Yahoo Delivers Message to Activist Starboard: Back Off (Bloomberg)
Yahoo! Chief Executive Officer Marissa Mayer delivered a message yesterday to activist shareholder Starboard Value LP: I’ve got this. Mayer began a defense of her leadership yesterday with a third-quarter earnings report that included sales that topped analysts’ estimates. She followed up with a conference call where she talked up her stewardship of the company, ticking off a list of points to show that her turnaround effort is making progress. Mayer argued she has a clear acquisition strategy for growth and said she is focused on maximizing value for shareholders. The shares jumped as much 5.8 percent today, for the biggest intraday increase in more than six months.
Russian Economy Stops Growing (WSJ)
Russia’s economy, hit by Western sanctions, stopped growing in September, data from the economy ministry showed Wednesday. Russia this year is on track to post its lowest growth since 2009. Russia’s standoff with the West over the Ukrainian crisis adds downside pressure on the economy as sanctions and geopolitical uncertainty fuel capital flight and kill investment activity. Alexei Ulyukayev, Russia’s economy minister, said that in the first nine months of 2014 the economy grew by 0.8%, Interfax news agency reported.
Goldman Sachs Shows Investors Path Out of Economic ‘Wonderland’ (Bloomberg)
Just as Alice was confused by the strange world she found herself in, Peter Oppenheimer said in a report published yesterday that investors face the unfamiliar in an environment of zero interest rates and low economic growth. Further complicating matters is that some old relationships have also broken down since the financial crisis. “Curiouser and curiouser,” he writes, quoting from Alice, in noting equities and bonds have often both performed well at the same time. Some of the strongest market performances have also been in the weakest economies.
‘Cannibal Cop’ interested in attending law school (NYP)
Notorious “Cannibal Cop” Gilberto Valle is “interested in attending law school,” his younger brother revealed in a letter to Manhattan federal Judge Paul Gardephe. “I even bought him a number of LSAT books which he completed, and he did very well on the practice tests at the end of the books,” wrote Daniel Valle The younger Valle was one of more than a dozen people who wrote letters on the ex-cop’s behalf before he is sentenced Nov. 4 for illegally using a police database. Gardephe overturned Valle’s conviction for conspiracy to murder in July. Read more »
Misery Widespread At Hedge Funds (WSJ)
This month’s turmoil in financial markets has been a “bloodbath” for hedge funds, inflicting large losses at an array of multibillion-dollar firms in the industry’s worst stretch since late 2011. It isn’t unusual for one segment of the $2.8 trillion hedge-fund world to find itself caught in a downdraft. But in October, the pain has been widespread. There were casualties among funds that make bets based on their fundamental analysis of companies, events like takeovers and broad economic trends. The losses came amid sharp volatility in stocks, bonds, currencies and commodities. Top firms including Jana Partners LLC, Discovery Capital Management LLC and Paulson & Co. have posted losses ranging from 5% to 11% for the month, according to investors…One hedge-fund manager told clients Monday that market activity reminded him of a “familiar plotline” from the “Jaws” movies. “An idyllic investment environment amid an improving economy…and then cue the music…dun-dun…dun-dun…dun-dun,” Paul Westhead, chief executive of $4 billion fund Rimrock Capital Management LLC, wrote in a letter to investors.
Fed to Banks: Shape Up or Risk Breakup (WSJ)
Federal Reserve officials sent a warning shot across Wall Street on Monday, telling bank executives they must do more to curb excessive risk-taking and improve employee behavior at their firms or face stiff repercussions, including being broken into smaller pieces. Federal Reserve Gov. Daniel Tarullo and Federal Reserve Bank of New York President William Dudley , in closed-door speeches Monday to bank executives gathered at the New York Fed, said Wall Street must clean up its behavior and image, according to copies of their remarks provided by the Fed. The regulators made it clear they aren’t satisfied with bank’s efforts in the six years since the financial crisis shattered public trust in big banks, citing ongoing probes of banks for currency-market and interest-rate manipulation, tax evasion and efforts to skirt international sanctions. Mr. Dudley raised the specter of breaking up big banks, saying if firms don’t prove they can comply with the law, “the inevitable conclusion will be reached that your firms are too big and complex to manage effectively. In that case, financial-stability concerns would dictate that your firms need to be dramatically downsized and simplified so they can be managed effectively.”
