Opening Bell

Opening Bell: 10.06.14

Bill Gross told rival Gundlach: ‘I am Kobe, you are LeBron’ (Reuters)
It was one of the most extraordinary meetings in the history of the bond market. Two of the biggest-ever names in fixed-income investing, Bill Gross and Jeffrey Gundlach, fierce rivals who had never previously talked, held a secret meeting over glasses of lemonade, water, and plates of crudites about whether to join forces. In the week of Sept. 15, just before Gross shocked the investment world on Sept. 26 by storming out of Pimco, he approached Gundlach and dropped a bombshell. According to Gundlach, Gross said he was about to be fired by the firm he had helped launch more than four decades ago and had built into a $2 trillion investment powerhouse. […] Gundlach said that Gross called him out of the blue. “Bill called through the DoubleLine switchboard,” said Gundlach. Skeptical that it was really Gross, Gundlach said he “told the receptionist to take a number and then call it to verify it was not some prankster. A couple of hours later I called Bill from home.” […] Discussing their potential legacies, Gundlach said Gross spun an analogy to National Basketball Association star players Kobe Bryant and the younger LeBron James. “I am Kobe. You are LeBron James,” Gross told Gundlach. “I have five rings, you have two rings – probably going to five,” a reference to the number of NBA championships the two players have each won.

Trio of Officials Key to AIG Bailout Face Grilling (WSJ)
Besides Mr. Bernanke, other high-profile witnesses will include former U.S. Treasury Secretary Henry Paulson and former Federal Reserve Bank of New York President Timothy Geithner. Court filings indicate each will field hours of questions. The lawsuit argues that the government cheated shareholders of $40 billion. It was filed by Starr International Co., an investment and charitable firm run by Mr. Greenberg that was AIG’s largest shareholder in 2008. The judge overseeing it in the U.S. Court of Federal Claims has certified it as a class action, and about 300,000 shareholders would share any award.

Hackers’ Attack Cracked 10 Financial Firms in Major Assault (Dealbook)
Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said.

Hewlett-Packard Plans to Break in Two (WSJ)
Hewlett-Packard Co. plans to separate its personal-computer and printer businesses from its corporate hardware and services operations, the latest attempt by the technology company to improve its fortunes by breaking itself in two. The company intends to announce the move on Monday, people familiar with the plan said. It is expected to make the split through a tax-free distribution of shares to stockholders next year, said one of the people. If the division goes off as planned, it would give rise to two publicly traded companies, each with more than $50 billion in annual revenue.

Poker Pro Says He Preys on Casinos With All Legal Means (Bloomberg)
Phil Ivey, a 10-time winner of the World Series of Poker tournament who’s suing a Genting Bhd. unit for 7.7 million pounds ($12.3 million) in unpaid winnings, said he uses every strategy that is legal to boost his chances. “As a professional gambler, my job is to seek to lawfully reverse or reduce the perceived house edge,” Ivey said in a witness statement on the second day of a London trial. Ivey, 38, won the money playing a form of Baccarat called Punto Banco, using a technique known as edge sorting, at Genting’s Crockfords casino in London, according to his lawyers. Genting refused to pay up, saying the practice is unfair. “I would not be doing my job very well if I did not seek to use to my benefit weaknesses that I identify in the way that casinos set up or offer particular casino games,” he said in his statement made available by the court.

