Opening Bell: 02.11.14

JPMorgan’s $13 Billion Accord Seen Needing Court Review (Bloomberg)
JP Morgan Chase’s $13 billion fraud settlement with the U.S. government should be blocked until a court is able to review it, a Wall Street watchdog group founded by an Atlanta hedge fund manager said. Better Markets Inc. is seeking judicial scrutiny of the accord because it’s the largest settlement “with a single entity in the 237-year history of the U.S.,” according to a complaint filed today in Washington federal court. “No one has any ability to determine if the $13 billion agreement is fair” or “if it is a sweetheart deal,” the group said in the filing. The accord, announced in November, settled allegations that the biggest U.S. lender by assets misled investors and the public when it sold bonds backed by faulty residential mortgages. U.S. and state officials blamed JPMorgan’s actions for helping to cause the credit crisis, and said the agreement didn’t shield JPMorgan or its employees from possible charges. The Justice Department “acted as investigator, prosecutor, judge, juror, sentencer and collector,” Dennis Kelleher, chief executive officer of Better Markets, said at a press conference in Washington. The agreement was “mostly designed to conceal, not reveal.”

Branson closes in on Virgin America IPO (FT)
Virgin America, the US carrier launched by billionaire entrepreneur Sir Richard Branson, is closing in on an initial public offering after recording its first profits since it was founded 10 years ago. The low-cost airline interviewed half a dozen banks last month, according to people familiar with the situation, and is understood to have appointed Barclays and Deutsche Bank for an offering which could come as soon as the second half of this year. The move comes seven years after Virgin America’s maiden flight and a turnround in its profitability as it has sought to reintroduce some style into US domestic air travel, which has been marked by declining quality over the past decade. In 2013 it turned its first profit on the back of $1.3 billion of revenues. A listing would allow the company to raise new capital to expand its fleet from 53 aircraft to closer to 100 over the next decade, according to people familiar with the company’s plans.

Ex-UBS Banker Lack to Enter Guilty Plea in U.S. Tax Case (Bloomberg)
A former UBS AG banker indicted in 2011 on a charge of helping wealthy Americans evade taxes has agreed to plead guilty in Florida, the latest target in a five-year U.S. crackdown. Martin Lack, a Swiss resident and independent investment adviser, is set to plead guilty on Feb. 26 in federal court in Fort Lauderdale, according to the records. Lack, who turned himself in to U.S. marshals in Miami on Oct. 14, was released on a $750,000 bond and returned to Switzerland with the consent of the U.S.

K.K.R. To Close 2 Mutual Funds (Dealbook)
The two funds, the KKR Alternative High Yield Fund and the KKR Alternative Corporate Opportunities Fund, have stopped selling shares and plan to liquidate by around March 31, according to regulatory filings on Monday. Investors will get their money back at that time. Started in 2012, the funds were part of K.K.R.’s strategy to attract capital from investors who would not be able to access traditional private equity funds, which count wealthy individuals and institutions as investors. Some of K.K.R.’s big rivals, including the Carlyle Group and the Blackstone Group, have also unrolled products aimed at retail investors. But the two K.K.R. funds were hurt by a competitive marketplace and a flawed design, according to a person briefed on the matter who was not authorized to speak publicly about it.

Legal issues didn’t cause ‘Flappy Bird’ end, analyst says (CNBC)
Short-lived mobile game sensation “Flappy Bird” has been taken off Apple’s App Store and Google Play following a series of tweets by its developer. “I can call ‘Flappy Bird’ is a success of mine. But it also ruins my simple life. So now I hate it,” the game’s developer, Nguyen Ha Dong, tweeted Saturday. The app generated $50,000 in advertising revenue daily, according to The Verge, and Reuters reported that the Android version of the game was downloaded more than 50 million times…”When people see a simple game, they expect [it] to be easy,” said Max Eddy, junior software analyst at PCMag.com. ” ‘Flappy Bird’ looked simple but was brutally, punishingly difficult. I think that threw people for a loop, and they didn’t want to be defeated by something so basic.” Ha was “unhappy with the coverage he’d received and was pulling the game,” Eddy said. “Given that backdrop, a sequel seems unlikely.”

