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steve cohenAt some point last year, after he had settled insider trading charges against his firm, the hedge fund formerly known as SAC Capital, Steve Cohen began exhibiting signs of man who felt, if not contrite, than contrite-lite. He agreed to rename his company, stripping his initials from all letterhead, fleece, and signage. He started paying employees to not commit securities fraud. And, most significantly, he agreed to only manage the money of people related to him by blood or marriage, returning billions of dollars to investors, and kissing a whole lot of would-be fees good-bye.

But now? Possibly/probably emboldened by the December appeals court ruling that knocked his No. 2 nemesis, Preet Baharara, down several pegs and officially made it harder for prosecutors to convict people of insider trading? He’s all but finished playing the part of a guy who feels bad about running a firm described as a “veritable magnet for market cheaters.” Not only is he no longer taking orders from Preet, the Feds, of the SEC, but he’s thinking maybe it’s about time he started giving them out. Read more »

bombedoutThe survivors of the Swiss cap-scrapping are beginning to emerge from the rubble of Bern and Zürich into a brave new world, with great big smiles on their faces. Read more »

No One Trashes Louis Bacon For 10 Years And Gets Away With It

Ready to wipe that smile off his face.

Ready to wipe that smile off his face.

For a decade, Moore Capital Management founder Louis Bacon has endured smear after smear on the part of his Bahamas neighbor, Canadian fashion mogul Peter Nygard: That he’s a racist, and possibly even a top-secret Grand Wizard of the KKK. That he’s a narcotics kingpin. That he’s trying to take over the government of the Bahamas. That he tried to burn Nygard’s somewhat less-than-tasteful Lyford Cay estate to the ground. That he’s employed “military-grade” loudspeakers to try to kill him, or at least to annoy him. That he has actually killed someone else. All because he’s either (a) trying to protect the exclusive enclave’s fragile ecosystem from Nygard’s planned 150,000-square-foot Mayan-style personal resort or (b) because he’s trying to force Nygard out of the Bahamas so that he can have Nygard Cay all to himself.

Well, Bacon’s finally had enough, and wants Nygard to cough up $50 million—coincidentally, the budget for the reconstruction of Nygard Cay following the fire that Bacon’s underlings set mysterious blaze in 2009 that destroyed the place—for saying all that stuff. Read more »

Opening Bell: 1.26.15

Screen Shot 2015-01-26 at 10.25.03 AMGreece Must Repay Debt, Europe Officials Say (WSJ)
Europe’s establishment moved quickly on Monday to douse hopes it would relax the terms of Greece’s bailout following the commanding victory by antiausterity leftists in its election, insisting that Athens honor its commitments. “We believe Greece has accepted terms that are not off the table after the election day,” German Chancellor Angela Merkel’s spokesman, Steffen Seibert, said in Berlin. Asked in Brussels whether Greece could expect more leniency from the eurozone, the head of the currency’s bloc’s conference of finance ministers, Jeroen Dijsselbloem, was blunt: “I don’t think there is a lot of support for that in the eurozone,” he said.

Tsipras Forges Anti-Austerity Coalition in EU Challenge (Bloomberg)
Alexis Tsipras was sworn in as Greek prime minister and handed a mandate to form a government that will challenge international creditors over the budget cuts he said had heaped humiliation on the country. Tsipras’s Syriza party and the Independent Greeks announced plans for an anti-austerity coalition in Athens on Monday after Syriza won an emphatic election victory by harnessing a public backlash against years of job losses and hardship. In a post-election speech, Tsipras said his priority is “for Greece and its people to regain their lost dignity.”

New Yorkers Told to Stay Home as 2 Feet of Snow Forecast (Bloomberg)
New York officials told residents to stay at home as a blizzard forecasters call “life-threatening” may dump as much as two feet of snow from New York to Boston. Northern New Jersey, New York City, Long Island and large parts of southern New England to Boston may receive as much as 24 inches (60 centimeters) of snow, the National Weather Service said in its latest advisory. The storm has already caused more than 1,800 flight cancellations and will probably block road and rail traffic, close schools and knock out power across the U.S. Northeast.

Hedge Funds Bet Oil Will Fall Further (Bloomberg)
Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.

Bonuses could jump 50 percent for top traders (NYP)
The top traders on the most profitable trading desks will see their bonuses skyrocketing by as much as 50 percent from 2013 levels in a new formula that sees fellow traders with smaller trading profits being docked a similar stunning proportion, according to a Wall Street recruiter. “The No. 1 thing I have noticed is the spread between the haves and have-nots this year,” said Peter Tannenbaum, CEO of Ramax Search, which places professionals at banks, brokerages, hedge funds, private-equity firms and other parts of the Street. “In the past, maybe 30 out of a 50-person team, for example, would share 70 percent of the bonus pool. That’s changing — firms recognize the need to keep the top 10 percent to 20 percent really happy, and then kind of figure out what to do with the rest.” Tannenbaum says it’s tough love for the underdogs. “Those second-tier guys are going to leave anyway,” he told The Post. “Their compensation could be down as much as 50 percent.”

