Video: Gasparino updates on Citigroup, Mike Mayo and the SEC -- Aired today
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I wrote about DTAs, deferrred tax assets, back in 2009. The best stories for background are the following:
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Early this week, Charlie Gasparino broke the story that banking analyst Mike Mayo has been shut out by Citigroup executives after he warned that Citigroup, by law, must take $10 billion in losses from expiring DTAs.
An all-out war has broken out between Citigroup CEO Vikram Pandit and a prominent securities analyst who is saying that the big bank may be cooking the books by inflating its earnings through an accounting gimmick, FOX Business Network has learned.
The analyst, Mike Mayo, of the securities firm CLSA, has been telling investors that Citigroup should take a writedown, or a loss on some $50 billion of “deferred-tax assets,” or DTAs. That is a tax credit the firm has on its financial statement that Mayo says is inflating profits at the big bank by as much as $10 billion.
Then yesterday, Gasparino wrote the following story at Huffington:
The people who run the big Wall Street firms and banks have notoriously short memories, which is why, for all the mea culpas that came after the 2008 financial collapse and taxpayer bailouts, you know these guys are going to screw up again and screw the country again in the process.
Recently, I was reminded of just how short their memories on Wall Street are by two new stories. In the first one, Morgan Stanley thinks it's a grand idea to throw a lavish party for its past and present partners in mid-September at a place called the "Temple of Dendur," a swanky room in the Metropolitan Museum of Art that gets rented out to the mega-rich and big profitable corporations that want to hold special events around artifacts of ancient Egypt. The event is supposed to commemorate Morgan's 75th anniversary as a firm even if it will be held on another important anniversary in its history: Nearly two years to the day, Morgan, along with the rest of Wall Street, received billions of dollars in bailout money from the American taxpayer.
OK, so throwing an expensive party on the anniversary of the bailouts may look bad, and may also require a police presence (so many former Morgan Stanley people viscerally hate the guys now in charge, and vice versa), but it isn't potentially illegal. But the second story underscoring Wall Street's memory loss involves something that could be.
As I reported early in the week on Fox Business Network, Citigroup, one of the most bailed-out banks in the history of bank bailouts, has the nerve to wage an increasingly vindictive war against a securities analyst named Mike Mayo for doing nothing more than telling the truth about the bank's questionable -- some would say illegal -- accounting practices.
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