Meet Britain’s Biggest Dog: Freddy, The 7ft 4 Great Dane (HPUK)
The Great Dane has been measured at 7ft 4in (2.24m) on his hind legs by owner Claire Stoneman. Although no official measurement has yet been made, that would make Freddy as tall as world-record holder Zeus, and significantly larger than Britain’s current biggest dog Samson, who is 6ft 6in (1.98m). Freddy is an incredible 41 inches (104.14cm) from his paws to his withers, the ridge between the shoulder blades, slightly shorter than Zeus’ 44 inches (111.76cm). But astonishingly the gigantic dog is only an 18-month-old puppy, and while most Great Danes reach their maximum height by that age, they can continue growing until the age of three. Owner Claire Stoneman, of Leigh-on-Sea, acquired Freddy as a newborn, along with his sister Fleur. The former glamour model admits to being “dog obsessed” and says that despite his size she regards Freddy as “my baby”. “I can’t imagine life without him,” Claire said. “Mum loves him too. She’s tiny, so when she first saw him she was like ‘Bloody hell!’ But she’s used to him now, she bosses him about.”

CFTC Is Set to Ease Rules on Trading Swaps Overseas (WSJ)
CFTC officials are expected to reach an agreement with counterparts in the European Union as early as this week, these people said, to allow U.S. firms to trade swaps on European platforms as long as those systems are governed by swaps rules that are comparable to those ushered in as part of the 2010 Dodd-Frank law. Critics say the agreement will encourage banks to move more swaps trading overseas to escape strict U.S. regulations intended to bring more transparency to the opaque financial products. Swaps, which were at the heart of the 2008 crisis, are complex contracts that allow financial firms and their clients to hedge against risks or bet on an asset’s value.

Blankfein Says China’s Expansion to Have ‘Huge Consequences’ (Bloomberg)
“The China growth story is going to be the story of the next 30-40 years,” Blankfein said in an interview with Bloomberg Television’s John Dawson from Hong Kong while attending the Goldman Sachs Global Macro conference. “We really need that growth in China to occur.”

Fannie-Freddie Fate Rests in Courts (WSJ)
Since last summer, the Treasury Department has faced a host of shareholder lawsuits over changes it made in 2012 to the terms of the bailout agreements with the mortgage-finance giants in 2008, when the government seized the firms as they neared collapse. The plaintiffs say that the Treasury wasn’t authorized to make the changes—which required Fannie and Freddie to send all of their profits to the Treasury—and that the move amounted to unlawful seizure of private property. The Treasury “has effectively nationalized the companies and ensured that they will never return to private ownership” using steps that are “plainly unlawful,” said Theodore Olson of Gibson, Dunn & Crutcher LLP, at a conference last week. Mr. Olson, who served as solicitor general through 2004, is representing Perry Capital LLC, a hedge-fund firm that filed suit last July. The government has argued that the plaintiffs don’t have standing to challenge its decisions because the rescue legislation barred shareholder claims and that the cases don’t have merit. “Treasury committed and provided hundreds of billions of dollars to rescue the entities,” the government said in its response last month. “Having gained that benefit, the shareholders cannot credibly claim that the [Constitution] demands that Treasury compensate them further for their investment.”

Private equity firm founder arrested in $9.3M theft (NYP)
The founder of a New York private equity firm was indicted Monday for allegedly stealing $9.3 million from investors and spending it on jewelry, a luxury car and rent, according to Manhattan prosecutors. West Point grad Lawrence Penn III is accused of siphoning dough from Camelot Acquisitions to a shell company set up by his pal Michael Ewers – who was also charged in the scheme that ran from 2010 to 2013. The diverted cash was made to look like payments for Ewer’s services but actually served as a front, prosecutors said. Penn, 44, allegedly used the stolen loot for credit card payments, cash withdrawals, luxurious office space, rent for two apartments, jewelry and even a fancy car. He turned himself in and pleaded not guilty at his arraignment Monday in Manhattan Supreme Court wearing a sharp pinstriped suit and red tie.

