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Bustle Owner Bryan Goldberg Wins Bankruptcy Auction for Gawker.com

A holding company owned by Bryan Goldberg, the founder of the websites Bleacher Report and Bustle, has been picked as the successful bidder for the assets of former media gossip site Gawker, WSJ Pro Bankruptcy reported. An auction for Gawker was held yesterday in the Manhattan offices of Ropes & Gray LLP, the law firm that has represented Gawker’s former publisher as it has been liquidating in bankruptcy over the last two years. Goldberg placed a high bid of $1.35 million, one of these people said. The assets for sale include the Gawker domain, social media accounts and nearly 200,000 of its published articles. Goldberg, 35 years old, outbid Mineola, N.Y.-based marketing firm Didit Inc., whose $1.13 million offer had led the bidding for the blog, these people said. He said that “there are no firm plans in place at the moment” for Gawker going forward and said he didn’t expect that to change before the end of the year.

JPMorgan Whistleblower Gets Record $30 Million From CFTC

The Commodity Futures Trading Commission has approved a record $30 million whistleblower award, it said yesterday, Bloomberg News reported. The award was the result of information that helped the agency sanction JPMorgan Chase & Co. for failing to properly inform some wealthy clients about conflicts of interest behind its investment recommendations, according to an attorney involved in the matter. The CFTC made the award public on Thursday without naming individuals or the bank. According to the attorney, Edward Siedle, it was the culmination of a December 2015 settlement in which JPMorgan agreed to pay regulators a total of $367 million for failing to disclose that it was steering asset-management clients into investments that would be especially profitable to the bank. That included $100 million that went to the CFTC — $40 million in penalties and $60 million in disgorgement. The bank agreed to pay an additional $267 million at the time to the Securities and Exchange Commission, where a pair of preliminary whistleblower awards totaling $61 million were authorized a year ago but still await final approval. 

Some Investors Want New Abraaj Review, Potentially Delaying Key Sale

Some investors in funds managed by Dubai-based Abraaj want to block the sale of assets to Colony Capital pending a review of Abraaj’s handling of funds, according to a report seen by Reuters, potentially delaying a deal key to the survival of the investment management business. U.S.-based Colony offered last month to buy the fund management unit that runs Abraaj’s Latin America, Sub-Saharan Africa, North Africa and Turkey funds after months of turmoil at Abraaj triggered by a dispute with investors over the use of their money in a $1 billion healthcare fund. Abraaj denies any wrongdoing, but the row has weighed heavily on the Middle East and Africa’s largest private equity firm, which filed for provisional liquidation in the Cayman Islands last month. A review of Abraaj’s handling of investor money is likely to delay the Colony transaction, according to a report by Abraaj Holdings’ provisional liquidators, PwC.

A Decade on, Pre-Crisis Mortgages Linger for Big Banks, Homeowners

A decade on big U.S. banks are still running down and selling off crisis-era mortgages, a process executives point to as weighing on loan growth, Reuters reported. Eager to see a turning point in loan books, analysts count these portfolios as one factor, along with home equity loan runoff and new mortgage demand, to watch for when deciphering the true loan growth picture as U.S. second-quarter bank earnings start today. Wells Fargo & Co and Bank of America Corp executives have flagged portfolios from prior to the 2008-09 crisis era where banks are no longer originating similar new products when they are asked to predict a turning point in consumer loans. “These are portfolios of a bygone era that were very, very painful for the banks,” said Gerard Cassidy, bank analyst with RBC Capital Markets. “They are not plain vanilla portfolios, which means they are more costly to manage. It may just not be worth the headache.” Analysts have said higher loan growth is critical to driving bank’s stock prices, but they anticipate only a modest acceleration year over year, driven primarily by commercial and industrial loans, not residential. Bank of America at the end of 2017 had nearly $11 billion in credit-impaired mortgages left from buying Countrywide Financial, less than one-third of what it held at the end of 2009. JPMorgan Chase & Co still owns roughly $30.5 billion-worth of the $89 billion in bad loans took on from Washington Mutual in 2008.

Mnuchin Rebukes Fannie and Freddie, Aims for Reform Next Year

Treasury Secretary Steven Mnuchin told Congress yesterday that he now aims to reform the bailed-out government-sponsored enterprises next Congress, and delivered a message to the companies’ government caretaker to stop allowing them to expand their missions, the Washington Examiner reported. “We need GSE reform,” Mnuchin said yesterday during testimony before the House Financial Services Committee. “This is something that I am determined, in the next Congress, should be a major focus of ours — hopefully on a bipartisan basis. But we can’t just leave these things sitting the way they are as they have been.” Mnuchin, a former banker involved in housing finance, came into office pledging to end the government’s conservatorship of Fannie and Freddie, ongoing since the financial crisis in 2008. But Congress barely got going on reform. Mnuchin said yesterday that he would consider administrative options if Congress does not act next session.

Fed Chair Jerome Powell Says Trade Policies Complicate Economic Outlook

Federal Reserve Chairman Jerome Powell said a strong economy should allow the central bank to keep raising interest rates gradually and it was premature to judge how recent trade policy actions could alter those plans, the Wall Street Journal reported. Powell pointed to considerable uncertainty around the range of possible economic effects of recent trade measures and how they might influence the Fed’s plans for raising short-term interest rates. If the Trump administration is successful over time in lowering trade tariffs, “then that’ll be a good thing for our economy,” Powell said. “If it works out other ways, so that we wind up having high tariffs on a lot of products ... and that they become sustained for a long period of time, then yes, that could be a negative for our economy.”
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