Private Equity Titans Open Cloistered World to Smaller Investors (Dealbook)
Carlyle, the Washington-based giant that Mr. Rubenstein co-founded in 1987, is at the forefront of an effort to open the cloistered and risky world of private equity to doctors, lawyers, well-heeled entrepreneurs and others with a brokerage account or, one day, a robust 401(k). The firm is close to establishing a new way to give individual investors direct access to a selection of Carlyle’s private equity funds, according to people briefed on the matter who were not authorized to speak publicly about the private fund-raising campaign in progress. Not just anyone can jump in. Investors — who must be so-called qualified purchasers, or those who own at least $5 million in investible assets — are required to commit a minimum of $250,000, which is divided evenly across four of Carlyle’s current funds. But the structure sharply lowers the bar on a per-fund basis for direct investment with Carlyle.
Heroin blamed in Google prostitute murder case (AP)
Defense attorneys for a high-priced prostitute accused of giving a Google executive a fatal dose of heroin on his yacht say their client had also injected herself, clouding her judgment…Gerald Christensen, Tichelman’s second attorney, says the death was an accident and not malicious. Police say surveillance video shows Tichelman gather her belongings, casually step over the body of 51-year-old Forrest Hayes to finish a glass of wine, clean up a counter, then lower a blind before leaving the yacht on Nov. 23.
Microsoft CEO Nadella Received Pay Package of $84 Million (Bloomberg)
Microsoft Chief Executive Officer Satya Nadella was given a compensation package worth as much as $84.3 million for the software maker’s latest fiscal year, about 11 times his pay from the previous year. Nadella was named CEO about five months before the end of the year, which ended in June. He was granted share awards potentially worth $59.2 million in connection with his promotion to CEO, according to a filing today. He also received a one-time retention award worth $13.5 million. The disclosure of Nadella’s compensation follows a gaffe about raises he made earlier this month at a women’s conference. He said he was advised early in his career to stop bucking for a promotion and that those who take the long view will eventually be rewarded. He later apologized for those statements, saying that they didn’t help to close the gender gap in pay.
Cops: Losers Of Beer Pong Match Opened Fire On Fellow Texas Partygoers (TSG)
The 1:20 AM shooting Sunday took place at a residence in Ames, a city 45 miles from Houston. According to the Liberty County Sherriff’s Office, investigators are searching for two men who allegedly shot up the party after losing at the beer pong table. Deputies identified the suspects as Decoris “Red” Rucker, 24, and Chris “Crazy Chris” Hackett. Rucker and Hackett were among a group of five men who became upset after losing a backyard beer pong game. The men, witnesses said, ran from the home while firing wildly at partygoers. An 18-year-old woman was shot in the thigh during the gunfire. Rucker, Hackett, and the other men fled in a 2006 Buick. Read more »
Billionaires and Mathematicians Crack Jokes at the Geekiest Event of the Season (WSJ)
Last week, at a glittering private hall in Manhattan steps from the East River, billionaires and socialites gathered for what one attendee called the “geekiest” event of the season: the Chaos Ball, the fundraiser for the National Museum of Mathematics. But it was also a night in which the nerds celebrated their revenge, as many in the crowd were among a coterie of the most secretive—and successful—money managers on Wall Street. So-called quantitative hedge funds are the squares of the investing world, numbers-obsessed firms that rely more on high-powered algorithms than old-school assessments of companies and their future prospects. These firms, known as “the quants,” are also notoriously tight-lipped about their strategies and their earnings—even among one another…The museum, or MoMath, is one of the few things that brings the quants together. James Simons, the Renaissance founder and 76-year-old former code breaker, was among the early backers of the museum, as was John Overdeck and David Siegel, the co-founders of the multibillion-dollar hedge fund Two Sigma Investments LLC. Other quants in attendance represented firms such as the D.E. Shaw Group and MQS Management LLC…To keep their big brains busy, there were numerous math-themed activities and decorations in keeping with the museum, which sports a door handle in the shape of the Greek letter Pi and a square-wheeled tricycle that rides smoothly over a specially designed curved pathway. Attendees took part in the creation of a fractal—a phenomenon where smaller copies of a pattern are nested within each other, similar to a fern plant—made up of lights attached to a black board and sat on benches that could be unfolded from squares into triangles as the guests mingled during the cocktail hour.
