors received votes in favor ranging from 53 to 99 percent. A vote as low as 53 percent is highly unusual in the corporate world, where directors are routinely re-elected with percentages in the high 90s. In 2016, only 44 directors at the 3,000 U.S. companies in the Russell 3000 index failed to win a majority vote, according to the Council of Institutional Investors. Both are members of the board’s corporate responsibility committee, which oversees political, environmental and consumer lending risks, as well as customer service and complaints. Peña is a former U.S. secretary of the energy and transportation departments. The overall vote is “a significant show of opposition to board members,” said Greg Waters, a research director with Glass Lewis, a San Francisco firm that advises large shareholders how to vote in corporate elections. After the vote was announced, Sanger said that stockholders had sent the board “a message of clear dissatisfaction.” At one point during the three-hour meeting, Sanger called a recess so that a shareholder could be removed. The shareholder, Bruce Marks, CEO of the nonprofit Neighborhood Assistance Corporation of America, would not stop demanding to hear from each individual director about their knowledge of fraudulent account openings. Glass Lewis recommended voting against the four longest-serving members of the corporate responsibility committee. Institutional Shareholder Services, another proxy advisory firm, recommended voting against 12 directors for “failure to provide sufficient timely risk oversight.” “I am surprised that everybody received a majority vote,” said Jason Schloetzer, an associate business professor at Georgetown University. Schloetzer said receiving a low percentage of the vote could have “a negative spillover effect” for Wells Fargo directors serving on other corporate boards. The state’s two largest public pension funds — the California Public Employees’ Retirement System and the California State Teachers’ Retirement System — both voted against the company’s nine longest-tenured directors for oversight failures. Berkshire Hathaway, the bank’s largest shareholder with a roughly 10 percent stake, said it was voting in favor of the entire slate of directors. The board formed a committee to launch an in-depth investigation of the unauthorized account openings on Sept. 25. A report on the investigation issued April 10 found “mass terminations” of employees for sales practice violations dating back to “at least 2002.” Wells Fargo said last week it would increase the size of a preliminary class-action settlement to $142 million to cover claims arising from fraudulent accounts dating back to 2002. Based on preliminary results, here is the approximate percentage of shareholder votes cast in favor of each Wells Fargo director at Tuesday’s annual meeting.



CalPERS, CalSTRS to vote against some Wells Fargo directors

Sat, 22 Apr 2017 00:21:52 UT

The state’s two largest public pension systems each said Friday they are voting against nine of Wells Fargo’s 15 directors, all of whom are standing for re-election at the company’s annual meeting in Florida Tuesday. On Sept. 8, in a settlement with regulators, Wells disclosed that about 5,300 employees had been fired since 2011 for opening deposit and credit card accounts that customers probably did not know about or want, allegedly to meet aggressive sales goals. CalPERS and the California State Teachers’ Retirement System are voting against John Baker II, John Chen, Lloyd Dean, Donald James, Cynthia Milligan, Federico Peña, Stephen Sanger, Susan G. Swenson and Enrique Hernandez, Jr. A CalPERS spokesman said it was focusing its “no” votes on directors who had served from 2013 or earlier, because “that is the time frame the primary oversight failures had occurred.” On Wednesday, California Treasurer John Chiang, who is a board member of both retirement systems, issued a press release urging shareholders and to vote against all five directors on Wells Fargo’s corporate responsibility committee, which oversees the bank’s reputational risk and customer service and complaints. Two companies that advise large investors on how to vote in corporate elections have also recommended against some directors for failing to do more to stop the fraud. Last week, Berkshire Hathaway, Wells Fargo’s largest shareholder with a roughly 10 percent stake, said it and was voting its shares in favor of all 15 directors.