Man Floating In Bubble Rescued By Coast Guard (AP)
A longtime endurance runner and peace activist whose latest goal was to reach Bermuda in a homemade floating “Hydro Pod” was rescued by the U.S. Coast Guard on Saturday after he began suffering from fatigue. Coast Guard air crew were able to safely pick up Reza Baluchi and the bubble Saturday morning, Coast Guard spokeswoman Marilyn Fajardo said in a statement. He was transported to a nearby Coast Guard station and found to be uninjured, Fajardo said…The “Hydro Pod” is a large bubble made of 3-mm- (0.11-inch)-thick plastic, Baluchi’s website, “Run With Reza” says. The bubble, which he propelled forward by running inside and pushing it with his arms, was housed in a large aluminum-type frame studded at intervals with inflated soccer balls. A man who appears on a video during the bubble’s construction compares it to a hamster wheel. According to the site, Baluchi planned to run in the bubble in the mornings, cool off in the sea while leashed to the floating sphere, and sleep in a hammock inside it at night. In addition to the protein bars the Coast Guard said it found in his bubble, he planned to catch and eat fish, the site said. Read more »

Opening Bell: 10.03.14

Secret Goldman Sachs Tapes Put Pressure on New York Fed (Dealbook)
Lawmakers are scrutinizing allegations that the Federal Reserve Bank of New York went easy on one of the most prominent banks under its watch, Goldman Sachs, despite concerns voiced by those inside the Fed that a deal Goldman was pursuing was “legal, but shady.” Now committees in the Senate and House of Representatives are looking at whether to hold hearings or conduct more extensive investigations into the Fed’s oversight of Goldman and other banks. The renewed interest in the Fed’s role came after the release of secret recordings detailing interactions between employees of the New York Fed and Goldman, which were made public by the investigative news organization ProPublica and the radio program “This American Life.” The former Fed employee, Carmen M. Segarra, who made the recordings had previously sued the New York Fed, arguing that she had been fired for being too hard on Goldman. While Ms. Segarra’s suit was dismissed, the newly released recordings suggest that her supervisor at the New York Fed went easy on Goldman, even after saying he wanted “to put a big shot across their bow” on a deal in which Goldman was suspected of helping make Banco Santander look financially stronger than it was.

Activist Funds Aren’t Sharing the Ties They Have to Advisers (WSJ)
Some activist investors have agreed to share trading profits with small-fry players who bring them stock ideas—but they aren’t always disclosing these financial ties. Consider the activist campaign involving Cliffs Natural Resources Inc., an iron-ore miner. Activist consultant Michael McNamara last year pitched the idea of launching a Cliffs campaign to Casablanca Capital LP, according to people familiar with the matter. Casablanca is an activist hedge fund co-run by Donald Drapkin, a former lawyer of high-profile investor Ronald Perelman. Casablanca built a stake of about 5.2% it disclosed in January. In exchange for his idea, Casablanca agreed to pay Mr. McNamara’s firm as much as one-third of the hedge fund’s profits on the stake, according to people familiar with the matter and a regulatory filing by Mr. McNamara’s firm. Casablanca didn’t disclose these ties in the Cliffs case, according to a review of its regulatory filings. A regulatory rule requires investors that acquire a stake of 5% or more in a company to describe any arrangement with another party that includes guarantees of profits, divisions of profits or losses, or other understandings related to the company’s securities.

Pimco CEO says ‘our DNA is fundamentally unchanged’ after Gross (Reuters)
Pimco CEO Doug Hodge played defense on Thursday, reiterating that Bill Gross’s departure has not affected the way the U.S. bond giant functions. “With Bill’s recent decision to resign, the perception has been that there has been a dramatic shift at Pimco,” Hodge said in a letter to clients on Pimco’s website. “However, the reality is that while Pimco has evolved into a globally diversified investment company, our DNA is fundamentally unchanged.”

You Know It’s a Tough Market When Ben Bernanke Can’t Refinance (Bloomberg)
Ben S. Bernanke said the mortgage market is so tight that even he is having a hard time refinancing his own home loan. The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. — “just between the two of us” — that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.” When the audience laughed, Bernanke said, “I’m not making that up.” “I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said.

French court to begin Airbus insider trading trial (Reuters)
A long-awaited French corporate trial involving allegations of insider trading in the shares of Airbus Group gets under way on Friday, marking the climax of an eight-year investigation. Seven current and former managers at Europe’s largest aerospace group, and two former industrial shareholders, are accused of trying to profit from inside knowledge of problems with two jet developments and a deteriorating financial outlook when they sold shares in what was then EADS in 2006. All deny the charges and are expected to argue that the trial should not be taking place because they have already been cleared by the French stock market regulator, highlighting a growing debate about “double jeopardy” rules.

