Anyone who’s seen The Wolf of Wall Street knows it really earned that ‘R’ rating. So what would the film look like if the naked ladies were stick figures and the bad words were bleeped? Still pretty dirty, actually.
Check out EW’s QuickDraw of the Oscar nominee below, and note how Leonardo DiCaprio’s voice can make anything sexy — even a doodle. (Warning: NSFW)
Leonardo DiCaprio plays Jordan Belfort in Paramount's "The Wolf of Wall Street.""Wolf of Wall Street" is a feverishly paced filmLeo DiCaprio gives a strong performance as Wall Street crook Jordan BelfortThe film could've used a stronger editStill, director Martin Scorsese pulled off something tricky with 'Wolf'(EW.com) -- Pay no attention to the title: Martin Scorsese's new shoot-the-works epic "The Wolf of Wall Street" isn't about rapacious stockbrokers or shady financial shenanigans. It's about drugs. Lots and lots of drugs.
From its twisted opening scene, where a floor of coked-up boiler-room meatheads toss dwarfs for bacchanalian sport, the feverishly paced film is hell-bent on making the audience feel like they just snorted a Belushian mountain of blow. You can practically feel your teeth grinding to dust. As with any high, though, it also doesn't know when to stop.From 'Hustle' to 'Mr. Banks,' the season's films make music into magicBased on Wall Street evil genius Jordan Belfort's 2007 memoir about getting insanely rich from conning investors, "Wolf" stars Leonardo DiCaprio as an amoral Horatio Alger with a rolled C-note up his nose. He gives a hell of a performance that's electrifyingly loose, perversely funny, and dripping with jerk charisma. Like Ray Liotta in "GoodFellas," DiCaprio's character explains through wise-guy voice-overs how he pulled off one of the most brazen and boneheaded scams in history.The film chronicles Belfort's improbable ascent from eager brokerage-house trainee (under the gonzo tutelage of a scene-stealing Matthew McConaughey) to Black Monday casualty to silver-tongued swindler, cold-calling suckers to peddle them worthless stocks out of a former auto-body garage.Oscar Too-Due List: Which never-nominated actors really deserve a nod?He proves to be such a born salesman that in no time he and his merry band of macho Bayside, Queens, goombahs (led by a terrific Jonah Hill as Belfort's bucktoothed loose-cannon sidekick) have more money than they know what to do with. So they blow it on Bond-villain yachts, trophy wives, and insane quantities of coke.Soon the firm becomes a millionaire-minting mecca, attracting both wannabe Gordon Gekkos and the attention of a hungry FBI agent (Kyle Chandler) who drools over Belfort's nouveau-riche toys while vowing to bring the drug-fueled Caligula down. It says something about DiCaprio's oily charm that you almost want him to get away with it.As bad judgment and paranoia take hold and the high rollers get careless about stashing their loot in Swiss banks, "Wolf's" pace never stops panting. And you can't help but be amazed that it's the work of a 71-year-old. After five decades behind the camera, Scorsese still works with the frantic energy of a man who's got something to prove.But the director also has to know that his film could have used some trimming. Clocking in at just a minute under three hours, "Wolf" starts to repeat itself as we're given one scene after another of men behaving badly. If you're feeling charitable, you could argue that the movie's running time is meant to mirror its theme of excess. Then again, you could also say that it's just way too long. There's a reason roller-coaster rides last for only a few minutes.Still, Scorsese has pulled off something tricky with "Wolf": He's given us a thrilling cautionary tale about a guy who never for a second seems the slightest bit sorry for what he's done. If anything, he just had the bad luck to get caught.Grade: B+See the original story at EW.com.CLICK HERE to Try 2 RISK FREE issues of Entertainment Weekly© 2011 Entertainment Weekly and Time Inc. All rights reserved./* push in config for this share instance */cnn_shareconfig.push({"id" : "cnn_sharebar2","url" : "http://www.cnn.com/2013/12/24/showbiz/movies/wolf-of-wall-street-review-ew/index.html","title" : "Review: \'Wolf of Wall Street\'"});
