Hedge Fund Women Boost Nonprofits
(Bloomberg News) The annual fundraiser for the female hedge-fund executives of High Water Women Foundation features Texas Hold 'Em.

Women make up about 90% of individual ticket buyers and half of the attendees. The proceeds from the organization's annual fundraiser, which began as a wine tasting, have more than doubled from $200,000 six years ago to $556,000 last year. This year's event was held April 15.

It's one of many indications that women donors are becoming significant financial boosters for nonprofits.
"Our female members are not only supportive in getting their friends and co-workers involved, but they also write checks," said Kathleen Kelley, High Water Women's co-founder and portfolio manager for global macro investments at Kingdon Capital Management LLC.

A telephone survey by the Center on Philanthropy at Indiana University released in 2010 shows that U.S. women who are single heads of households are more likely to donate to charity than their male counterparts.

At three salary levels-$100,000 or more, $23,000 to $43,000, and less than $23,000-women are inclined to give double the amount that men give for the first two and almost twice as much for the last.

The Phoenix, Ariz.-based Make-A-Wish Foundation of America is launching a new "Women for Wishes" club in New York to identify women donors who will help recruit more women to its patron base. A survey conducted by the charity last year showed that more than half of its 600,000 active donors are women, Elizabeth LaBorde, Make-A-Wish's vice president of resource development, said by phone.

The $3 million that High Water Women has raised from donations and its poker tournaments has been distributed to nonprofits such as Women in Need Inc., which provides shelter to homeless women in New York, and Harlem's Iris House Inc., which aids mothers and children living with AIDS and the HIV virus.

Kelley said she hopes the poker tournament will continue to expand its ranks of patrons.

"If I want to make the world a better place, the causes that need funding will have the face of a woman or a child," Kelley said. "Those are the scenarios where there's real suffering and real inequality."

Heir To Nutella Fortune Dies At 47
(Bloomberg News) Pietro Ferrero, chief executive officer of the Ferrero group, maker of Nutella chocolate spread and Tic Tacs, and heir to Italy's biggest fortune, died of a suspected heart attack in South Africa. He was 47.

Ferrero died while bicycling April 18 on a coastal road near Cape Town, during a break from a company meeting in South Africa. A passerby saw him fall off his bicycle, and he was declared dead of a suspected heart attack shortly after an ambulance arrived, Western Cape Police spokesman Captain FC van Wyk said in a telephone interview.
"Italy has lost a businessman who embodied the best qualities of our industrial history-the continual search for excellence, creativity, the determination to compete even in difficult moments to defend a brand and make it a symbol," Foreign Minister Franco Frattini said in an e-mailed statement.

Pietro Ferrero's death comes as his company considers joining a takeover battle for Parmalat SpA, Italy's biggest dairy company. A government-backed group of Italian investors is trying to block France's Groupe Lactalis from gaining control of Parmalat. In 2009, Ferrero mulled and abandoned a takeover offer for Cadbury Plc, before it was purchased by Kraft Foods Inc. Pietro Ferrero was joint CEO with his brother Giovanni.

Wealthy Parents Shield Kids From Riches, Survey Says
(Bloomberg News) Less than half of wealthy Americans say that leaving an inheritance is important, according to a survey by U.S. Trust.

"I think it's reflective of the mindset of a lot of the baby-boomer generation," said Keith Banks, president of U.S. Trust, the New York-based private wealth management unit of Bank of America Corp., the largest U.S. lender by assets. "I think they expect to live a lot longer and I think their first concern is, 'Am I enjoying the hard-earned wealth I created?'"

Of the 457 individuals surveyed, each of whom said they had $3 million or more in investable assets, about 49% said that passing assets on to heirs is very important to them. That may help explain why about half of respondents said they've never spelled out how they'd like their estates to be divided among heirs, said spokeswoman Lauren Sambrotto for Charlotte, N.C.-based Bank of America. U.S. Trust clients generally have at least $3 million in investable assets.

About 67% of those surveyed haven't told their children the full extent of their net worth, and 15% told their children nothing about their family's wealth. The average age of those surveyed was 61.
"There's a concern that if the kids are fully cognizant it may start to influence how hard they work at their own careers," said Banks.

About 78% of those surveyed said their children won't be mature enough to handle their inheritances until they are at least 30 years old, and 45% said their children won't be mature enough until they are 35 or older.
U.S. Trust hired Rhinebeck, New York-based Phoenix Marketing International to survey the individuals online in January and February.

The last time U.S. Trust conducted a survey on attitudes about personal wealth and estate planning was in 2007, almost a year before the collapse of Bear Stearns Cos. About 43% of respondents then said they owed it to their children to leave a significant inheritance, and the average age at which participants said their children assumed responsibility for their own money was 27.

"If you knew you had a tremendous amount of wealth behind you, would you be as ambitious, would you be as self-reliant, knowing that?" said Doug Ketterer, head of New York-based Morgan Stanley's U.S. private wealth management unit, where clients have $20 million or more in assets. "In their own way they're protecting their children to make sure they can live the life they hope they would live."

Levin: Goldman Duped Clients, Congress
(Bloomberg News) Goldman Sachs Group Inc. misled clients and Congress about the firm's bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said.
Sen. Carl Levin, releasing the findings of a two-year inquiry on April 13, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value.

The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.

"In my judgment, Goldman clearly misled their clients and they misled the Congress," Levin said at a press briefing where he and Sen. Tom Coburn, an Oklahoma Republican, discussed the 640-page report from the Permanent Subcommittee on Investigations.

