Eugene Plotkin, who allegedly masterminded the Stripper-Eastern Europe-Business Week-Mail Dude-Insider-Trading scam from inside his post at Goldman Sachs, was indicted yesterday. He’s now sitting in jail, waiting to make bail. Apparrently the young man has had some trouble coming up with co-signers on his $3 million bail bond.
The NY Post has details about the bail bond haggling.
At a bail hearing yesterday, Plotkin’s lawyer, Martin Schmukler, said the aunt and uncle agreed to put their $1 million home on the line. But they don’t want to co-sign on the bond, which could make them liable for the entire $3 million if Plotkin fled.
Plotkin’s parents are willing to co-sign on the bond, but they are no longer willing to put up the $250,000 in cash they’d promised because his father, Mikhail, was concerned about not having any cushion if his health failed, Schmukler said.
DealBook reports that Goldman confirmed our young Plotkin’s been fired from Goldman Sachs. Earlier he was merely under suspension.
Wall St. Scammer to Stay in Slammer [New York Post]
Ignore the puffery in the lede on the Telegraph’s story on Alexey Mordashov, the boss of the Russian company Severstal, which Arcelor has agreed to buy in an effort to block Mittal Steel’s hostile bid to take it over. The rest of the story has some useful information, although you have to translate it to understand exactly what it really means.
A boyish 40-year-old, Mr Mordashov emerged from Russia’s era of primitive capital accumulation with a vast fortune and has gone on to build vital establishment credentials during the rule of President Vladimir Putin.
Translation: Mordashov is not an oligarch or a gangster because in Russia today those words mean someone who isn’t a friend of Putin. Mordashov is a friend of Putin.
He has lobbied for Russia’s bid to join the World Trade Organisation. His purchase of a stake in commercial channel REN TV last year amounted to a demonstration of loyalty towards a Kremlin which tightly controls the broadcast media.
Translation: Mordashov is Putin’s boy.
Analysts said Mordashov would never have been able to pull off the Arcelor deal without first getting the nod from President Putin.
“It’s about who you are and it’s about what you’ve done,” said Rob Edwards, metals analyst at Renaissance Capital. “He’s always been politically well placed.”
Translation: Mordashov is the guy behind Severstal. Putin is the guy behind Mordashov.
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Going Private has read the KKR offering memo so you won’t have to. The post is full of nifty diagrams. It describes the structure and answers some important questions, such as how KKR will be made to continue to invest in the public fund.
A bit of a warning. If you were planning on curling up with the offering memo this weekend, you might avoid clicking the link below. It’s full of spoilers and we wouldn’t want to ruin your beach reading.
They’re KKRrrreat! (Part I) [Going Private]
The roads east from New York City are in good shape this morning. But as you know, that can change fast. Traffic.Com’s LIE page provides real time updates on Fire Island and Hamptons bound traffic. Right now the LIE is rated “clear” with just a bit of construction, all scheduled to be cleared up before this afternoon.
Let’s face it. Between the house out east, the new summer wardrobe, the car rentals and the sundry costs of living well between Memorial Day and Labor Day, summer in and around New York can get a bit pricey.
This advice from the Natty Banker won’t help at all.
Ford to Pay 10.6 Percent Yield in U.S. Debt Exchange (Bloomberg)
Psst… want some high-yield corporate paper? If so, Ford is offering over 10% in a new bond offering. It’s a bold move for a company, and strategically probably a wise one. The company is in a high-leverage situation here (remember, people keep referring to auto stocks as options anyway) and since they have to survive now, it makes sense for them to give it everything they’ve got, not necessarily preserver for a future they won’t have. It’s like when you’re down 3-1 in the World Series and your ace is rested. You don’t bench him because you’re worried about who you’re gonna pitch in game six. You worry about that in game six. So Ford is saving its cash now, deferring some payments, and devoting their resources (they claim) to developing some hot new cars which will go toe-to-toe with the Japanese. Sounds exciting. When the cash is owed down the line, they’ll worry about that then.
Phone Tax Laid to Rest at Age 108 (NYT)
There really should be a law that requires all laws to sunset after 10 years and disappear if not renewed. Yes, this does get into a college-philosophy dilemma; but does that law sunset too? Nevertheless, the phone tax, as you know, was initially passed 108 years ago to help pay for the Spanish-American War, which ended after a few months. Even though the war finished up sometime ago, the congress — surprise surprise — never got around to repealing the tax. Hey, would you? But now they’re even repealing the tax retroactively, so if you go through all of your bills, and figure out how much you paid over the last three years, there will be a place to indicate that on your 2006 tax return. You might get as much as $50 back. Awesome. Of course, it’s not really a tax cut without an equivalent spending cut, but…
Arcelor Plans $1.59B Merger With Severstal (AP)
Arcelor was supposed to be spending this week mulling over the Mittal buyout offer. Apparently, that’s not all that was going on behind closed doors, the company found the time to negotiate and agree on its own merger with Russian steel concern Severstal. And in case there was any doubt, this would seem to be their answer to Mittal, nyet. This isn’t the first defensive merger they’ve announced though, since Mittal’s initial offer. Who’s to say that this won’t make them more attractive, as it only means the combined company will be larger?
Fed May Be Less Concerned With Wage Inflation After Pay Data (Bloomberg)
The market may find relief (or even cheer) in surprisingly “benign” wage data. In other words, at least according to the official measure of statistics, wages aren’t going up very fast. The market can take comfort too, in some evidence that the economy is slowing (yesterday’s GDP number notwithstanding). But not too mention the obvious fact, that none of these statistics are, you know, good, it’s not like the Fed’s rate hikes have really been damaging to the market. All that stuff about not fighting the Fed has to be thrown out the window, or will at least need revision, when this chapter of the market comes to a close.
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We’ve been so wrapped up with our EV Day coverage that we haven’t mentioned today’s other big White Collar Criminal news. Today is the deadline for Martha Stewart to respond to the three-year-old SEC civil suit claiming she engaged in insider trading when she sold shares of ImClone in 2001. Stewart’s responses to investigators during the investigation into that sale eventually led to her conviction for obstruction of justice, serving jail time and having to wear a really ugly device around her ankle.
There is speculation that Stewart will settle the case with the SEC. Her lawyers were reportedly still in settlement negotiations yesterday with lawyers for the SEC.
The Return of Martha Stewart, the Civil Case
Despite Wendy Straker’s warnings against dating investment bankers, some of you kids are still doing it. Or at least trying to. Because sometimes you might only think you’re dating a banker.
Meet Shane, a shy administrative assistant who likes to make up stories about himself when he meets women.
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Enron Verdict Day (EV Day?) continues! Not surprisingly, the Houston Chronicle has some of coverage of the post-verdict scene. Here’s the Chronicle’s reporting on what memebers of the jury told the press after the verdict. This story runs down the reactions of ex-Enron employees, including one who speculates that Lay and Skilling are aliens from another dimension.
On a day when telecom stocks generally went up, Vonage managed to drop more than ten percent. Nyquist Capital is predicting that the class action lawyers are probably already preparing lawsuits.
I’ll be the first to call it – the class-action attorneys are going to try and monetize the Vonage customer class of shareholders that took 13.5% of this deal. Vonage used tactics of a bucket-shop, pitching yours truly by email, voicemail, and snail mail. Fair? No. Reality? Yes.
Seeking Alpha has a round up of other reactions to the Vonage slide.
Telecoms mostly gain, but not Vonage
Vonage – Lipstick on a Pig [Nyquist Capital]