EDITION: INTERNATIONAL U.S. MÉXICO ARABIC TV: CNNi CNN en Español Set edition preference Sign up Log in Home Video World U.S. Africa Asia Europe Latin America Middle East Business World Sport Entertainment Tech Travel iReport SHARE THISPrintEmailMore sharingRedditStumbleUponDelicious/* push in config for this share instance */cnn_shareconfig.push({"id" : "cnn_sharebar1","url" : "http://www.cnn.com/2013/12/18/showbiz/movies/wolf-of-wall-street-wall-street-movies/index.html","title" : "A wealth of Wall Street movies"});A wealth of Wall Street moviesBy Breeanna Hare, CNNDecember 18, 2013 -- Updated 1803 GMT (0203 HKT)if (typeof cnnArticleGallery=="undefined"){var cnnArticleGallery={};if(typeof cnnArticleGallery.currentImageList=="undefined"){cnnArticleGallery.currentImageList=[];}}var expGalleryPT00=new ArticleExpandableGallery();expGalleryPT00.setImageCount(11);expGalleryPT00.setAdsRefreshCount(3);//cnn_adbptrackpgalimg("A wealth of Wall Street movies", 1);.cnn_html_slideshow_metadata > .cnn_html_media_utility::before{color:red;content:'>>';font-size:9px;line-height:12px;padding-right:1px}.cnnstrylccimg640{margin:0 27px 14px 0}.captionText{filter:alpha(opacity=100);opacity:1}.cnn_html_slideshow_media_caption a,.cnn_html_slideshow_media_caption a:visited,.cnn_html_slideshow_media_caption a:link,.captionText a,.captionText a:visited,.captiontext a:link{color:#004276;outline:medium none}.cnnVerticalGalleryPhoto{margin:0 auto;padding-right:68px;width:270px}
Wall Street is a place of near-mythical competition, ambition and greed -- and, as a result, it's also the setting of some of our favorite Hollywood films. On Christmas Day, Martin Scorsese and Leonardo DiCaprio will paint a portrait of a fraudulent stockbroker living a criminally high life in "The Wolf of Wall Street," which is based on the true story of Jordan Belfort. If we're lucky, it'll be as rich as some of these:cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":true,"x":0,"y":0,"pos":1,"title":"A wealth of Wall Street movies"}
Michael Douglas' Gordon Gekko is one of the defining characters of the '80s. The scheming, reptilian stock broker champions the phrase "Greed is Good" in 1987's "Wall Street," and audiences -- not to mention Hollywood -- have yet to forget it. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":2,"title":"A wealth of Wall Street movies"}
Relying on the charms of star Melanie Griffith, 1988's "Working Girl" tried to milk more laughs out of the Wall Street scene. The movie sees Griffith's character tap into her innate talent for numbers to quietly take over for her hell-on-wheels boss, played by Sigourney Weaver. Harrison Ford was also on hand to add some romance to the comedy.cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":3,"title":"A wealth of Wall Street movies"}
When it comes to the book vs. movie debate, Tom Wolfe's "The Bonfire of the Vanities" far outweighs the 1990 adaptation. Starring Bruce Willis, shown, Tom Hanks and Melanie Griffith, Brian De Palma's story follows the downfall of a filthy rich and powerful stockbroker whose association with a hit-and-run leads to his ruin. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":4,"title":"A wealth of Wall Street movies"}
watch it here. " border="0" height="360" id="articleGalleryPhoto005" style="margin:0 auto;display:none" width="640"/>After 1990's walk on the terrible side with "Bonfire," 1992's "Glengarry Glen Ross" with Kevin Spacey, left, and Jack Lemmon was a revelation. It's not set in the world of Wall Street per se but it is all about sales, and no one sold the tense, cutthroat themes of the film quite like Alec Baldwin. If you have yet to see his incredible and memorable monologue on the art of selling, which some see as inspiration, watch it here. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":5,"title":"A wealth of Wall Street movies"}
In 2000's "Boiler Room," Giovanni Ribisi's Seth Davis attempts to trade in his illegal casino for a more impressive career and winds up as a stockbroker "a good hour away from Wall Street," and finds himself in a much shadier business. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":6,"title":"A wealth of Wall Street movies"}
What was it about the dawn of the aughts that had movie studios buzzing with ideas about the evil lurking on Wall Street? Along with "Boiler Room," 2000 also brought us Christian Bale in "American Psycho," an adaptation of Bret Easton Ellis' '80s-era novel. Directed and co-written by Mary Harron, Bale's portrayal of broker by day, serial killer by night Patrick Bateman has gone down in history as some of his best work. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":7,"title":"A wealth of Wall Street movies"}
