Investment Banking

Bank of America Corp. quadrupled its first-quarter profit, reducing expenses and loan losses and reporting better brokerage and investment banking results, but continued to be bogged down by its mortgage operations, disappointing investors. Trying to regain forward momentum after two years of downsizing, the nation's second-largest bank said Wednesday its revenue fell 8% from last year to $23.9 billion. That was better than the $23.4 billion Wall Street had expected, in contrast with rival megabanks Wells Fargo & Co. and JPMorgan & Co., which missed analysts' estimates for revenue when they reported results last week.

Bank of America Corp. quadrupled its first-quarter profit, reducing expenses and loan losses and reporting better brokerage and investment banking results, but continued to be bogged down by its mortgage operations, disappointing investors. Trying to regain forward momentum after two years of downsizing, the nation's second-largest bank said Wednesday its revenue fell 8% from last year to $23.9 billion. That was better than the $23.4 billion Wall Street had expected, in contrast with rival megabanks Wells Fargo & Co. and JPMorgan & Co., which missed analysts' estimates for revenue when they reported results last week.

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.

Citigroup Inc.'s first-quarter profit jumped 30% as the giant bank tries to emerge from the shadow of the financial crisis under new Chief Executive Michael Corbat. Citi said Monday it earned $3.8 billion, or $1.23 a share, in the first quarter, up from $2.9 billion, or 95 cents, during the same period a year ago, beating analysts' estimates. The bank's shares gained $1.15, or 2.6%, to $45.93 in early trading on Wall Street. Revenue of $20.5 billion grew 6% from $19.4 billion in the first quarter of last year.

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.

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.

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.

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.

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.

JPMorgan Chase & Co. reported a 33% jump in profit in the first quarter as the nation's largest bank by assets saw the economy and housing market strengthen. The New York-based bank said it earned a record $6.5 billion, or $1.59 a share, for the three-month period ended March 31, up from $4.9 billion, or $1.19 a share, for the same period a year ago. Continued improvement in the housing market led to a 37% jump in mortgage originations, while the bank also saw strong growth in investment banking and asset management.

B. Riley & Co., a Los Angeles investment bank, bought stock research firm Caris & Co. to increase its sales and trading business amid a slowdown in the brokerage industry. B. Riley, founded in 1997, is adding nine analysts, 12 salesmen and four traders in San Francisco, New York, Los Angeles, San Diego and Atlanta, Chairman Bryant Riley said. Darren Caris, who was president of Caris & Co., will run research, sales and trading, the company said in a statement. Small brokerages including ThinkEquity, Rodman & Renshaw and WJB Capital Group Inc. closed this year as institutional investors turned to computerized stock trading.

Sex doesn't always sell, and that's a problem plaguing racy lingerie retailer Frederick's of Hollywood Group Inc. Frederick's of Hollywood introduced Americans to the push-up bra after World War II and pioneered the concept of sexy undergarments. But for the last two decades its skimpy outfits have failed to entice shoppers to its stores or to its mail-order business. Now the company is taking come-ons from potential buyers. With competition from retailers such as Victoria's Secret, four straight years of financial losses and shares trading around 30 cents, Frederick's has hired investment bank Allen & Co. to explore strategic moves, "including but not limited to a sale of the company or a business combination," the company announced recently.

"Bring back Glass-Steagall!" That's the cry you hear most often for restoring regulatory stringency to our misbehaving financial sector. The 1933 law, which barred commercial banks from underwriting or investing in stocks - in effect, from owning investment banks - was repealed in 1999, and reinstating it is a good proposal for several reasons. But what the 2008 financial crash and misadventures such as JPMorgan Chase's multibillion-dollar derivatives loss tell us is that reinstatement of the old law isn't enough.

Ina Drew, the JPMorgan Chase & Co. executive who headed the bank's unit responsible for a stunning $2 billion trading loss, will retire, the bank announced. Chief Investment Officer Drew will step down after more than 30 years with the bank, though the bank's announcement did not specify when she would depart. A source familiar with the situation told The Times on Sunday that Drew had offered repeatedly to resign and that her resignation would likely be accepted this week.

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.

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.

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.

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.

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.