Dealbreaker

Posts by Dealbreaker

Write-Offs: 04.16.14

$$$ Avenue Capital’s Lasry Said Buying Bucks for $550 Million [Bloomberg]

$$$ Yellen Says Fed Committed to Policies to Support Recovery [Bloomberg]

$$$ Hedge Funds Post Worst First-Quarter Results Since 2008 [BusinessWeek]

$$$ Former Madoff aides seek to have convictions tossed [Reuters]

$$$ The first 2,500 fans in attendance at MCU Park on July 5 will receive a Keith Hernandez “Magic Loogie” bobblehead, commemorating the episode in which Kramer and Newman accused the former Mets first baseman of spitting at them after a game. [ESPN] Read more »

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Opening Bell: 04.16.14

Credit Suisse Net Falls on Lower Investment Bank Profit (Bloomberg)
Net income decreased to 859 million francs ($976 million) from 1.3 billion francs in the year-earlier quarter, the Zurich-based company said in a statement today. Credit Suisse tumbled in Swiss trading after earnings missed the 1.09 billion-franc estimate of seven analysts surveyed by Bloomberg.

Mt. Gox Files for Liquidation (WSJ)
Defunct bitcoin exchange Mt. Gox has given up its plan to rebuild under bankruptcy protection and has asked a Tokyo court to allow it to be liquidated, people familiar with the situation said. These people cited as reasons the complexity of the procedure—including the difficulty of holding meetings with creditors spread around the world—as well as the lack of realistic rehabilitation plans for the Tokyo-based exchange. Mt. Gox, at one point the world’s busiest bitcoin exchange, collapsed in February and said as it filed for bankruptcy protection in Tokyo on Feb. 28 that it had lost 850,000 bitcoin worth around half a billion dollars. Since then, about 200,000 bitcoin have been recovered and are part of the exchange’s assets.

Goldman Moves To Energize Stock Trading (WSJ)
Under pressure from unhappy clients and losing market share to rivals, Goldman Sachs Group is trying to jump-start its stock-trading business. At recent trading conferences with top clients, including Fidelity Investments and BlackRock Inc., and in private conversations, investors have vented their concerns with the way Goldman and other firms trade stocks, people familiar with the matter said. Amid the mounting frustration, Goldman has sought to take a more public role in the debate over the market’s future. The firm has encouraged employees to stress to clients its views on market mechanics, and in March the firm’s president wrote an opinion piece about those ideas in The Wall Street Journal. Goldman’s effort also has included discussions over the future of its Sigma X private stock-trading venue. The Journal reported April 8 that Goldman was considering shutting it down.

Fed should beef up low-rate vows, two officials say (Reuters)
“If you commit to keeping rates low even as the recovery is proceeding, even as we continue to recover, I think people have a sense, the Fed has the recovery’s back,” Minneapolis Federal Reserve Bank President Narayana Kocherlakota said at North Dakota State University. “And that’s the message that I think we need to do a better job of promoting.”

Keep Steve Jobs’ personality out of trial – tech companies (Reuters)
Witnesses at an upcoming trial over no-hire agreements in Silicon Valley should not be allowed to offer evidence that Apple co-founder Steve Jobs was “a bully,” four major tech companies argued in a court filing. Tech workers filed a class action lawsuit against Apple Inc, Google Inc, Intel Inc and Adobe Systems Inc in 2011, alleging they conspired to avoid competing for each other’s employees in order to avert a salary war. Trial is scheduled to begin at the end of May on behalf of roughly 60,000 workers in the class, and defendants say damages could exceed $9 billion. The case, which is closely watched in Silicon Valley, is largely built on emails among top executives, including late Apple Chief Executive Steve Jobs and former Google CEO Eric Schmidt. For instance, after a Google recruiter solicited an Apple employee, Schmidt told Jobs that the recruiter would be fired, court documents show. Jobs then forwarded Schmidt’s note to a top Apple human resources executive with a smiley face. In a joint court filing late last week, the companies told U.S. District Judge Lucy Koh in San Jose, California that they were not seeking to bar Jobs’ interactions with other witnesses about the no-hire agreements. However, opinions based on other evidence, like Walter Isaacson’s bestselling biography about Jobs, should be kept out of trial.