Gordon Gekko's immortal words came back to haunt us in 2010, when 20th Century Fox decided to give "Wall Street" a sequel more than 20 years after the film's initial release. "Wall Street: Money Never Sleeps" focused on Gekko's relationship with his daughter, as played by Carey Mulligan, and her fiance (Shia LaBeouf), who aspired to be an investment broker with a heart. Of course, with Gekko out of prison, that aspiration didn't stick around too long. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":8,"title":"A wealth of Wall Street movies"}
In 2011, the country's very real financial struggles got a touch of movie magic with the thriller "Margin Call." Written and directed by J.C. Chandor, "Margin Call" chronicles the financiers at the heart of the 2008 financial crisis just as it was beginning to unfold. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":9,"title":"A wealth of Wall Street movies"}
With 1983's "Trading Places," financial industry corruption is played for laughs. Eddie Murphy stars as a street hustler who's roped into an experiment by the loaded Duke brothers. To pull it off, the brothers install Murphy's character as a high-earning broker and leave Dan Aykroyd's aristocratic Louis Winthorpe III in ruins. In the Wall Street finale, the Dukes learn they're terrible at placing bets. cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":10,"title":"A wealth of Wall Street movies"}
In 2012's "Arbitrage," Richard Gere at first appears to be a man who has it all together. He's incredibly successful and married with a daughter set to inherit his abundant wealth. But in actuality, Gere's hedge-fund magnate is struggling to sell off his trading empire in hopes of escaping from his fraudulent past without a scratch. It's not a spoiler to tell you that his frantic off-loading doesn't go as planned.cnnArticleGallery.currentImageList[cnnArticleGallery.currentImageList.length]={"currentPicture":false,"x":0,"y":0,"pos":11,"title":"A wealth of Wall Street movies"}HIDE CAPTIONA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street moviesA wealth of Wall Street movies<<<
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11>>>Event.observe(window,'load',function(){if(typeof(cnn_adbptrackpgalimg) == 'function' && typeof(cnnArticleGallery) != 'undefined'){cnn_adbptrackpgalimg(cnnArticleGallery.currentImageList[0].image,"A wealth of Wall Street movies");}});0Comments »SHARE THISPrintEmailMore sharingRedditStumbleUponDelicious/* push in config for this share instance */cnn_shareconfig.push({"id" : "cnn_sharebar2","url" : "http://www.cnn.com/2013/12/18/showbiz/movies/wolf-of-wall-street-wall-street-movies/index.html","title" : "A wealth of Wall Street movies"});
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| Advertise with us | License our content | About us | Contact us | Work for us | Help CNN TV | HLN | Transcripts cnnad_ugsync(); var cnn_edtnswtchver="edition"; msQueueManager.init('requestFrame',ms_blankURL); if(ms_isLoggedIn()){ CNN_setCookie('CNN_member',true,854400,'/',document.domain); } var jsmd=_jsmd.init(),pageURL=location.href.toLowerCase();if (pageURL.indexOf("/.element/ssi/ads.iframes/")==-1&&pageURL.indexOf("/doubleclick/dartiframe.html")==-1&&pageURL.indexOf("/search/")==-1){if (_jsmd.plugin.gQuery("refresh")){jsmd.trackMetrics("dynamic-autoRefresh","autorefresh","cnn-autorefresh");} else if (_jsmd.plugin.gQuery("is_LR")){} else if (cnn_metadata.template_type_content!="gallery"){jsmd.send();}}/*globals CNN_CB, cnnsocial, cnnzite_mod, sectionName *//* configure apis to load and specify their callbacks */cnnsocial.setapiconfig([{'site' : 'facebook','success' : function() {/* trigger connect-cnnsocial.js calls */window.cnn_fbAsyncInit();}},{ 'site' : 'twitter' }]);var _vrq = _vrq || [];var vrId = 6;if(cnn_edtnswtchver === 'edition'){vrId = 396;}_vrq.push(['id', vrId]);_vrq.push(['automate', false]);_vrq.push(['track', function(){}]);(function(d, a){var s = d.createElement(a),x = d.getElementsByTagName(a)[0];s.async = true;s.src = 'http://a.visualrevenue.com/vrs.js';x.parentNode.insertBefore(s, x);})(document, 'script');/* add the multiple config instance for sharebars */cnnsocial.share.setconfig(cnn_shareconfig);$j(document).ready(function () {'use strict';loadChartbeat("showbiz", "Breeanna Hare, CNN");CNN.initFlipperTicker();/* initialize cnnsocial */cnnsocial.init();});(Reuters) – The U.S. government suffered a setback in its investigation of subprime fraud when a judge dismissed a case against two former State Street Corp executives accused of misleading investors in the summer of 2007 about a $2.9 billion fund loaded with exposure to risky mortgages.
