Opening Bell: 03.20.14

French Court Upholds Prison Sentence for Rogue Trader at Société Générale (WSJ)
PARIS—France’s highest appeals court on Wednesday said former Société Générale trader Jérôme Kerviel must serve the three-year prison sentence handed to him for his wayward bets but it overturned an award of €4.9 billion ($6.37 billion) in civil damages that was to be paid to the bank.

U.S. Alleges Inside Traders Used Spycraft, Ate Evidence (WSJ)
The scheme involved an elaborate attempt at cloak-and-dagger tradecraft, prosecutors said. According to the criminal complaint, the middleman usually met Mr. Eydelman, who lives in Colts Neck, N.J., by the large four-face clock at Grand Central. There, he would flash a piece of paper with the stock trading symbol of the company in question and then chew it up after the stockbroker committed the information to memory. Throughout the alleged scheme, Mr. Metro and the middleman intentionally limited telephone calls and texts to seemingly innocuous statements, such as “let’s meet for coffee,” but then would meet to exchange inside tips, with Mr. Metro allegedly pointing to stock ticker symbols on his smartphone, according to a related civil complaint by the SEC. Mr. Eydelman knew the source of his customer’s information was a friend who worked at a law firm and was referred to once by the middleman as the “boy at the law firm,” according to the SEC complaint. Mr. Eydelman, who traded on the inside information for himself and others, covered his tracks with a “paper trail of false and contrived emails” citing market research and other rationales intended to serve as legitimate bases for the illegal trading, according to the SEC complaint. Mr. Metro, who is from Katonah, N.Y., saw little immediate benefit from his part in the alleged scheme, because his share of the profits—originally about $7,000—was rolled over into subsequent trades that increased his take to about $168,000, according to the criminal complaint. Last fall Mr. Metro told the cooperating witness that he wanted to cash out his share. The request prompted Mr. Eydelman to say to the middleman in January, “Sooo, we got to figure out a way to get [him] some cash, right?” according to the complaint.

Bitcoin firms explore U.S. rules for derivative exchanges (Reuters)
“Let me tell you, (if) they’ve got a derivatives contract, we have jurisdiction… and we should regulate it,” Bart Chilton, a member of the Commodity Futures Trading Commission told Reuters in an interview.

Amish Buggy Driver Sought In Hit-And-Trot (TSG)
Pennsylvania cops are hunting for the driver of an Amish buggy that was involved in a hit-and-gallop accident Sunday evening. According to state troopers, victim Michelle Cooper, 36, was driving her Honda CRV on a Mercer County road when an “unknown actor driving an Amish buggy” damaged the vehicle “by running into it twice.” “The Amish buggy drove away from the scene” and was last spotted “near Orchard Road and #8 Rd,” a police report notes. While the left side of Cooper’s car was damaged by the buggy, she was not injured during the collisions. Police have classified the buggy accident as a criminal mischief incident, so it appears unlikely that the perp would face an additional charge of trotting from the scene of a crime. In a TSG interview, Cooper said she was at a stop sign waiting to make a turn when she spotted the buggy “flying like a bat out of hell” down the road. As the buggy turned alongside her vehicle–which carried Cooper’s two young sons and a 10-year-old nephew–it struck the side of the 2009 Honda. After pursuing the buggy for about a minute, Cooper pulled in front of it and exited her car to confront the driver, whom she described as a “young kid” with “no beard.” The driver, Cooper said, “threw his hands in the air” and drove on, striking the Honda’s open driver’s door (which Cooper could not subsequently get to close).

Bank Dividends on Up and Up (WSJ)
Large, publicly traded U.S. banks will distribute an average of about $1.21 billion each in dividends to common shareholders for the year starting April 1, according to estimates of the 23 U.S. firms that will participate in the Federal Reserve’s so-called stress tests. That estimate, compiled by Thomson Reuters for The Wall Street Journal, is up 25% from the amount paid in the previous 12 months. The distributions would be the highest since at least 2007 and would show banks’ strength following the Fed’s stress tests and capital-plan approvals, scheduled for this week and next.

SEC contacted investment companies with Russian exposure – sources (Reuters)
U.S. securities regulators contacted public funds with investments in Russia to make sure they are properly managing risks and disclosing their holdings to investors as political tensions rose over Crimea, according to several people familiar with the matter. Attorneys with the U.S. Securities and Exchange Commission started to place calls to registered investment companies such as mutual funds and exchange-traded funds more than a week ago, the sources said.

Chatroom evidence questions BoE role in FX probe – sources (Reuters)
British regulators are examining evidence relating to a 2012 meeting of currency dealers and Bank of England officials which potentially challenges the central bank’s assertion it had not condoned sharing details of client orders. The practice of sharing details about such orders is at the center of a global rigging probe. Transcripts of a foreign exchange chatroom, now in the hands of Britain’s Financial Conduct Authority, reveal for the first time that an un-named senior dealer who attended the meeting told fellow traders the next day that Bank officials had agreed there were advantages to sharing client order information to minimize market volatility around daily reference rates known as “fixings”, two sources familiar with their content told Reuters.

Muriel Siebert’s Discount Brokerage Is Said to Seek Buyers (Bloomberg)
Siebert Financial Corp., whose late founder Muriel Siebert was the first woman to buy a seat on the New York Stock Exchange, is exploring a sale, people with knowledge of the matter said. The brokerage is working with Raymond James Financial Inc. (RJF) to seek a buyer and could fetch more than $50 million in a sale, said the people, who asked not to be identified because the matter is not public.

