Archive for April 2011

  • 12 Apr 2011 at 12:45 PM

Business School Professor Didn’t Know You Couldn’t Bring Exotic Dancers To Class

By Bess Levin

Not okay?

Jack Rappaport is a business professor at Lasalle University. Last month he gave students an opportunity to earn extra credit by taking a “symposium” on business ethics, for which he charged attendees $150. Their admission fee apparently went toward the hiring of three strippers, if you can even call them that, according to some attendees who were not impressed. “They were just dancing around the room,” said junior Louis Halegoua. “I mean, they had clothes on and stuff.” One, however, was apparently was doing a special kind of dance.

“I don’t know, just kind of laying on top of him. Not laying on top of him but straddling him. It was like a lap dance you could say,” said sophomore Brad Bernardino.

It was during the “like a lap dance” portion of the class that the business school’s dean happened to walk by the room and threw a wrench in the professor’s plans. Continue reading »

  • 12 Apr 2011 at 11:42 AM

Pro-Tip: Upon Finding Yourself In An Elevator With Lloyd Blankfein, Whistling The Theme Song To WKRP in Cincinnati Will Get You Far

By Bess Levin

According to William Cohan’s new Goldman book, Money and Power, Blankfein is known to “sing sitcom theme songs from the 1970s.” You get in a lift together today, you hum a few bars and let it hang there, in the air. Then, with a twinkle in his eye, LB picks up where you left off. You’ll be the next Gary Cohn before the doors open. Continue reading »

  • 12 Apr 2011 at 10:57 AM

Want To ‘Invest’ In Japan? Kyle Bass Has A Fund For That

By Bess Levin

According to Bloomberg Brief, Bass launched the Japan Macro Opportunities Master Fund in July and is still accepting investors who agree with him that the country has some debt and demographic issues. Continue reading »

  • 12 Apr 2011 at 8:37 AM

Opening Bell: 04.12.11

By Dealbreaker

JPMorgan, BofA Earnings May Show Weaker Revenue (Bloomberg)
“While loan growth tends to be seasonally weak in the first quarter, this quarter is tracking worse than seasonality would suggest,” Barclays Capital Inc. analysts led by Jason Goldberg wrote in an April 8 report. “We fear companies have been disappointed.” Profits may have increased even with declining revenue as lenders set aside fewer funds to cover loan losses and in some cases released reserves they’ve already built up, said Matt Burnell, a banking analyst at Wells Fargo. Cost reductions may also help the bottom line in a smaller way, Burnell said.

Goldman Sachs Accused by Marvell Founders of Margin Call Fraud (BW)
Sehat Sutardja, Marvell’s chief executive officer, and Weili Dai, the company’s former chief operating officer, said they were duped into selling shares in 2008 that are now worth $141.5 million, according to a complaint filed yesterday in state court in San Francisco. Goldman Sachs pressured them by claiming a regulatory rule, which didn’t exist, required them to sell their stock, according to the complaint.

US Lawmakers Reach Agreement On $38 Billion In Cuts (Bloomberg)
The U.S. Environmental Protection Agency, high-speed rail and law enforcement are among the programs that would get reduced funding as part of a budget deal to avert a government shutdown, according to legislation unveiled this morning that identified specific cuts.

BofA Kept Executives In Dark On Dividends (WSJ)
The March 23 filing with the Securities and Exchange Commission was more explicit than an earlier news release. It showed that the Federal Reserve had “objected” to the proposed dividend increase following a “stress test” of all major U.S. financial institutions. Shares of Bank of America, the only bank to disclose the Fed’s outright objection, dropped almost 4% in three days after the filing. But Chief Financial Officer Chuck Noski and Chief Accounting Officer Neil Cotty didn’t see the filing before it went to the SEC, people familiar with the matter said. Head of investor relations, Kevin Stitt, found out late the night before, according to one of these people.

Gupta Says His SEC Suit Should Be Heard In Federal Court (Bloomberg)
…instead of dismissing the complaint as the agency has requested.

Sokol Knew Lubrizol’s Board Would Be Told of Berkshire Interest (Bloomberg)
Sokol knew Dec. 17 that Lubrizol Corp Chief Executive Officer James Hambrick planned to notify his board of directors about Berkshire Hathaway Inc.’s possible interest in acquiring the company. Sokol, who had inquired about Lubrizol through Citigroup Inc. bankers, was informed of Hambrick’s intention by the same bankers, according to a Lubrizol regulatory filing yesterday. Continue reading »

  • 11 Apr 2011 at 6:33 PM

Write-Offs: 04.11.11

By Bess Levin

$$$ “The one group of people who have avoided their fair share of blame in the credit bust are the pension fund managers who invested these absurd vehicles at the tail end of the boom. What the hell were you thinking? Rather than a class action by you against JPMorgan, you should be the recipients of class action suits by your own investors. Of all the fools out there, you are surely the worst.” [Fortune]

$$$ Falcone-backed telecom tests IPO waters [Reuters]

$$$ Depressed Traders Make Bad Decisions [FINS] Continue reading »

