Opening Bell: 08.12.14

Ex-SAC Capital Manager Martoma Forfeiture Sought by U.S. (Bloomberg)
Former SAC Capital Advisors LP portfolio manager Mathew Martoma, convicted of orchestrating the most lucrative insider trading scheme in U.S. history, should be ordered to forfeit $9.4 million and required to pay a fine, U.S. prosecutors said. The amount sought is equal to Martoma’s 2008 bonus, and exceeds his reported net worth of $7.4 million, prosecutors said in a filing today in Manhattan federal court. Guidelines for the fine range from $20,000 to more than $570 million, representing twice the gains to SAC Capital of the illegal trades, prosecutors said. The court’s probation department recommended a fine of $20,000, they said, without making their own recommendation.

Falcone files for ‘divorce’ from LightSquared (NYP)
On Monday, Falcone filed “divorce papers” from LightSquared, his bankrupt wireless venture, in the form of a proposed plan of reorganization to lead the restructuring for LightSquared Inc., the smaller arm of the failed Reston, Va., startup. LightSquared Inc. owns a small swath of 5 megahertz spectrum, as well as the rights to the tax losses in LightSquared, which could be valued at more than $2 billion. LightSquared LP, by contrast, owns the larger, more coveted swath of L-Band spectrum. But its ability to come to life has been hampered by years of infighting between creditors, including Dish Network co-founder Charlie Ergen. Falcone was offered a chance to stay in the larger LightSquared LP restructuring if he dropped his litigation against Uncle Sam and Ergen, who he’s accused of screwing with the company so he could buy the assets on the cheap, sources told The Post. Falcone refused, and was erased from the current LP plan, which is being led by private-equity firm Fortress. Falcone’s new, smaller plan centers on a $560 million bid to restructure “Inc” along with JPMorgan. This will keep him in the spectrum game, as he plans to use the 5 megahertz of spectrum he gets from the restructuring and to buy more, a source familiar with his thinking told The Post.

Alibaba IPO Has Unusual Challenges for Bankers (WSJ)
For a start, the deal is likely to total more than $20 billion, according to people with knowledge of it. Bankers figure they will need to drum up orders for as much as four times the size of the deal from big institutional investors to create enough fervor to keep the shares rising in the days after it goes public, the people said. That will require seeking some buyers willing to pony up $1 billion or more for a slice of the deal to ensure demand.

Gross Reduces U.S. Government-Related Debt in July (Bloomberg)
The proportion of U.S. government-related debt in the $223 billion Pimco Total Return Fund (PTTRX) was 45 percent, versus 47 percent in June, data posted yesterday on the company’s website showed. That compared with 50 percent in May, the highest level since 54 percent in July 2010.

Barclays Quant Trading Unit Said to Take 60 Employees in Spinout (Bloomberg)
A Barclays trading team that’s leaving this year to start a quantitative investment firm will take 60 bank employees with it, adding to Wall Street’s migration to the $2.8 trillion hedge-fund industry. Olivier Durantel, Gregoire Schneider, Antoine Fillet and Maxime Fortin of the British bank’s nQuants unit will form the venture, according to a person with knowledge of the plans, who asked not to be identified because the information is private. The firm, which hasn’t yet been named, will use algorithms to trade mainly equities and other liquid securities globally.

Robin Williams, a Comic Force, Dies at 63 (WSJ)
Since his days on “Mork & Mindy,” a fish-out-of-water tale that ran for four seasons in which he played an alien from the planet Ork, Mr. Williams demonstrated a fully formed comedic style filled with tics and habits that would become his trademarks. Those idiosyncrasies, like monologues full of non sequiturs or unexpected accents, would help him quickly become one of the world’s biggest comedy stars and a favorite guest of late-night television talk shows. Even when not pictured on screen, Mr. Williams had a tendency to become the center of attention, including a celebrated turn as the voice of the madcap genie in the 1992 animated film “Aladdin.” “Robin Williams was an airman, a doctor, a genie, a nanny, a president, a professor, a bangarang Peter Pan, and everything in between. But he was one of a kind. He arrived in our lives as an alien—but he ended up touching every element of the human spirit,” President Obama said in a statement.