Calif. woman says gym told her she was too fit for her halter top (NYDN)
In her first workout since being injured in a car accident, Tiffany Austin said she couldn’t wait to get back on the treadmill. But barely 15 minutes into her walking exercise, she noticed people staring. Then a member of the Planet Fitness staff approached and told her to cover up because she was intimidating others in the facility. Austin, who said she’d just joined the Richmond, Calif., gym, agreed to put a shirt over her halter top. But she drew the line when a second worker called her out as she waited for the first employee to bring her shirt. That staffer said “excuse me, we’ve had some complaints you’re intimidating people with your toned body,” Austin quoted the woman as saying KTVU-TV reported.

27 comments (hidden to protect delicate sensibilities)
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Comments (27)

  1. Posted by Dad | March 20, 2014 at 8:02 AM

    You can bet your mortgage that it was Shaz on the stairmaster scrolling through HuffPo on his iPad that complained to the planet fitness staff as soon as he felt "body-shamed"

  2. Posted by London Banker | March 20, 2014 at 8:38 AM

    I can't help feeling that Tiffany Austen is making the most out of this "toned body" complement during her "walking exercise".

  3. Posted by Guest | March 20, 2014 at 8:38 AM

    So can we expect a EUR4.9B loss on Soc Gen's balance sheet next quarter now that Kerviel doesn't have to pay it…..

  4. Posted by Guest | March 20, 2014 at 8:43 AM

    How do they know Eydelman ate the stock tips. Did they find the evidence?

  5. Posted by Guest | March 20, 2014 at 8:44 AM

    I hope for Eydelman's sake that the middle man was using rice paper.

  6. Posted by Guest | March 20, 2014 at 8:53 AM

    Not convinced the chat room chat shows evidence of bid rigging. The central bank can claim it is there to reduce price volatility. If traders come up with a matching system that reduces volatility, getting better prices for the client, how can this be rigging by the BOE? If the dealers are front running in between, that's a problem with the dealers, If the BOE is telling the dealers what rate to fix at, then that Is rigging, but it doesn't sound like that is what the room was chatting about.

  7. Posted by Chris Christie | March 20, 2014 at 8:55 AM

    I definitely understand the position with Tiffany Austin. It's a shame people like us our discriminated for being too fit. Time for some serious traffic jams at Planet Fitness.

  8. Posted by Guest | March 20, 2014 at 9:14 AM

    Planet fitness; the only gym that doesn't want you to get fit.

    What a brilliant business model.

  9. Posted by VonSloneker | March 20, 2014 at 9:20 AM

    I'm often asked to cover up my ab at the gym. Though I suspect it's for an entirely different reason.

    – Guy whose abs have morphed in to a single glorious super-ab

  10. Posted by Jim McGreevey | March 20, 2014 at 9:21 AM

    I work out there and it is fabulous!

  11. Posted by SEC | March 20, 2014 at 9:29 AM

    Middle man ate the tips… not Eydle man

  12. Posted by Guest | March 20, 2014 at 9:44 AM

    That horse is a friend of mine.

    -Hezekiah Gasparino

  13. Posted by Guest | March 20, 2014 at 9:49 AM

    Well, the day can only get better after the massive letdown of clicking that link.

  14. Posted by Alt_EST | March 20, 2014 at 9:50 AM

    Like all those times I tell a girl, "Yeah babe, that looks great! Like, almost too good? I feel like you're going to offend some of the other girls at the party. Yeah, you'd definitely piss off some people with that look. You may want to consider changing in to something less stunning."

    I definitely mean that, and not the opposite.

  15. Posted by London Banker | March 20, 2014 at 10:05 AM

    I haven't bothered to look up whether Soc Gen actually had Kerviel's proposed repayment as an asset on its Balance Sheet, but you'd have to question any accounting policy that allowed them to recognise a €4.9 billion future repayment from a guy that's planning on rambling for 900 miles before going to jail for 3 years, so no, or at least I hope not.

  16. Posted by Dr_Rosenrose | March 20, 2014 at 10:09 AM

    I don't know, if you're using Bay-area, over-40, recent-car-accident-victim standards, I think she's in okay shape.

  17. Posted by Lamp | March 20, 2014 at 10:44 AM

    Worst comment since mid November

  18. Posted by Cosmo | March 20, 2014 at 10:49 AM

    Poor little Pincus. Poor poor little Pincus.

  19. Posted by Peter La Fleur | March 20, 2014 at 11:12 AM

    Worked for Average Joe's dick.

  20. Posted by Guest | March 20, 2014 at 11:36 AM

    I don't love you anymore.

  21. Posted by gues | March 20, 2014 at 12:22 PM

    I think that was the joke

  22. Posted by guest | March 20, 2014 at 12:23 PM

    so you now the joke briefer or what

  23. Posted by Guest | March 20, 2014 at 1:10 PM

    in the ass!

  24. Posted by Swisshedge | March 20, 2014 at 1:21 PM

    Why is Jerome walking 900km before he goes to jail?? You'd think he'd realize that he'll be walking like John Wayne soon enough anyway…

    – Guy who thinks he knows what the 1st week in La Bastille might entail

  25. Posted by guest | March 20, 2014 at 1:28 PM

    Haven't hit back space so fast for quite a while

  26. Posted by Guest | March 20, 2014 at 1:49 PM

    Da brothers like big asses.

  27. Posted by J. Skilling | March 20, 2014 at 4:54 PM

    Seems legit to me