Practice/Industry Group Overview
S&C Financial Institutions Group Plays Leading Advisory Roles in Global Credit Crisis and Financial Crisis
At the vanguard of critical issues and developments affecting financial institutions, S&C has remained the chosen firm of leading global financial institutions seeking non-traditional investments, sales and restructuring arrangements in connection with the global credit and financial crisis. The Firm works with our clients on achieving their strategic business objectives despite the challenges of an unpredictable and often difficult global economic climate. In an increasingly complex regulatory environment, S&C has been at the forefront in educating clients about legislative and regulatory developments. We are providing extensive advice to market participants on the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III, as well as other aspects of Financial Services reform, including to various trade association clients. This advice covers a broad range of issues arising out of the legislation that are fundamental to our clients’ core strategies, such as changes to capital requirements and restrictions on trading activities involving commodities, securities, currencies and derivatives. S&C has organized major client events on these topics at both its New York and London offices.
As economic recovery created opportunities for expansion and restructuring in the past year, S&C provided regulatory and transactional advice with respect to sales, acquisitions and restructuring arrangements stemming from or related to the crisis. In 2009 and throughout 2010, we were industry leaders in structuring FDIC-facilitated transactions and private equity investments in financial institutions. The Firm has also played an instrumental role advising on the regulatory aspects of the Emergency Economic Stabilization Act of 2008, including representing clients in the Troubled Assets Relief Program (TARP). In recent months, S&C has advised many clients on their repurchase of stock from the U.S. Treasury Department as part of their TARP repayment plan.
- The underwriters in the $20.5 billion initial public offering and Hong Kong listing of AIA Group Ltd.
- AIG in connection with its $15.5 billion sale of American Life Insurance Company (Alico) to MetLife and the $85 billion emergency financing plan with the Federal Reserve and in its subsequent additional $30 billion equity capital commitment facility modifying the terms of Credit Agreement and the Series D Preferred Stock
- American Express in its conversion to a bank holding company
- The Bank of East Asia, Limited in its $140 million sale of an 80% interest in its U.S. national bank subsidiary, The Bank of East Asia N.A., to Industrial and Commercial Bank of China Limited; the approval was the first of its kind for a Chinese bank and paves the way for other leading Chinese banks to acquire control of depository institutions in the United States
- The Bank of New York in its $16.5 billion merger with Mellon Financial
- Barclays in the $15.2 billion sale of its Barclays Global Investors (BGI) business to BlackRock, Inc.
- Barclays in its acquisition of Lehman Brothers’ North American investment banking and capital markets operations and supporting infrastructure
- The Board of Directors of The Bear Stearns Companies in its sale to JPMorgan Chase
- CIFG creditor group in connection with French and U.S. aspects of commutation/recapitalization transactions
- EverBank Financial in its $2.4 billion acquisition of Business Property Lending, Inc. from GE Capital Real Estate
- Goldman Sachs and JPMorgan Chase, as capital advisers in connection with the takeover of the Federal Home Loan Mortgage Corporation (Freddie Mac) by the U.S. Department of the Treasury through a conservatorship
- The Federal National Mortgage Association (Fannie Mae) in connection with the establishment of a conservatorship by the Federal Housing Finance Agency
- Goldman Sachs in its sale of $5 billion in Preferred Shares and warrants to Berkshire Hathaway, its public offering of senior debt guaranteed by the FDIC and its public offering of $5 billion of Common Stock
- Goldman Sachs in its conversion to a bank holding company and related merger of its industrial loan bank and trust company
- HSBC Holdings PLC in its $1 billion sale of 195 U.S. retail bank branches to First Niagara Bank, National Association
- Hudson City Bancorp in its pending $3.7 billion merger with M&T Bank Corporation
- ING Groep in its C$3.1 billion sale of ING Bank of Canada to The Bank of Nova Scotia – the largest bank acquisition in Canada since 1999 – in the sale of its $2.9 billion stake in Capital One Financial Corp. through an underwritten public offering, in its €7.5 billion (approximately $11.2 billion) aggregate amount rights offering pursuant to Reg S, in the capital injection of approximately $13.4 billion from the Dutch government in the form of Convertible Core Tier 1 Perpetual Securities and in connection with the $28 billion Illiquid Assets Agreement with the Dutch State
- J.C. Flowers & Co. in its acquisition, as part of an investor group, of IndyMac Federal Bank
- JPMorgan Chase in its acquisition of all deposits, assets and certain liabilities of Washington Mutual’s banking operations from the FDIC, as well as the related stock offering
- Lehman Brothers in connection with its capital raising and consideration of strategic alternatives prior to its bankruptcy
- Mitsubishi UFJ Financial Group in its equity investment in Morgan Stanley for a 21% interest in the Company and in its “going private” acquisition of UnionBanCal Corporation
- National City in its merger with PNC Financial Services Group
