Wall Street Sweats Out Volcker Rule Impact on Revenue (Bloomberg)
Wall Street banks, which already shut proprietary trading units that helped fuel record profits, are girding to learn next week how much revenue the Volcker rule may cut from the $44 billion they say comes from market-making. With U.S. regulators scheduled to vote Dec. 10, the largest firms are getting little detail about the final terms of the Volcker rule’s ban on proprietary trades, and still have basic questions about what kind of market-making will be allowed, said three senior U.S. bankers. They’re also wondering whether they’ll have to change practices or curtail business in some less-liquid markets, the bankers said.
EU Fines Financial Institutions Over Fixing Key Benchmarks (WSJ)
Six financial institutions were fined €1.71 billion ($2.32 billion) by European Union regulators Wednesday for colluding in an attempt to manipulate key benchmark interest rates, the EU’s largest-ever penalty in a cartel case. The settlements involved penalties against some of the world’s biggest banks, including Deutsche Bank AG, Société Générale SA, Royal Bank of Scotland Group PLC and J.P. Morgan Chase & Co. The action brings to roughly €6 billion the total penalties levied by regulators against financial institutions in connection with probes into manipulation of the London interbank offered rate, or Libor, and other widely used financial benchmarks. Further penalties are possible.
Accuser’s credibility ripped in SAC manager trial (NYP)
Horvath earlier testified that Steinberg asked him to get “edgy, proprietary” information after trade ideas of his lost money in 2007, and Horvath said he took that to mean “nonpublic, material” info — or inside information. But Berke, getting his first shot at cross-examination of Horvath in Manhattan federal court Tuesday, used two hours of withering questions to reveal that Horvath used one of the terms even before he joined Steve Cohen’s SAC hedge fund. In a bombshell piece of evidence, a document called “Jon’s Trading Rules,” created by Horvath — which prosecutors didn’t know existed — Horvath asked himself the question, “What do I have that is proprietary?” With Steinberg barely suppressing a smile, Berke asked about “Jon’s Trading Rules.” A squirming Horvath first said it was written while he was at SAC. He then said he could not remember when he wrote it. Finally, he said, “I don’t remember creating this document.” Nor did Horvath remember the day he began working at the hedge fund, or the email Steinberg forwarded to him on his first day, Sept. 18, 2006. Written by former SAC analyst Nils Tristan, it used the word “edgy” three times to discuss the type of research information on companies SAC found useful. “If you hear something from the grapevine, there is a 90 percent chance it’s not edgy,” the email, written in 2004, said. “We no longer use that type of information.” The email also mentioned making sure information has been “triangulated by multiple proprietary sources.” Horvath conceded the words “edgy” and “proprietary” were used often during his time at SAC — and weren’t referring to illegal info — but said that Steinberg meant something different when he asked him to get that type of information in 2007. “I don’t think edgy proprietary has the same meaning as the conversation we had later,” he told the jury.
House of Morgan Divided on Junk as Returns Wane: Credit Markets (Bloomberg)
JPMorgan Chase & Co. recommends sticking with U.S. high-yield bonds next year as the best protection against rising interest rates. Morgan Stanley cautions that valuations are unattractive following a record five-year rally. Speculative-grade debt will return 5 percent in 2014 with default rates remaining below historic averages, according to analysts at JPMorgan, the largest underwriter of the notes since 2010. Investors need to lower their expectations and will see gains of 2.8 percent, Morgan Stanley said yesterday.
Deputies Looking For Men Who Stole Condoms, Family Planning Materials (ABC)
HILLSBOROUGH COUNTY, Fla. – The Hillsborough County Sheriff’s Office is looking for two men who stole about $460 worth of condoms and family planning materials. Detectives say the men stole the items from a CVS near Hillsborough Avenue and Memorial Highway around 3 p.m. on November 26. They placed the items in a backpack and left without paying. They drove off in a newer model four door white or silver Honda.
NY to free ex-Tyco exec Dennis Kozlowski on parole (NYP)
“I will seek, obtain and maintain employment,” the board’s required Kozlowski to pledge — along with prohibitions on drinking booze and doing drugs. The parole board also made it clear they don’t want Kozlowski getting back to his old tricks, specifically barring him from acting in any “fiduciary capacity,” having a bank account, or opening a credit card without the permission of his parole board. Kozlowski showed so much gall at the helm of Tyco he kept two ex-mistresses on his payroll, even charged the company for a “yacht stylist” for his $130 million sloop, and kept tidy with the help of an $80,000-a-year housemaid.
Hayman Capital Said to Take Stake in GM as U.S. Exits (Bloomberg)
The largest U.S. automaker should increase in value by more than 40 percent in 12 to 18 months, Hayman Capital said in a presentation published on website HVST.com. The GM stake is one of the fund’s largest investments, said the person, who asked not to be identified because the matter is private. “GM equity represents one of the most compelling risk/reward situations of any large cap in the world today,” the Dallas-based fund founded by J. Kyle Bass said in the presentation. “Detroit is back. And GM could lead the way forward on the equity front.”
U.S. Banks Again Fail to Comply With Parts of Mortgage Settlement (WSJ)
Three of the largest U.S. mortgage servicers again failed to comply with parts of a $25 billion landmark national mortgage settlement, the watchdog overseeing the process said Wednesday. Joseph A. Smith said that Bank of America Corp., J.P. Morgan Chase & Co. and Citigroup Inc. C -0.99% each failed at least two of 29 metrics that measure standards over how to provide relief to homeowners under threat of foreclosure. In total, the three banks failed on seven metrics in the first half of 2013.
Jason Biggs slams Paul Walker-inspired tip jars at Los Angeles Coffee Bean (NYDN)
Jason Biggs has his limits.
The 35-year-old actor took to Twitter to share his confusion and disapproval of a “poor taste” gimmick by a Coffee Bean & Tea Leaf in Los Angeles on Tuesday. The shop displayed two tip jars, one marked “Fast and Furious” and the other “Varsity Blues,” which happen to be two films of the late Paul Walker, 40, who died in fiery car crash on Saturday. “Umm, am I crazy, or does this seem exploitive and in poor taste? @CoffeeBeanLA,” Biggs, tweeted with a photo of the two almost full jars. The containers appear to have been in effort for customers to give tip money for whichever popular movie of Walker’s they liked better. The Coffee Bean franchise responded to Biggs’ tweet expressing their concern over the situation. “@JasonBiggs This is completely inconsistent w/our brand values & the jars have since been removed. Thank you 4 bringing this 2 our attention,” the Twitter account wrote back to the “Orange is the New Black” star.