Financial Business Wrap: Morgan Stanley Loses Top Adviser, AIG Pays To Settle Inquiry

Fund manager Mark Egan remarks that “The fundamentals haven’t changed, but the prices certainly have,” as he explained why he recently divested Bank of America Corporation (NYSE:BAC) bonds yielding 3 percent which he had bought in 2011 when they were yielding 8 percent. He added that the impressive balance sheets of the financials promise good times ahead for bondholders, but less so for the owners of the common stock.

The heavy-hitting financial adviser Rebecca Rothstein and her team leave Morgan Stanley (NYSE:MS) for Bank of America Merrill Lynch, as they are said to be frustrated with tech problems and also the culture changes that came with the Morgan Stanley Smith Barney merger. Rothstein held some $2.5 billion in client assets, and is only one of several top rainmakers to leave MS in 2012.

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American International Group (NYSE:AIG) will shell out $11 million to resolve a multi-state inquiry into its handling of death benefits, along with agreeing that in the future its roles of policyholders will be checked against an SSA database in order to locate the beneficiaries of those deceased without entered claims.

Goldman Sachs (NYSE:GS) fails to get a $1 billion lawsuit dismissed over CDOs which are loaded with toxic subprime mortgages that it sold to an Australian hedge fund. Timberwolf, one of the CDOs, was described by Goldman mortgage department chief Thomas Montag as “one s—— deal.”

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