Chief Administrative Law Judge Brenda Murray dismissed the U.S. Securities and Exchange Commission's case against John P. Flannery and James D. Hopkins, according to her initial decision on October 28.
Flannery was a chief investment officer of the Americas for State Street Global Advisors until November 2007. SSgA is the investment management arm for Boston-based State Street, which has agreed to pay more than $600 million to investors who lost money during the subprime market meltdown in 2007. The company has neither admitted or denied allegations made by regulators, including the SEC.
Flannery's attorney on Monday declared "total victory" against the SEC, which sought fines and to bar Flannery from the industry.
"This really represents complete exoneration," Mark Pearlstein, a lawyer for Flannery, told Reuters in a telephone interview.
Flannery left State Street in November 2007 after his position was eliminated, according to documents in the case. Hopkins left the company last year after State Street offered him retirement, a move he had not planned to make.
In a 59-page decision, Judge Murray said Flannery and Hopkins testified with candor, conviction and sometimes frustration. An 11-day hearing produced more than 3,000 pages of transcript. Flannery's witnesses included a Catholic priest from Boston, who praised his charitable work.
As subprime worries began to roil Wall Street in the summer of 2007, SSgA had to quickly unwind the Limited Duration Bond Fund to avoid big losses. During a one-month stretch, the fund sold more than $1.2 billion in assets to raise liquidity.
The SEC accused Flannery and Hopkins, a former head of product engineering for SSgA North America, of misleading investors about the extent of subprime mortgage-related investments in the fund. Investors included Emory Investment Management, General Motors, Xerox Corp, the Monetary Authority of Macao and the Houston Police Officers Pension System, case documents show.
Investors also included clients advised by SSgA internal advisory groups. These funds cut their exposure to the troubled bond fund, but not because of any confidential information, the judge said.
Judge Murray said in her decision that Flannery and Hopkins did not have ultimate authority over fact sheets distributed to investors. The judge also said the evidence in the case did not show that the fact sheets contained material misrepresentations or omissions about the fund's assets.
In addition, Flannery did not have ultimate authority over letters sent to investors, but rather they were a joint effort by a number of people, the judge said in her ruling. She also said letters State Street sent to investors were not misleading.
David Bergers, director of the SEC's Boston Regional Office, said, "We are reviewing the decision."
State Street shares were down 1.4 percent at $41.44 on Monday afternoon on the New York Stock Exchange.
(Reporting by Tim McLaughlin in Boston; Editing by Gerald E. McCormick, Matthew Lewis and Steve Orlofsky)
WASHINGTON – Two former executives of State Street Bank & Trust Co. have been cleared of federal civil fraud charges of misleading investors about their potential risk from subprime mortgage investments in 2007.
The chief administrative law judge at the Securities and Exchange Commission issued an order Friday dismissing the charges filed last year against John Flannery and James Hopkins.
Judge Brenda Murray said neither Flannery nor Hopkins was responsible for the misleading documents alleged to have been provided to investors in the bond fund marketed by State Street Global Advisors.
Flannery was the chief investment officer of State Street Global Advisers; Hopkins was the head of product engineering.
Boston-based State Street agreed to repay investors about $300 million in February 2010 to settle charges by the SEC and Massachusetts regulators related to the bond fund. State Street also has paid around $340 million to investors to settle private lawsuits.
The SEC said the fund was marketed as an alternative to a money market fund. But it was almost entirely invested in securities tied to risky subprime mortgages, the agency said. The value of those securities plunged when the housing bubble burst in mid-2007.
Attorneys for Flannery and Hopkins issued statements Monday saying they were pleased with the judge's decision in a case they asserted should never have been brought.
COMMENTARY | Yes, I have student loans. Am I mad about that? No. Because I chose to go to college. Do I think college should be given to me? No. It's something you work for. It's something you earn. Don't want to have to pay for it? Study hard and get scholarships. It's not my (or any taxpayers') fault you decided to be an art history major and during a recession you can't "find a job."