Scandal continues to weigh on Wells Fargo earnings

Thu, 13 Apr 2017 22:48:57 UT

Wells Fargo’s first-quarter earnings beat estimates by a few cents per share, but its stock price fell 3.3 percent Thursday on concerns about the direct and indirect costs of the sham-account scandal that has rocked the bank. Wells Fargo earned $5.5 billion, or $1 per share, for the first quarter of 2017, beating expectations by 3 cents per share and roughly matching last year’s first-quarter earnings of $5.5 billion or 99 cents per share. [...] the San Francisco bank responded to a “sales and marketing” scandal by “unveiling a new marketing campaign.” Last week, Institutional Shareholder Services, which advises large investors on how to vote in corporate elections, recommended voting against 12 of Wells Fargo’s 15 directors at the meeting for failing “to provide a timely and sufficient risk oversight process.” The bank’s non-retail operations have fared better than its consumer side, which has suffered since September when the bank disclosed in a $185 million settlement agreement with regulators that it had fired 5,300 employees over several years because they may have opened more than 2 million deposit, credit card and debit card accounts without customers’ knowledge or approval. In a call with analysts Thursday, Wells Fargo CEO Tim Sloan said that retail banking metrics the company has been releasing monthly since October have come off their lows but are “certainly not back to pre-settlement levels.” The company spent about $80 million on legal, compliance and other fees related to the scandal in the first quarter and expects to spend $70 million to $80 million per quarter the rest of the year. On the bright side, the firm’s wealth and investment management business generated a 22 percent increase in income over the past 12 months on a 9 percent increase in client assets, Sinegal said in a note. In an email, the treasurer’s office said, State law requires that a competitive sale of State of California General Obligation bonds be awarded ‘to the bidder whose bid will result in the lowest interest cost on account of those bonds.’ Because Wells Fargo has been buying back stock (reducing its shares outstanding below 5 billion for the first time since 2009), Berkshire’s stake had risen above 10 percent. According to the Federal Reserve, an ownership interest above 10 percent “would materially restrict our commercial activity with Wells Fargo,” Berkshire said in a press release.



Warriors playoff tickets prices same or less than last year

Fri, 7 Apr 2017 22:01:35 UT

Warriors playoff tickets prices same or less than last year The Golden State Warriors are keeping ticket prices for the playoffs that start next weekend the same or less than last year. Season-ticket holders will pay the same as last year for the first three rounds of playoffs and about 14 percent less for the NBA Finals, if the team makes it that far. The cheapest ticket for round one will be $125 this year versus $175 last year, said Brandon Schneider, the team’s senior vice president for business development. To afford playoff games last year, some fans tried to resell tickets to other games at higher prices, but so many people had the same idea that they did not get what they were hoping for. Last year, he sold about half of his playoff tickets to help finance the other half, but had to drop his price because there were so many on the market. In setting ticket prices, the Warriors analyze transactions on Warriors.com, the team’s resale marketplace powered by Ticketmaster.




SF home prices see big drop in January

Wed, 1 Mar 2017 00:47:48 UT

The median price paid for new and existing Bay Area homes and condos that sold in January was $630,000, down 5.3 percent from December and up 1.6 percent from January of last year, according to CoreLogic data released Tuesday. Buyers in San Francisco want to be the first to cook on a stove and the first to use a bathroom, said Gregg Lynn, a real estate agent with Sotheby’s. The city’s condo-building boom can cause distortions in monthly data because developers generally begin selling units long before construction is completed, but sales are not recorded until the building is ready for occupancy and buyers close escrow. [...] the median price for the nine-county region rose a mere 1.6 percent because a higher share of sales occurred in the more affordable inland stretches of the Bay Area. Because they feel the future is so uncertain, “people who can choose not to sell are choosing not to sell,” Lynn said. New construction will add to supply this year, but generally in higher price ranges (except for mandatory affordable housing).




Almost 67,000 polluting VW and Audi diesels returned so far

Wed, 18 Jan 2017 19:17:34 UT

Almost 67,000 of the roughly 470,000 Volkswagen and Audi 2-liter diesel models sold in the United States with emissions-cheating software have been returned to dealers for buybacks or lease terminations, an attorney for the automaker said at a hearing in federal court in San Francisco Wednesday. Under a consumer class-action settlement that will cost VW up to $10 billion, people who own or lease one of the 2-liter TDI models with a so-called defeat device can sell the car back to the manufacturer at the vehicle’s September 2015 trade-in value or terminate their lease without penalty and receive a cash restitution payment ranging from $2,634 to $9,852. U.S. District Court Judge Charles Breyer approved the consumer class action settlement, the largest in U.S. automotive history, on Oct. 25. At a status conference on the settlement Wednesday, Robert Giuffra, an attorney with Sullivan & Cromwell who represents VW, said that about 451,000 cars have been “registered” for the settlement, 383,000 claims have been filed and 160,000 buy-back appointments have been scheduled with dealers. Earlier this month, federal and state environmental regulators approved the first repair, but it only covers about 70,000 so-called generation 3 vehicles from model year 2015.