South Daytona man charged with molesting vending machine (UPI, related)
Daytona Beach police have arrested a man they say is a suspect in several cases related to the robbery of coin-operated machines. On Wednesday, Daytona Beach police officers responded to Crystal’s Car Wash on South Nova Road to investigate a theft and vandalism. Video surveillance captured parts of the crime, and left police with enough evidence to pursue a suspect. On the video, the suspect was seen using a sledge hammer and ax to force open the coin-operated vending machines. After reviewing the footage, detectives identified Jason Joslyn as the suspect. Joslyn was arrested four months ago for similar crimes police say he committed at Melissa’s Car Wash on Beville Road. On Friday, detectives located and arrested Joslyn. He’s now facing charges of felony criminal mischief, and molesting a vending machine. Read more »

Opening Bell: 10.02.14

Gross Exit Gets Tongues Wagging Around Pimco’s Hometown (Bloomberg)
In Newport Beach, a town of 87,000 where the median household income of $109,677 is almost 80 percent above the state’s, the Bill Gross story is dominating conversations at hairdressers, restaurants and golf courses even as Pimco forbade employees to discuss the matter. Gross, who managed about $373 billion at Pimco, is a familiar sight to many in the seaside town, in a suit or carrying his yoga mat and gym bag. “He’s going to manage a $13 million, million with an ‘m,’ global unconstrained bond fund after building an almost $300 billion, with a ‘b,’ fund,” said Mark Moehlman, a managing director at Beacon Pointe Wealth Advisors, who was sipping tea at the Starbucks at Fashion Island, near Pimco’s offices. “It’s a little bit like Pavarotti singing at the community fair.”

As PIMCO bleeds assets, Gross shows risk of star culture (Reuters)
Gross’s new employer, Janus Capital, saw its shares soar nearly 40 percent as investors bet Gross would act as a magnet for investor funds. But those who stay put may have played the better hand. Lipper data shows that the heir to the throne of the “Bond King”, Dan Ivascyn, has been a more successful manager in recent years, making nearly three times the gains recorded by Gross over three and five years, and was on the way to beating him again in 2014, although at a much lower asset base.

Fannie, Freddie Shares Plunge After Investor Lawsuit Is Dismissed (WSJ)
Shares of Fannie Mae and Freddie Mac plunged on Wednesday, following a federal-court decision that dealt a blow to big stockholders such as money managers Fairholme Capital Management LLC and Perry Capital LLC. A U.S. District Judge on Tuesday threw out lawsuits brought by Fairholme, Perry and other shareholders that challenged the U.S. government’s 2012 decision to sweep nearly all of Fannie and Freddie’s profits to the U.S. Treasury rather than collect set dividend payments. Fannie Mae’s common stock declined 37% to $1.70 on Wednesday, while shares of Freddie Mac were down 38% to $1.65. Some classes of the companies’ preferred shares fell by more than 50%. The single-day declines in the market capitalizations of the companies were the steepest in dollar terms since March 11. For the year, shares of Fannie Mae common stock are down 44%. Freddie Mac has suffered similarly steep declines.

Bank of America Board Gives Chairman Job to Brian Moynihan (WSJ)
The move had been informally discussed among board members at least as early as early 2013, said people familiar with the matter. Some board members who had argued against it have since left.

