Goldman faces losses on erroneous trades (FT)
A computer glitch at Goldman Sachs could cost the investment bank $100m or more after it inadvertently made a large number of erroneous options trades on Tuesday that disrupted trading across multiple US exchanges, market participants told the Financial Times. A trading system that normally tracks how Goldman would price options on behalf of its clients malfunctioned and sent expressions of interest as orders to exchanges operated by NYSE Euronext, Nasdaq OMX and CBOE in the opening minutes of the US trading day, a person familiar with the bank’s trading said. Some of those orders were sent with default prices that differed dramatically from market prices for options linked to stocks and exchange-traded funds including JPMorgan Chase and Kellogg. The bank’s losses from the mishap are expected to become clearer in coming days as the exchanges review each transaction. The problem sparked heated discussions between Goldman, the exchanges and trading firms that took the other side of the trades, people familiar with the situation said.
Justice Department Plans New Crisis-Related Cases (WSJ)
Attorney General Eric Holder said the Justice Department is nearing decisions on a number of probes involving large financial firms and that he plans to announce new cases stemming from the economic meltdown in the coming months. “My message is, anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time. If any individual or if any institution is banking on waiting things out, they have to think again,” Mr. Holder said in an interview Tuesday with The Wall Street Journal.
Investment banks’ hiring points to uptick in recruitment (FT)
Investment banks including Nomura, Citigroup and Bank of America have started hiring dealmakers and traders in Europe in a sign that recruitment is picking up following a two-year cull that saw thousands of bankers lose their jobs. Recruiters say they are at their busiest since 2010 as banks add new staff in revenue-generating positions including M&A advice to equities trading. … “I think it’s fair to say that there’s been a pent-up desire to hire and all of the recent positive data are making it much easier for them to pull the trigger,” said Joseph Leung, founder of Aubreck Leung, the executive search group. It comes as the rate of job losses in the global investment banking sector has fallen to its slowest pace in two years.
S.E.C. Charges Former Oppenheimer Manager With Misleading Investors (DealBook)
Federal securities regulators accused a former portfolio manager at Oppenheimer & Company on Tuesday of misleading investors about the performance of a fund, a rare enforcement action involving the private equity industry. The Securities and Exchange Commission contends that Brian Williamson issued quarterly reports and marketing materials that inflated the performance results of an Oppenheimer private equity fund.
Volkan the Intruder: Man in Underpants Partied in Merkel’s Jet (Spiegel)
On the night of July 25, a 24-year-old man clutching a bag full of marijuana and ecstasy pills managed with relative ease to get on board an empty government jet used frequently by Chancellor Angela Merkel, while it was parked at a closed military section of the Cologne airport. The man, a bodybuilder of Turkish descent named as Volkan T., proceeded to stage a raucous, one-man party. Reports said he stripped down to his underpants, sprayed fire extinguisher foam around the elegant cream and beige interior, pushed buttons in the cockpit, released an inflatable emergency slide and danced on the wing of the Airbus 319.
SEC Deals With Turnover at the Top (WSJ)
Mary Jo White is the Securities and Exchange Commission’s third boss in nine months. And it is even harder to keep up with the rest of the turnover near the top of the nation’s securities-law enforcer. In barely the past year, four of the agency’s five divisional chiefs have stepped down, including the top SEC officials for trading and markets, corporation finance and enforcement, along with four of the 11 regional directors in offices scattered across the U.S.
ECB in Athens as third-bailout talk heats up (Reuters)
The European Central Bank was checking up on how well Greece is meeting its international bailout obligations on Wednesday, a day after Germany’s finance minister said a third aid program would be needed to keep Athens afloat. Joerg Asmussen, a member of the ECB’s executive board, was to meet Greece’ prime minister, finance minister and central bank governor, and to have talks with Greek business leaders. His immediate concern is with the next tranche of aid from Greece’s second international bailout, due in October. But his visit was announced the same day that German Finance Minister Wolfgang Schaeuble told an election campaign audience that Greece will need a third bailout on top of rescue loans worth about 240 billion euros already obtained for 2010-2014.
