Opening Bell

Opening Bell: 06.26.14

Dark Pool Greed Drove Barclays to Lie to Clients, N.Y. Says (Bloomberg)
Barclays was so bent on lifting its private trading venue to the upper ranks of Wall Street dark pools that it lied to customers and masked the role of high-frequency traders, according to New York’s attorney general. Barclays falsified marketing materials to hide how much high-frequency traders were buying and selling, according to a complaint filed today by Eric Schneiderman. Barclays runs one of Wall Street’s largest dark pools, a private trading venue where investors can trade stocks mostly anonymously.

Barclays pulls bond offering after lawsuit emerges (Reuters)
Barclays pulled a US$1.5bn bond offering on Wednesday after it emerged that the New York attorney general was preparing to sue the UK bank for securities fraud. It had already amassed more than US$4.5bn in orders for the 10-year subordinated deal, market sources said, when reports of the lawsuit hit trading screens. “Investors just baulked,” one portfolio manager who had been looking at the deal told IFR. “If something dire does come out the suit, then that could mean that the deal has to be nullified anyway – so it was just better to pull it.”

Greek Bonds Beat Lottery as Funds Surge on Smashed Glass (Bloomberg)
The economy will expand this year after the worst downturn in peacetime, the highest unemployment in the region has peaked and investors are buyers of Greek bonds again. The yield on benchmark 10-year government debt is 5.79 percent, down from the high of 44.2 percent in March 2012 — a return better than most winning lottery tickets.

Soccer Break: Why It Pays to Watch the World Cup at Work (CNBC)
Americans aren’t really known for their devotion to soccer, but come Thursday, there are going to be a lot of worker bees stuck in a quandary when the United States faces off against Germany at noon, Eastern Time. Perhaps surprisingly, HR is on your side here. “It’s an inspiring and motivating thing that’s going on, and we need to take advantage of that,” said Monique Honaman, founding partner of HR consulting company ISHR Group.

Puerto Rico Moves to Restructure Debt (WSJ)
Puerto Rico paved the way to overhaul the finances of its power and transportation agencies, potentially saddling investors with losses on about $13.6 billion of debt. Puerto Rico Gov. Alejandro Garcia Padilla proposed legislation Wednesday that would allow some debt-laden public entities to restructure their bonds. The proposed bill doesn’t include a way for the island’s general-obligation bonds and sales-tax debt to be restructured. The step, if approved, would be the first significant move since the Puerto Rico government hired advisers this year to help it find a way to turn around its utilities, which are heavily indebted and face mounting deficits. The island, which has about $70 billion in obligations, has labored under rising unemployment and declining tax revenue.

Man Sues British Airways After He’s Sent To Grenada Instead Of Granada (AP)
A Maryland dentist who said he hadn’t had a vacation in two years, is suing British Airways after a booking mistake landed him in Grenada in the Caribbean instead of Granada, Spain, according to NBC News. Edward Gamson said he told the British Airways booker he wanted to go to Spain and didn’t notice the error on his ticket because it didn’t have an airport code or the flight duration printed on it. He only learned that he was headed to the tiny island nation after his connecting flight in London was in the air and the flight map showed his plane flying west. Gamson said he wasted 375,000 frequent flyer miles for the trip and was only offered $376 for him and his partner and 50,000 miles for their trouble. He is now suing the airline for $34,000 to cover the cost of “pre-booked hotels, trains and other tours” he and his partner had planned, according to NBC.

Standard Chartered Warns On Profit (WSJ)
Standard Chartered PLC has warned investors that operating profit will fall sharply this year as its financial-markets business took a big hit in the first half from squeezed margins at its currency and interest-rate trading operations. The U.K.-based, emerging markets-focused bank said on Thursday that lower profits in foreign-exchange and interest-rate trading as clients have pulled back from these activities helped push first-half operating profit 20% lower than last year’s $4.1 billion. The bank said the second half should be slightly better than last year, resulting in a full-year decline of roughly 10% on the $6.96 billion operating profit the bank reported.

Hidden Billionaire Emerges Amid Silicon Valley Tech Boom (Bloomberg)
The construction site at 181 Fremont St. in downtown San Francisco is home to the deepest foundation ever laid in the city’s history. The base will support a 54-floor tower, which, when completed in 2016, will be the Bay Area’s second-tallest building. The structure is the first major property developed in San Francisco by real estate tycoon Jay Paul, who’s become a billionaire creating some of Silicon Valley’s most sought-after corporate campuses. His tenants include Hewlett-Packard Co., Microsoft Inc. and Inc. “He’s made a killing anticipating where the market would go,” said Garrick Brown, director of research at Cassidy Turley. “He always seems to be two steps ahead. Timing is everything in commercial real estate.”