Marc Andreessen quits eBay board ahead of PayPal spinoff (Reuters)
The Silicon Valley pioneer has been involved in a public war of words with activist investor Carl Icahn, one of eBay’s largest shareholders, who convinced the company to spin off PayPal after a long campaign. “After 6 years of service + completed decision to split, I’ve decided now is a good time to step off the eBay board of directors,” Andreessen tweeted on Monday…Andreessen, in an interview to CNBC this month, likened Icahn to an “evil Captain Kirk” and said that the activist investor cared little for the companies in which he became involved. Icahn, in an interview to CNBC a day after, said “Andreessen has screwed more people than Casanova.” He also said the eBay board member had a “high squeaky voice that only a dog can hear.”
Did Bank Rules Kill Liquidity? Volcker, Frank Respond (Bloomberg)
“When I hear complaints about less liquidity, remember there is such a thing as too much liquidity,” Paul Volcker, the former Federal Reserve chairman whose calls to limit the ability of deposit-taking banks to bet with their own money inspired the rule that bears his name, said in an e-mail. “Traders’ and investors’ sense of an ability to sell anything instantaneously contributed to the excessive leveraging and risk-taking that led up to the crisis.” [...] “It’s a very good thing we don’t have AIGs that are willing to provide lots of liquidity and are buying this stuff now, so we won’t have to bail them out one day,” said Barney Frank, the former Massachusetts congressman who was a co-author of the Dodd-Frank Act. “People felt comfortable with banks taking the risk pre-crisis because they were government-backed. Now they’re not comfortable selling to other players that aren’t government backed.”
SEC sniffing out pot companies for fraud (NYP)
The Securities and Exchange Commission is investigating fresh allegations that a coterie of financiers has been minting millions as they pump the shares of money-losing pot companies, The Post has learned. Weed-related firms that face the SEC’s sniff test include GrowBlox Sciences, a supplier to pot farmers, and DigiPath, a consulting outfit that trains people how to market marijuana, sources said. Also under scrutiny are Vape Holdings, which makes pot-vaporization gear; and GrowBlox Sciences, which peddles climate-controlled light chambers designed to grow green, glistening dope buds fit for medical use, according to a person briefed on the situation.
Cook’s ‘Sexy’ Shirtless Photos At Chili’s Get Him Fired (HP)
A Chili’s cook in Florida was fired after he popped his top and posed for several Facebook photos in the restaurant’s kitchen, The Denver Channel reports. The shirtless man, who calls himself Justin J Speekz online, labeled the photos “Sexy Cooks Of Chili’s” and even tagged his employer in the post. Two of the photos, taken at a Chili’s location in Valrico, show him lying on a table where food is prepared. Concerned customers quickly discovered the bizarre post. The Department of Business and Professional Regulation, which oversees restaurant operations in Florida, reported that there were no official violations in the photos because no food was being prepared at the time. But a Chili’s Bar and Grill spokesperson told ABC Action News that “Speekz” was spoken to: “Chili’s clearly does not encourage this type of behavior in our restaurants. We maintain very high standards of food quality, safety and cleanliness and took immediate steps to ensure the restaurant continues to follow these requirements. Additionally, we ended this team member’s employment after learning of his conduct.” Read more »
BofA Posts Profit on Trading After Mortgage Settlement (Bloomberg)
Net income was $168 million, down from $2.5 billion a year earlier, the Charlotte, North Carolina-based bank said today in a statement. Adjusted earnings per share, which exclude an accounting gain, were 40 cents, beating the 32-cent average estimate of 14 analysts surveyed by Bloomberg. Chief Executive Officer Brian T. Moynihan, 55, who was named chairman this month, has booked more than $70 billion in costs tied to his predecessor’s takeovers of Countrywide Financial Corp. and Merrill Lynch & Co. He’s said that the firm’s underlying earnings power would become apparent once the litigation costs subsided.
BlackRock Results Top Expectations (WSJ)
Analysts are closely watching the results of BlackRock to see how much the Sept. 26 departure of investor Bill Gross from Pacific Investment Management Co. has helped the world’s largest asset manager. BlackRock has been one of the beneficiaries of money flowing out of Pimco, and it said it saw $11.1 billion of investor inflows into its fixed-income division during the quarter, the most of any of its product segments.
