Sector developments and company hires

B-piece service bulks out

Greystone, has added Paul Smyth, Cary Williams, and Paul Jankovsky as mds and Robert Farrington as a director to its CMBS platform. Based in Irving, Texas, the team brings to Greystone extensive expertise in CMBS B-Piece acquisitions as well as special servicing. While originating debt for clients across all of Greystone’s lending platforms, Smyth and his team will also pursue B-Piece investment and special servicing opportunities. These additional capabilities enable more certainty of loan execution and full continuity throughout the lifecycle of a CMBS loan, from origination to payoff.

CarVal MBO

Cargill is set to sell its ownership and economic interest in CarVal Investors to a partnership comprised of the firm’s senior management team. The transaction is expected to close in 4Q19, pending consents to the change in control from investors in CarVal’s funds. As part of the purchasing partnership, CarVal managing principals Lucas Detor, James Ganley and Jody Gunderson will continue to hold their roles going forward. Following the completion of the MBO, Cargill will remain invested in CarVal’s funds.

MBS portal launched

Broadridge Financial Solutions, has announced the launch of a new centralised Trade Assignment Portal (TAP) that will allow mortgage originators and broker-dealers to transform the execution of Mortgage-Backed Securities (MBS) Trade Assignments. TAP is a web-based platform, maximising operational efficiency through a well-managed workflow to facilitate the initiation, review, acceptance, e-signatures, status tracking, archival, and straight-through execution of MBS Trade Assignments. Several originators, including Freedom Mortgage, and Tier 1 broker-dealers are completing user acceptance testing in preparation for going live on TAP. Once live, these firms can expect an improvement in efficiency while eliminating errors in the execution of MBS Trade Assignments.

Wing Chau settles

Wing Chau and his firm Harding Advisory have settled with the US SEC in connection with violations of Section 206(2) of the Advisers Act and Section 17(a)(2) of the Securities Act in their role as investment managers for the Lexington V Capital Funding and Neo CDO 2007-1 transactions. The Commission alleges that by acting in conflict with the offering circulars for these CDOs, Harding and Chau negligently breached their obligations to the issuers by failing to use reasonable care in selecting for inclusion in their portfolios millions of dollars’ worth of triple-B rated notes from a CDO known as Norma. Norma was structured by a subsidiary of Merrill Lynch, pursuant to an agreement with Magnetar Capital. The Norma notes defaulted on 10 March 2008, while Neo defaulted on 20 December 2007 and Lexington defaulted on 23 July 2009. Accordingly, Chau is prohibited from acting as an employee, officer, director or member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company, with a right to apply for re-entry after one year. Chau has also been ordered to pay disgorgement of US$95,490 and a civil money penalty of US$850,000.