Financially? Their executives can loose millions by making wrong decisions, keep their jobs, get huge bonuses, while they take good paying jobs from the middle class and send them "off shore". They, just like most companies do not care for the common worker. Only to fill their pockets with more money, more options, more bonuses, more greed.
WASHINGTON (AP) -- A federal judge says the government acted unreasonably by ignoring the costs to MetLife of being targeted for stricter supervision as a potential threat to the financial system.
U.S. District Judge Rosemary Collyer says she decided to strike the government's labeling of MetLife because it was "arbitrary and capricious." The federal regulators who make up the Financial Stability Oversight Council failed to consider possible financial harm to the insurance giant from the action, backtracking on their own policy, Collyer wrote.
Her opinion, which had been kept under seal, was made public Thursday. In a ruling last Wednesday, Collyer removed the council's labeling of MetLife Inc. as "systemically important" — requiring closer oversight.
Her ruling dealt a setback to the government's policy for preventing another financial crisis using new legal tools.
By ignoring potential costs to MetLife and failing to observe its own standards — and then not explaining why — the FSOC has made its process for deciding whether to designate companies "fatally flawed," Collyer wrote in her opinion.
In fact, she wrote, the regulators' decision to tag MetLife in December 2014 "hardly adhered to any standard when it came to assessing MetLife's threat to U.S. financial stability."
New York-based MetLife, the largest U.S. insurance company by assets, took the government to court more than a year ago to appeal its labeling as "systemically important" — so big and enmeshed with the financial system that it could threaten the economy if it collapsed.
The government is expected to appeal the judge's ruling. Treasury Secretary Jacob Lew, who heads the FSOC, said Thursday he "strongly disagrees" with the ruling.
Collyer's decision "leaves one of the largest and most highly-interconnected financial companies in the world subject to even less oversight than before the financial crisis," Lew said in a statement. "We intend to continue defending vigorously the process and the integrity of FSOC's work, and I am confident that we will prevail."
The FSOC is a group of top federal regulators created by the 2010 Wall Street overhaul law to monitor the financial system with an eye to preventing another crisis.
The council was empowered by the law to tag certain companies for stricter supervision as a way to end "too big to fail" — the idea that some financial institutions are so big and crucial to the system that the government would step in to rescue them if they veered toward collapse. That's what happened in the crisis that struck in 2008, with hundreds of millions of dollars in taxpayer aid going to big U.S. banks and other financial institutions.
The council is led by Lew, and includes Federal Reserve Chair Janet Yellen and Mary Jo White, chair of the Securities and Exchange Commission.
In fighting the oversight agency's action, MetLife said the label and stricter oversight would cost it dearly. The designation required MetLife to increase its cushion of capital held in reserve against losses, limit its use of borrowed money, submit to inspections by federal examiners and come under the supervision of the Federal Reserve. MetLife's primary regulator has been New York state.
For the industry as a whole, MetLife maintained, tougher requirements on life insurance companies would force them to raise the prices of their products, reduce the amount of risk they take on in selling their products, or stop offering some products altogether. Capital requirements for banks were established to protect depositors, rather than ensuring that life insurers can meet their obligations to policyholders, the company said.
MetLife was the fourth nonbank financial firm to be given the label by the council. The others were American International Group Inc., General Electric Capital Corp. — the finance arm of General Electric Co. — and Prudential Financial Inc. They did not appeal the designation.
Sentiment: Strong Sell
What the hell is the problem now? This company doesn't support its own stock price yet they claim to purchase shares. There are always excuses and problems. Let's hope there are no surprises.
At a current price-to-book multiple of around 0.9x, Prudential Financial is trading cheaper than other insurers including Allstate (ALL), ACE (ACE), and Chubb (CB).
I've chosen, a few weeks ago, to grab some Jan 20 2017 $85 calls at around a buck. Already a double and have a feeling in 6 months this will be closer to $85 than $65. Baring any unusual situation like mgmt losing billions again on a Japanese hedge.
Sentiment: Strong Buy