Honestly, don't give me that "can't find a job" line. Temp agencies are always hiring. McDonald's is always hiring. How about, rather than trashing the streets, blocking traffic and using an NYPD car as a bathroom, you look for a job?
These Occupy "where ever you are" protesters are getting on my last nerve.
Here's an idea. Want to stick it to the banks? Don't take a loan. Don't borrow money. Don't spend more than you make. If you can't afford it, don't buy it. Want to change the world? Want to change policy? Don't just hang out. DO SOMETHING. Contact your representatives, your senators, the president. Write letters, tweets, emails. Make phone calls.
Do I agree with the protesters? No. Have you read some of the "demands" of the group? Wow. If that's the kind of government and regulations they want, I'm sure Cuba would love to have them. But their anger is directed at the wrong group. It's not Wall Street or bankers, it's the failed administration of Barack Obama. The protesters need to move from Wall Street to 1600 Pennsylvania Avenue.
Here's the deal. Just because you were born in America, you're only entitled to three things, Life, Liberty and the Pursuit of Happiness. No one said "health care" or "college education." People who have worked for things (and yes, even those who have inherited it) owe nothing to anyone.
Yes. We need to boost the economy, but I've never known of a poor company hiring people, it's always the companies that are doing well that hire. We need to get our people back to work. We need to stop the wasteful spending (and bailouts). This is America. No one and no company is too big to fail. It is failing is how we learn. At nine months of age, we didn't start walking around without falling a few times.
Unlike this blogger, I don't consider myself a percentage. My husband and I don't own, we rent. Having worked for a mortgage company, I knew that once the "balloon loans" everyone was getting came due, it was going to burst. And it did. But I knew what we could and couldn't afford. So we didn't buy.
It's about personal responsibility. That's what it all comes down to. It's something that worked for our grandparents... why can't our generation do it? Stop blaming and start working. And be sure to vote in 2012.
Editor's note: A previous version of this article referred to allegations of fraud against US Bancorp. We regret the error.
"What do we want?" "500 different things!" "When do we want it?" "Nowish!"
-- @TheTweetofGod
Thousands of people are occupying the Wall Street area as I type this, and have been for many days. The simplest way to describe it all is that masses of people are protesting the status quo, specifically the behavior of corporate America. The message has been compelling enough to keep drawing new people, and it's spreading to cities across America and the world. But many are mocking it, or at least chuckling at it all. Fair enough. There's some cause for head-shaking. But don't write the protests off: There's a lot of truth behind them.
The grievances
One criticism is that the movement has been disorganized. Well, that's not surprising, especially as it snowballs into something bigger than initially expected. Organization is happening, though, and the NYC General Assembly recently issued a "Declaration of the Occupation of New York City," listing many grievances and a few calls to action.
There's no doubt critics will find something objectionable in it. For example: "[Corporations] have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right." This strikes me as silly, because students with debt knowingly took on that debt, much as homebuyers opt for mortgages.
The truths
Despite the quibbles one might raise, there are plenty of hard-to-refute truths at the declaration's core:
These are just a few of many grievances, and just a few examples of many things that don't seem to make America a better and stronger nation.
Capitalism isn't evil
But all is not lost within a system of capitalism. In many ways, it serves us quite well, offering entrepreneurs and workers the chance to build businesses and to prosper.
And while many things seem to get worse from year to year, such as outlandish executive compensation, some things actually get better. For instance, not so long ago, investors were mostly at the mercy of traditional "full-service" brokerages, which charged arms and legs per trade and offered financial guidance that was often compromised by conflicts of interest. Enter the discount brokerages, which offer very inexpensive trading commissions and gobs of free research and guidance to help investors make the best decisions.
Even the severely problematic initial public offering process has been improved upon a bit, with some companies, such as Google, bucking the standard operating procedure and going public via Dutch auctions. By contrast, the standard operating procedure is good at making banks many millions of dollars -- and in some cases, such as LinkedIn's recent debut, seems to really fleece the company going public.
Be inspired
Don't dismiss the protesters. They're making lots of good points, and I think that most of us would agree that our current system leaves at least some room for improvement, if not a lot of room.
Don't let the protesters' efforts be wasted on you. Be inspired. Hope for a better future and consider what role you might play in making it so. You can vote your conscience on proxy ballots for the companies in which you own stock. You can vote with your wallet, too, when you see companies doing things you don't like. You can remind companies you're interested in that they can actually make good money by doing the right thing.
And you might even join the protesters -- on Wall Street and in many cities besides New York.