Corporate U.S. Healthiest in Decades Under Obama With Lower Debt (Bloomberg)
Steve Wynn, founder of the Wynn Resorts Ltd. (WYNN) casino empire, once called President Barack Obama’s administration “the greatest wet blanket to business and progress and job creation in my lifetime.” Barry Sternlicht, chief executive officer of Starwood Property Trust Inc. (STWD), said Obamacare was driving down wage growth and “affecting spending and the desire to buy houses and everything else.” They are among a chorus of corporate executives and lobbying groups that regularly assail Obama for policies that they say are stifling investment and hurting companies. Corporate and economic statistics almost six years into his administration paint a different picture. Companies in the Standard & Poor’s 500 (SPX) Index are the healthiest in decades, with the lowest net debt to earnings ratio in at least 24 years, $3.59 trillion in cash and marketable securities, and record earnings per share. They are headed this year toward the fastest average monthly job creation since 1999, manufacturing is recovering and the U.S. has returned as an engine for global growth. The recovery, which stands in contrast to weak growth in Europe and Asia, has underpinned an almost threefold gain in the Standard & Poor’s 500 Index since March 2009. Wynn has been part of that recovery. Since Obama first took the oath on Jan. 21, 2009, the shares of his luxury hotel company have surged fivefold while the S&P 500 Index more than doubled.

Woman Strips Naked In Corporate Box At Australian League Football Game (HP)
The stadium luxury suite wasn’t supposed to be clothing-optional. But a Scottish woman still stripped naked in a corporate box at an Australian Football League game in Melbourne Saturday, giving fans an eyeful. Heather McCartney apparently pulled the stunt on a dare as she watched Hawthorn play Sydney in the Grand Final. “I said ‘If Hawthorn win I’m getting naked,’” McCartney told the Herald Sun. “They won and I got naked. It was great.” But not everybody appreciated the view. Police at the Melbourne Cricket Ground arrived to arrest McCartney, and she was accused of trying to hit and bite officers. On Sunday the 26-year-old pleaded guilty to indecency and other charges and was fined $300 Australian (about $262 U.S.), according to reports. Both McCartney and the building firm that owns the corporate box have denied allegations that McCartney was hired to strip. Read more »

Opening Bell: 10.01.14

Fannie, Freddie Investors Lose Suits Over Lost Dividends (Bloomberg)
The lawsuits, among the first of almost 20 related cases to be decided, were filed by investors including Bruce Berkowitz, the head of Fairholme Capital Management LLC, who was named Morningstar Inc.’s domestic stock manager of the decade for the 2000s, and billionaire hedge-fund manager Richard Perry’s Perry Capital LLC. The investors sued for breach of contract over allegedly promised dividends and liquidation preferences, and what they called an illegal “taking” under the U.S. Constitution. U.S. District Judge Royce Lamberth rejected their claims today, finding that the government is allowed under a 2012 amendment to the companies’ bailout agreements to sweep “nearly all” profits from Fannie Mae and Freddie Mac to the U.S. Treasury. The U.S. is facing almost 20 federal actions brought by investors claiming they’ve been barred from participating in post-bailout profits earned by Fannie Mae and Freddie Mac. At least $33 billion — the face value of potentially worthless preferred shares in the companies — is at stake in the cases, as well as investors’ efforts to win congressional support for the idea of reviving Fannie Mae and Freddie Mac.

American Apparel’s Board Said to Be Open to Letting Charney Stay (Bloomberg)
The retailer, which ousted Charney as CEO almost four months ago in an acrimonious split, is considering giving him a new role, said the people, who asked not to be identified because the deliberations are private. In the meantime, Charney is serving as a paid strategic consultant. Reaching an agreement with Charney would help stave off a legal fight and preserve continuity at the company, which he founded in 1998. His cause has been helped by Standard General LP, a hedge fund that shook up the board in July and spurred the retail chain to take a second look at the executive.

Snoop Dogg joins Reddit funding round (FT)
Snoop Dogg, the hip-hop star, Silicon Valley investor Marc Andreessen and the Oscar-winning actor Jared Leto have joined a $50m funding round for Reddit, the online discussion forum. The fundraising for the site, which describes itself as “front page of the internet”, was led by Sam Altman, president of Y Combinator, the start-up incubator that helped launch Reddit in 2004. Other investors included Alfred Lin of Sequoia Capital and PayPal founder Peter Thiel.