Stocks defy conventional wisdom, soar on Trump victory

Fri, 11 Nov 2016 16:00:10 UT

When early returns started pointing to a Trump presidential victory Tuesday night, futures contracts on the Dow Jones industrial average plunged as much as 800 points. [...] futures began paring their losses “in the wee hours, when Trump gave a victory speech that was much more conciliatory than people expected,” said Rob Sharps, a portfolio manager with T. Rowe Price. [...] they sold off on Wednesday morning, apparently on concerns that Trump would increase government spending while cutting taxes, which could lead to bigger deficits, higher inflation and higher interest rates. [...] if you look underneath those indexes, “there was really wicked volatility as people repositioned” their portfolios for a Trump presidency, Sharps said. Trump’s vow to increase spending on infrastructure caused a surge in shares of metals, mining, construction and engineering firms. On the flip side, some hospital and health insurance companies were stricken by fears that Trump will carry through on his promise to replace the Affordable Care Act with “something better.” Banking, asset managers and other financial service companies were big winners, apparently on the belief that the Trump administration will relax the Dodd-Frank Act, as well as the Department of Labor’s new fiduciary rule for brokers and other laws and regulations that have weighed on financial institutions. Banking and finance employees and political action committees poured $64.3 million into her campaign and pro-Clinton super PACs — and less than $2 million into Trump’s, according to Politifact. Investors should not read too much into a single day’s action, warned Brad Sorensen, director of sector analysis and market research with Charles Schwab. In an interview with Fox News’ Sean Hannity this spring, Trump claimed that Bezos is using the newspaper for political purposes to save Amazon in terms of taxes and in terms of antitrust. Martin Baron, executive editor of the Washington Post, issued a statement that said, “I can say categorically that I have received no instructions from Jeff Bezos regarding our coverage of the presidential campaign — or, for that matter, any other subject.”



Bay Area rent control measures getting mixed results

Wed, 9 Nov 2016 18:16:29 UT

Measures initiated by citizens to establish rent control programs appeared headed for victory in Richmond and Mountain View but were losing in Alameda, San Mateo and Burlingame. Citizens in the five Bay Area cities placed initiatives on the ballot to protect tenants from spiraling rents and evictions that have resulted from job growth outstripping housing creation. In Alameda and Mountain View, the city councils placed on the ballot less-stringent measures to temper rent increases. The measures, which all needed a simple majority to pass, aimed to bring urban-style rent and vacancy controls to Bay Area suburbs. Like the Burlingame measure, it generally would have limited rent hikes on pre-1995 multifamily buildings to the CPI increase. The initiative would roll back rents on pre-1995 multifamily units to October 2015 levels and generally limit future increases to the CPI increase. Placed on the ballot by the City Council, the measure would continue a city program that requires mediation on rent increases above 5 percent and limits evictions on all rental property.



Prospect of Trump victory roils markets

Wed, 9 Nov 2016 07:18:56 UT

Asian stocks and U.S. stock index futures collapsed Tuesday night as Donald Trump appeared on the verge of winning the presidential race. The Dow rose a total of 444 points on Monday and Tuesday, after FBI Director James Comey said there was no additional evidence in new emails uncovered in an unrelated case that would warrant a prosecution of Hillary Clinton over her use of a private email server for U.S. State Department business. Contributions from people or political action committees in the banking and finance industry to the Clinton campaign and pro-Clinton super PACs totaled $64.3 million. With Trump, you don’t know what to expect today or next week or really until his transition leader, Chris Christie, starts making appointments. Is Newt Gingrich going to be Treasury Secretary? CNBC reported that plunges of more than 5 percent in S&P 500 and Nasdaq 100 futures Tuesday night triggered “limit down” measures on the Chicago Mercantile Exchange, which prevent those contracts from trading above but not below those levels until regular trading opens on Wednesday.



Nation’s largest brokerage firm acquires SF’s Climb Real Estate

Wed, 31 Aug 2016 23:12:12 UT

Climb Real Estate, a boutique San Francisco brokerage focused on city-dwelling Millennials, has been acquired by NRT LLC, the nation’s largest residential brokerage, the companies announced Wednesday. NRT is the parent of Coldwell Banker, Sotheby’s International Realty and ZipRealty and a subsidiary of Realogy, a publicly traded real estate conglomerate. NRT has pursued the same approach with other regional firms it acquired including the Corcoran Group in New York City and Laura McCarthy Real Estate in St. Louis, said Bruce Zipf, NRT’s president and chief executive. Climb tries hard to appeal to Millennials by focusing on mobile technology and social media. “I believe what this represents is a more traditional type platform coming together with a more innovative, unique-type platform” and providing the financial capital to expand Climb in the Bay Area, Zipf said. Greg Macres, NRT’s executive vice president for the western region, said, We want our agents to be more mobile (and) stretch the boundaries of technology.



