Leonardo DiCaprio tied to “Wolf of Malaysia,” DOJ

You can file this under the heading of life imitating art

On Thursday the Justice Department seized a Picasso and Basquiat paintings given to Leonardo DiCaprio, as well as rights to two Hollywood film comedies, in complaint filings to claw back $540 million they say was “stolen” from the Malaysian sovereign wealth fund, 1MDB.

The high-end art work was given to DiCaprio by Jho Low — a Malaysian financier — who the feds charged with laundering more than $400 million stolen from 1MDB through an US  account.

Low used the ill-gotten gains to fund a film production studio called Red Granite to live the life depicted in DiCaprio’s “Wolf of Wall Street” where he and his friends used the money to pay for lavish parties, gambling and yachts.

The DOJ’s filing also sought to claw back the assets of two other Red Granite films, which the federal investigators say were financed by money from the 1MDB fund.

“Dumb and Dumber To” starring Jim Carrey in the 2014 comedy, and 2015 comedy “Daddy’s Home” starring Will Ferrell.

Last year, the DOJ also tried to seize the rights to “The Wolf of Wall Street” although the Red Granite Pictures said on Thursday it was “actively engaged in discussions with the Justice Department aimed at resolving these civil cases and is fully cooperating.”

“Mr. DiCaprio initiated return of these items, which were received and accepted by him for the purpose of being included in an annual charity auction to benefit his eponymous foundation,” the actor’s people said in statement on Thursday. “He has also returned an Oscar originally won by Marlon Brando, which was given to Mr. DiCaprio as a set gift by Red Granite to thank him for his work on ‘The Wolf of Wall Street,'” the statement added.

Low also had connections with a former Goldman Sachs Far East director Tim Leissner, who helped the government set up the sovereign wealth fund and profited from its many bond offerings to allegedly funds airports, roads  and other infrastructure projects.

Leissner also had a Hollywood connection with his second wife Kimora Lee Leissner, the ex-wife of Russell Simmons, the cofounder of Def Jam Records. Leissner resigned from Goldman in 2016 has been barred from the securities industry in Malaysia for 10 years.


Deutsche's stock rocked by fed's $14B fine

Deutsche Bank’s shares are down 8% in pre-market here in the US on the news that the Justice Department requested a $14B settlement in an investigation into the bank’s  handling of mortgage-backed securities during in 2008.

DB’s CEO John Cryan dismissed the figure as an opening offer in negotiations and said the bank would not pay anywhere near that amount. The $14B get out of jail (well not really because no one goes to jail) card is curious since it’s the identical amount the EU hit Apple with for back taxes involving Ireland.

DB’s $14B fine would also put it just behind Bank of America, which paid $17B two years ago for Angelo Mozillo’s toxic mortgage transgressions at Countrywide Financial.

The price tag rocked DB’s share price, since Germany’s largest bank has been struggling with liquidity and according to analysts covering the bank, any fine over $4B would be a hardship to Cryan’s beleaguered balance sheet.

Here’s my take on some news that I have written about recently.

Federal regulators are changing how money market funds calculate their net asset values and whether they can “break the buck.” The reg changing liquidity rules at a time historically when liquidity is strained. And now the feds are looking to extract a king’s ransom from a “too big to fail” bank that the street is concerned could actually fail.

Don’t get me wrong I’m not defending DB — never could after my banker suicide stories on the bank — but the timing is curious.