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Hoffa, Teamsters Call on Regulators to Investigate Questionable Insurance Promotion for YRCW Bonds
December 22, 2009International Brotherhood of Teamsters General President Jim Hoffa today sent letters to the Securities and Exchange Commission (SEC), state Attorneys General, state insurance officials and Congressional leaders on financial industry oversight calling on regulators to review the questionable promotion of credit default swaps for bonds of YRC Worldwide, Inc. (NasdaqGS: YRCW), the country's largest less-than-truckload company. Hoffa urged the oversight bodies to investigate financial firms that are underwriting and/or marketing basis packages that consist of YRC bonds and credit default swaps (CDS). Financial firms such as Goldman Sachs, Deutsche Bank, TD Bank, Barclays and UBS have a history of making markets in these types of derivative financial products. "Certain financial firms, have been or are marketing and/or underwriting a strategy where bonds in YRCW would be bought by investors with the intent of voting against the exchange, thereby triggering a bankruptcy that would pay the investors and possible other financial firms huge profits from the high CDS payments which would be triggered by a YRC bankruptcy or liquidation," Hoffa wrote. "The profit from the YRCW CDSs would far outweigh losses from the failed YRCW bonds." Full release.