{"id":10252,"date":"2010-03-25T20:54:10","date_gmt":"2010-03-26T00:54:10","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=10252"},"modified":"2010-03-25T20:54:10","modified_gmt":"2010-03-26T00:54:10","slug":"march-25-2010","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=10252","title":{"rendered":"March 25, 2010"},"content":{"rendered":"

The Ontario Securities Commission has released<\/a> the new edition of Perspectives<\/i><\/a>, which provides information on regulatory initiatives.<\/p>\n

We have a new poster-boy for the banks’ pursuit of mediocrity, rivalling Canada’s David Berry<\/a>. Ladies & Gentlemen, let’s hear it for Raphael Geys<\/a>!<\/p>\n

Raphael Geys, former managing director of European fixed income sales for French bank Societe Generale, claims he was summarily dismissed without cause in November 2007.<\/p>\n

He said that during his three years at the bank he was responsible for more than doubling the gross revenue of his division, from 205 million euros to 440 million euros.<\/p>\n

Deputy Judge George Leggatt QC was told at a hearing earlier this month: “He was dismissed for being too successful in that role because the provisions in his contract were considered by the bank to be too generous.”<\/p>\n

It was claimed that the bank’s termination of the contract “raised issues about the claimant’s entitlement to termination and other payments due under the contract. Very substantial sums are at stake”.<\/p>\n

These have been reported as being 12.5 million euros (\u00a311.3 million).<\/p>\n

The bank claims he is not entitled to any “termination payment” under the contract because he has taken legal action.<\/p><\/blockquote>\n

And now, he’s passed the first milestone<\/a>:<\/p>\n

Societe Generale SA, France\u2019s second-largest bank, lost a U.K. court decision over whether an 8 million-euro ($10.6 million) severance package it offered a former employee was less than what he was owed.<\/p>\n

Raphael Geys, a former managing director of European fixed income sales at Societe Generale, sued and claimed at a trial that began last week in a London court that under his contract\u2019s terms he was owed more severance than the bank offered.<\/p>\n

If a severance value can\u2019t be negotiated, a trial will be held to determine the amount, Judge George Leggatt said in the ruling today. Geys, who was fired in November 2007, said he was entitled to more than 12.5 million euros under his contract. Societe Generale argued it no longer owes Geys any severance because suing breached his contract.<\/p>\n

\u201cI reject the bank\u2019s arguments that the claimant has lost any right to receive a termination payment, or any other payment, as a result of making or pursuing any claims,\u201d Leggatt said.<\/p>\n

The bank may have saved itself about 2.5 million euros had it \u201cappropriately\u201d worded a November 2007 letter firing Geys, according to the judge. Leggatt said the company didn\u2019t properly end Geys\u2019s contract until months later, meaning Societe Generale owed him a year-end bonus.<\/p><\/blockquote>\n

Sarah Butcher of eFinancial News reports It’s not unusual for banks to fire over-performers<\/a>:<\/p>\n

Bizarrely, lawyers say it\u2019s not at all unusual for banks to eject high performers with large pay claims, even if they\u2019re making a profit for the firm.<\/p>\n

\u201cYou\u2019d think that banks would recognise that it\u2019s sensible to keep these people onboard,\u201d says Charles Ferguson, a solicitor who specialises in the representation of traders. \u201cHowever, there are some banks where there\u2019s a limit to what they\u2019re willing to pay. If someone takes them above that, they\u2019ll look for an excuse to back out.\u201d<\/p>\n

Most banks include clauses in their contracts specifying that you need to be in employment and not under notice at the bonus date in order to be eligible for a payment. As a result, redundancies in the run up to bonuses are abnormally common.<\/p>\n

Equally, Ferguson says some contracts specify that profit sharing entitlements will disappear if salespeople or traders are sacked for gross incompetence. He says this is also a favourite reason for dismissal.<\/p><\/blockquote>\n

Hah! Us proud Canadians can teach them a thing or two about justification for firing, eh?<\/p>\n