Be an informed citizen and investor: Read up on corporate governance issues and corporate hanky-panky via our own Alyce Lomax's articles.
Longtime Fool contributor Click here to see her holdings and a short bio. The Motley Fool owns shares of Bank of America, Google, FedEx, Altria Group, and United Parcel Service. Motley Fool newsletter services have recommended buying shares of FedEx, Google, and AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
WILMINGTON, Delaware (Reuters) – The U.S. Supreme Court's dismissal of a massive sex-bias case against Wal-Mart Stores Inc may have handed Wall Street a new weapon in its battle against angry investors who lost billions on securitized home loans.
At first glance, last month's ruling in the Wal-Mart case may seem far removed from lawsuits over complex mortgage investments blamed for helping to trigger the global financial crisis in 2008.
But attorneys are seizing on the Supreme Court decision as they fight to prevent pension fund investors from banding together as a class to pursue claims they were misled about bonds built from flimsy mortgages.
In the Wal-Mart case, the Supreme Court on June 20 found that 1 million current and former female employees from 3,400 of the retailer's stores had too little in common to form a class. The court's language about issues of a "common question" could, according to attorneys arguing for the banks, also bar mortgage bond investors from suing en masse.
Lawyers defending a unit of Washington Mutual argue that the "commonality" that was missing among the female Wal-Mart workers is also missing among investors in securitized mortgages, even when they invested in the same pool of loans.
They made the argument in court papers filed on June 22 arguing against certifying a class of investor plaintiffs suing Washington Mutual. The case is pending in District Court in Seattle.
If successful, the defense tactic could prevent investors in mortgage-backed securities from pooling their resources and bringing a case as a group. That could make it more difficult for them to pursue cases against big issuers of mortgage bonds, such as Bank of America Corp and JPMorgan Chase & Co.
The Washington Mutual legal team referred questions to JPMorgan, which bought the bank in 2008. JPMorgan declined to comment on Friday.
CLASS SYSTEM
The Wal-Mart case was closely watched and the ruling is expected to make it tougher to bring class-action cases, which are often used in drug and product liability lawsuits and have led to mammoth settlements with consumers or shareholders.
The Supreme Court decision steers courts away from certifying broad classes of plaintiffs while leaving the door open to breaking out sub-classes later, said James Cox, a professor at Duke University Law School.
In the mortgage market, banks securitized home loans by collecting large pools of mortgages and placing them with a trust. The trust then issued bonds cut into "tranches," each carrying a different credit rating. The higher-rated tranches were paid first from the money flowing from homeowners.
Courts already have denied class status to investors who sued on behalf of all others who bought bonds issued by different trusts that were set up by a particular bank or mortgage company, such as Countrywide Financial.
The Supreme Court's Wal-Mart decision may help narrow the class scope further, separating tranches within a particular loan pool trust.
In their court papers, Washington Mutual lawyers cite the Wal-Mart decision for their argument that each tranche of the mortgage-backed security needs to be analyzed separately to determine which loans back which tranche, and whether those loans were properly written.
"Even if plaintiffs seek to ask the same question across all loan groups and all securities, unless they can be assured of getting the same answer, no class can be certified," the court filing says.
The Wal-Mart ruling is the first case cited in Washington Mutual's argument. The company's lawyers also cite the decision to make their point that each tranche must be evaluated separately, not lumped together merely because they have common legal claims, according to the court papers.
Thomas Hatch, an attorney who has brought mortgage-backed securities cases but is not involved in the Washington Mutual lawsuit, said courts are right to narrow classes to a single trust, but he disagreed with cutting to the tranche level.
"The defendants are wrong in claiming you have to be in the same tranche to be in the same class," said Hatch, because those various slices of the bond rely on the same offering document. "It isn't tranche specific, it is trust specific."
The Seattle federal court will take up the Washington Mutual class certification issue on July 27.
The case is In re Washington Mutual Mortgage Backed Securities Litigation; U.S. District Court, Western District of Washington, No. 09-00037
(Reporting by Tom Hals; editing by Martha Graybow, Gary Hill and Andre Grenon)
WASHINGTON (Reuters) – Individual investors are wading back into the market nearly three years after the financial crisis, but some U.S. brokerage executives said their customers remain cautious.