Banks start courting Twitter to land rich IPO biz (NYP)
Bankers have met with Twitter’s management in recent weeks for preliminary talks ahead of a more formal selection process to pick underwriters to lead the IPO, sources tell The Post. JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, Credit Suisse and others will be jockeying to score a role in the much-anticipated offering. These early discussions are intended for the banks to get an early feel for what Twitter is aiming to accomplish in its IPO so they can better craft sales pitches, sources said. Twitter’s executive suite — comprising CEO Dick Costolo, operations chief Ali Rowghani and newly appointed finance chief Mike Gupta — have shared a few concerns with the bankers. Among them, the 7-year-old San Francisco tech company wants an offering that’s “low profile,” one source said. The concern seemed to reference Facebook’s $15 billion botched offering as something Costolo’s crew wanted to avoid, sources said.
Re/Max Holdings Real Estate Brokerage Files for U.S. IPO (Bloomberg)
Re/Max Holdings Inc., a franchiser of real estate brokerages, filed for a U.S. initial public offering as the nation’s property market rebounds and shares of housing-services companies surge. Re/Max, a Denver-based company that has more than 92,000 real estate agents globally, filed to raise as much as $100 million, according to a regulatory filing today. The amount is a placeholder that will probably change. The number of shares and price range haven’t been determined, Re/Max said. The U.S. housing market’s recovery from the worst crash since the 1930s is bolstering shares of companies that make money from home sales and searches. Realogy Holdings Corp. (RLGY), the Madison, New Jersey-based owner of the Century 21 and Coldwell Banker brands, raised $1.08 billion in an October IPO. The shares have climbed about 60 percent since they started trading.
Intern death leads to calls for shake-up of City bank culture (FT)
Banks in the City of London are facing calls to overhaul the working culture for younger staff following the death of a 21-year-old intern at Bank of America. Moritz Erhardt, an intern at Bank of America Merrill Lynch in London, was found dead last week in the shower of his temporary residence in east London, it emerged yesterday. … Bankers said working hours for interns were tough and often stretched beyond midnight but that it would be unusual for an intern to do two or even three all-nighters. “Analysts and associates have to work like dogs. But interns would not be trusted to do such long working hours as they are seen as too inexperienced,” one banker said.
Caffeine Spray, Brought to You by Peter Thiel’s College Dropout Challenge (BBW)
A few years ago, when Peter Thiel started giving teenagers $100,000 grants to skip college for two years to pursue world-changing projects, plenty of howling ensued. The libertarian billionaire, who earned degrees from Stanford University, countered that his fellowship program isn’t for everyone: It’s meant for elite tinkerers trying to better themselves and society through entrepreneurship. “The world’s hardest problems aren’t going to solve themselves,” Thiel noted in a press release last year. “If you have a great idea, the right time to work on it isn’t four years off—it’s now.” So far, more than 60 would-be visionaries have received fellowships, and the application period for the fourth crop opens in October. Among the alums is Ben Yu, who took a leave after one semester as an undergrad at Harvard University to become a Thiel fellow in 2011. The 21-year-old and his partner, 33-year-old former venture capitalist Deven Soni, recently kicked off a crowdfunding campaign to raise $15,000 for Sprayable Energy, which plans to sell topical caffeine spray. Yup—topical caffeine spray. Meaning you spray it not in your mouth but on your skin (ideally your neck, Yu says) as if it were perfume.
Samurai sword-wielding, knife-throwing man lost it over missing can of shrimp, report says (Orlando Sentinel)
A Samurai sword-wielding, knife-throwing Volusia County man attacked his mother’s boyfriend over a missing can of shrimp Saturday morning, an arrest report said. Jayson Laughman, 34, of Deltona used a sword to break down a door and threw kitchen knives at family members after his mother’s boyfriend accused him of taking a can of shrimp, according to the Volusia County Sheriff’s Office. Laughman told deputies he didn’t remember everything that happened during the fight because he “went into code red and lost his temper,” the report said.