Investment Banking

France's Societe Generale USA and Bannon & Co., a boutique investment banking firm, are forming Societe Generale Bannon, aimed at media, entertainment and communications investment banking. Bannon is headed by former Goldman Sachs executives Stephen K. Bannon and Scot K. Vorse. Societe Generale is one of the world's largest banks.

Calls for reforming Wall Street pay packages reverberated across Washington and the financial district following the disclosure that 50 Lehman Bros. employees were awarded nearly $700 million in the year before the investment bank collapsed. Lawmakers and other experts said disclosure at major banks and other financial institutions should be beefed up significantly, in part to spotlight potential risks that employees may be taking in their pursuit of super-sized paychecks. The Times reported Friday that dozens of lesser-known traders and others at Lehman were allotted pay ranging from $8.2 million to $51.3 million in 2007, including one person who earned more than the chief executive and 42 people who were awarded at least $10 million.

Roaring merger activity and resilient trading revenue fueled strong growth in fourth-quarter earnings for the biggest U.S. investment banks, capping what may be a record year for Wall Street. Starting this week, four of the largest securities firms will report results for the quarter ended Nov. 30. Overall equities trading rebounded after a weak September, merger and acquisition activity was strong and fixed-income markets continued to defy skeptics predicting a slump, analysts said.

A bipartisan effort to make it easier for smaller businesses to access investment cash was back on track after clearing the Senate, but not without grave warnings from opponents who insisted it would open the door to a new era of fraud. Senators added a provision that would bolster investor protections on the emerging practice of crowd-funding: soliciting pools of investors online and from social media. The bill passed overwhelmingly, 73 to 26, but broader efforts to amend it had been turned back by GOP-led opposition.

BancAmerica Robertson Stephens & Co. said investment banking chief Misha Petkevich, 49, will leave once BankBoston Corp. completes its purchase of the San Francisco-based firm. In addition, Paul Sherer, 39, head of telecommunications investment banking, said he has not signed a contract to remain and is both talking with Robertson Stephens about a change of assignment and exploring outside prospects.

Accounting firm Ernst & Young stepped into the investment banking arena with a new corporate finance unit, but stopped short of taking aim at Wall Street's biggest names. The firm said that the unit, which will be called Ernst & Young Corporate Finance, will focus on advising on merger deals worth $50 million to $1 billion, rather than on the multibillion-dollar deals handled by companies such as Goldman Sachs Group Inc. and Morgan Stanley.

Techniclone Corp., concerned that its stock may be delisted for failing to meet the $1-per-share minimum requirement on the Nasdaq SmallCap market, said it hired an investment banking firm. The firm will help the company seek financing alternatives, potential partnerships and other arrangements aimed at raising its stock price. Ironically, the company's stock closed at $1 a share Thursday for the first time since Jan. 30. The shares were up 28 cents for the day.

Franklin Telecom in Westlake Village announced that its subsidiary, FNet Corp., has selected Sutro & Co. to handle its investment banking. "Our goal of deploying an Internet protocol telephony network will be greatly enhanced by the addition of a quality investment bank such as Sutro & Co.," said Thomas Russell, FTEL's chief financial officer. Sutro is the oldest investment bank in the western United States, and the telecommunications industry is a growing focus of its activities.

Morgan Stanley Dean Witter (MWD) and Goldman Sachs Group (GS), two of the biggest U.S. investment banks, said fiscal fourth-quarter earnings fell as revenue from trading and investment banking declined amid sliding equity markets. Morgan Stanley's quarterly net income fell to $1.21 billion, or $1.06 a share, from a record $1.63 billion, or $1.42 per share, last year. The results fell short of First Call/Thomson Financial's average estimate of $1.29 a share.

Thomas Weisel, former head of NationsBanc Montgomery Securities, opened a new investment bank to focus on such industries as technology, media and health care. Weisel, 57, said he hired 90 people, including 35 partners, to join Thomas Weisel Partners. About half of the staff is from BankAmerica Corp.'s investment banking arm, NationsBanc Montgomery, from which Weisel resigned in September. His firm has raised about $65 million in capital, Weisel said.

