After a good first half, Citadel is getting so close to its high-water mark that Ken Griffin is starting to reminisce about the good old days when he used to earn performance fees. That in turn reminds him of what else he was up to back in those care-free pre-crash times, like sinking $2.5 billion into an online brokerage saddled with a disastrous mortgage lending operation in November 2007.
And so today he decided to catch up with E*Trade Financial, where he’s the largest shareholder after leading a rescue in 2007. But what started as a nice note to the CEO quickly turned ugly.
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What did Larry Summers really think of the Winklevoss twins? “Rarely, have I encountered such swagger, and I tried to respond in kind,” the former president of Harvard said in an interview at Fortune’s Brainstorm Tech conference. Cameron and Tyler Winklevoss were at Harvard at the same time that Mark Zuckerberg launched Facebook, and they had come to Summers for help in their fight for a piece of the action. Summers dismissed them, a scene dramatized in the movie the “Social Network.” Summers didn’t try to dispel the portrayal. “One of the things you learn as a college president is that if an undergraduate is wearing a tie and jacket on Thursday afternoon at three o’clock, there are two possibilities. One is that they’re looking for a job and have an interview; the other is that they are an a**hole. This was the latter case.” [Fortune]
Back in May, UBS AG investment-banking chief Carsten Kengeter told employees that he was “done with their complaints about pay,” and that those asking why they haven’t seen a bonus in several years “just don’t get it.” While the tough love approach may have worked for some, others felt it was too much, with one senior banker noting that “You got off the call and thought ‘how can I stay here any longer?’” And yet, despite the fact that there’s been very high turnover at the bank in the last few months, which many believe has to do with the whole lack of pay situation, there are probably people out there who’d love to work at UBS. Young children in Switzerland. Recent business school graduates who’ve dreamed of living in Stamford their whole lives. Twenty year Wall Street vets looking to jump from Goldman. Unfortunately, those dreams have been dashed by Kengeter, who informed the investment bank that no one is getting, indefinitely. Continue reading »
“I would like to apologize for the wholly unacceptable treatment you received from a member of the public,” John Whittingdale, chairman of the House of Commons’s Culture, Media and Sport Select Committee, told Murdoch, 80, at the end of the hearing. Tom Watson, a member of the panel who has spearheaded the campaign against Murdoch, said “Mr. Murdoch, your wife has a very good left hook.” [Bloomberg, earlier]
Which is a mere 6 years after they asked for it back, so, not much to complain about here. Continue reading »
By day, Gregory Roselli is a Gaming, Lodging and Leisure research analyst for UBS. By night, on the weekends, and when he’s got 6 vacation days to spare, he’s a speed demon who loves to grip a stick shift. Which is why last week, the week of the Bullrun Live Rally, an “eight-day rolling party from Las Vegas to Miami – bringing together a celebrity strewn cast of characters and petrosexuals for an unforgettable adventure – where the only obligatory goals are to party, drive and enjoy,” was supposed to be great. No, better than great- epic. And for the first 7.5/8ths of it, it was. Roselli was making new friends, including BLR participant Ice-T. He was tooling across America in his Audi R8. He was feeling alive again for the first time in god knows how long. In short, the $20,000 entrance fee was well worth it. Then Roselli hit the Florida Turnpike, and things started to go down hill. Continue reading »
Everyone knows that a public company merger is a feeding frenzy for service providers. When you’re writing a multi-billion dollar check for a transformative acquisition, you’re not so worried about a million in fees here and there. So bankers make a lot, lawyers make a bit less, and printers and accountants and proxy solicitors and the SEC all get a piece of the cash cheerfully handed out by acquirers. What is less obvious to people outside the M&A business is that there’s also a tax paid to a group of securities plaintiffs lawyers, who make it their business to sue the board of every company involved in a merger.
The process is pretty straightforward. A merger is announced. A group of law firms sue, on behalf of the target’s shareholders, claiming that the board followed a defective process, had a variety of conflicts of interest, and obtained an inadequate price. The board disagrees, but doesn’t want to run the risk of a court holding up the merger and so agrees to pay off the law firms. It’s not legal just to pay them to go away – they represent shareholders, after all, so they have to get something for those shareholders.
Occasionally what they get is a 5 or 10 cent increase in the merger price, but more often it’s just some added disclosure in the merger proxy. The company amends its proxy to say “we forgot to mention that our lead banker plays a lot of golf with the acquirer’s CEO so he was probably talking smack about us on the side,” the lawyers can say that they got something for the shareholders, and everyone signs a settlement that the judge can approve and that includes a $500k payoff to the law firm. Shareholders get nothing other than additional reading material, but it’s a pretty profitable business for the law firms.
Today’s WSJ has an excellent story about how judges in Delaware have started taking a closer look at these cases:
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When Lenny Dykstra began a downward spiral several years ago, in which he went from having several million in the bank and buying Wayne Gretzky’s house to ripping bathroom fixtures out of the place and selling them at a pawn shop before meeting up with hookers to whom he bounced checks, a man named Jim Cramer took a lot of flack for a comment he’d made about LD in March 2008. Cramer told Bob Costas that of all the people Cramer knew (when he ran a hedge fund, before he got into TV), Dykstra ranked as “one of the greats” in the investing industry. Cramer seemed to stand alone in his comment– especially after Nails started shitting on the floor of his foreclosed house, prompting creditors to file a restraining order– which seemed to rival the one he’d made the same month about Bear Stearns being more than “fine.” Then today, buried in a retrospective on the life and times of Leonard K. Dykstra, who currently sits in a tiny jail cell, vindication. Continue reading »
Apparently Maryland, South Carolina, New Mexico, Tennessee and Virginia should be preemptively quaking in their boots. Continue reading »
As you may have heard, a man attempted to hit Rupert Murdoch in the face with a pie during his hearing before Parliament this morning. It’s unclear what sort of cream the pastry contained (custard, whipped, shaving, man, cow), but apparently some of it “spattered Murdoch,” and the proceedings were adjourned for 10 minutes. The pie-thrower was immediately taken into custody, which probably came as relief as it meant that Rupert’s wife Wendi couldn’t finish him off. Continue reading »
