Citi Is Bracing to Miss a Profit Target (WSJ)
Citigroup Inc. is warning investors it may miss a key profitability target after the Federal Reserve rejected the bank’s capital plan last month, people familiar with the matter say. The Fed on March 26 shot down the New York bank’s proposal to boost its dividend and ramp up stock buybacks, saying it had failed to measure potential risks to its operations during a severe economic recession. The rejection makes it unlikely Citigroup can hit its 2015 goal for return on tangible common equity.
Intrade’s New Gamble Is Sports Betting (BusinessWeek)
Contests on Tradesports will consist of a series of markets, where players buy stock based on events within a game. To not run afoul of the law, players cannot simply buy stock on whether the San Antonio Spurs will win; the position must also include a bet on, say, how many rebounds Tim Duncan will pull down. A pot is set in advance, and the stocks can be traded throughout the game. When the final buzzer sounds, players holding stock with the highest combined value win the pot. The company takes a cut of the entry fees.
Bank Regulators Set Vote on Big Jump in Capital Requirements (WSJ)
Under the new “leverage ratio,” scheduled for a vote by the Federal Deposit Insurance Corp. and the Federal Reserve, the eight biggest U.S. firms would have to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books—not just the risky ones…The biggest companies would be required to maintain loss-absorbing capital worth at least 5% of their assets, and their FDIC-insured bank subsidiaries would have to keep a minimum leverage ratio of 6%. The amounts, which are line with what banks expected from regulators, compare with the 3% set out by international accord. For the largest banks, satisfying the new requirement will likely be manageable in the near term, but analysts warned it could constrain future growth since it would limit each bank’s ability to increase its asset base, forcing it to either raise more cash from investors or shed assets elsewhere if it begins to bump up against the ratio’s limits.
Tech Firms May Find No-Poaching Pacts Costly (Dealbook)
A high-stakes negotiation is taking place in Silicon Valley among some of the biggest names in the industry — Apple and Google among them — over accusations that they were involved in a collusion to prevent their employees from being hired at rival companies. The employees filed a class-action suit, contending that the illegal hiring practices cost employees $9 billion in lost wages. Now the companies are locked in mediation sessions, hoping to settle the case in the next several weeks. The question being whispered all over town now is how much will Apple, Google, Intel and Adobe ultimately have to pay? The companies privately scoff at the $9 billion figure that the plaintiffs are seeking, contending it amounts to extortion. The employees, who number about 100,000, suggest that the facts are so damning against the companies — and so embarrassing — that they won’t settle for anything less than a blindingly high number.
Cohen firm has new name, still makes big money (CNBC, earlier)
In an internal email issued Monday morning, the company’s president, Tom Conheeney, praised employees for their loyalty…In a telling line of the morning’s memo, Conheeney spoke of the mark the former hedge fund had made in the business. “At its best, SAC was looked upon as the industry’s leading long/short hedge fund, the place where everyone wanted to work and be,” he wrote. “Our goal, certainly my goal, is to see us reach those heights as Point72, but in a manner that no one can ever claim is the result of anything other than your hard work, integrity and smarts.”
Woman Allegedly Calls Cops To Complain About Weed Quality (AP)
Lufkin police Sgt. David Casper said Monday that an officer went to the home of 37-year-old Evelyn Hamilton to hear her complaint that the dealer refused to return her money after she objected that the drug was substandard. Casper says she pulled the small amount of marijuana from her bra when the officer asked if she still had it. She was arrested Friday on a charge of possession of drug paraphernalia. Hamilton said Monday she spent $40 on “seeds and residue.” She says she called police when she got no satisfaction from the dealer’s family.
Citigroup Reaches $1.13 Billion Pact Over Mortgage Bonds (Bloomberg)
The 68 securitization trusts covered by the settlement issued a combined $59.4 billion in mortgage-backed securities from 2005 to 2008, the New York-based bank said today in the statement. The agreement covers 18 investors represented by Gibbs & Bruns LLP and trustees have until June 30 to accept the deal, the law firm said in a separate statement. The accord must be approved by the Federal Housing Finance Agency.
Gold Is Least Preferred Metal as Morgan Stanley Predicts Decline (Bloomberg)
The factors that boosted bullion in the first quarter, including tensions in Ukraine, are set to weaken, analyst Joel Crane wrote in a report today. While the 2014 forecast was raised 5 percent to $1,219 an ounce, average prices are still expected to drop for the next four quarters, Crane said.
IRS whistleblower payouts down, critics say program too slow (Reuters)
The U.S. Internal Revenue Service reported it made progress last year in rewarding tax whistleblowers with a few big cash payouts, but critics said the tax agency is still struggling to act quickly on informants’ tips. For the fiscal year ended September 30, the IRS said late last week that it paid whistleblowers $53.1 million, down from $125.4 million in 2012; $8 million in 2011; and $18.7 million in 2010. The whistleblower program is aimed at encouraging people who know about tax evasion by companies or individuals to step forward and alert the IRS. Critics have long complained that the program moves too slowly and is inadequately funded, making would-be whistleblowers reluctant to file claims.
Rob Lowe on Justin Bieber: ‘His audience doesn’t give a s–t’ about his music (NYDN)
The former “Parks and Recreation” star opened up to Oprah Winfrey on her “Prime” show Sunday night, reflecting on his past days as an object of desire for scores of young women — and commenting on today’s young celebrities meeting the same fate. “I have tremendous empathy,” Lowe said of the most prominent one, Justin Bieber. “He makes really good music, he does, but I think he knows the dark secret, and the dark secret is 80% of his audience doesn’t give a s–t about the music.” Lowe, 50, explained the thought behind celebrity fandom, telling Winfrey that Bieber, 20, is just the guy who is “standing in front” for now. “They care about lemming-think, and their girlfriends and who’s oohing and aahing and screaming,” Lowe said. “It has nothing to do with what he’s doing as an artist. He is the guy who is standing in front at a moment that they’re going through a developmental thing. It’s natural, it’s all great, but if it wasn’t him, it would be somebody else, like it was me.”