Trapped Bobsledder Gets Stuck Again (NYP)
American bobsledder Johnny Quinn…who made headlines by breaking down his stuck bathroom door at the Olympic Village, said Monday he and some compatriots were trapped in an elevator. Quinn, a former NFL player, is competing in the two- and four-man bobsled events. Two days ago, his bathroom door wouldn’t open after he took a shower, and “with no phone to call for help, I used my bobsled push training to break out,” he said on Twitter. Monday, he posted pictures of the inside of an elevator, saying he was stuck with teammate Nick Cunningham. “No one is going to believe this, but we just got stuck in an elevator,” he wrote on Twitter.

49 comments (hidden to protect delicate sensibilities)
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Comments (49)

  1. Posted by Guest | February 11, 2014 at 7:32 AM

    Cute dog.

  2. Posted by uninvited guest | February 11, 2014 at 7:56 AM

    cute bitch

  3. Posted by L. Tilton | February 11, 2014 at 8:07 AM

    hey!

  4. Posted by Guest | February 11, 2014 at 8:26 AM

    "Oh, he's just excited to see you. He'll calm down in a few minutes. Isn't he cute?"

    – Guy who realizes not everybody loves his dog

  5. Posted by Quant me maybe... | February 11, 2014 at 8:30 AM

    So Branson hired Barclays and Deutsche Bank to do his IPO….

    > That's going to end well.

  6. Posted by Quant me maybe... | February 11, 2014 at 8:32 AM

    Or maybe he likes sitting at the children's table.

  7. Posted by GoneHoggin' | February 11, 2014 at 9:02 AM

    They sure don't make glamour models like they used to….

  8. Posted by Guest | February 11, 2014 at 9:15 AM

    The model is 7ft4in according to the original article. Was either glamour model or the WNBA.

  9. Posted by Yes | February 11, 2014 at 9:16 AM

    UBS sucks!

  10. Posted by Alt_EST | February 11, 2014 at 9:24 AM

    Black and British? Call me when you're two and a half.

    -You Know Who

  11. Posted by Too soon? | February 11, 2014 at 9:25 AM

    After seeing this broad, suddenly all that effort to receive a full time offer so I could get "models and bottles" just doesn't seem nearly worth it.

    – BofA London Intern

  12. Posted by UBS Sucks guy | February 11, 2014 at 9:25 AM

    just dont say anything bad about Shazzy

  13. Posted by Chinese soup master | February 11, 2014 at 9:30 AM

    Who doesn't love dog? Dog gives you vigour!

  14. Posted by Rodney Jr. | February 11, 2014 at 9:36 AM

    Models and bottles? More like Kibbles and Bits.

    Heyyyyyyooooooo!!!

  15. Posted by guest | February 11, 2014 at 9:41 AM

    Winch one?

    -That guy

  16. Posted by Quant me maybe... | February 11, 2014 at 9:54 AM

    I think that in the UK 'Glamour model' means 'has good teeth'

    > Also, think that the British are more obsessed with big boobs than the Americans, so that could also be factor.

  17. Posted by Guest | February 11, 2014 at 9:56 AM

    No, only you can't.

  18. Posted by Guest | February 11, 2014 at 9:58 AM

    Yeah, never heard the term 'glamour model' before when referring to an actual model. Sounds along the lines of being the smartest kid on the short bus.

  19. Posted by Snoop Lion | February 11, 2014 at 10:03 AM

    This site is going to the dogs

  20. Posted by Guest | February 11, 2014 at 10:07 AM

    When did Great Danes become a thing? Suddenly it feels like everyone's family has one. Is it like a wealthy symbol that shows you can afford to feed the damn thing?

  21. Posted by Guest | February 11, 2014 at 10:09 AM

    That is a pretty dog. It's a shame they have such short lifespans though.

  22. Posted by Texashedge | February 11, 2014 at 10:45 AM

    Come on. She's not that big.

  23. Posted by Dane Geld | February 11, 2014 at 10:49 AM

    We're the new labradoodle …bitch

  24. Posted by M. Shanahan | February 11, 2014 at 10:54 AM

    Never trust black guys who call themselves the third,

  25. Posted by buzz "your gf" woof | February 11, 2014 at 11:14 AM

    not a strong showing by the commentariat this morning.

  26. Posted by guest | February 11, 2014 at 11:15 AM

    I love how you wrote out buzz your girlfriend woof so it looks like buzz's nickname is "your girlfriend" and his last name is woof instead of macalister.