Apple, Facebook to Pay for Female Workers to Freeze Eggs (Bloomberg)
Facebook started providing the benefit, which applies to employees and their spouses or domestic partners, in January. The Menlo Park, California-based social network offers full coverage, or as much as $20,000 in expenses, related to the procedure, which could include surrogacy or court fees. Apple, based in Cupertino, California, said it will start offering similar coverage next year. In a statement, Apple spokeswoman Kristin Huguet said the iPhone maker wants to “empower women at Apple to do the best work of their lives as they care for loved ones and raise their families.” The decisions come amid a debate about the best ways to recruit and retain women in the technology industry, where women are underrepresented as a percentage of the total workforce. Apple and Facebook are among the first companies to offer an option to freeze eggs.
Where Do the World’s Wealthiest People Live? (RTE)
After the U.S., the United Kingdom, France and Germany added more millionaires than any other countries last year. Of course, the U.S. has a lot of wealthy people because it’s a big country. But the analysis suggests that the U.S. is punching above its weight, even after accounting for population. Total wealth per adult increased by $340,340 in North America, or an increase of 10.2% from the prior year. Total wealth per adult grew by nearly $146,000 in Europe, an increase of 10.4%. By contrast, wealth per adult grew just 2.3% in China and it fell 1.9% in Latin America and 3.1% in India.
Fed Is Silent on Doomsday Book, a Blueprint for Fighting Crises (NYT)
The Doomsday Book, as it happens, is not a book. It is a collection of documents maintained by the New York Fed’s legal department. The contents include “an extensive legal history of Federal Reserve lending activities,” and memos on subjects that deal with the Fed’s authority to make loans to municipalities and restructure debts. There is no comparable collection in Washington. The New York Fed is the central bank’s firefighting department. The New York Fed keeps three full sets, plus an electronic version, and it circulates an index. These facts are on the first page of the index, which the lead lawyer for the plaintiffs, David Boies, read aloud in the courtroom last week. Timothy F. Geithner, who led the New York Fed during the early stages of the financial crisis before becoming Treasury secretary, testified that he kept in his office an abridged version, in a binder about two inches thick, containing the index and a selection of memos. He said he had never seen the full work. Mr. Geithner in his testimony also played down the importance of the Doomsday Book, saying that he had consulted it infrequently during the crisis because the Fed was quickly forced to take measures beyond anything it had done before.
Prosecutor behind ‘crack hoes’ Facebook post cleared (MN13)
An investigation has cleared a prosecutor for Orange and Osceola County of any wrongdoing after he posted a controversial message on Facebook mentioning “crack hoes” on Mother’s Day. Assistant State Attorney Ken Lewis was demoted in May during an internal investigation to see if his comments or political views may have affected cases he worked on for the state of Florida. In an official letter obtained by News 13, Chief Assistant State Attorney Linda Drane Burdick told State Attorney Jeff Ashton she found no evidence that Lewis showed any bias related to his Facebook post in handling any cases assigned to him…Lewis later apologized to the public for his comments, admitting he used a “poor choice of words,” but adding his message was the same. Lewis said he didn’t think anyone but his Facebook friends would see the comment, but the post was published as public instead of Facebook’s optional “friends only” setting for status updates, photos, links and other information. Read more »
Too-Big-to-Fail Banks Face Up to $870 Billion Capital Gap (Bloomberg)
Too big to fail is likely to prove a costly epithet for the world’s biggest banks as regulators demand they increase debt securities to cover losses should they collapse. The shortfall facing lenders from JPMorgan Chase & Co. to HSBC Holdings Plc could be as much as $870 billion, according to estimates from AllianceBernstein Ltd., or as little as $237 billion forecast by Barclays Plc. The range is so wide because proposals from the Basel-based Financial Stability Board outline various possibilities for the amount lenders need to have available as a portion of risk-weighted assets. With those holdings in excess of $21 trillion at the lenders most directly affected, small changes to assumptions translate into big numbers.
