Citigroup, Palm: Friday Headlines

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Updated with FHA news, Sirius XM minimum bid price notice, report on UBS tax settlement affecting other banks

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NEW YORK (

TheStreet

) -- Here are the top stock market headlines for the morning of Friday, September 18, 2009.

Friday's Early Headlines

• SEC Moves to Ban Flash Trading. - The Securities and Exchange Commission late Thursday proposed a rule amendment that would prohibit the practice of flashing marketable securities. "Flash orders may create a two-tiered market by allowing only selected participants to access information about the best available prices for listed securities," said SEC Chairman Mary Schapiro. "These flash orders provide a momentary head-start in the trading arena that can produce inequities in the markets and create disincentives to display quotes."
• $100 Million Pay Package Too Much: Citigroup CEO. - During an event in New York Thursday, Citigroup (C) - Get Report CEO Vikram Pandit answered "Yes" when asked whether a $100 million annual pay package was too much. The response was aimed at Andrew Hall, the head of Citi's oil trading unit Phibro, who received $98.9 million in 2008, according to The Wall Street Journal. Pandit said that Citi wants to reduce its ownership in Phibro and have it manage money from outside investors, The Financial Times reports. Phibro currently trades with capital from Citigroup.
• Airlines Team Up for JAL Offer. - AMR's (AMR) American Airlines plans to team up British Airways and Qantas Airways to make a joint proposal for Japan Airlines, according to a Reuters report. The proposal is aimed at thwarting a bid from Delta Air Lines (DAL) - Get Report.
• Ex-Morgan Stanley Trader Sentenced for Insider Trading. - Reuters reports that former Morgan Stanley (MS) - Get Report managing director Du Jun was sentenced to a maximum seven years in jail on Friday after a Hong Kong district court found him guilty of insider trading. "This sentencing sends the strongest possible message to anyone tempted to commit an insider dealing offence in the future," Mark Steward, the Commission's Executive Director of enforcement told reporters outside the court, according to the Reuters report.
• FHA Cash Reserves to Fall Below Required Levels. - The Washington Post Friday reported that cash reserves at the Federal Housing Administration have been pushed below mandated minimum levels due to growing loan defaults. CNBC confirmed that the reserves are likely to fall below the required 2% level by Oct. 1, and that FHA Commissioner David Stevens is expected to announce steps Friday to address the problem.
• UBS Tax Case Prompts Disclosures from Other Bank Clients. - Bloomberg reports that UBS' (UBS) - Get Report tax settlement with U.S. authorities has prompted a flood of disclosures by customers of Credit Suisse (CS) - Get Report, HSBC (HBC) , Julius Baer Holding, LGT Group and Bank Leumi Le-Israel, tax attorneys said. That may give the Internal Revenue Service ammunition to target other overseas wealth managers as it seeks to crack down on tax evasion, the report said.
• Sirius XM Receives Potential Delisting Notice. - Late Thursday Sirius XM (SIRI) - Get Report said it received notice from the Nasdaq on Sept. 15 that its common stock had closed below $1 per share for 30 consecutive business days and is therefore not in compliance. The minimum bid price rule had been waived following events of the financial crisis before the Nasdaq reinstituted the rule on Aug. 3. Sirius XM reminded investors that its shareholders in May approved an amendment to effect a reverse stock split at a ratio of not less than one-for-ten and not more than one-for-fifty, which would put the company in compliance.

Friday's Earnings Roundup

• Palm (PALM) late Thursday posted a fiscal first-quarter loss of 10 cents a share, above the Thomson Reuters consensus for a loss of 25 cents a share. Revenue slipped 1.6% to $360.7 million, also better than estimates. However, looking ahead Palm offered revenue guidance for the fiscal second quarter that was well below Wall Street's target, and the company said it would sell 16 million shares of common stock.