Nonbank lenders surging in California mortgage market

Tue, 12 Jul 2016 23:42:12 UT

Nonbank lenders surging in California mortgage market The number of home loans originated in California by nonbank lenders soared last year to 537,757, up 47.3 percent from 2014, according to a report issued Monday by the California Department of Business Oversight. The principal amount of mortgages originated in the state by nonbank lenders last year grew 56.7 percent, to $179.3 billion. Nationwide, the principal amount of nonbank mortgage originations grew only 43.9 percent between 2014 and 2015, according to Guy Cecala, publisher of Inside Mortgage Finance. The California department regulates nonbank lenders, meaning those that do not accept insured deposits to make loans, like traditional banks do. The department could not say how much of the growth in nonbank mortgage lending came from an increase in the underlying loan market and how much from nonbanks taking business from banks. Nationwide, however, nonbanks have been taking big chunks of market share from banks. In the first quarter of 2016, the nonbank share of U.S. originations was 48.3 percent. “Banks are pulling back from certain types of mortgage lending due to settlements (with government agencies) and enforcement actions,” Cecala said. Banks are still dominant in jumbos, but it’s only 20 percent of the market. The other 80 percent, they are reducing, and that is giving an opening and the nonbanks are stepping in to fill that void, Cecala said. Nonbanks typically borrow money from investors or banks to make loans, then quickly sell these loans to Fannie Mae, Freddie Mac, banks and other buyers, so they can repay their loans and start the process over again. Banks also sell loans but hold onto some of them. Many banks and nonbanks continue to service loans they sell for a fee. Servicers collect payments, forward them to the new loan owner and take action when borrowers fall behind. “Mortgage lending has pretty thin profit margins,” said Keith Gumbinger, a vice president with mortgage information service HSH Associates. Nationwide, San Francisco’s Wells Fargo was still the nation’s largest mortgage lender in the first quarter of this year, with 11.4 percent of the market, but that was down from 28.2 percent in the first quarter of 2012. Chase was number two in the first quarter, followed by Quicken Loans, the largest nonbank lender nationwide, according to Inside Mortgage Finance. Quicken Loans was also the largest nonbank lender in California last year, according to the department. Kathleen Pender is a San Francisco Chronicle columnist. Top nonbank lenders California mortgages by nonbank lenders in 2015 Quicken Loans Pinnacle Capital Mortgage United Shore Financial Services California Department of Business Oversight



What VW drivers should know about the giant emissions settlement

Wed, 29 Jun 2016 00:17:15 UT

What VW drivers should know about the giant emissions settlement Under the largest automotive class-action settlement in U.S. history, people who own or lease one of about 475,000 Volkswagen and Audi 2.0-liter diesel models designed to cheat emissions tests could sell their car back to the manufacturer or terminate their lease without penalty and receive cash restitution ranging from $2,634 to $9,852. Details of the settlement, which still requires approval by the U.S. District Court in San Francisco, were disclosed Tuesday by plaintiff’s attorneys and federal and state regulators. Under related settlements with the U.S. Environmental Protection Agency and California Air Resources Board, Volkswagen will pay $2.7 billion to support environmental programs and reduce emissions nationwide, including $380 million for programs in California. VW promoted its TDI models as “clean diesels,” but secretly installed devices and software that allowed them to pass emissions tests while spewing illegal levels of nitrogen oxide pollutants. The state air resources board “uncovered the fraud and figure out how it worked,” Chair Mary D. Nichols said in a press conference. The nearly $15 billion agreement is one of the swiftest and largest settlements of a complex class-action case, said San Francisco attorney Elizabeth Cabraser, the court-appointed lead counsel for VW owners. “I hope it will be a model for future resolutions in which private plaintiffs and government entities can work together to forge resolutions that, like this one, as a whole are greater than the sum of its parts,” she said. Owners who remain in the class will have the option of selling these cars back to the company or obtaining an approved emissions fix. [...] of whether they choose a repair or buyback, they also will get a cash payment equal to 20 percent of the vehicle’s value, plus $2,986.73 (subject to a minimum of $5,100). If you combine the trade-in and cash payments, total compensation for a buyback will range from $12,475 for a basic 2009 VW Jetta Sedan TDI to $44,176 for a loaded Audi A3 TDI Prestige, according to a court document posted at http://1.usa.gov/298cKRO. If an owner sold one of the tainted cars after Sept. 18, the current owner can get the buyback or repair and roughly half of the cash payment. The previous owner will get the rest of the cash payment, but must identify himself or herself within 45 days of preliminary approval, which could happen as early as July 26. People who sell an eligible car after June 28 (except back to the company) cannot participate in the settlement. People who had leased an eligible car with VW Credit as of Sept. 15 and remain in the class can terminate the lease without penalty or get it fixed. “I’m heartbroken that the fabulous, efficient, fun-to-drive, environmentally friendly car I thought I bought turns out to be a fraud,” said David Jones, a Peninsula resident who owns a 2011 Jetta Sportwagen TDI. The settlement does not cover about 100,000 late-model TDIs made by Audi and Porsche that also had emissions tampering. If preliminary approval is granted by the court, eligible owners can go www.vwcourtsettlement.com and enter their Vehicle Identification Number to see what their payment would be. In general, “any settlement you get for something other than personal physical injury or sickness is taxable,” said Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting. Theoretically, owners who sold their cars back would not owe tax if the combined payment (trade-in plus cash payment) was less than their basis, which is generally what they paid for the car (or the depreciated basis if they used it in a business).