    -guy for whom it's the little things

  27. Posted by good ole boy | February 11, 2014 at 11:21 AM

    I found your comment to be verbose… if you catch my drift

  28. Posted by Guest | February 11, 2014 at 11:23 AM

    Living in squalor while spending hundreds of dollars a month to feed a gigantic animal in the NKI.

  29. Posted by Groggy Guest | February 11, 2014 at 11:26 AM

    At first I thought you were joking, but now I realize you aren't and I hate myself for giving your comment a thumbs up

  30. Posted by Guest | February 11, 2014 at 11:30 AM

    Who let the dogs out?

    -Couldn't help myself

  31. Posted by guest | February 11, 2014 at 11:31 AM

    Voldemort?

  32. Posted by Shazars mom | February 11, 2014 at 12:00 PM

    yaaa…

  33. Posted by Guest | February 11, 2014 at 12:07 PM

    "Your girlfriend" is not a desirable nickname

  34. Posted by guest | February 11, 2014 at 12:14 PM

    avg day how many uncomfortably awkward jokes do you make at the office? can you distinguish between a real laugh and a sycophantic chuckle?

  35. Posted by Guest | February 11, 2014 at 12:39 PM

    My nickname in college was the Mountain Hog.

  36. Posted by Quant me maybe... | February 11, 2014 at 12:55 PM

    Like 'our girlfriend' is any better.

  37. Posted by Quant me maybe... | February 11, 2014 at 12:57 PM

    'Glamour model' is short for hasn't done hardcore, yet.

  38. Posted by guest | February 11, 2014 at 12:57 PM

    cool story.

  39. Posted by MFIN Grad | February 11, 2014 at 12:57 PM

    UBS MD Stars in "The Three Stooges"
    http://www.businessinsider.com/financial-advisor-

  40. Posted by Quant me maybe... | February 11, 2014 at 1:04 PM

    She's just crazy. I have two giant dogs — almost as big as that thing. They eat about 50 pounds of dog food a week and split a can of wet food a day. Animal's going to die young because it gets too much protein.

    The vet bill, though. That sucks. Dogs get shots by weight. My larger dog, named Matt Levine (really) weighs 230lbs – his shots cost me $320 every year.

    Also, the collateral damage they can do when young is amazing. Mattie got bored one night last summer and pulled the door frame off the first floor bathroom and ate it.

  41. Posted by Marmaduke | February 11, 2014 at 1:09 PM

    Big fuckin' deal

  42. Posted by Michael Vick | February 11, 2014 at 1:15 PM

    HEY, that's racist. You both should be ashamed.

  43. Posted by Levine's Vet | February 11, 2014 at 1:58 PM

    Let me guess, next you found it devouring derivative trade documentation?

  44. Posted by Guest | February 11, 2014 at 2:15 PM

    The dog's name is Matt Levine, it was forming its dog food into a chart on correlation of Quant's bonus and cans of wet food per week.

  45. Posted by Guest | February 11, 2014 at 2:33 PM

    It's ridiculous. My neighborhood is mostly one bedroom and studio apartments and condominiums, and over the last few years the number of Great Danes, Doberman Pinschers, Golden Retrievers, and Greyhounds has exploded.

    I think it's some stupid ironic hipster thing. "Yes I know I live in a tiny space and I'm supposed to get a a toy size dog or even a cat, but I'm going to buck the system and get a huge outdoor dog and cram it into my apartment just to show how independent-minded I am."

  46. Posted by UBS Sucks guy | February 11, 2014 at 2:33 PM

    When Axelowitz is on the set of a show, he doesn't advertise that he's a Wall Streeter. Most folks on set assume that he's a working actor.

    Wall Streeter > TV extra > UBS PWM MD

  47. Posted by Quant me maybe... | February 11, 2014 at 2:53 PM

    Revel in the thumbs down, dude.

    > You have to be really good to be that bad.

  48. Posted by MFIN Grad | February 11, 2014 at 3:31 PM

    No longer a "Wall Streeter"

    – Shia LaDouche

  49. Posted by Guest | February 11, 2014 at 5:01 PM

    Not half as good at it as SMU Secure