Parent complains about ‘Po Pimp’ homework assignment (UPI)
Scott Tolleson appeared before a school board in Newton County, Ga., after his son showed him a homework assignment featuring a sentence about “Po Pimp,” a hit song by rap group Do or Die. “Try to explain to a fourth-grader what ‘Po Pimp’ is,” Tolleson told WSB-TV. The assignment, part of an English language-arts class, dealt with sentence structure and relationship of ideas, including concepts of compare and contrast, sequence, and cause and effect. The sentence in question dealt with a chronological series of career milestones by rap artist Twista, including his appearance in the “Po Pimp” video in 1996. Tolleson said that after watching the video for “Po Pimp,” he was disturbed by the song’s references to illegal activity and the objectification of women. “It was very upsetting to my family when we saw this,” Tolleson said. “My wife was left in tears at the kitchen table.” Aside from the song’s content, Tolleson asked the school board if “this kind of slang is appropriate in language arts.” “We take great care to review documents selected by our curriculum teams,” Samantha Fuhrey, superintendent for Newton County schools, said in a statement. “Unfortunately we missed this item.” Read more »

  • 23 Jan 2015 at 5:45 PM

Write-Offs: 1.23.15

$$$ Morgan Stanley Gives Gorman $4.44 Million Stock Bonus for 2014 [Bloomberg]

$$$ Oil Falls as New Saudi King Says Policies Won’t Change [Bloomberg]

$$$The Catfight Between CNBC And Fox Business At Davos Has Gotten Out Of Control” [BI]

$$$ Harvard Business School Dean Fights to Keep M.B.A. Relevant [WSJ]

$$$ Leaders in Davos Urge Quick Action to Alter the Effects of Climate Change [Dealbook]

$$$ A “crazy hockey dad” at a girls tournament found himself banned from a Pennsylvania ice rink after he was caught on video breaking the glass during a game. [UPI] Read more »

john-pierpont-morganEd. note: This is a weekly column by Elie Mystal, Managing Editor of Above the Law Redline, wrapping up the week that was in law and finance. Elie is not a practicing attorney, and anything he says that you listen to can and will be used against you.

So we’re all having fun today with J.P. Morgan, lawyers at Mayer Brown and Simpson Thacher, and their collective $1.5 billion error. The Second Circuit ruled that creditors to the old General Motors may be entitled to $1.5 billion based on a legal mistake in old JPM loan documents.

It might seem weird to use this story as an example in favor of gigantic legal fees, but as you look at how this error happened, you’ll see my point.

JPM loaned GM money as part of a $300 million synthetic loan. Unrelated to that, JPM also financed part of $1.5 billion loan to GM. When GM paid off the first loan, it needed to release JPM’s interest in GM property used to secure the $300 million.

I’m bored already. Evidently, so were lawyers at Mayer Brown. A senior partner delegated part of the task to an associate, who delegated some of the research to a paralegal. The paralegal was unfamiliar with the transaction, probably because he was a paralegal and people spend more time housebreaking their dogs than they spend explaining to a paralegal why they are being asked to do any particular task. The paralegal put in the wrong term because, whatever, he made a mistake researching something no lawyer knows off the top of his head.

From there, the associate copied the mistake into the documents sent to the senior partner without checking the paralegal’s research. The partner send the docs to JPM’s outside counsel without checking the associate’s research. Outside counsel Simpston Thacher didn’t double check or catch the error. Nobody at Mayer Brown, Simpson Thacher, or in-house at GM or JPM caught the mistake. Richard Gere shoved a gerbil up his ass. I know because I read it somewhere. Read more »

  • 23 Jan 2015 at 3:39 PM

Preet Bharara Doesn’t Need This Right Now

Deep thoughts.

Deep thoughts.

The last six weeks have not been the best of Preet Bharara’s life. But he’s used them profitably, moving through most of the five stages of grief after the U.S. Second Circuit Court of Appeals basically torpedoed his life’s work vis-à-vis insider-trading. Indeed, after a black start to the new year, Preet was starting to emerge from his deepest depression (Stage 4) and in to a sort of acceptance (Stage 5).

So the Second Circuit took away two of his insider-trading convictions. And, sure, his remaining total of 84 appeared likely to be further diminished as the likes of Michael Steinberg got the Chiasson-and-Newman treatment on appeal. But he still had dozens and dozens of guilty pleas, those people he was able to browbeat into confessing to crimes that are no longer crimes. Those, surely, were safe. Read more »

lucarelliThe 52-year-old said his inside trading was fueled by drugs and resentment of the Midtown firm, which he said owed him money on commissions. “I didn’t take the drugs to get high, I did it because I can’t drink coffee — that’s a painful trip to the bathroom,” Lucarelli said…Lucarelli, occasionally tearing up, now lives in North Dakota with his brother and says he hopes to become a truck driver. “The one thing about trucking, you’re urine tested all the time,” he said during a 20-minute statement. “If you’re a good driver, which I am, they don’t care about insider trading.” [NYDN, earlier]