Mobile brothel catches fire at German motorway rest stop (DM)
Police and around 35 fire fighters were called to the scene after the mobile home burst into flames at the lay-by near Horneburg, Germany. The female brothel owner parked up at the site as it was a convenient spot for her to offer erotic services to clients. According to the police, these were mainly lorry drivers or car drivers who were travelling along the B73 motorway near the region of Horneburg, southwest of the city of Hamburg in Lower Saxony. The 32-year-old brothel owner known as ‘Lady Jane’ was fortunately conducting business with a truck driver in his cab when her ‘Love-Mobil’, which had included a bed and various erotic aids, caught fire. Read more »

Write-Offs: 04.15.14

$$$ Yellen Says More Capital Would Help Biggest, Most-Complex Banks [WSJ]

$$$ Loeb Ratchets Up Campaign Against Sotheby’s Board [ValueWalk]

$$$ N.Y. Regulator Sends Subpoena to Credit Suisse in Tax-Evasion Probe [WSJ]

$$$ European Companies See Sales Growth Hit by Exchange Rates [WSJ]

$$$ Outlook for pensions is pretty awful: Bridgewater [NetNet]

$$$ Texan, 23, Headed To State Prison For Urinating On The Alamo [TSG] Read more »

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Opening Bell: 04.15.14

Citigroup CEO Vows to Fix Regulatory Problems as Bank Logs Higher Profit, Beats Estimates (WSJ)
Speaking after Citigroup reported better-than-expected first-quarter earnings Monday, Mr. Corbat faced more than a dozen questions from analysts on the bank’s recent failure to win regulatory approval to return capital to shareholders. “Is the Fed denial a wake-up call for Citi or not?” CLSA analyst Michael Mayo asked. “We’re wide awake,” Mr. Corbat replied after declaring earlier, “I want, and I know shareholders deserve, an industrial-strength, permanent solution that paves the way for sustainable capital return over time.”

Stockbrokers Who Fail Test Have Checkered Records (WSJ)
More than 51,500 stockbrokers failed a basic exam needed to sell securities at least once, according to data that Wall Street regulators don’t disclose to investors, and those who repeatedly failed have on average worse disciplinary records. The more times a broker failed, the higher the average total of black marks was, such as criminal charges and firings, a Wall Street Journal analysis of the data found. Those who failed the test more than twice, for example, were 77% more likely to report a felony or financial-related misdemeanor than brokers who passed the exam on the first try, and about 55% more likely to have been terminated.

Mt. Gox founder won’t appear in U.S. for questions about bankruptcy case (Reuters)
Mark Karpeles, the founder of Mt. Gox, said he would not come to the United States to answer questions about the Japanese bitcoin exchange’s U.S. bankruptcy case, Mt. Gox lawyers told a federal judge on Monday. In the court filing, Mt. Gox lawyers cited a subpoena from the U.S. Department of Treasury’s Financial Crimes Enforcement Network, which has closely monitored virtual currencies like bit coin. “Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena. Until such time as counsel is retained and has an opportunity to ‘get up to speed’ and advise Mr. Karpeles, he is not willing to travel to the U.S.”, the filing said.

Regulators Weigh Curbs on Trading Fees (WSJ)
SEC officials, including some commissioners, are considering a trial program to curb fees and rebates they say can make trading overly complex and pose a conflict of interest for brokers handling trades on behalf of big investors such as mutual funds.

NY attorney general probes Herbalife: sources (NYP)
New York Attorney General Eric Schneiderman is investigating Herbalife over claims it is a pyramid scheme, The Post has learned. At least two whistleblowers have come forward and given Schneiderman’s investigators sworn testimony, sources said. The New York lawman has also fielded complaints from former Hispanic Herbalife distributors who say they were defrauded by Herbalife, sources said.

Berlusconi Given Community Service for Tax Fraud (NYT)
Former Premier Silvio Berlusconi must spend at least four hours a week in the service of the elderly to repay society for his tax fraud conviction, the first sentence against him ever confirmed by Italy’s highest court. The one-year assignment, announced by a Milan court on Tuesday, curtails Berlusconi’s ability to participate in the upcoming European election campaign — a point of contention among his political allies…The court stipulated that Berlusconi must spend most of his time in the Lombard region, where he lives, but granted permission to travel to Rome from Tuesday to Thursday each week. He must spend at least four straight hours one day a week at an elderly center, the court said. The document did not identify the center, or specify what Berlusconi would do there. Berlusconi was sentenced to four years for tax fraud, reduced to one year for a general amnesty. The one-year community service order may eventually be reduced by 45 days…The media mogul is on trial for political corruption in Naples and under investigation in Milan for witness tampering in trials relating to sex-fueled parties at his villa near Milan. Read more »

Write-Offs: 04.14.14

$$$ EU Weighs Tougher Russian Sanctions Amid Ukraine Unrest [Bloomberg]

$$$ Bitcoin promoter Shrem indicted in NY for money laundering [Reuters]

$$$ Cantor Fitzgerald CEO sues over blocked Hamptons hoops court [NYP]

$$$ Citigroup Says It Discovered Second Alleged Fraud in Mexico [WSJ]

$$$ Hustler Club claims ‘pole-dance tax’ violates rights [NYP] Read more »

