Study Asserts Startling Numbers of Insider Trading Rogues (Dealbook)
A quarter of all public company deals may involve some kind of insider trading, according to the study by two professors at the Stern School of Business at New York University and one professor from McGill University. The study, perhaps the most detailed and exhaustive of its kind, examined hundreds of transactions from 1996 through the end of 2012. The professors examined stock option movements — when an investor buys an option to acquire a stock in the future at a set price — as a way of determining whether unusual activity took place in the 30 days before a deal’s announcement. The results are persuasive and disturbing, suggesting that law enforcement is woefully behind — or perhaps is so overwhelmed that it simply looks for the most egregious examples of insider trading, or for prominent targets who can attract headlines. The professors are so confident in their findings of pervasive insider trading that they determined statistically that the odds of the trading “arising out of chance” were “about three in a trillion.” [...] But, the professors conclude, the Securities and Exchange Commission litigated only “about 4.7 percent of the 1,859 M.&A. deals included in our sample.”
Deutsche Bank Entertained 45 Japan Pension Funds, Document Shows (Bloomberg)
Deutsche Securities Inc. spent 22.1 million yen ($217,000) wining and dining fund officials from 2010 to 2012, according to the document prepared by the investigative arm of Japan’s financial regulator and Germany’s biggest bank. Deutsche Securities Chief Operating Officer Bret Dandoy approved expenses for two overseas trips, and Chairman Norimichi Kanari joined in the entertaining on one occasion, the report showed…Japanese criminal law prohibits companies from providing benefits to public servants with the intention of obtaining business from them. Company officials who oversee public retirement funds as part of their assets under management are defined as civil servants.
Morgan Stanley’s Valeant E-Mails Call Client a ‘House of Cards’ (Bloomberg)
A few weeks ago, Morgan Stanley pitched its defense services to Allergan Inc., which was fighting a hostile takeover bid from Valeant Pharmaceuticals International Inc. Valeant was a “house of cards” with an unsustainable business model, Morgan Stanley bankers wrote in the e-mails to Allergan, which released them yesterday. Allergan decided not to hire Morgan Stanley — while Valeant recently did. The unusual disclosure of the e-mails was intended to bolster Allergan’s argument that Valeant is a flawed buyer — and shows how antagonistic the battle between the two pharmaceutical companies has become. Mary Claire Delaney, a spokeswoman for Morgan Stanley, declined to comment on the release of the e-mails. Valeant Chief Executive Officer Michael Pearson said in an e-mail that Allergan’s release “is a sign of desperation, and we look forward to proving the naysayers wrong.”
Fernandez says Argentina will not default on restructured debt (Reuters)
President Cristina Fernandez said on Monday that Argentina would honor its payments to holders of its restructured debt and to avoid a default despite suffering a setback in its long-running legal battle against “holdout” investors. The U.S. Supreme Court earlier on Monday declined to hear Argentina’s appeal over its battle with hedge funds that refused to take part in its debt restructurings. The court’s decision was unexpected and risks toppling Latin America’s No 3 economy into a new default.
IMF Cuts U.S. Growth Outlook, Sees More Scope for Zero Rates (Bloomberg)
The Washington-based IMF now sees the world’s largest economy growing 2 percent this year, down from an April estimate of 2.8 percent. The IMF left a 2015 prediction unchanged at 3 percent, and said it doesn’t expect the U.S. to see full employment until the end of 2017, amid low inflation.
New Hampshire woman busted for prostitution at Massachusetts library (NYDN)
A New Hampshire woman has been busted selling sex at a suburban Massachusetts library, police said. Brittany Macintyre, 20, was allegedly caught offering her services at the quiet public lending house in Tewksbury on Tuesday. Cops said they went undercover after a receiving a tip-off about her sleazy deeds. An officer said that, within moments of entering the building, he was approached by the suspected hooker. To respect the peaceful ambiance, the duo started passing written notes between each other, reports CBS Boston. Macintyre is said to have eventually offered to perform a sex act on the officer in exchange for $60. She was arrested on charges of prostitution, reports Nashua Patch, and was arraigned Wednesday in Lowell District Court.
Companies Cash In on Tax-Credit Arms Race (WSJ)
Companies are finding the new state tax credits especially alluring because many of their biggest federal tax breaks expired at the end of last year. What’s more, an increasing number of the state credits are refundable or transferable, meaning they can guarantee a company cash regardless of the size of its state tax bill. Some 46 states now offer such tax credits through more than 200 different programs, compared with only a handful of states a decade ago, and exchanges are popping up to help businesses trade them.
BofA fined $32M for ripping off charity, retirement accounts (NYP)
The country’s No. 2 lender has now paid a total of about $90 million in fines and restitution for ripping off charities and small business retirement plans through 2011, according to the Financial Industry Regulatory Authority, the self-funded regulator for US brokers. The latest fine from the watchdog group — about $32.4 million on Monday — included $24.4 million in restitution to customers, including small business’ retirement accounts. Merrill Lynch, which was acquired by BofA in 2009, added extra mutual-fund charges for small business retirement plans for five years, even after discovering that it shouldn’t, the watchdog said.
CEO of HSBC’s U.S. Division to Retire This Year (WSJ)
HSBC Holdings PLC on Monday said HSBC U.S. Chief Executive Irene Dorner, a 32-year HSBC veteran and one of the U.S.’s most senior female bankers, will retire this year and be succeeded by Patrick Burke. Ms. Dorner, 59, has been with HSBC since 1982 and was appointed CEO at HSBC Bank USA in January 2010. She became responsible for all of HSBC’s U.S. businesses the following year upon the departure of Niall Booker, another longtime HSBC executive.
Dealbreaker Dramatic Reading Night Is Tomorrow (DB)
Wilbur and other special guests look forward to seeing you there.
Woman Rescuing Cat Stuck In Tree Gets Stuck In Tree Herself (AP)
Authorities in northwestern Pennsylvania say a woman who tried to rescue a cat from a tree ended up needing a rescue herself. Firefighters in Erie say they brought a 28-foot ladder to help Tara Dennis get down from the branches on Sunday. Residents tell the Times-News that they’ve heard the feline crying for the past couple of days. It’s not clear who owns the cat. Dennis says she couldn’t stand by and do nothing. So, she scaled a fence, got on a roof and climbed onto a branch. She reached the animal, which she put in her shirt. But the 21-year-old got stuck as she tried to come down. A neighbor called 911.