Critical Time for Pimco, as Pensions Consider Removing Funds in Wake of Bill Gross Departure (Dealbook)
The next few days and weeks could be critical for the bond giant as it tries to stem a wave of money flowing out after the abrupt departure of its co-founder last Friday. For years, Mr. Gross, 70, was the public face of Pimco and one of Wall Street’s most successful bond investors.

New Pimco Captain’s Style: More Teamwork, Fewer TV Cameras (WSJ)
…while Mr. Ivascyn (pronounced eye-vuh-sun) is making the media rounds this week to reassure clients after Mr. Gross left to take a post at Janus Capital Group Inc., he prefers not to appear on television. In an interview with The Wall Street Journal Tuesday, Mr. Ivascyn, 45 years old, said the shifts underscore the team focus at Pimco following the departure of Mr. Gross, its 70-year-old co-founder, investment chief and public face. “The new structure is based on shared responsibility,” Mr. Ivascyn says. “We’re shifting from a founder-driven management structure to one that, in short, emphasizes teamwork.”

Poker-Playing Hedge Fund Manager Sued Over Premature Bet (Bloomberg)
If a U.S. regulator has its way, Daniel Shak will soon have more time to focus on gambling at poker tables and none at all to spend betting on derivatives. Shak, founder of SHK Management LLC and a competitor in the World Series of Poker, has been sued by the Commodity Futures Trading Commission over allegations that he violated a two-year ban from some trading included in a 2013 accord settling claims that he tried to manipulate oil futures prices. Six months after the settlement, the hedge fund manager traded two gold contracts that were “the exact type of commodity futures trading that he agreed to be banned from trading,” the CFTC said in a complaint in federal court in Washington today.

Wearable Futons: Clothing Of The Future? (HP)
Japan, the country that gave the world condom cookbooks, burgers that are completely black and men who eat their own genitals in the name of art is giving the world something almost as weird: suits that double as futon mattresses. King Jim, a Japanese company specializing in office equipment and supplies, recently started selling something called the Wearable Futon Air Mat Set. It’s a jumpsuit made of nylon, polyethylene and polyester that can double between as an overcoat and a bed, for those times when you’re not sure where you’re going to sleep. The product is available in Japan for about $40 from supplier King Jim — and that includes an air mattress, according to the Daily Mail. Read more »

Opening Bell: 09.30.14

Trial in $40 Billion Lawsuit Against AIG Bailout Begins (WSJ)
A $40 billion lawsuit against the U.S. government for its crisis-era bailout of American International Group Inc. AIG -0.64% got under way in federal court Monday, with a lawyer for the insurer’s shareholders accusing the government of unlawfully seizing a majority stake in the insurer. Litigator David Boies called the deal a “grab” of a 79.9% equity stake at an “extortion interest rate” in an unlawful attempt to punish AIG’s shareholders. Government lawyer Kenneth Dintzer responded in his opening statement that American taxpayers had extended “an enormous benefit” to AIG shareholders in the ultimately successful effort to stabilize AIG, one they weren’t automatically entitled to and which they apparently “do not appreciate.”

Pimco staff ‘frantic and sad’ in wake of Bill Gross sudden exit (Reuters)
As executives worked at damage control and to promote the new faces behind investment decision-making at the $2 trillion asset manager, some employees were struggling to cope with the tsunami that swamped their world on Friday. “I couldn’t believe it on Friday, and I still can’t believe it now,” one employee who was not authorized to speak publicly told Reuters. “We lost Mohamed El-Erian in January and now Bill Gross. It’s been confusing, frantic and sad.”