Glencore appoints first female board director (Reuters)
Glencore, the last British blue-chip company with an all male board, has appointed Patrice Merrin as its first female board director. The commodity trader and mining group had come under fire from some shareholders over its apparent failure to follow recommendations in a 2011 British government review that called for more women on company boards. The government’s Davies Review set a target for all companies in the FTSE 100 to have a quarter of board roles held by women by 2015.

Paulson buys more than 6M shares of Allergan stock (NYP)
Valeant’s $53 billion hostile takeover for Botox maker Allergan has another hedge-fund heavyweight besides Bill Ackman on its side. John Paulson, a Valeant shareholder, has taken an even bigger big stake in Allergan, sources told The Post. Paulson has bought more than 6 million shares of Allergan, according to Reuters, which first reported the hedgie’s big stake. Paulson did not return a call for comment. The hedgie owned 1 million shares of Valeant at the end of the first quarter, according to regulatory filings. The bigger Allergan stake would give Paulson, who is known for his merger bets, more than 2 percent of the Botox maker.

“Skateboard Cop” on a mission in Green Bay (WGB)
The Green Bay Police Department has a brand new patrol division. For now, there is just one member but he is making a big impact. “I think I am the only one in the world who actually patrols with a skateboard” explains Green Bay Police Officer Joel Zwicky. Known as “Skateboard Cop”, he is earning superhero status in the community. “When I am out on the trails patrolling people, I get a lot of selfies with people and things like that” he says with a laugh. While he does not sport tights or a cape, he does have the latest gadgets. The specially designed board has wider trucks, bigger wheels, and red and blue LED lights. A ten year veteran of the force, Skateboard Cop is happy to be out of the patrol car. “It gets us more exercise, and it also helps us talk to people because the squad is kind of a barrier for us” Officer Zwicky explains. He is also trying to change stereotypes about the sport. “I wanted to break that down and show people that skateboarders are not just punk kids causing trouble, they are all kinds of people in the community, and they are even your police force,” he says. His passion is even earning respect from the hard to please teen crowd. “It could help the littler kids be encouraged and whatnot. Oh look there is a cop skateboarding and they could go up and ask him about it” says fellow skater, Chris Endlich.

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23 Responses to “Opening Bell: 06.26.14”

  1. guest says:

    Skateboard Cop, we salute you.

  2. Guest says:

    Paulson + Ackman = Collusion? Surely the DoJ can extract some serious fine fees from that.

  3. guest says:

    If I had a nickel for every time I accidentally woke up in Grenada…

  4. Guest says:

    WSJ has lost it. It says skip work to watch the US in the World Cup.

  5. Windy City Secure says:

    "It could help the littler kids be encouraged and whatnot"

    There's that quality Wisconsin public school education.

  6. Rooster says:

    Suddenly all the civics in Stamford are being traded in for skateboards.

  7. Guest says:

    Second largest dark pool in the US found to outright lie to the clients about protecting clients order flow? It will be interesting to see how many orders they get today.

  8. Guest says:

    39. These representations were false. The chart and accompanying statements misrepresented the trading taking place in Barclays’ dark pool. That is because senior Barclays personnel de-emphasized the presence of high frequency traders in the pool, and removed from the analysis one of the largest and most toxic participants in Barclays’ dark pool.
    40. On October 5, 2012, a draft version of the analysis was circulated by email to senior executives in Barclays’ Equities Electronic Trading division. The accompanying email noted that Barclays “de-emphasized the number of ELPs [electronic liquidity providers, or high frequency traders] by moving them to the back.” The email also stated that the chart “remov[es] Tradebot.” Tradebot Systems had historically been, and was at that time, the largest participant in Barclays’ dark pool, with an established history of trading activity that was known to Barclays as “toxic.” Those alterations had the effect of obscuring the amount of high frequency trading activity in the dark pool by disguising the total number of high frequency trading firms, and deleting one significant firm altogether.
    41. In a response email, one employee objected to the modified chart, stating that removing Tradebot from the analysis was a falsification of the data.
    42. In response to this objection, a Director in the Equities division wrote that “the point of the chart is not to show what’s in the pool. The point is to market our capability . . . to monitor individual participants in the pool.”
    43. A Vice President responsible for selling the dark pool to clients disputed that
    explanation, replying to the group that “[m]y point when selling that picture was always: ‘here is a snapshot of the participants in [Barclays’ dark pool] as an accurate view of our pool.’ I was never using it like an ‘illustration’” of Barclays capability to monitor the pool. “I had always liked the idea that we were being transparent, but happy to take liberties if we can all agree” (emphasis added).

  9. Guest says:

    Michael Lewis vindicated.

  10. Guest says:

    If you take in things in the dark, you end up with darkpools.

  11. Rebecca M. says:

    Anyone else confused by BA using London for connecting flights to the Caribbean, especially for flights that originate from the US.