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Opening Bell: 04.14.14

Europe’s top banks cut 80,000 more staff in post-crisis overhaul (Bloomberg)
Europe’s largest banks cut their staff by another 3.5 percent last year and the prospect of a return to pre-crisis employment levels seems far off, despite the region’s fledgling economic recovery. Spurred into action by falling revenue, mounting losses and the need to convince regulators they are no longer “too big to fail”, banks across the globe have shrunk radically since the 2008 collapse of U.S. bank Lehman Brothers sparked the financial crisis. Last year, the tide of bad news began to turn for European banks, which are among the region’s largest employers. Helped by recovering economies and receding fears for the euro zone’s future, the benchmark Stoxx Europe 600 Banks index .SX7P rose 19 percent, outpacing the 17.4 percent increase in multi-sector stocks. But despite the improved outlook, Europe’s 30 largest banks by market value cut staff by 80,000 in 2013, calculations by Reuters based on their year-end statements showed.

High-Frequency Traders Set for Curbs as EU Reins In Flash Boys (Bloomberg)
European Union lawmakers are poised to approve some of the toughest restrictions in the world on high-frequency trading, the first crackdown in the aftermath of Michael Lewis’s latest book, “Flash Boys.” The curbs are part of revamped EU markets legislation spanning from commodity derivative speculation to investor protection. The high-frequency trading limits include standards meant to keep the price increment for securities from being too small, mandatory tests of trading algorithms and requirements that market makers provide liquidity for a set number of hours each day.

CME Gave High-Frequency Traders Peek at Market, Lawsuit Claims (Bloomberg)
The Chicago-based company, owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, offers futures based on interest rates, equity indexes, currencies, energy products and agricultural commodities. The plaintiffs, in their complaint against CME and CBOT, allege “a fraud on the marketplace” and seek class-action status on behalf of exchange users. CME denied their accusations in a statement. Sometime after the start of 2007, the CBOT and CME began letting HFTs peek “at all orders to buy and sell futures contracts before they were reflected” to the rest of the market, according to the complaint filed April 11 in federal court in Chicago. That glimpse occurred “before the person or entity entering the buy or sell order received confirmation that their order was received — in other words before anyone other than the HFTs were privy to this information.”

Hedge Funds Wield Risky Legal Ploy to Milk Buyouts (WSJ)
When Dole Food Co. sold itself last year to its founder for $1.2 billion, many market watchers saw just another in a string of buyouts. A few investors saw an opportunity to squeeze the buyers for potentially millions of dollars more, using an arcane—but increasingly popular—legal process known as appraisal. Merion Capital LP bought 7.5 million shares of the fruit company in the days before Dole’s October stockholder meeting. It rejected the $13.50-a-share deal price and, alongside three other hedge funds, is seeking more in court through appraisal. Dole’s buyout highlights the rise of “appraisal arbitrage,” in which hedge funds buy shares of companies on the brink of a buyout and ask a judge to award them a higher price. These lawsuits have risen sharply as a growing group of investors looks to extract more money from corporate takeovers.

Gisele audited by IRS after making Forbes ‘rich list’ (NYP)
Gisele Bundchen has revealed that she was audited by the IRS just because she was placed on the Forbes Supermodel Rich List. “It’s sad, because the people who write these things don’t have my bank-account details,” she laughs. “I do OK, I earn plenty, but not as much as they say. I’ve already been audited by the IRS because of this list, and, truthfully, whether I’m on this list or not doesn’t interest me,” the Brazilian supermodel told Vogue magazine on Friday. Mrs. Tom Brady went on to say she’s no different than you or me. “I’ve got the same interests, the same day-to-day life, as any woman. I want to raise my children well, be a good wife and work. This is what I value: Are my children educated, is my husband happy, are people feeling positive energy from me? There should be a magazine to quantify knowledge, understanding and love for people: That is power.” Read more »

Write-Offs: 04.11.14

$$$ JPMorgan profit weaker than expected as trading revenue falls [Reuters]

$$$ Herbalife Marketing Tactics Said to Be Probed by FBI [Bloomberg]

$$$ SAC Capital’s Criminal Settlement: Was Justice Done? [BusinessWeek]

$$$ Bond Traders From JPMorgan to RBS Said Placed on Leave [Bloomberg]

$$$ Justin Livingston never intended to be his own boss. In 2012, he worked in social media for Amazon, and in his spare time he used his Instagram account to share men’s fashions. Soon, he started getting approached by companies to model their products. Now, he’s paid by them. He’s what the industry calls an “Instagram Influencer.” [CNBC] Read more »

