Popularized in films like Limitless, legal smart drugs called Nootropics are becoming more and more prevalent in board rooms and on Wall Street.Keep reading »
Mickelson Role Said to Be Overstated in Insider Inquiry (Dealbook)
Phil Mickelson, the famed golfer, did not trade in the shares of Clorox just as the billionaire investor Carl C. Icahn was mounting an unsolicited takeover bid for the company in 2011, say four people briefed on the matter. Recent reports in The New York Times and other news organizations said that Clorox was among the stocks that federal authorities were examining as part of a two-year investigation into well-timed trades made by Mr. Mickelson and the sports gambler William T. Walters. Initially, authorities pursued a theory that Mr. Icahn shared private details of his Clorox bid with Mr. Walters, who then traded on the information and passed on the tip to Mr. Mickelson. Although Mr. Icahn and Mr. Walters remain under investigation over Clorox, the F.B.I. and the Securities and Exchange Commission have found no evidence that Mr. Mickelson traded Clorox shares. The overstated scope of the investigation came from information provided to The Times by other people briefed on the matter who have since acknowledged making a mistake.
Activist Funds Dust Off ‘Greenmail’ Playbook (WSJ)
More companies are resorting to an old tactic to get rid of activist investors: Pay them to go away. The practice, which involves buying back shares from activist hedge funds, has raised concerns among some investors because it bears similarities to “greenmail,” a controversial strategy popular in the 1980s. Back then, aggressive investors such as Carl Icahn and the late Saul Steinberg bought company shares and threatened a hostile takeover. Eager to avoid a battle, companies including Walt Disney Co. and Goodyear Tire & Rubber Co. bought back their stakes above market price, giving the activists a quick profit. The practice, widely criticized as corporate blackmail, largely died out by the early 1990s as companies beefed up defenses and lawmakers took steps to discourage it. But in the past 12 months, at least 10 companies have repurchased blocks of shares from activist investors, including Daniel Loeb and William Ackman, according to FactSet SharkWatch. That is more than in the previous six years combined. The practice differs from greenmail in two crucial aspects. The share buybacks aren’t at a premium to the market but typically at or slightly below the last trading price. They also don’t follow threats of hostile takeovers.
Europe Bankers Cringe at Rising U.S. Fines Amid BNP Probe (Bloomberg)
HSBC Holdings Plc (HSBA) Chairman Douglas Flint had some advice for bank executives meeting in London last week: Read up on how the U.S. uses financial warfare against its enemies in a foreign-policy shift that’s entangling lenders…At a June 4 meeting of the Institute of International Finance’s board, Flint, 58, advised participants including Barclays Plc Chief Executive Officer Antony Jenkins to read former U.S. deputy national security adviser Juan Zarate’s “Treasury’s War: The Unleashing of a New Era of Financial Warfare,” according to two people who were present. In his book, Zarate recounts how U.S. foreign policy is increasingly targeting financial activity by criminals, enemy states and individuals in sanctioned regimes. Caught in the middle are international lenders, whose desire to avoid business and reputational risk assures their cooperation.
Treasury Secretary Lew Warns of Lower Potential Economic Growth (WSJ)
In a speech to the Economic Club of New York, Mr. Lew said the U.S. growth rate is now projected to run a little above 2% a year, down from a 3.4% average from the end of World War II until 2007. If America can’t maintain stronger growth, the country could face deepening challenges from sluggish labor market and widening inequality, he said. “The choices we make over the years to come can alter this projection,” he said.
SEC Says Investor Accused of Fake Gold Bid Fled to China (Bloomberg)
The U.S. Securities and Exchange Commission said the man behind a fake $750 million bid for Allied Nevada Gold Corp. (ANV) profited from selling an undisclosed stake in the mining company and has fled the country. Luis Chang and Everbright Development Overseas Ltd., a company he controls, “furtively” bought Allied Nevada stock while disseminating false information about the company, the SEC said in a complaint filed June 9 in federal court in New York. Everbright then sold the shares into a “falsely inflated market” for a profit of more than $7 million, the SEC said.
Florida John Offered Salad In Return For Sex (TSG)
Liverman was arrested Monday morning during a reverse sting that netted nine other men for soliciting a prostitute. The hookers in question were actually undercover Daytona Beach Police Department officers. While negotiating a liaison with a female officer, Liverman–who was “operating a bicycle”–revealed that he did not have any money. “I’m hungry, you got food?” the undercover asked. Liverman replied, “I got a salad,” according to a booking affidavit. “I’ll give you a bl0w j0b for a salad,” the cop declared. Liverman replied, “You ready to go?” The document does not detail the location of Liverman’s salad (or its street value). Liverman was busted because he and the cop “agreed upon the sexual act in exchange for food,” investigators reported.
