February 20th, 2008
Bank that censored WikiLeaks was preparing for IPO
Correction: This post previously reported that there was a press statement from WikiLeaks; in fact, I did receive it from Wikileaks, but it turns out that email was forwarded, unattriibuted, a posting by Animats on Slashdot.
Wikileaks has discovered Bank Julius Baer was preparing to take their US operation public via an a billion dollar IPO. They filed the prospectus with the SEC on Feb 12, a mere three days before convincing Federal court Judge Jeffery White to order total censorship of the transparency site. (http://www.sec.gov/Archives/edgar/data/1419178/000095010308000318/dp08507_s1.htm): “We are an asset management company that provides investment management services to institutional and mutual fund clients. We are best known for our International Equity strategies, which represented 92% of our assets under management as of September 30, 2007.” They were going to call the business “Artio” (ticker symbol ART, to be listed on the NYSE). Goldman Sachs and Merrill Lynch were to underwrite the IPO, according to Bloomberg
So the last thing they needed was to be the subject of a New York Times story and all over the world press, associated with money laundering. Now the deal goes under a microscope. Their underwriters have to take a second look and the SEC may have questions. Julius Baer will probably have to file a “material event” 8-K report with the SEC. Newspaper and magazine reporters will be looking at Baer. The question will be raised that the rather high returns Baer reports may be achieved via money laundering.
All this is happening in a down market, in which it is hard to do an IPO and in which investors are very sensitive to unexpected risk. The whole deal may evaporate, or be repriced downward.
Attempting to censor Wikileaks was a very, very expensive mistake for Baer.
