Compliance June 16, 2009

SEC Will Move To Block Reserve Fund Suits

The Securities and Exchange Commission (SEC) will ask a federal judge to block some investor lawsuits against the failed Reserve Primary Fund to ensure all shareholders get as much money as possible, the New York Times reported.
Reported by

U.S. District Judge Paul G. Gardephe for the Southern District of New York will hold a hearing on September 23 to consider an SEC request that “certain claims” against the failed money market fund be blocked, according to a June 8 court document. The SEC said blocking private litigation will help ensure the fund’s remaining assets are divided evenly, according to the Times.

The commission sued the managers of Reserve Primary in May, accusing them of misleading shareholders about the safety of the fund after it suffered losses on Lehman Brothers Holdings debt (see “Reserve Management Execs Accused of Fraud in Money Fund Debacle“). The Reserve Fund is also facing a lawsuits brought by Ameriprise Financial and a hedge fund (see “Lawsuits Spring up from Lehman Brothers Fall“).

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Last October, Reserve Primary Fund, which helped set off the financial crisis after it “broke the buck,” said it will return at least one-third of investors’ money (see “Reserve Primary Fund Promises $20B in Shareholder Repayments“).

More information about the SEC’s position is available here.

Deals & People June 16, 2009

Barclays Formally Accepts BlackRock’s Offer for BGI

BlackRock, Inc., announced Tuesday it has received written notice from Barclays PLC that Barclays’ Board of Directors has formally accepted BlackRock’s offer to acquire Barclays Global Investors (BGI).
Reported by

A BlackRock news release said Barclays also indicated its board will recommend the transaction to Barclays’ shareholders for approval at a special early August meeting.

According to the release, Barclays’ acceptance of BlackRock’s offer followed satisfaction of the provisions required under a “go-shop” arrangement with respect to a previous offer for iShares, BGI’s exchange-traded funds (ETF) platform. The other party had five business days to match the terms of BlackRock’s proposal or the Board of Directors of Barclays agreed to execute the purchase with BlackRock and recommend it to Barclays’ shareholders for approval.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The transaction is expected to close in the fourth quarter 2009 following Barclays’ shareholders consideration, the receipt of client consents, regulatory approvals, and satisfaction of customary closing conditions.

The two sides announced last week that BlackRock had executed an agreement to acquire BGI and iShares (see “BlackRock Snags BGI, iShares’).

The combination of BlackRock and BGI brings together “market leaders in active and index strategies to create the preeminent asset management firm, BlackRock Global Investors,” the release said. The transaction would create an independent and asset management firm with combined assets under management of more than $2.7 trillion.

«