Banks Get Ready for Triple-Threat Tuesday (MoneyBeat)
Third-quarter earnings season for the banking sector kicks off Tuesday with an unprecedented three banks—J.P. Morgan, Wells Fargo, and Citigroup—announcing their quarterly results on the first day. “That’s over 200 pages of information that need to be reviewed,” said CLSA bank analyst Mike Mayo, struggling to contain his joy [...] “I’m going to tell my wife, ‘Honey, I will not be home for dinner,’” Mr. Mayo said. Asked about his preparations for the big day, Mr. Mayo already has it all planned out: “Back-to-back spin classes to work off the trepidation. Maybe a squash game in there too.”
Ex-UBS Banker Tax Trial Rides on Underling’s Credibility (Bloomberg)
Jury selection is set to begin today in federal court in Fort Lauderdale, Florida, where Weil was indicted in 2008 on a charge that he conspired to help 17,000 U.S. taxpayers hide $20 billion in accounts from the Internal Revenue Service. Since his arrest last year in Italy, Weil, 54, has maintained his innocence and blamed others for the bank’s misconduct. He is the highest-ranking official among three dozen foreign bankers, lawyers and advisers charged in a seven-year U.S. crackdown on offshore tax evasion. The chief witness against him is Martin Leichti, former head of cross-border banking at UBS. Leichti’s testimony about any conversations the two men had might be crucial to establishing Weil’s state of mind, said Dan Levy, a former federal prosecutor in New York.
Venezuela Default Almost Certain, Harvard Economists Say (Bloomberg)
The economy is so badly managed that per-capita gross domestic product is 2 percent below 1970 levels, the professors wrote in an column published by Project Syndicate yesterday. A decade of currency controls has made dollars scarce in the country with the world’s biggest oil reserves, causing shortages of everything from deodorant to airplane tickets.
G20 watchdog toughens up new rule for securities financing (Reuters)
The Financial Stability Board (FSB), which coordinates regulation for the Group of Twenty (G20) economies, published on Monday its new rule for the first global minimum “haircut” or discount on collateral used to back securities financing transactions, toughening up its original draft proposal. “The regulatory framework for haircuts on securities financing transactions issued by the FSB today addresses important sources of leverage and the level of risk-taking in the core funding markets,” FSB Chairman Mark Carney said in a statement. From the end of 2017, banks must impose a haircut of at least 6 percent on the collateral they receive from non-banks as “insurance” on the value of securities being loaned. The FSB had originally proposed a minimum haircut of 4 percent. This means that for every $100 a hedge fund, for example, gets from a securities transaction, the bank must collect collateral worth at least $106.
Parrot Missing For 4 Years Comes Home Speaking Spanish (AP)
A pet parrot that spoke with a British accent when it disappeared from its home four years ago has been reunited with its owner — and the bird now speaks Spanish…the reunion was brought about by a Southern California veterinarian who mistook the African gray parrot for her own missing bird. Teresa Micco tracked Nigel’s microchip to Darren Chick, a Brit who lives in Torrance. Little is known about Nigel’s whereabouts the past four years, but Chick says the bird’s British accent is gone and it now speaks Spanish. It’s the fifth parrot reunion facilitated by Micco, who has been running ads for her own missing bird for nine months. Read more »
Putin Billionaire Allies Move Assets to Sons Amid U.S. Sanctions (Bloomberg)
Arkady Rotenberg, Putin’s boyhood friend and judo partner, divested his stake in OAO Mostotrest, Russia’s largest builder of roads and bridges, and his son Igor now holds 26 percent, according to company. He also transfered his stake in TPS Real Estate Holding, which builds shopping malls in Moscow and Sochi to Igor, according to his press office. The U.S. and European Union have targeted Russians in Putin’s inner circle, as part of rolling sanctions against individuals, companies and the financial, energy and defense industries, saying they seek to defend Ukraine’s territorial integrity amid a separatist insurgency in the east. “They are obviously seeking to bypass the potential impact of sanctions,” said Igor Bunin, head of Moscow-based Center for Political Technologies. “Going after his enemies, even Joseph Stalin admitted that children aren’t responsible for their parents. Let’s see how the West would address this.”