Much of the blame for the 2008 market collapse belongs to banks that earned billions of dollars in profits creating and selling financial products that imploded along with the housing market, according to the report. The Levin-Coburn panel levied its harshest criticism at investment banks, in particular accusing Goldman Sachs and Deutsche Bank AG of peddling collateralized debt obligations backed by risky loans that the banks' own traders believed were likely to lose value.

In a statement, New York-based Goldman Sachs denied that it had misled anyone about its activities. "The testimony we gave was truthful and accurate and this is confirmed by the subcommittee's own report," Goldman Sachs spokesman Lucas van Praag said.

"The report references testimony from Goldman Sachs witnesses who repeatedly and consistently acknowledged that we were intermittently net short during 2007. We did not have a massive net short position because our short positions were largely offset by our long positions, and our financial results clearly demonstrate this point," van Praag said.

In a statement, Deutsche Bank spokeswoman Michele Allison said, "As the PSI report correctly states, there were divergent views within the bank about the U.S. housing market. Moreover, the bank's views were fully communicated to the market through research reports, industry events, trading desk commentary and press coverage. Despite the bearish views held by some, Deutsche Bank was long the housing market and endured significant losses."

The panel's report also examined the role of credit-rating firms in the meltdown, lax oversight by Washington regulators and the drop in lending standards that fueled the mortgage bubble and ultimately caused hundreds of bank failures.

The subcommittee's findings show "without a doubt the lack of ethics in some of our financial institutions who embraced known conflicts of interest to accomplish wealth for themselves, not caring about the outcome for their customers," said Coburn. "When that happens, no country can survive and neither can their financial institutions."

The report is likely Washington's final official assessment of the turmoil beginning in 2007 that froze credit markets, took down investment banks Bear Stearns Cos. and Lehman Brothers Holdings Inc., sent housing finance giants Fannie Mae and Freddie Mac into government conservatorship and caused the worst economic collapse in the U.S. since the Great Depression.

The $700 billion taxpayer bailout that followed in October 2008 upended the relationship between Wall Street and the federal government, turning CEOs like Blankfein and Lehman's Richard Fuld into political punching bags. Populist anger at high-paid bank leaders helped fuel the passage of last year's Dodd-Frank law, which set out the biggest changes to financial oversight since the 1930s.

The Senate report comes less than a year after Goldman Sachs paid $550 million to resolve SEC claims that it failed to disclose that hedge fund Paulson & Co. was betting against, and influenced the selection of, CDOs the company was packaging and selling.

Goldman Sachs, in its settlement with the SEC, acknowledged that marketing materials for the 2007 CDO deal contained "incomplete information."

The Senate subcommittee's bipartisan report, buttressed by 2,800 footnotes and thousands of internal documents from Goldman Sachs and other firms, may have more impact than previous investigations into the crisis.

It's an open question whether the Justice Department and the SEC will review its findings. Levin does not have the power to refer the allegations to federal authorities on his own. The subcommittee has a formal process for making referrals, which requires Levin to get the support of Coburn before making an official referral. Levin is going to recommend that the subcommittee make referrals, though he has not done it yet, staff members said.

The Levin report will be examined by policy makers including the SEC and Commodity Futures Trading Commission, which are writing hundreds of Dodd-Frank rules governing derivatives, mortgage securities and proprietary trading.
Coburn, the senior Republican on the subcommittee, said the review carries more heft than the three separate reports issued earlier this year by a politically divided Financial Crisis Inquiry Commission.

"We don't need commissions to do our job and this proves it," Coburn said. The FCIC "spent $8 million and 15 months" on its inquiry and "didn't report anything of significance."

The panel said Goldman Sachs relied on "abusive" sales practices and was rife with conflicts of interest that encouraged putting profits ahead of clients.

"While we disagree with many of the conclusions of the report, we take seriously the issues explored by the subcommittee," van Praag said.

Van Praag pointed to the firm's recent examination of its business practices that prompted it to make "significant changes that will strengthen relationships with clients, improve transparency and disclosure and enhance standards for the review, approval and suitability of complex instruments."

In the case of one CDO, Hudson Mezzanine Funding 2006-1, Goldman Sachs told investors its interests were "aligned" with theirs while the firm held 100% of the short side, according to the report.

The report detailed a $1.1 billion Deutsche Bank CDO known as Gemstone VII, which was backed with subprime loans that its then-top trader, Greg Lippmann, referred to as "crap." The head of the bank's CDO group, Michael Lamont, said in an e-mail cited in the report that he would try to sell the CDO "before the market falls off a cliff."
On lending, the panel alleges that executives at failed thrift Washington Mutual Inc. dumped its bad loans on clients while misleading them about their value.

"WaMu selected delinquency-prone loans for sale in order to move risk from the banks' books to the investors in WaMu securities," Levin said.

Compounding that problem, the subcommittee found, was an apparently cozy relationship between WaMu and its regulator, the Office of Thrift Supervision.

The report cited a July 2008 e-mail from then-OTS director John Reich to WaMu CEO Kerry Killinger, in which Reich said the regulator would issue a memorandum of understanding regarding the bank's problems.

"If someone were looking over our shoulders, they would probably be surprised we don't already have one in place," Reich wrote, apologizing twice for communicating the decision in an e-mail.

Under the Dodd-Frank regulatory overhaul, the OTS will be folded into other regulators in July.

"The head of OTS knew his agency had been providing preferential treatment to the bank," Levin said. "The OTS was abolished by Dodd-Frank, and for good reasons.".