Miss Bumbum 2014 Contestants Hope To Have Brazil’s Best Butt (HP)
In Brazil, the “Miss Bumbum” contest is a nationwide annual undertaking to find the best derriere. This year’s 27 contestants, who represent the country’s different states, were announced last week. “Miss Bumbum 2014” will start in São Paulo on August 11. Brazilians have until November to vote online and determine the 15 finalists for the finale. This year the pageant will have a historic first after twins Rafaella and Graziella Fornazieri, representing Alagoas and Ácre respectively, entered the contest. Dai Macedo, a 25-year-old model with a 42-inch bottom, was crowned “Miss Bumbum 2013.” “It’s a lot of work, a lot of devotion,” Macedo told Agence France-Presse by way of an interpreter after winning the title. “I denied myself a lot of things. No nightclubs. No sweets. I went to the gym Saturdays and Sundays.”

Kinder Morgan Deal Risks Big Tax Bills for Investors (WSJ)
Because Kinder Morgan Energy Partners is organized as a partnership that benefits from substantial deductions, the taxes on its substantial quarterly payouts were deferred. When the units are sold or exchanged—as they will be in the reorganization—the deferred taxes come due. “In this deal, one group of stakeholders will owe tax so that the company as a whole can benefit,” said Robert Willens, an independent tax expert in New York. Most of that income will probably be taxed at ordinary rates, which are higher than long-term capital-gain rates, said Robert Gordon, a tax strategist who heads Twenty-First Securities Corp. in New York. The tax could be especially unwelcome for investors who planned to hold the units until death, when they could skip paying the deferred taxes. In effect, Mr. Gordon said, these people will owe tax they wouldn’t otherwise have had to pay. The individual impact would vary widely, depending on when the units were bought and other factors, he said.

Standard Chartered to scour records for money laundering, with penalty at stake (Reuters)
Standard Chartered Plc will soon begin sifting through a mountain of data for signs of possible money laundering or other criminal activity, as a result of faults in the software critical to its anti-money laundering compliance program, two sources with knowledge of the matter said. The outcome of this review could affect any penalties regulators impose on the bank for anti-money laundering lapses.

Derivatives Reincarnate Boosting Debt Wagers in New Era (Bloomberg)
Wall Street is starting to return to the financial innovation that helped extend the debt rally seven years ago before exacerbating the worst financial crisis since the Great Depression. The instruments are springing back to life as investors seek new ways to boost returns that are being suppressed by central bank stimulus. At the same time, they’re allowing hedge funds and other investors to bet more cheaply on a plunge after a 145 percent rally in junk bonds since 2008.

Dominique Ansel’s Latest Creation: Peanut-Butter-Stuffed Pretzels Shaped Like Lobster Tails (Grub Street)
…the latest: a pull-apart pretzel shaped like a lobster tail, stuffed with buttercrunch and peanut butter and served salted with whipped brown-butter-honey sauce on the side. Here’s the idea: The pretzel lobster — Pretzer? Lotzel? — bears a resemblance to the Italian pastry known as a lobster tail; it’s a pretzel through and through, with bits stuffed with buttercrunch brittle and housemade peanut butter. The design is such that you’re supposed to pull the pretzel apart in segments. The “tail” is sprinkled with Maldon salt, and in a nod to its lobster-tail inspiration, it comes with a pot of whipped brown butter and honey on the side.

2 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (2)

  1. Posted by guest | August 12, 2014 at 9:30 AM

    RIP Robin.

    As an aside, I will judge the bum contest if necessary.

  2. Posted by Guest | August 12, 2014 at 10:02 AM

    It's what he would have wanted.