The Ontario 2010-11 Budget<\/a> was introduced today. Not a word about dividends – probably a good thing! More worrisomely, they proudly announce that the current deficit will be eliminated in a mere eight years – which stands a good chance of being the next completely unexpected and totally unforecasted recession. In that time, a mere $88.9-billion will be added to the provincial debt … and debt charges will rise from 9.35% of revenue to 11.3%.<\/p>\n

In the Canadian preferred share market, volume was heavy AGAIN, Perpetual Discounts were down AGAIN (losing 21bp) and FixedResets were up AGAIN (gaining 5bp). Yields on FixedResets are now at 3.38%.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices<\/strong>
Values are provisional and are finalized monthly<\/td>\n<\/tr>\n
Index<\/td>\nMean
Current
Yield
(at bid)<\/td>\n		Median
YTW<\/td>\n		Median
Average
Trading
Value<\/td>\n		Median
Mod Dur
(YTW)<\/td>\n		Issues<\/td>\nDay’s Perf.<\/td>\nIndex Value<\/td>\n<\/tr>\n
Ratchet<\/td>\n2.61 %<\/td>\n2.73 %<\/td>\n59,156<\/td>\n20.84<\/td>\n1<\/td>\n1.8868 %<\/td>\n2,113.4<\/td>\n<\/tr>\n
FixedFloater<\/td>\n4.94 %<\/td>\n3.06 %<\/td>\n50,216<\/td>\n20.10<\/td>\n1<\/td>\n2.2305 %<\/td>\n3,198.4<\/td>\n<\/tr>\n
Floater<\/td>\n1.93 %<\/td>\n1.72 %<\/td>\n44,167<\/td>\n23.26<\/td>\n4<\/td>\n-0.1470 %<\/td>\n2,387.2<\/td>\n<\/tr>\n
OpRet<\/td>\n4.84 %<\/td>\n1.26 %<\/td>\n111,554<\/td>\n0.18<\/td>\n12<\/td>\n-0.0965 %<\/td>\n2,313.1<\/td>\n<\/tr>\n
SplitShare<\/td>\n6.36 %<\/td>\n6.05 %<\/td>\n137,742<\/td>\n0.08<\/td>\n2<\/td>\n0.1538 %<\/td>\n2,144.6<\/td>\n<\/tr>\n
Interest-Bearing<\/td>\n0.00 %<\/td>\n0.00 %<\/td>\n0<\/td>\n0.00<\/td>\n0<\/td>\n-0.0965 %<\/td>\n2,115.1<\/td>\n<\/tr>\n
Perpetual-Premium<\/td>\n5.95 %<\/td>\n6.02 %<\/td>\n119,154<\/td>\n13.75<\/td>\n7<\/td>\n-0.0630 %<\/td>\n1,871.5<\/td>\n<\/tr>\n
Perpetual-Discount<\/td>\n5.99 %<\/td>\n6.01 %<\/td>\n180,510<\/td>\n13.90<\/td>\n71<\/td>\n-0.2061 %<\/td>\n1,767.2<\/td>\n<\/tr>\n
FixedReset<\/td>\n5.34 %<\/td>\n3.38 %<\/td>\n348,962<\/td>\n3.67<\/td>\n43<\/td>\n0.0488 %<\/td>\n2,212.1<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n
Performance Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nChange<\/td>\nNotes<\/td>\n<\/tr>\n
W.PR.H<\/td>\nPerpetual-Discount<\/td>\n-1.88 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 21.89
\nEvaluated at bid price : 21.89
\nBid-YTW : 6.42 %<\/td>\n<\/tr>\n
TD.PR.P<\/td>\nPerpetual-Discount<\/td>\n-1.70 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 22.47
\nEvaluated at bid price : 22.61
\nBid-YTW : 5.90 %<\/td>\n<\/tr>\n
IGM.PR.B<\/td>\nPerpetual-Premium<\/td>\n-1.44 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 24.49
\nEvaluated at bid price : 24.70
\nBid-YTW : 6.13 %<\/td>\n<\/tr>\n
TD.PR.R<\/td>\nPerpetual-Discount<\/td>\n-1.27 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 23.90
\nEvaluated at bid price : 24.11
\nBid-YTW : 5.90 %<\/td>\n<\/tr>\n
CM.PR.K<\/td>\nFixedReset<\/td>\n-1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 26.51
\nBid-YTW : 3.76 %<\/td>\n<\/tr>\n
IAG.PR.E<\/td>\nPerpetual-Premium<\/td>\n1.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 24.40