The heads of several of the largest U.S. brokerages, speaking at the Financial Industry Regulatory Authority's annual conference on Monday, said expectations remain muted and faith in the markets tenuous. Financial advisers must work to help investors avoid market land mines by communicating risks more clearly, but also by listening more carefully to what customers want, they said.
The industry's "views of what clients want is outdated. So much time is spent looking for ways to produce upside, as opposed to what the clients want, which is protection against the downside," said Sallie Krawcheck, who as Bank of America Corp's (BAC.N) wealth management division president oversees giant brokerage Merrill Lynch. "There is a disconnect."
Stock prices have bounced back since the depths of the crisis in 2008 and 2009, but the confidence of small investors remains shaken. A panel of four executives said brokerages can do a lot to address those concerns -- and must, or they risk losing a new generation of customers put off by a decade of negative returns.
"Clients have more appreciation for the risks. They're sitting on a lot of cash, and many are starting to pay off debt," said James Weddle, managing partner of Edward D. Jones & Co, which operates more than 10,000 brokerage offices catering to smaller investors.
Many of the old tools and techniques do not work, such as parking assets into U.S. Treasury securities and money markets when stock markets get too choppy.
"It's a new environment, where there are no sidelines," said Mark Cresap, who runs the small broker-dealer Cresap Inc. in Radnor, Pennsylvania. With benchmark interest rates near zero, he said, firms should make sure cautious clients do not stray into investments that promise more yield but also carry more risk, such as illiquid private partnerships.
Krawcheck said firms have to make it easier for investors to understand what they are buying. That means investing in research and educating clients and advisers, while improving disclosures. If that were done right, investments widely considered "risky" would not have to be dismissed.
Yet lack of clarity has all too often attracted the wrong customers to investments that ultimately have caused great harm, such as collateralized debt obligations.
"'Structured products' has become a bad word, after what we saw happened with CDOs. You just say it and people start to twitch," Krawcheck said. "But if you go back, you see clients say they got really burned, and that they're willing to give up some upside to protect against the downside."
The lesson of the past few years also should remind investors to spread their eggs across many baskets, Edward Jones' Weddle said. "Diversification is not 'nice;' it's absolutely necessary."
(Reporting by Joseph A. Giannone, editing by Gerald E. McCormick)
NEW YORK (Reuters) – Encouraging economic indicators sent U.S. stocks higher on Friday, but the market's recent struggles are set to continue into next week when more than one-fifth of S&P 500 companies report results.
The S&P 500 fell for a second straight week, and some in the market pointed to strong resistance building around 1,340. The daily chart shows a bearish double top near that level.
In another worrisome sign, investors again favored defensive stocks, which tend to do better in times of waning growth. Utilities (.GSPU) and healthcare (.GSPA) were the S&P 500's top-performing sectors.
Disappointing results from Google and Infosys weighed on technology shares, while financials were pressured by Bank of America's results.
"Even while some of the earnings (were not) exactly what the market hoped for, the macro economic data was actually pretty good this morning," said Paul Zemsky, head of asset allocation at ING in New York.
Consumer price inflation remained contained in March while industrial production increased. A separate survey showed improvement in consumer sentiment in April.
Investors have been concerned that higher energy and food costs would slow consumer spending, while at the same time force the Federal Reserve to tighten its very loose monetary policy earlier that anticipated.
The Dow Jones industrial average (.DJI) gained 56.68 points, or 0.46 percent, to 12,341.83. The Standard & Poor's 500 Index (.SPX) rose 5.16 points, or 0.39 percent, to 1,319.68. The Nasdaq Composite Index (.IXIC) added 4.43 points, or 0.16 percent, to 2,764.65.
For the week, the Dow fell 0.3 percent while the S&P 500 and the Nasdaq each lost 0.6 percent.
The CBOE Volatility Index or VIX (.VIX) dropped 5.8 percent to close at 15.82, its lowest level since July 2007.
The first week of earnings has been a mixed bag, with some bellwether companies unable to excite the market despite some cases of stronger-than-expected profits. Investors have been disappointed with companies' revenues or outlooks.
"If this theme of discouraging reports continues, I'll become more bearish on the season," said Randall Warren, chief investment officer of Warren Financial Service in Exton, Pennsylvania. "But right now, it could go either way, and it looks like the market wants to go up."
Bank of America Corp (BAC.N) reported a steeper-than-expected decline of 37.5 percent in profit and named a new chief financial officer. The stock fell 2.4 percent to $12.82 and was the Dow's bigger percentage loser.
