Archive for May 2007

RahimFaysal.jpgFederal prosecutors yesterday brought criminal charges against Pakistani banker Ajaz Rahim, who they allege traded on inside information leaked to him by a junior Credit Suisse banker. Rahim is a prominent figure in Pakistani investment banking, and until quite recently worked as the country head of investment banking of the Faysal Bank in Karachi.
The picture to the left appears to be of Rahim and Farook Bengali, the chief executive of Faysal. It was prominently placed on the bank’s website until recently but has been removed. DealBreaker was not able to confirm that the picture is Rahim.
Earlier this month, federal prosecutors arrested Hafiz Mohammed Zubair Naseem, a junior associate in the energy group at Credit Suisse, on charges that he had leaked information on nine deals which his employer was involved with, including the buyout of Texas energy giant TXU. At the time of the arrest, prosecutors said that Naseem had leaked the information to a banker in Pakistan but did not name him. A little more than a week later, the SEC amended its civil complaint against Naseem and named Rahim as a defendant. The complaint alleges that in at least twenty-five instance, Rahim made trades several minutes after concluding phone calls with Naseem.
An arrest warrant has been issued for Rahim but his whereabouts are currently unknown. After the SEC named him as a defendant, Rahim’s lawyer , Spencer Barasch, had said that his client would not come the US for a deposition in the suit unless he received guarantees that he would not be arrested. Naseem had also said he planned to call Rahim as a witness for the defense in his own trial.
Through his lawyer, Rahim is denying any wrong doing. “Mr. Rahim looks forward to vigorously defending himself against the charges,” Barasch told DealBook yesterday.
U.S. Attorney Charges Pakistani Banker with Insider Trading [DealBook]
Banker faces insider trade charge [BBC]

  • 30 May 2007 at 2:08 PM
  • Oil

Energy trader’s version of pump and dump?

fire.jpg A reader tipped us off to the following energy market shake up this afternoon regarding oil prices. US crude prices shot up 40 cents when a Tulsa, Oklahoma television station reported on its website that a regional refinery was on fire from a lightning strike. The only problem – there was no fire, save for the pants of the KOTV webmaster (Brain Hunter, as part of Solengo’s new macro event-driven strategy).
Web site error rocks global oil markets [Reuters]

  • 30 May 2007 at 1:29 PM
  • Apple

How do you like them sometimes rotten apples?

rotten apple.jpg It’s refreshing to see, at least for anyone who prefers a little balance in the technological world order, that not everything Apple touches turns to gold, which has been the case since the iPod (although the Power Mac Cube was shelved just as the iPod was launching in 2001). The Apple TV, which is a $300 doorstep, furniture leveler or sushi platter according to Fortune’s Brent Schlender, is Apple’s very own Zune, crammed with features that are unusable because of compatibility issues and lacking common sense controls – like a volume gauge on the remote. Schlender points out that the advertising push for the Apple box in the very medium it’s trying to transform is non-existent and that Steve Jobs would rather talk about his ignorance of options dating practices than the Apple TV.
Although computing giants still pursue the holy grail of Web/TV integration, the real changes in TV have come from complimentary hardware (DVR) or the displacement of content across an already established medium (video sharing with high speed internet connections). This gives Apple a 1-1-1 record when it comes to transforming media platforms, with its overwhelming victory in shaping the way we listen to and store music, a trip back to the drawing board with a clunker of a TV set, and a push when it comes to home-computing (I don’t think OS counts as defining the home computing platform, despite what Apple enthusiasts will tell you).
The debate rages over Apple’s effect on wireless communication with the arrival of the iPhone next month. Will the device be another example of battery gobbling feature creep or compatibility turmoil, or will the iPhone finally integrate music, video and phone in a user-friendly way?
Apple (AAPL) shares are up more than 2% today, shooting past the $115 mark to a new 52-week high.
The trouble with Apple TV [Fortune via CNN]

