Your daily dose of financial industry news

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Details are continuing to emerge about the size, scope, and audacity of Volkswagen’s diesel-engine cheating software scandal.  The German automaker issued a  “de facto profit warning” due to the $7.3 billion it’s setting aside to address issues related to the 11 million cars worldwide impacted by its deception – NYTimes and WSJ

Breakingviews sees parallels to the Libor debacle – NYTimes

The SEC’s new push to protect mutual fund shareholders has scored its first victory. First Eagle Investment Mgmt has agreed to pay $40 million to resolve agency claims that it misused assets to market and distribute shares.  The SEC alleged that First Eagle breached a fiduciary duty to shareholders by using fund assets to pay for costs of marking and distributing shares – Law360 and NYTimes

Elsewhere, an industry survey of the largest money market firms suggests that most are struggling to prepare for the dawn of new SEC rules set to take effect next year, with one of the biggest hurdles being the requirement that “prime money market funds that cater to institutional investors set a floating net asset value, replacing the fixed one-dollar NAV” – Law360

The SEC’s also expected to issue new guidelines today addressing mutual fund investments in rarely traded illiquid securities. The problem is that many funds have currently parked more than 15% of their holdings in bonds that would take more than 7 days to sell, contrary to promises made to investors. The Journal’s nifty bar graph is helpful here – WSJ

The Dealbook cites an empty 6th floor—nearly a block long—in its newish Hudson River-overlooking HQ as a sign of the changes at Goldman Sachs, particularly in its once-robust trading operations, and the industry writ large in the post-financial-crisis era – NYTimes

Following the 2d Circuit’s reversal, a group of union pension funds is seeking Supreme Court review of its claims that BNY Mellon should be liable under the Trust Indenture Act (TIA) for failing to properly oversee hundreds of now-collapsed RMBS. The issue on appeal focuses on the characteristics of the sequential-pay certificates in dispute and whether they fit within the TIA’s definition of securities – Law360

After years of criticism over the amount of personal information it was collecting and sharing (without users’ knowledge), Facebook has decreased access to its “social graph” in recent months. The Journal points out that the move, though good for privacy concerns, has meant serious consequences for those—from academics to app developers—who have come to rely on that treasure trove of personal data in their work – WSJ

So, just “Pennsylvania General” then? – WSJ

 

MDR

Follow me on Twitter: @reifmd

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