Google Inc (GOOG.O) unnerved investors late on Thursday with a large jump in first-quarter spending. The Internet company also reported an adjusted profit slightly under expectations. Its stock sank 8.3 percent to $530.70.
Also hurting technology stocks, Infosys Technologies Ltd (INFY.NS)(INFY.O), India's No. 2 software services exporter, sparked worries about the sector's growth after it forecast annual sales lower than expected on slower client spending. Its U.S.-traded shares fell 13.4 percent to $63.21.
Information technology (.GSPT) was the sole S&P sector to fall. The IT sector's index fell 0.4 percent.
Charles Schwab Corp (SCHW.N) reported first-quarter earnings that beat expectations by a penny. The broker also said clients had reduced the percentage of their cash assets held in Schwab to pre-crisis levels. The stock rose 2.1 percent to $18.61.
Bond insurer Assured Guaranty Ltd (AGO.N) surged 24.2 percent to $17.60 on heavy volume after the company announced an agreement with Bank of America on mortgage repurchase claims. Among other companies in the sector, MBIA Inc (MBI.N) climbed 17.4 percent to $10.48, also on heavy volume.
About 7.1 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year's estimated daily average of 8.47 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of more than 2 to 1, while on the Nasdaq, more than nine stocks rose for every five that fell.
(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)
CHARLOTTE, North Carolina (Reuters) – Bank of America Corp is expected to report a 9 percent drop in its first quarter profit, as U.S. consumer lending contracts and the costs for collecting on mortgages continue to rise.
Analysts estimate the largest U.S. bank will report net income of $2.9 billion, or 27 cents per share, down from $3.2 billion, or 28 cents per share, in the first quarter of 2010, according to Thomson Reuters I/B/E/S.
Bank of America's results come two days after rival JPMorgan Chase & Co -- the second largest U.S. bank by assets -- reported weaker consumer lending and more than $1 billion in added costs for servicing mortgages due, in part, to a settlement with bank regulators over problems in the industry's foreclosure practices.
Those same factors could hit Bank of America, analysts said.
"The company is profitable, but revenue growth is constrained and the costs in the mortgage business just keep increasing," said Jefferson Harralson, bank analyst at Keefe, Bruyette & Woods Inc. "They've had this general trend of lagging their peers coming out of this recession."
Bank of America's results are closely tied to the health of U.S. consumers, which is still weak nearly three years after the financial crisis peaked.
The Charlotte, North Carolina-based bank does business with one out of every two U.S. households, whose myriad of consumer lending businesses are either the largest, or among the largest in the country. But with high U.S. unemployment and consumers' cutting back on their debt loads it has left the bank with little room to grow its domestic lending business.
Loan growth is necessary for a long-term increase in net interest income, but analysts said they do not expect the bank to show an increase in the first quarter.
"They're still waiting around for the recovery of the consumer," Harralson said. "I don't think anybody's going to show loan growth at this point."
Outside its consumer lending businesses, more normal growth for the bank may remain elusive for two more years, the bank's management has said.
BofA's wealth management business -- run by Sallie Krawcheck -- has been highlighted as one of the bank's key areas for domestic growth since it bought Merrill Lynch in 2009. The division, which runs the second largest U.S. brokerage with roughly 15,000 advisers, earned $1.3 billion in 2010 net income.
But during the company's fourth quarter earnings call, Chief Executive Brian Moynihan expressed disappointment over the division's ability to add advisers in 2010.
And during the first quarter, Lyle LaMothe, BofA's U.S. brokerage chief, announced plans to retire in May.
Other businesses, like its mortgage unit, will not fully recover until 2014 or later, the company said recently.
In the first quarter, the bank announced plans to split off $1 trillion in bad mortgage assets from its home loans unit into a new division, called Legacy Asset Servicing, run by former OneWest Bank CEO Terry Laughlin.
The move was made, in part, to allow Barbara Desoer, the company's home loans chief, to focus BofA's mortgage business on making new loans, rather than dealing with delinquencies and foreclosures.
BofA's home loans and insurance business has reported three years of quarterly losses, and most recently lost $4.9 billion in the fourth quarter of 2010, due to charges related to a settlement with Fannie Mae and Freddie Mac over mortgage repurchases.
"Its the biggest piece of the business' losses right now, and those costs are still rising," said Harralson.
(Reporting by Joe Rauch, editing by Bernard Orr)
