Cohen Expands SAC Trading Team as Hedge Funds Groom Successors (Bloomberg)
Adding the four senior traders will allow him to focus on fewer investments, mentor employees on portfolios and manage risk, according to an April 28 letter sent to investors. “I have always felt that one of the keys to the firm’s success over the years has been our ability and willingness to change the organization,” Cohen, who turns 54 on June 11, said in the letter. The traders selected by Cohen each has responsibility for an industry — energy, technology, media and health care — and for discussing investments with the rest of the firm’s managers and analysts, according to the letter. The sector heads, whom the letter didn’t name, will also continue to run their own portfolios.

Germany, France Urge EU to Eye Short Selling Ban (Reuters)
In a joint letter published by Berlin on Wednesday, Chancellor Angela Merkel and French President Nicolas Sarkozy told European Commission President Jose Manuel Barroso the EU executive needed to accelerate the pace of financial reform. “In particular we think it’s imperative to improve the transparency of short-selling positions on shares and bonds, particularly sovereign bonds,” the letter said. The Commission should also look at the possibility of an EU-wide ban as introduced in Germany, it added.

Fed’s Finding Status Quo In Bank Pay (NYT)
Officials have found, for example, that risk managers at several of the biggest banks still report to executives who have influence over their year-end bonuses and whose own pay might be constricted by curbing risk. In many cases, risk managers do not have full access to the compensation committee of the banks’ boards. The review also revealed that banks tend to set similar bonus formulas for broad sets of employees and often do not adjust payouts to account for risks taken by traders or mortgage lending officers. Bank executives and directors, meanwhile, are often in the dark on the pay arrangements of employees whose bets could have a potentially devastating impact on the company.

SAC Capital Hires Anil Stevens to Run Unit Trading Financials (BW)
Stevens, who worked at SAC until 2003, returned last month and will run the division together with Glenn Shapiro, 36, another SAC alumnus who rejoined last month after a stint at Balyasny, said the people, who asked not to be identified because the information is private. The new unit, Parameter Capital Management LLC, is based in New York and has 12 employees.

Moore’s Bacon Feels Market’s Wrath (WSJ)
Bacon, who has scored annual gains of about 20% on average over the past two decades, shouldered losses of 9.2% in May in his biggest hedge fund, according to investors. That’s the fund’s weakest one-month performance in its history; it makes him one of the higher-profile investors recently snared in the European debt crisis.

“Volcker rule” at issue as reform bill nears finale (Reuters)
And someone is none too pleased about that: “I absolutely oppose any such modification” of the Senate bill, Volcker said in his May 17 letter sent to Senator Dodd. “Allowing a bank to invest in a speculative fund goes against the very intent of the (Senate) bill as we seek to define those activities that are worthy of government protection,” he said in the letter.

Debrahlee Lorenzana had two boob jobs, wanted to be stacked like Playboy Playmate (NYDN)
Debrahlee Lorenzana, the bombshell banker who says Citigroup canned her because men couldn’t stop gawking, repeatedly went under the knife to get her brick-house build. A Discovery Health Channel series chronicled Lorenzana’s pursuit of plastic surgery perfection, in which she described her desire to be stacked like a Playboy Playmate. “That’s what I want to be: t— on a stick,” she titters in “Plastic Surgery New York Style.” Her ultimate goal, she says, is to be a cross between Pamela Anderson and Carmen Electra.

Former Citadel Execs Start Fund (Reuters)
The executives are Matthew Andresen, former co-head of a Citadel equity market-making group; Jason Lehman, head of the global options business; and Neil Fitzpatrick, responsible for operations at a Citadel equities and options trading unit. The fund, called Headlands Technologies, may include trading in stocks, options and futures markets, the newspaper reported.

SEC Putting In New Market Rules Soon (NYT)
There would be a six-month trial period for the new ”circuit breakers,” which were worked out by the SEC and the major exchanges following the May 6 market plunge.

He’s So Vain: Carly Simon and The Wannabe Madoff (NYO)
An hour later, the agents were about to use a master key when Ms. Starr, a former erotic dancer, opened the door: “He’s,” she whispered, “upstairs.” The 66-year-old financial adviser, whose clients have included Henry Kissinger, Caroline Kennedy, Bunny Mellon and Martin Scorsese, was found hiding in a closet, his shoes sticking out.

Showdown On Fund Taxes (WSJ)
The section of the bill that most rankles financiers is the enterprise-value tax. Lawyers and lobbyists for investment-management partnerships describe the provision as punitive and having no precedent. The sale of a grocery store, manufacturer or bank would still be taxed at lower capital-gains rates. Matthew Beck, spokesman for the House Ways & Means Committee, said the enterprise value tax provision “does not represent a change of basic philosophy about the taxation of partnership sales.” He said the House had no plans to impose the tax on other partnerships beyond those specified.