\nEvaluated at bid price : 24.61
\nBid-YTW : 6.12 %<\/td>\n<\/tr>\n
BAM.PR.E<\/td>\nRatchet<\/td>\n1.89 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 22.64
\nEvaluated at bid price : 21.60
\nBid-YTW : 2.73 %<\/td>\n<\/tr>\n
BAM.PR.G<\/td>\nFixedFloater<\/td>\n2.23 %<\/td>\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 22.00
\nBid-YTW : 3.06 %<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n
Volume Highlights<\/strong><\/td>\n<\/tr>\n
Issue<\/td>\nIndex<\/td>\nShares
Traded<\/td>\n		Notes<\/td>\n<\/tr>\n
MFC.PR.C<\/td>\nPerpetual-Discount<\/td>\n191,429<\/td>\nNesbitt crossed blocks of 100,000 and 73,300 at 18.58.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 18.50
\nEvaluated at bid price : 18.50
\nBid-YTW : 6.13 %<\/td>\n<\/tr>\n
BNS.PR.T<\/td>\nFixedReset<\/td>\n132,410<\/td>\nCIBC bought 10,000 from National at 28.28; RBC crossed 50,000 at 28.31. CIBC bought another 13,600 from National at 28.32; anonymous bought 10,000 from TD at 28.39.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.36
\nBid-YTW : 3.09 %<\/td>\n<\/tr>\n
BNS.PR.X<\/td>\nFixedReset<\/td>\n116,804<\/td>\nCIBC bought 48,200 from National at 28.35, then another 10,000 from anonymous at the same price. Desjardins sold 20,000 to anonymous at 28.35; CIBC bought another 20,000 from National at 28.35 again.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-05-25
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.40
\nBid-YTW : 3.07 %<\/td>\n<\/tr>\n
TD.PR.K<\/td>\nFixedReset<\/td>\n112,270<\/td>\nCIBC bought 43,500 from National at 28.35. TD sold 23,300 to RBC at 28.35, then crossed 25,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-08-30
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.35
\nBid-YTW : 3.26 %<\/td>\n<\/tr>\n
RY.PR.P<\/td>\nFixedReset<\/td>\n92,243<\/td>\nNational crossed 50,000 at 28.09, then bought 17,000 from TD at 28.20.
\nYTW SCENARIO
\nMaturity Type : Call
\nMaturity Date\t: 2014-03-26
\nMaturity Price : 25.00
\nEvaluated at bid price : 28.16
\nBid-YTW : 3.06 %<\/td>\n<\/tr>\n
SLF.PR.A<\/td>\nPerpetual-Discount<\/td>\n86,888<\/td>\nRBC bought 18,700 from Dundee at 19.31, then crossed 50,000 at the same price.
\nYTW SCENARIO
\nMaturity Type : Limit Maturity
\nMaturity Date\t: 2040-03-25
\nMaturity Price : 19.24
\nEvaluated at bid price : 19.24
\nBid-YTW : 6.21 %<\/td>\n<\/tr>\n
There were 52 other index-included issues trading in excess of 10,000 shares.<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Ontario Securities Commission has released the new edition of Perspectives, which provides information on regulatory initiatives. We have a new poster-boy for the banks’ pursuit of mediocrity, rivalling Canada’s David Berry. Ladies & Gentlemen, …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-10252","post","type-post","status-publish","format-standard","hentry","category-market-action"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/10252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10252"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/10252\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}