Man For Sale (So To Speak)

themanshow.jpgFinally, something quasi-exciting today (other than the planning of our upcoming “Whose Boobs?” contest, which we’ll tell you all about in good time): the Man Group plans to list a hedge fund on the NYSE! Man, one of the largest hedge funds in the world, will be selling a closed-end fund that employs hedge fund strategies. Shares of the Man Dual Absolute Return Fund will be pawned for $20 each, with a minimum order of 100 shares (to maintain
the farce of hedge fund availability only to “accredited investors”).
The fund’s assets will be invested by two managers: About 80% will be under the watch of quantitative manager Tykhe Capital, using a long/short equity strategy. The rest will by managed by Man’s AHL Core program, a mangaged-futures strategy.
Everyone is excited to point out that this move is indicative of a “broader trend of hedge-fund managers boosting their assets through exchange-traded funds that can be bought by both institutional and retail investors” (or something to that effect). We’re just psyched to be getting some mileage out of what we’d previously thought was our retired “bukkake party of IPOs” tag.
Man Group to List Hedge Fund on NYSE [Forbes]

  • 30 May 2007 at 11:42 AM’s Price Tag: $280 Million

Word broke this morning that has been acquired by CBS for $280 million. The online music provider has been the subject of acquisition speculation for months. The most persistent rumor had Viacom buying the company for as much as $450 million. We may never know what happened to that deal, if it ever existed outside of the heads of London music fans and market watchers.
CBS, which was at one time a corporate sibling of Viacom, is comparing the deal to News Corp’s acquisition of MySpace.
“We’re emulating what Fox did with MySpace. There are a lot of super-cool, whiz-bang applications they have that I can’t wait to apply to other parts of the business,” CBS digital boss Quincy Smith tells Reuters.
CBS buys online music site [Reuters via Dot Music]

  • 30 May 2007 at 11:30 AM
  • CNBC

CNBC: THIS Is What We Choose To Take A Stand On

cnbclogo1.jpgCNBC has announced an investigation into “complaints of unusual trading among some of the 20 finalists in the CNBC Million Dollar Portfolio Challlenge [sic],” which was mercifully taken out back and shot on May 25. Ooo, insider trading, how trendy, how scandalous, how very “you are a bad boy,” indeed. While it’s true that we don’t necessarily have any hard evidence that this isn’t a plot by producers to drum up page views (on about the Challenge and CNBC in general during this “we haven’t had a reporter go down on a source in a while, we’ve got to come up with something” period, we are allowed to speculate that this is the case, are we not? When John “I Bleed For CNBC” Carney and Tim “Pre-tax Sum of $2 million” Sykes stop taking your calls, you know something’s got to be done.
Earlier: CNBC Continues to Be Nonplussed Over Ethics, Lack Thereof
CNBC Probing Alleged Violations by Finalists in Million Dollar Challenge [CNBC]

Apparently all it takes is a mysterious departure of a CEO to make a company’s shares shoot up almost 3.5%, as VeriSign (VRSN) is surging on news of Stratton Sclavos’ resignation as CEO after 12 years. No one, aside from a secret cabal of VeriSigners knows why Sclavos bolted, but analysts speculate that the main internal squabbles regarded a lack of new talent and lackluster returns from VeriSign’s aggressive acquisition platform. Former Science Applications International Corporation CFO William Roper Jr. was appointed to succeed Sclavos.
VeriSign is restating its financials from 2001-2006 and expected to take at least a $250mm hit from dodgy options dealing, but there is no official word on whether this had anything to do with the CEO shuffle.
VeriSign’s Chief Executive Resigns Abruptly [New York Times]

Zoellick.jpg Robert Zoellick is not afraid of foreign relations, or panda relations, seen here last January with Jing Jing at the Chengdu Giant Panda Breeding Research Base in central China. “You want to know how the panda felt?” Zoellick asked. “Very soft.”
U.S. Envoy Engages In Panda Diplomacy [Washington Post]
Zoellick to Be Nominated to World Bank [Forbes]