Mud runs as new way to entertain on Wall Street (NetNet)
Firms are looking for more creative ways beyond traditional dinners to entertain clients and prospective business partners. It’s now becoming about sweat, stamina and overcoming obstacles at activities such as spinning, CrossFit and even races like Tough Mudders. Stephanie Cadet, a sales rep at investment bank CLSA, has scheduled events for clients at SoulCycle, the boutique indoor cycling chain. She has another one coming up later this month. “There are definitely many more options now—especially in the past couple of years. They have sort of flourished,” Cadet said…After the classes, [Jay Galuzzo] sees many business partners and their clients discussing work in the facility’s common area which is stocked with fresh fruit and water. “You take a class and it’s an icebreaker with the client,” said Galuzzo, who doesn’t believe a hard, sweaty workout would be a turn-off to doing business.
Who does this Swiss banker have the goods on? Stay tuned (CNBC)
The highest-ranking Swiss banker ever to be captured by U.S. authorities goes on trial Tuesday in federal court in Florida on charges of helping wealthy Americans evade millions in taxes. Raoul Weil, 54, was indicted in 2008, but continued to live and work in Switzerland, which does not extradite its citizens in tax cases. He was declared a fugitive by the United States in 2009. It wasn’t until last year, when Weil made the mistake of traveling to Italy for a vacation with his wife, that authorities were able to catch him…His indictment was a watershed moment in the effort by the United States to pierce the veil of Swiss bank secrecy: The United States alleged UBS’ so-called “cross border” business had approximately 20,000 American clients with assets hidden from the IRS totaling as much as $20 billion. In 2009, UBS agreed to pay a $780 million fine and turn over the names of thousands of clients.
Ireland Considers Closing Corporate-Tax Loophole (WSJ)
Ireland is expected on Tuesday to announce changes to its tax code that could eventually close one of the world’s most famous corporate-tax loopholes, dubbed the Double Irish, after heavy pressure from governments and the European Union, tax experts say…The Double Irish uses a twist in Irish laws to funnel royalty payments for intellectual property from one Irish-registered subsidiary to another that resides for tax purposes in a country with no corporate income taxes. It is often paired with a related tax structure that planners call the “Dutch Sandwich,” which uses a Netherlands-based structure to avoid certain taxes. The Double Irish structure allows companies to legally shift billions of euros in profit to tax havens each year.
Deutsche Bank Legal Costs May Hit $8.8 Billion: Spiegel (Bloomberg)
Deutsche Bank’s provisions for potential legal costs could rise to as much as 7 billion euros ($8.8 billion), Spiegel reported, citing people close to Germany’s largest bank that it didn’t identify. That would be 30 percent more than what Deutsche Bank has accounted for so far. The Frankfurt-based lender said on July 29 second-quarter reserves for litigation expenses increased 450 million euros from the first quarter to 2.2 billion euros, while contingent liabilities rose to 3.2 billion euros to reflect potential costs from regulatory investigations. It said it couldn’t predict such costs for the rest of the year. The company’s legal costs, which totaled 3 billion euros last year, are hampering efforts to build capital and increase returns for investors. Deutsche Bank has yet to resolve probes into its role in industrywide attempts to manipulate benchmark interest rates and currency markets and faces lawsuits alleging it didn’t make adequate disclosure of U.S. mortgage-backed securities.
Man With Tom Brady Helmet Tattoo Arrested For Narcotics (HP)
Thompson, 46, was busted Sept. 10 for possession of Spice, the synthetic marijuana, according to The Smoking Gun. The suspect told police that he purchased the “Master Kush” Spice “from a black male for $15” at a downtown park. He also told the cops he did not know the drug was illegal in Florida, claiming it was still legal in his home state of New Hampshire, from where he had moved just three weeks prior. New Hampshire actually banned the sale of synthetic marijuana in 2012, according to UnionLeader.com. Thompson was charged with felony drug possession and trespassing. He is being held at the Pinellas County jail in lieu of $1500 bond, the New York Daily News reports. The jailers took the extra step of taking four separate booking photos of Thompson so that his tattoos could be memorialized for possible future identification purposes. The tat includes Brady’s number, 12, an American flag and the NFL logo and even a small green dot to indicate a helmet that, if real, would have a headset allowing Brady to hear plays from his coaches. Thompson’s tattoo goes further: There’s a recreation of the Vince Lombardi Super Bowl trophy and ink-replicas of the signatures of Wes Welker, Rob Gronkowski and Randy Moss tattooed across the dome, NESN.com reports. Thompson got the tattoo in January, 2008, after the Patriots finished the regular season undefeated. “It’s something that popped in my head,” he told WMUR TV at the time. “I was watching the game, and I said, ‘I want my head to look like Tom Brady’s helmet.’” Read more »
Trading Activity Likely to Buoy Banks (WSJ)
The pickup in action was driven by signs of an improving U.S. economy, the European Central Bank’s push to stimulate growth and Scotland’s bid for independence. Choppier markets helped lift trading revenue for banks that had previously been leaning more heavily on lending and investment-banking deals to increase profits. Banks face an easy comparison from a year ago when trading volumes slumped amid uncertainty about when the Federal Reserve could move to raise rates. But trading “hasn’t been the albatross it had been in past quarters,” said Devin Ryan, an analyst with JMP Securities, referring specifically to the long slump in trading revenue in bonds, currencies and commodities.
