SAC Faces a Final Reckoning for 14 Years of Insider Scam (Bloomberg)
SAC Capital Advisors LP employees gathered in the hedge fund’s cafeteria on July 21, 2008, for a seminar by former Securities and Exchange Commission Chairman Harvey Pitt on compliance and how to prevent insider trading. Yet the U.S. government has alleged that the hedge fund’s portfolio managers and analysts were busy trading that very day, and in the weeks that followed, on inside information. Two of the trades, on drug and technology stocks, were at the heart of cases brought against some of the firm’s top traders: cases that unraveled an alleged 14 year-scheme to reap hundreds of millions of dollars in illegal profit. That scenario, Pitt said in an interview, reminded him of the baptism scene from “The Godfather,” in which a duplicitous Michael Corleone swears to reject evil on behalf of his godson as his henchmen busy themselves executing rival bosses. “Here I was going over the fundamentals about insider trading and you’ve got people at SAC who apparently on the day or nearly the same day were doing the business equivalent of what the Godfather did,” Pitt said.
New Jersey’s Rating Cut to A+ by S&P on Budget Imbalances (Bloomberg)
The downgrade puts the state’s credit four levels below the top, and leaves it with California and Illinois in the single-A category, lower than 47 other states. The New York-based company gave New Jersey a stable outlook. The state had $2.4 billion of general-obligation debt and $32.6 billion of bonds subject to annual legislative appropriation as of June 30. S&P lowered the appropriation debt to A, one level below the general obligations.
Brazil’s Mantega Rejects Criticism of World Cup, Economy (WSJ)
“I believe that the Cup is being politicized,” Mr. Mantega said in an interview with The Wall Street Journal in New York before attending a gathering of the International Monetary Fund. “For Brazil to host the Cup, it needs to meet FIFA’s requirements for a certain numbers of stadiums and seats, and that is being done,” he said, referring to the world soccer governing body. Brazil is racing to put finishing touches on its stadiums and airports two months before the June 12 kickoff of the tournament, which the host country has won five times, more than any other nation. Brazilians are increasingly concerned that the late dash to finish vital infrastructure will showcase something else: the inefficiencies of a once-blazing economy predicted to grow less than 2% in 2014 and 2015. Mr. Mantega rejected any idea that government policies contributed to the slowdown, mostly blaming it on the downturn in the global economy, starting in 2008. He said President Dilma Rousseff’s government has taken steps–such as a big stimulus package–to help Brazil avoid an even deeper slowdown. More investment would flow now that the currency has stabilized at a lower rate after a large decline last year, he contended. “As the exchange rate has stabilized, it has become more convenient to invest in Brazil,” Mr. Mantega said.
Big Hedge Funds Roll Dice on Puerto Rico Debt (WSJ)
Several large hedge funds doubled down on Puerto Rico in last month’s giant bond sale despite the U.S. territory’s financial struggles, according to confidential documents reviewed by The Wall Street Journal. Och-Ziff Capital Management LLC, Fir Tree Partners, Perry Capital LLC and Brigade Capital Management each bought more than $100 million of the bonds, according to a list of buyers of the $3.5 billion deal. The list doesn’t show whether the firms continue to hold the bonds, which carried junk credit ratings, or whether they sold some or all of their purchases afterward. John Paulson’s Paulson & Co. also purchased more than $100 million of the deal. It isn’t clear whether Mr. Paulson owned Puerto Rico debt before. His firm invested in a Puerto Rico hotel earlier this year.
Banks Ease Hours for Junior Staff, but Workload Stays Same (Dealbook)
A number of young bankers say that while they can now enjoy a leisurely brunch or a binge of television watching on Saturdays, their overall workload has not changed noticeably. It just gets pushed to a different day. “If you have 80 hours of work to do in a week, you’re going to have 80 hours of work to do in a week, regardless of whether you’re working Saturdays or not,” said a junior banker at Deutsche Bank, who, like the others interviewed for this article, spoke on the condition of anonymity because he risked his job by talking to a reporter. “That work is going to be pushed to Sundays or Friday nights.” “It’s well intentioned,” he added, “but I don’t know if it’s actually practical.”
Police: Man With Stolen Cop’s Badge Demands Discounted Spray Tan (CBS Houston)
With the badge pinned on his sweater, Dustin Lee Bell, demanded that he only be charged $10 for a $34 spray tan at a tanning salon, KOTV reported. The manager went to call police and when he returned he noticed that a bottle of tanning lotion was missing from behind the counter, he explained in a statement to police. The 25-year-old man claimed that he found the police badge at a car wash in South Tulsa, but police said it belonged to a Sand Springs officer after they called dispatch to confirm it was stolen. Police arrested Bell and while booking him into jail, they found a Sam’s Club card belonging to the Sand Springs officer in his wallet. Bell is facing charges of false impersonation of a police officer, larceny from a retailer and stolen property.
J.P. Morgan’s Dimon Describes Year of Pain (WSJ)
The largest U.S. bank by assets, he said, “was under constant and intense pressure.” The “best option, perhaps the only sensible option,” he added, was to “settle as much as we could all at once, albeit at a high price.”
Federal Reserve Plays Down Own Forecasts for Rate Rise (Bloomberg)
“Several participants noted that the increase in the median projection overstated the shift in the projections,” according to minutes of the March 18-19 meeting of the Federal Open Market Committee released yesterday. Some expressed concern the rate forecasts “could be misconstrued as indicating a move by the committee to a less accommodative reaction function.”
Pimco Total Return cuts mortgage, U.S. government holdings in March (Reuters)
The fund, which has $232 billion in assets and is managed by Pimco co-founder and chief investment officer Bill Gross, cut its holdings of U.S. government-related securities to 41 percent in March from 43 percent in February, and cut its mortgage holdings to 23 percent in March from 29 percent in February.
RBC Joins Goldman in Suing Clients After Singapore Crash (Bloomberg)
Royal Bank of Canada sued three private wealth clients in Singapore, joining companies including Goldman Sachs Group Inc. seeking money owed by customers after an October stock rout. Blumont Group Ltd. (BLUM)’s Executive Chairman Neo Kim Hock and Executive Director James Hong and businessman Nelson Fernandez owe the Canadian bank a total of $63.3 million, according to lawsuits filed in the Singapore High Court. The men refused to pay after shares in companies such as Blumont, Asiasons Capital (ACAP) Ltd. and LionGold Corp. (LIGO), held as security, tumbled in the October crash, the bank said in court papers.
Coach using Gosling-like looks on recruits’ moms (NYP)
Texas Tech coach Kliff Kingsbury, who bears a striking resemblance to the famous actor, was asked on the Dan Le Batard show if a single mother ever flirted with him while he was on a recruiting trip.
“Yeah, yeah, that’s kind of — you’ve got to play to your strengths,” said Kingsbury, who at age 34 was the third-youngest head coach in the FBS last season, when he led the Red Raiders to an 8-5 record.
“So I kind of encourage that a little bit. It’s part of the deal, man.”