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Opening Bell: 04.11.14

Investor Group Seeks Court OK to Buy, Revive Bankrupt Bitcoin Exchange Mt. Gox (WSJ)
A group of investors with Hollywood ties is seeking to revive bankrupt bitcoin-trading exchange Mt. Gox, according to people familiar with the matter. The investor group, which includes Brock Pierce, a former child actor-turned technology entrepreneur, is offering a token payment of one bitcoin, or about $400, to buy the exchange outright, according to these people. The acquisition must be approved by a Japanese bankruptcy court. Mt. Gox collapsed in February after disclosing that 750,000 bitcoins belonging to customers had vanished, along with an additional 100,000 bitcoins owned by the virtual-currency exchange. Since then, about 200,000 bitcoins have been recovered and are part of the exchange’s assets. The investor group hopes to revive the exchange and set aside 50% of its transaction fees to pay back burned customers and other creditors over time, according to documents filed to the Japanese bankruptcy court and reviewed by The Wall Street Journal…According to people familiar with the plan, the group is justifying the low price because of the “information vacuum” over Mt. Gox’s 550,000 missing bitcoins, currently worth about $220 million. It isn’t possible to place a value on the lost coins, they said.

Citigroup CEO faces grilling over failed plan, missed target (Reuters)
As Citigroup Chief Executive Mike Corbat prepares to talk to investors on Monday about the bank’s biggest failure during his 18-month tenure, his biggest struggle may be with how little he knows about the reason he failed. The U.S. Federal Reserve said on March 26 that it had rejected Citigroup’s request to boost its dividend and buy back more shares. The news was a stinging blow to Corbat, who was charged with improving the bank’s relationship with regulators in October 2012, when he was named the new CEO. The Fed still had not explained as of earlier this week why Citigroup failed to win approval, a bank executive told Reuters. Corbat, he said, has little information as to what went wrong and why. Corbat, through a spokesman, declined to comment.

JPMorgan crashes Goldman’s date with eBay (CNBC)
Earlier Thursday, eBay issued a surprise press release announcing an end to an ugly battle with Icahn, who had built up a large position in the online auctioneer and was demanding a spinoff of its payment-processing company, PayPal, and the addition of two candidates he had selected to eBay’s board. Along the way, Icahn had called out Donahoe for demonstrating “inexcusable incompetence” and eBay had criticized Icahn for airing accusations that were “false and misleading.” As part of a newly-inked agreement, however, Icahn was withdrawing both demands before eBay’s upcoming annual meeting in exchange for naming telecom industry veteran David Dorman as an independent director to the auctioneer’s board. And apparently, eBay had [Jimmy Lee, a longtime banker at JPMorgan Chase] to thank for the amicable settlement. “A week ago, Jimmy Lee, who is the vice chair of JPMorgan, called me and said he had been meeting with Carl on something completely unrelated, but he saw opportunity for some sort of compromise,” said Donahoe in a CNBC interview about an hour before the markets opened. “So he encouraged both of us to spend more time together, which is what we did over the weekend” – leading, ultimately, to Thursday’s pact. A few hours later, Icahn said much the same thing. “Jimmy Lee did a great job over the weekend back and forth, back and forth as a catalyst,” he said. This point was not lost on Icahn, who wondered aloud why Goldman’s bankers had never contacted him. “It’s not that I personally have anything against Goldman. I just think their approach to this, at least where I’m concerned, is completely wrongheaded and there should be much more peace than war in these things.”

Greece Gets Strong Demand for Bond (WSJ)
Greece sold more than $4 billion worth of bonds to eager investors Thursday, marking a milestone for a country that over the last four years had convulsed global markets, imperiled the euro and precipitated the biggest default in history. Greece’s absolution by investors is a stark demonstration of how much those markets have improved since the dark days of the euro-zone crisis, and a reflection of a mounting belief that Greece has turned a corner after six years of painful recession. “People are starting to look at Greece again in the investible universe,” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland in London.

As Judge OKs SAC Plea, Pursuit of Cohen Appears to Cool (WSJ)
On Thursday, a federal judge approved a guilty plea entered on behalf of SAC and a landmark insider-trading settlement with the firm. Prosecutors and the Federal Bureau of Investigation have eyed Mr. Cohen for years, but haven’t been able to mount a criminal case against him personally. While prosecutors aren’t barred under terms of the settlement from indicting Mr. Cohen or other SAC traders, no new charges are imminent, according to a person familiar with the matter.

‘Game of Thrones’ a budding inspiration for baby names (NYP)
In 2012, there were 146 babies named “Khaleesi,” the title of “queen” that Targaryen took on after marrying a Dothraki leader, according to Social Security Administration data analyzed by Vox.com. The name has been slowly climbing up the baby-naming charts since 2010, when fewer than five babies were given the moniker. Now it’s more popular than traditional names like “Betsy” and “Nadine.” But Targaryen’s first name has proven less popular, with only 21 babies being called “Daenerys” in 2012, the same data showed. That’s not the only “Game of Thrones”-inspired name out there: More than 700 babies were named Arya in 2012, the first name of orphan Arya Stark. The name was used prior to the hit cable show, but it has risen in popularity in recent years. Read more »