Johnson Controls Fires Consultant After Affair With CEO (Bloomberg)
Johnson Controls Inc. (JCI) fired a consulting firm after learning that one of its principals had an extramarital affair with Chief Executive Officer Alex Molinaroli. Molinaroli, 55, told his family about his affair with Kristin Ihle, a 45-year-old psychologist, in late May, according to the transcript of a court hearing at which Ihle unsuccessfully sought a restraining order against the CEO’s estranged wife. Ihle’s Milwaukee company, which helps businesses with leader development and succession planning, had been working with auto supplier Johnson Controls for years, according the consulting firm’s website…On May 29, Molinaroli’s wife of 28 years, Patsy, 59, sent an e-mail to Ihle: “I will destroy you, your family, and business just as you have done to me,” according to the transcript of the hearing. Later that day, while her husband was absent, Patsy Molinaroli fired a .38 caliber pistol at least four times in their Brookfield, Wisconsin, home, according to the criminal complaint. She also smashed window panes, a Pac Man arcade game and a china cabinet, leaving holes consistent with an aluminum baseball bat found in the kitchen, according to the complaint.
Fuld Advises on Deal to Buy National Stock Exchange (WSJ)
A little-known company called OpenMatch Holdings LLC agreed to buy the 130-year-old National Stock Exchange in a deal in that was advised by former Lehman Brothers Holdings Inc. CEO Richard Fuld, according to people familiar with the plans. The Jersey City, N.J.-based NSX, which is part-owned by the CBOE Stock Exchange, closed down at the end of May amid low trading activity. It handled roughly 13 million shares on its last day of operations, or about 0.2% of all U.S. stocks traded…Mr. Fuld, who was chief executive of Lehman Brothers when it collapsed in 2008, has played a role in the acquisition talks, the people said. Mr. Fuld’s firm, Matrix Advisors LLC, is advising OpenMatch on the deal.
Bill Ackman adds to Fannie, Freddie stakes (NYP)
Ackman has added to his Fannie Mae and Freddie Mac bets since the stocks got clobbered by a federal court ruling last week, The Post has learned. Ackman’s Pershing Square hedge fund said it added to its 10 percent stakes in the two mortgage giants. Pershing Square quit reporting its Fannie and Freddie holdings earlier this year, so it’s unclear how big the stake has become. Uncle Sam owns 80 percent of both companies.
Noah’s Ark Theme Park Plans To Only Hire People Who Believe Biblical Flood Actually Happened (Reuters)
The developer of a Noah’s Ark-based theme park in Kentucky said on Wednesday he would fight for his religious rights after state officials warned he could lose millions in potential tax credits if he hires only people who believe in the biblical flood. Ark Encounter, which is slated to open in 2016 in Williamston, Kentucky, is not hiring anyone yet, but its parent company Answers in Genesis asks employees to sign a faith statement including a belief in creationism and the flood. State officials and Ark Encounter lawyers have exchanged letters in which the state threatened not to proceed with tax incentives for the park if there was discriminatory hiring practices, a state official confirmed on Wednesday. The letters between the parties came to light after the Louisville Courier-Journal and the Lexington Herald-Leader obtained them through open records requests. “We’re hoping the state takes a hard look at their position, and changes their position so it doesn’t go further than this,” Ark Encounter’s Executive President Mike Zovath told Reuters. Read more »