US Plans Charges On Bond Fraud (WSJ)
The Manhattan U.S. Attorney’s office is planning to allege in a criminal complaint that several former traders at Credit Suisse Group AG, a major global investment bank, misled the bank’s investors by booking inflated prices of mortgage bonds to boost their bonuses, despite knowing the values of those securities had dropped, according to the people familiar with the matter.
Credit Suisse Employee Higgs Surrenders in CDO Prosecution (Bloomberg)
David Higgs, who has worked at Credit Suisse Group AG, surrendered to the FBI after a person familiar with the matter said fewer than five people will be charged in a U.S. prosecution for intentionally mismarking prices of securities including collateralized debt obligations…Higgs surrendered to at 8:02 a.m. this morning in Manhattan, according to J. Peter Donald, a spokesman for the Federal Bureau of Investigation. At least one other individual is set to surrender to the FBI and face charges today in New York federal court, a second person familiar with the case said.
Private Sector Adds 170,000 Jobs In January (Reuters)
The pace of job creation by private employers slowed in January after a sharp gain the month before, a report by a payrolls processor showed on Wednesday. The private sector added 170,000 jobs last month, the ADP National Employment Report showed, shy of economists’ expectations for a gain of 185,000 jobs. December’s private payrolls were revised down to an increase of 292,000 from the previously reported 325,000.
Facebook IPO: second windfall for a few insiders (NYP)
While 1,000 new millionaires are expected to be minted when Facebook shares begin trading in a few months, a handful will be experiencing their second round of IPO wealth. That’s because as the Menlo Park, Calif., tech phenom has staked its position in the gravitational center of Silicon Valley, it has been pulling talent from the old guard represented by the likes of Yahoo!, AOL and, especially, Google. The most high-profile of the exclusive Google group is Facebook Chief Operating Officer Sheryl Sandberg, who was in the trenches with Google during its IPO in 2004 — and cashed in on that $1.67 billion offering.
Wealth Adviser To Tech Elite Is Another Facebook Winner (WSJ)
Sometime around 2006, when Facebook Inc. was little more than a collection of T-shirt-clad 20-somethings in a sparsely populated office, Goldman Sachs Group Inc. private-client adviser Divesh Makan showed up to add a dash of formality. Dressed in a suit and tie and speaking in a South African accent, he impressed at least one of the start-up’s executives with his forward-thinking ideas on taxes and estate planning before the magnitude of the company’s success was clear. “He had a comprehensive approach to thinking about this stuff,” the executive recalled, at “a much more sophisticated level than anybody else.” Mr. Makan’s early prospecting paid off in a big way. The executive signed up with Mr. Makan, as eventually did Facebook founder Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg, according to people familiar with Mr. Makan’s firm. Ms. Sandberg and her husband Dave Goldberg have co-hosted several “wine dinners” for a few dozen of Mr. Makan’s clients at their home, the people said. Facebook’s founding president, Sean Parker, and Zynga Inc. Chief Executive Mark Pincus also are clients of Mr. Makan’s team, the people said.
Facebook Yet to Friend Exchanges as NYSE, Nasdaq Vie for Listing (Bloomberg)
Facebook chose Morgan Stanley to lead the IPO, four people with knowledge of the matter said yesterday. The Menlo Park, California-based company will file plans today to raise $5 billion, though the amount may rise, two people said. Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc and Bank of America Corp. will help manage the sale, people said. Should it increase, Facebook’s IPO could be the biggest ever by an Internet or technology company, data compiled by Bloomberg show. The debut of Infineon Technologies AG for $5.85 billion in 2000 is the largest to date. NYSE and Nasdaq are trying to lure Facebook by promising they will do the most to raise its profile, according to William Hambrecht, chairman and founder of San Francisco-based investment bank WR Hambrecht & Co. and a four-decade veteran of public offerings by Silicon Valley companies.
Police Raid 5-Story Bronx Marijuana Farm, 593 Plants Seized (NBC)
Police raided a five-story Bronx building that they believe was being used as a marijuana farm with hundreds of plants in an elaborate growing system. A search warrant was executed at about 1 p.m. Tuesday at 610 Morris Park Ave., according to police. Investigators seized 593 plants, some as tall as seven feet…each floor of the building was used for a different stage of growth for the plants. It had been outfitted with an intricate ventilation and hydration system. The seized plants and packages totaled about 1,550 pounds, police said.
MF Global’s Missing Money Traced (Reuters)
The Commodity Futures Trading Commission, the regulator leading the investigation, traced nearly all the money to banks, MF Global’s trading partners and the firm’s securities customers. The Commission, however, is unsure whether the money can be retrieved, the paper said. “We understand the frustration of customers, but the CFTC must take the necessary time — however long it takes — to get to the bottom of what happened at MF Global and take appropriate actions,” the regulator said in a statement to the paper.
Gross: Low Rates Signaling Birth of Austerity (Bloomberg)
Bill Gross said the zero-bound interest rate policies embraced by central banks including the Federal Reserve may end up killing as opposed to creating credit and developed economies may suffer accordingly…“Monetary and fiscal excesses carry with them explicit costs,” Gross wrote in his monthly newsletter. “My intent really is to alert you, the reader, to the significant costs that may be ahead for a global economy and financial marketplace still functioning under the assumption that cheap and abundant central bank credit is always a positive dynamic.”
US Widens Case Versus Gupta (WSJ)
In the new indictment, the government said the conspiracy began in 2007, and it charged Mr. Gupta in connection with trading by Galleon ahead of Goldman’s earnings for the first quarter of that year, a new accusation. According to the indictment, Mr. Gupta participated on March 12, 2007, in a conference call of the Goldman board’s audit committee while he was at Galleon’s offices, learning about the coming earnings. About 25 minutes after Mr. Gupta hung up, Mr. Rajaratnam allegedly ordered Galleon funds to begin purchasing Goldman stock, buying 350,000 shares in all. A Goldman spokesman declined to comment. In addition, the indictment also formally charges Mr. Gupta with leaking P&G quarterly earnings ahead of their public disclosure to Mr. Rajaratnam on Jan. 29, 2009, after learning details of them in a conference call while he was in Davos, Switzerland. That same day, Galleon allegedly placed a negative bet against P&G, selling short 180,000 shares of its stock. A P&G spokesman declined to comment.
Romney’s High-Finance Political Donors Named (Reuters)
Three hedge fund managers pitched in $1 million to the pro-Romney PAC: Tiger Management’s Julian Robertson, Elliot Management’s Paul Singer and Renaissance Technology’s Robert Mercer…The list of major donors to Restore Our Future is studded with other veterans of Wall Street and the investment community. Tudor Investment founder Paul Tudor Jones contributed $200,000. Goldman Sachs executive Edward Forst forked over $95,000. Four other Goldman employees gave at least $50,000. Lewis Eisenberg, a leader at private equity firm KKR, gave $25,000.
Park ranger used Taser on man over unleashed dog (NYDN)
The unidentified female ranger thrust the electroshock weapon into Gary Hesterberg’s back late Sunday afternoon as he began walking away from an argument over his roaming terrier Jo-Jo, the Half Moon Bay Review reported. Barlett said the ranger shouted at Hesterberg to turn over face down so she could handcuff him, but it took “several” minutes before the stunned Montara electrician could move.