Goldman Sachs Misses Out on Big Alibaba Payoff (Dealbook)
In 1999, the Wall Street bank was among the first investors in Alibaba Group, the Chinese e-commerce business, injecting $3.3 million in what was then little more than a scrappy start-up operating out of its founder’s apartment in Hangzhou. But as Alibaba Group prepares to sell its stock to the public for the first time, in one of the biggest and most eagerly anticipated initial public offerings in years, Goldman Sachs will not be among the investors standing to make mind-bending sums. It sold all of its stake in Alibaba by early 2004 — for $22 million, or nearly seven times its original investment. In comparison, some of the early investors who bought out Goldman Sachs’s stake have since made as much as 30 times their original investments as the company’s value has ballooned exponentially.
EU Probes Tax Affairs of Apple, Starbucks (WSJ)
The probes represent a new front in European efforts to focus on tax avoidance by big companies in Europe in the wake of the region’s financial crisis. The European Commission, which acts as the region’s central antitrust authority, said it would examine whether generous tax deals granted to Apple in Ireland, Fiat Finance and Trade in Luxembourg, and Starbucks in the Netherlands, amounted to illegal aid by governments for the companies. The decision to examine the tax deals through the lens of the region’s state-aid rules, which is a first for the European Union, means the investigation would have more bite, because the commission must pursue such investigations to their conclusion and can demand that unpaid taxes be returned, tax experts said.
BNP Tentatively Agrees to Remove Adviser (WSJ)
BNP Paribas has tentatively agreed to oust a senior adviser at the French bank at the behest of New York’s top financial regulator as part of a proposed settlement of BNP’s alleged violations of U.S. sanctions, according to people familiar with the matter. Benjamin M. Lawsky, who runs New York’s Department of Financial Services, requested the bank remove Vivien Lévy-Garboua, the people said. Mr. Lévy-Garboua has served as head of compliance and internal controls for BNP in North America and currently acts as an adviser to senior bank officials.
Aubrey McClendon Launches His Post-Chesapeake Comeback (WSJ)
Mr. McClendon, whose flair made him a fixture at the energy industry’s marquee events, is working feverishly to build a new energy empire, raising $10 billion in the last nine months for his American Energy Partners LP. On Wednesday, he joined the head of the Environmental Protection Agency and the governor of Delaware at a Goldman Sachs energy conference in Manhattan. The executive’s appearance at the event marked a re-emergence after a quiet period. Just over a year ago, Mr. McClendon was shown the door at Chesapeake, the company he co-founded and built into the nation’s second-biggest natural-gas producer, behind Exxon Mobil Corp. Regarded by many as a visionary early to grasp the potential of American shale, Mr. McClendon eventually lost favor with Chesapeake’s largest shareholders because of his aggressive spending, appetite for risk and mingling his personal finances with the company’s drilling.
Goldman, Bain to pay $121 million in LBO collusion settlement (Reuters)
Goldman Sachs will pay $67 million and Bain Capital Partners LLC will pay $54 million to settle their portions of a lawsuit accusing several big private equity firms of conspiring not to outbid each other in takeovers. The preliminary settlement with former shareholders of companies acquired in leveraged buyouts from 2003 to 2007 was disclosed in papers filed on Wednesday in Boston federal court, and requires approval by U.S. District Judge William Young.
A millionaire on nearly every block in US: study (NYP)
The number of millionaire households in the US grew by 18 percent last year from 2012, the study found, bringing the total number of millionaire households in the country to roughly 7.1 million. That means there is one millionaire household for every 16 households in the country. That’s up from one of every 22 households being millionaires in 2010 and one in 24 in 2007.
Doctor suspended for ‘sexting’ and sending explicit pics during surgery (Mirror)
An anesthesiologist has been suspended for allegedly s3xting and sending photographs of his exposed gen!tals while involved in surgery including caesarean births. The hospital doctor sent more than 250 texts containing sexual innuendo during complex procedures including 45 messages over a 90 minute period during one stomach operation, an investigation found…In one message he said: “I’m hella busy with C sections.” In another it is claimed he invited his girlfriend to come to the hospital and told her he would let her into the doctors’ lot so she wouldn’t have to pay for parking.