Can Lending Club survive federal probe, investor skepticism?

Tue, 17 May 2016 23:06:25 UT

Can Lending Club survive federal probe, investor skepticism? Embattled Lending Club disclosed late Monday that it has received a grand jury subpoena from the Department of Justice after it ousted Renaud Laplanche as chairman and CEO on May 9 over internal control issues. The San Francisco company, which operates an online marketplace for consumer loans, also disclosed that a number of investors that, in the aggregate, have contributed a significant amount of funding on the platform, have paused their investments. ... The news, included in a quarterly report filed with the Securities and Exchange Commission, calls into question whether Lending Club can regain the investor trust it needs to survive. “I think survival is very much a question mark at this point,” said Julianna Balicka, an analyst with Keefe, Bruyette & Woods. [...] they have a clear strategy to regain investor confidence,” she said, “it really isn’t possible for us to know how this will play out. On May 9, Lending Club said Laplanche resigned after a board review found that the company sold $22 million in loans to an unnamed institutional investor “in contravention of the investor’s express instructions.” Separately, the company said Laplanche failed to fully inform the board that he had a personal interest in an outside fund while Lending Club was considering an investment in the same fund. Hedge funds might be willing to take the place of departing investors, but they are likely to want higher rates, said Evan Singer, president of SmartBiz Loans, a San Francisco company that helps banks originate Small Business Administration loans through its online marketplace. Lending Club said, We are not surprised to receive a Department of Justice subpoena in light of our public disclosures and the focus of the department on financial services.




‘Million Dollar Listing San Francisco’ won’t return for 2nd season

Thu, 28 Apr 2016 00:22:49 UT

Bravo has confirmed it won’t renew its reality TV show “Million Dollar Listing San Francisco” for a second season. The show followed the professional and personal lives of three Bay Area real estate agents. A Bravo spokeswoman confirmed that the cable network “decided not to move forward with a second season” but wouldn’t say why. The show’s other two stars, Justin Fichelson and Andrew Greenwell, said Bravo’s casting company spent about four months looking for another cast member for season two but did not sign one. Los Angeles has a plethora of people involved in the entertainment industry looking to be on TV in the first place, Fichelson said. On the New York version, one cast member had been on a soap opera and another had been a filmmaker, he said. San Francisco real estate agent Gregg Lynn said he interviewed for the show “three years before it ever got here” and knows people on the New York production team. Eighty percent of it was fabricated — the listings were not really on the market, the buyers were not really buyers. Greenwell believes the show could come back at some time, and pointed out that the New York version went a year between its first and second seasons.



California’s new Secure Choice retirement plan idea gets boost

Tue, 29 Mar 2016 00:20:04 UT

California’s plan to set up a mandatory, state-sponsored retirement plan for private-sector workers whose employers don’t offer one moved a step closer to reality Monday. Kevin De León, D.-Los Angeles, president pro tempore of the state senate, said he will put the board’s recommendation into a bill that he hopes will get to the governor’s desk by July. The board recommended that the default contribution rate would start at 2 to 5 percent of pay, said Grant Boyken, California deputy treasurer. The board hired New York consulting firm Overture Financial to conduct a financial feasibility study, market analysis and design such a program. In this complex option, each participant would have an account that would be credited based on the performance of an underlying portfolio of securities managed by a state authority. The Investment Company Institute, which represents mutual funds, sent a 30-page letter to the board on Thursday raising questions about the plan that it said warranted further attention. The Secure Choice plan could only go forward if it would not be treated an employee benefit plan under the federal Employee Retirement Income Security Act. To streamline such plans, the U.S. Labor Department in November issued a proposal that said state-sponsored auto-enrollment IRAs would not fall under that act, as long as employees could opt out and employers “are minimally involved.” Reid said California is also “trying to get exemptions from having to register as a mutual fund” with the Securities and Exchange Commission. Even if Secure Choice charges participants a 1 percent annual fee, the plan will run at a deficit for much longer than the Overture report predicted even under its most pessimistic participation and contribution-rate scenarios, Reid said.