It was a tense negotiation. Fox Sports and ESPN were paying about $54 million a year for the TV rights to Pac-12 Conference games. The Pac-12 guys wanted five times that. And a 12-year commitment. The networks were so taken aback that a top executive sarcastically asked if the Pac-12 was smoking something, according to people who witnessed the exchange but spoke on condition of anonymity because of the sensitive nature of the deal. But in the end, the two sides agreed to the biggest TV rights contract in college sports history — a 12-year, $3-billion deal, which works out to a per-year average of $250 million.

Wells Fargo & Co. reported fourth-quarter profit rose 20%, fueled by strong returns from the San Francisco bank's mortgage business. The bank said robust loan growth from consumers and businesses helped it top Wall Street projections. Profit rose to $4.1 billion, or 73 cents a share, on $20.6 billion of revenue. The results demonstrate that Wells Fargo is able to grow its loan portfolio and overall revenue despite the sluggish economy and continued global financial turmoil.

Lehman Bros. Holdings Corp., now just the odds and ends of the global financial behemoth that collapsed in September 2008, received court approval Tuesday to exit bankruptcy early next year. Lehman may now wind down its remaining operations, U.S. Bankruptcy Judge James Peck said at a hearing in New York. Once a mammoth investment bank and brokerage, Lehman is now a collection of assets including real estate, private equity and banking investments. Peck, who has spent more than three years overseeing the bankruptcy, choked up as he looked back on the largest ever bankruptcy, one that accelerated the global financial crisis and eroded confidence in markets worldwide.

Goldman Sachs' image as masters of the universe took a blow after the bank posted a quarterly loss for only the second time since going public. The investment banking giant announced Tuesday that it lost $393 million, or 84 cents a share, in the three months ended Sept. 30. During the same quarter last year the firm had a profit of $1.9 billion, or $2.98 a share. Goldman was expected to report a loss, but the numbers were worse than analysts had predicted. Rather than being dragged down by any one division, the bank struggled across its business lines because of unpredictable markets and broader economic uncertainty — factors that are weighing on all Wall Street banks.

Question: The situation at Lloyds Banking Group seems dismal. Is there hope for the future? Answer: This is the case of a fire-sale bargain gone bad. This London financial services company, 41% owned by the British government, boasted nearly one-third of the mortgage market in Britain after its 2008 purchase of beleaguered rival HBOS. But the seemingly low price paid at the height of the financial debacle has proved costly because of significant losses attributed to prior practices of the acquired company.

AOL Inc., which is struggling to halt a sales slide, said Thursday that it retained investment bank Allen & Co. and law firm Wachtell, Lipton, Rosen & Katz as advisors. Its stock jumped. Graham James, a spokesman for New York-based AOL, confirmed the hiring of the firms but declined to comment further. AOL has posted losses of almost $800 million in less than two years as a stand-alone company as it has struggled to make money from online advertising and its profitable dial-up Internet business has become increasingly obsolete.

Quintek Technologies Inc. in Camarillo has entered into an agreement with Travis Morgan Securities Inc., a division of National Capital Cos. Inc., for investment banking and retail brokerage services. National Capital was founded in 1992 to provide investment banking, brokerage trading and financing services, primarily to rapidly growing small-cap companies.

Wells Fargo & Co. is expanding its investment banking business by opening an office in Chicago and hiring bankers in New York and in the Midwest. The San Francisco-based securities arm of the bank named Steve Moss a managing director to head the Chicago office. Moss previously led a 12-member team at Merrill Lynch & Co. that worked with computer, imaging and other technology companies.

Question: I am a disgruntled Bank of America Corp. shareholder. Is there reason to expect improved results? Answer: The question for shareholders is how quickly the company can put mistakes behind it, significantly improve its controls and use its enormous size to greater advantage. It became the biggest U.S. bank after acquisitions of Countrywide Financial and Merrill Lynch, but in coming months it's likely to slip into second place in assets, behind JPMorgan Chase & Co. Sluggishness stems from bad loans from acquisitions and from lax practices in the past.

The Beverly Hills-based private-equity firm that owns the San Diego Union-Tribune has hired a New York investment bank to explore options for the newspaper, a move often considered a first step for an owner seeking to sell. Platinum Equity, which acquired the paper two years ago from the Copley family, hired Evercore Partners to "evaluate strategic alternatives," said Mark Barnhill, a principal at Platinum. "We manage a large and complex investment portfolio, and routinely consider a range of options that will best position our companies for the future," Barnhill said in a statement.