- Numerous financial institutions in efforts to maintain or increase their capital levels, such as public offerings of stock and exchange offers, in response to the establishment of the Supervisory Capital Assessment Program (“bank stress test”) by the U.S. Treasury Department; specific clients include The Bank of New York Mellon, SunTrust Banks, Regions Financial, Fifth Third Bank and KeyCorp
- Numerous financial institutions and underwriters in the offering of securities under the Temporary Liquidity Guarantee Program (TLGP) by the Federal Deposit Insurance Corporation, including the first offering under the program by Goldman Sachs Group as well as offerings by U.S. Bancorp, The Bank of New York Mellon, Regions Bank, SunTrust Banks, Zions Bancorp and New York Community Bancorp
- Goldman Sachs, JPMorgan Chase and The Bank of New York Mellon as initial participants in the Troubled Assets Relief Program (TARP), as well as numerous institutions in the “second wave”; S&C subsequently represented these institutions, as well as American Express and TCF, among others, in the repurchase of preferred stock from the Treasury Department as repayment of the federal government’s investment
- Wachovia in its merger with Wells Fargo
S&C continues to have the preeminent financial institutions practice in the United States. Our Financial Institutions Group brings together the Firm’s premier banking practice, its long-standing representation of some of the largest U.S. and international insurance companies, its leading position among legal advisers to the investment management industry, its extensive experience in the securities industry and its strength in derivatives markets and electronic trading systems to provide unparalleled advice to established and emerging financial services companies.
In addition to being a leading adviser in the global convergence of financial services companies, S&C is a recognized leader in financial institutions M&A, compliance and regulatory matters and securities transactions. Our M&A transactions in this sector are significant not only because of their size, but also because of their substantial complexity involving acquisition-related restructurings that have significantly reshaped the landscape of the financial services industry. Advising banking, broker-dealer and insurance clients on compliance and regulatory matters that shape their respective industries is an important dimension of our practice. S&C also acts in some of the most complex and challenging capital markets transactions involving a broad array of U.S. and non-U.S. financial institutions.
Our Firm has played a leading and unique role in connection with the problems facing the financial services industry as a result of the subprime crisis. For example, S&C has taken the lead in advising a number of major U.S. and non-U.S. financial institutions in significant capital raisings and sovereign wealth fund capital investments in leading U.S. financial institutions, in a role that The Wall Street Journal called “a front row seat for one of the biggest developments in the financial world in 2007.” We have also been instrumental in obtaining a number of regulatory rulings supporting the industry’s efforts to obtain liquidity for itself and to provide it to customers efficiently. In addition, S&C is representing a number of industry participants in connection with regulatory investigations and litigations arising from the crisis. Our role in connection with the subprime crisis illustrates the unique interdisciplinary nature of our financial institutions practice.
Our lawyers represent financial institutions in numerous confidential matters of great importance to them. Most recently, these matters have included representations in connection with the subprime lending crisis, economic sanctions compliance, anti-money laundering requirements and reporting issues, and the financing of companies engaged in Internet gambling. We participated actively in the development of the international transparency initiative for bank payments that is designed to prevent money laundering and terrorist financing.
S&C is widely recognized as having the premier banking practice in the United States. The Firm represents major U.S. and non-U.S. banking clients in merger and acquisition, regulatory, corporate and capital markets matters and regularly interacts with state and federal banking regulatory agencies. For more on S&C’s banking practice, please see Banking.
The Insurance Group’s regular clients include some of the largest U.S. and international insurance and reinsurance companies, for whom the Firm provides corporate, securities, M&A, tax, litigation, insurance regulatory, derivatives and other advice. For more on S&C’s insurance practice, please see Insurance.
Since the enactment of the Investment Company Act of 1940, S&C has been one of the leading legal advisers to the investment management industry, and has advised numerous public and private companies and their advisers on issues under that Act. The Firm is also a leader in merger and acquisition transactions in the investment management industry. For more on S&C’s investment management practice, please see Investment Management.
S&C provides advice on all regulatory, compliance and securities law matters relating to broker-dealers under U.S. federal and state securities laws and the regulations of the SEC, FINRA (formerly NASD and NYSE Member Regulation) and major securities exchanges. For more on S&C’s broker-dealer regulation practice, please see Broker-Dealer Regulation.
Commodities, Futures and Derivatives
S&C’s Commodities, Futures and Derivatives Group practices extensively in all areas of the growing derivatives markets, including work on transactions, product development, regulatory advice, compliance and litigation. For more on S&C’s commodities practice, please see Commodities, Futures and Derivatives.