  • 11 Apr 2011 at 5:50 PM

Galleon Defense Uses Witness To Lay Out Three Reasons Why Raj Rajaratnam Is Not Guilty Of Insider Trading

By Bess Levin

Earlier today, Richard Schutte, former Galleon Group president and chief of research at the hedge fund, took the stand in the trial of his ex-boss, Raj Rajaratnam. The defense team led by attorney John Dowd attempted to use his testimony to contradict that of individuals called by the prosecution, which rested its case last week, arguing that Raj is guilty of insider trading. Today, via Schutte, we learned three reasons why Raj-Raj could potentially be innocent.**

Reason No. 1: Raj was just really well-versed in the companies Galleon covered.

Schutte said that the hedge fund employed 35 analysts at its peak in early 2008 and each was expected to be expert in as many as 15 companies. The analysts had to file weekly reports to Rajaratnam, he said. Every morning, Rajaratnam led a meeting of dozens of Galleon employees to review new “data points” — news accounts, regulatory filings and research — that might influence stock prices, he said. “He was the most prepared of any of us,” Schutte said of Rajaratnam today in Manhattan federal court. “He’s amazingly educated on the issues at hand.”

Reason No. 2: Schutte never saw Raj ask for material, non-public information in front of him.

“Did you ever see him ask for inside information?” defense attorney Michael Starr asked.

Reason No. 3 (and this is probably the most important): Raj had an extremely lucrative secondary source of income, rendering a need for ill-gotten gains unnecessary. Continue reading »

  • 11 Apr 2011 at 5:03 PM

Insider Trader Can’t Keep Track Of All The Mergers From Which He Profited By Having Early Info

By Bess Levin

Last Wednesday, Garrett Bauer and Matthew Kluger, a trader and lawyer, were charged with running an insider trading scam that spanned over 17 years. In transcripts of conversations record by the government (on topics varying from dumping evidence in McDonald’s, debating burning dirty money versus washing it, and arguing how far a walk it’s worth to get rid of a cell phone), one other individual appears, identified only as CC-1. Today CC-1 took off his mask. Continue reading »

  • 11 Apr 2011 at 4:28 PM

Area Man Gets Three And Half Years Behind Bars For Telling Women He Worked At Deutsche Bank

By Bess Levin

Pretend, for a moment, that you are the sort of person who would lie to a female to get what you wanted in the short term. If you figured a (fictional) gig on Wall Street might help you attain certain goals, which firm would you go with? Depending on who the lie was being told do, most hedge funds would probably be out, as a) they’re not household names to the general population and b) should the lady in question happen to know the firm of which you speak, a staff of <1,000 could pose problems should she know someone else who works there and decide to do a background check. Restricted to banks, Goldman would presumably be the (fake) employer many would go with,** unless they wanted to come off as “finance-y, but also man of the people” in which case it’d be Citi. Jay D. Singh chose Deutsche Bank, which apparently worked just fine for quite some time. Continue reading »

  • 11 Apr 2011 at 3:34 PM

After Early Morning Car Troubles, Larry Summers’ Day Is Looking Up

By Bess Levin

A U.S. appeals court ruled Monday that the Winklevoss twins can’t back out of a settlement they struck with Facebook Inc. to resolve claims that founder Mark Zuckerberg stole their idea for the social network.  In a 2008 settlement…Cameron and Tyler Winklevoss got $20 million in cash and $45 million in Facebook stock to drop their suit claiming that Mr. Zuckerberg deceived them when he agreed to work for their company, called ConnectU, on a similar website…after they signed the settlement, the Winklevosses said they learned that Facebook’s board had adopted an internal valuation of just $3.7 billion. Had this lower valuation been used, the Winklevoss twins would have received more Facebook shares as part of their settlement. [WSJ]

Related: Larry Summers Will Not Apologize For Being A Dick To The Winklevoss Twins

  • 11 Apr 2011 at 2:25 PM

NYU Stern Students Send Natalie Portman A Message: You Better Work

By Bess Levin

In the grand tradition of business school follies, the performances generally have the same sort of appeal as a train wreck you can’t look away from (prove us wrong). Not so with the offerings from NYU Stern this year. From the production value to the writing to the acting to the editing, these clips are something we’d watch without having a gun put to our heads. Favorites? The Stern Network, featuring Asian Winklevi and the Black Swot whose lead is clearly gunning for Natalie Portman’s role in the sequel. Take a looksee and then try and tell us he doesn’t have a legitimate shot (the student who plays the mother also gets a nod for best supporting actress). Continue reading »

  • 11 Apr 2011 at 12:32 PM

Programming Note: Ray Dalio Has Updated The Name Of Bridgewater’s Handbook

By Bess Levin

“Principles” is now titled “Principles (That Might Be Right or Wrong, for You to Take or Leave).” [NYM, earlier]