Goldman execs joining Walmart fintech venture; Robinhood may settle trade probes

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Goldman Sachs Group Inc. senior bankers Omer Ismail and David Stark are jumping ship to join a new fintech startup of retail giant Walmart Inc., which disclosed last month that it partnered with investment firm Ribbit Capital for an independent financial services venture, Bloomberg News reported, citing people with knowledge of the matter. Walmart's splash into the financial services space is rocking the boat for Wall Street, which has been asking regulators to limit retailers' and startups' bid to offer core banking products, according to a succeeding Bloomberg report.

* Online trading platform Robinhood Markets Inc. is negotiating to settle regulatory investigations into its options-trading practices and its app's outages last year, a regulatory filing showed. The company's two units, Robinhood Financial LLC and Robinhood Securities LLC, are now in talks with the Financial Industry Regulatory Authority on the possible settlement, which could cost the company at least $26.6 million.

➤$1B AmeriHome deal highlights seller's alternative investments strategy

The transaction produced a "fantastic outcome" for a life insurer with significant holdings in the mortgage lender both in terms of incremental investment income and validation for its strategy to allocate a portion of its portfolio to alternatives.

➤VCs reopen funding tap for Asia-Pacific fintechs in Q4'20; brighter days in 2021

Although Asia-Pacific saw a decline in financial technology investments in 2020, the surge in both deal value and volume in the last quarter of the year pointed to a brightening outlook for the fundraising environment in 2021.

BANKING

* Citigroup Inc. revised its net income for the fourth quarter of 2020 lower by about $300 million, to $4.31 billion, to reflect the impact of a court ruling that creditors to Revlon Inc. could keep about $500 million that the bank transmitted to them by mistake. The revision translated to an 8% reduction in EPS for the period, to $1.92.

* JPMorgan Chase & Co. and Bank of America Corp. are giving their employees up to eight hours of paid time off for COVID-19 vaccinations, Reuters reported. Bank of America staff will have the option of two half days in 2021 to complete a two-dose inoculation, according to a memo Reuters verified with the company. JPMorgan employees eligible for the vaccination will get eight hours' leave, company spokeswoman Amy Bonitatibus told the news outlet.

* Bank of America will book its contentious staff bonus policy changes as a $400 million expense in the first quarter instead of spreading the cost over the next four years, Bloomberg News reported, citing the bank's CFO, Paul Donofrio, at Credit Suisse Group's Feb. 26 virtual conference. The plan would have forced certain long-tenured staff that were eligible for retirement to forfeit a sizeable portion of their 2020 bonus, but the company backpedaled after the idea caused an internal uproar.

* Quantum Governance founder and CEO Michael Daigneault laments credit unions' slow pace to diversify their boards even on the heels of increased awareness of diversity, equity and inclusion in the past 10 years, American Banker reported.

* In New Jersey, the boards of Magyar Bancorp MHC and Magyar Bancorp Inc. (MHC) adopted a plan of conversion and reorganization. Magyar Bancorp Inc. will reorganize into a fully public stock holding company structure and conduct a second-stage offering of new common shares. Magyar Bancorp MHC will merge into Magyar Bancorp and will cease to exist.

FINANCIAL SERVICES

* Northern Trust Corp. launched two exchange-traded funds in Europe that combine smart beta strategies with climate metrics, the Financial Times reported. The new funds will be launched in collaboration with index provider Stoxx.

* Robinhood has been in talks with underwriters about plans to confidentially file for an initial public offering as soon as March, Bloomberg News reported, citing unnamed sources. Robinhood was valued at $11.7 billion in its last private fundraising round in September 2020 and recently raised $3.4 billion in funding, including $1 billion announced Jan. 29.

* Huge losses reaching $250 million on derivative trades amid a volatile stock market last year forced Geode Capital Management to shut its hedge fund business, The Wall Street Journal reported, citing people familiar with the matter. Even Fidelity Investments, whose stock-index funds account for the bulk of Geode's $720 billion in assets, withdrew its money from the company's largest private fund after the losses, the Journal added.

POLICY AND REGULATION

* The U.S. Securities and Exchange Commission suspended trading in the securities of 15 more companies due to what the regulator believes as questionable trading and social media activity. The regulator has of late halted trading for nearly two dozen securities amid heightened social media interest in efforts to police the market and protect investors.

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