Pimco Is in a Race to Keep Investors After Bill Gross Exits (WSJ)
Pimco executives, among them Chief Executive Douglas Hodge and the firm’s new portfolio-management team, hosted a string of calls with financial advisers at Wall Street firms, including Merrill Lynch and Morgan Stanley, to explain why the firm will thrive despite Mr. Gross’s exit, according to people familiar with the matter. “We’re energized, we’re prepared and we’re strong,” Mr. Hodge said to a group of Morgan Stanley financial advisers Monday afternoon on a teleconference, according to a person familiar with the matter.

Bill Gross is NOT crazy (CNBC)
“Let me say flatly, Bill Gross is NOT crazy. There was a palace coup in which disgruntled underlings gave an ultimatum to Pimco’s parent company, Allianz, complaining that the “Bond King” had become difficult to work with and erratic. Five managers said it was “us or him,” and Gross reportedly quit the day before he was set to be fired. Some have said Gross’s investment letters to shareholders were indicative of a delusional mind. Gross is well-known for his colorful, contemplative and, often, offbeat, market commentary. But so what? That does not make him a lunatic who deserves to be locked up, or a wild man, hell-bent on self-destruction. That is how you get your work to stand out from the pack when you’re trying to make the bond market interesting to investors who might otherwise never read his missives. Was he a demanding boss? I suspect so. Was he dismissive of other’s ideas? Perhaps — and it wouldn’t be the first time that would be true of a highly driven and successful money manager. Legendary hedge-fund managers from Michael Steinhardt to Julian Robertson to Stan Druckenmiller to my old boss, Steve Cohen were, or are, reputed to be impossibly difficult to work with. I know all of them quite well. Michael Steinhardt, who is extraordinarily gracious in social setting, would admit that, in his day, his voice would thunder so loud that the walls shook when he berated an underling. Steve Cohen, who says he has mellowed in recent years, would also acknowledge rattling a few cages in his younger years, which, I suspect, would be a mild way of describing those interactions with SAC employees. Socially, almost all of these folks are amiable and surprisingly gentle outside the office. But like highly skilled athletes, they are animals when they get on the field.”

PayPal co-founder rounds on European tech entrepreneurs and regulators (FT)
“If you’re a slacker with low expectations, those low expectations are likely to be met,” Peter Thiel said. “I don’t think optimism always works. There is a form of pessimism, such as in China where people work really hard because they are scared that they will be old while they are still poor. “Pessimism in China motivates hard work. Pessimism in Europe has a more demotivating effect. When you’re pessimistic and unmotivated, it has as self-fulfilling character.”

Nerds Want Muscles Too; Workouts For Comic-Con Goers (WSJ)
Fitness programs and gyms are popping up around the country, catering to people who have spent much of their lives on the sofa playing games, reading comic books or acting out fantasies of superhero stardom. These new fitness regimens use characters and storylines from those media to spur people to move their bodies in real life—not just as avatars. “They stumble across Nerd Fitness and they can truly be themselves,” says Mr. Kamb, who attributes the interest in nerd-centric fitness to the rise of movies based on muscular Marvel Comics characters such as Captain America, and the expanding definition of a nerd. “They can talk about squats and deadlifts and vegetables, and Harry Potter and Lord of the Rings, and be accepted for it.” […] Earlier this month Nerd Fitness held its first large public gathering, a four-day summer camp for adults at a retreat center in Clayton, Ga. Michelle Grimaldi, 23, of Warminster, Pa. attended and met like-minded exercisers. She did “Game of Thrones” combat training with PVC-pipe swords and attended a lecture on making your kitchen and home healthier called “Building Your Batcave.” Campers came from as far as Australia, did ropes courses, lifted weights and danced dressed as fictional characters such as the Mario Bros. of video-game fame. Read more »

Opening Bell: 09.29.14

Gross Trading Against Gross Seen Starting Monday (Bloomberg)
The way Gross quit is seen inside Pimco as him going out of his way to do damage to Pimco, the person said, because of all the things Gross did that flew in the face of standard practices at the company. The person requested anonymity because he doesn’t want to jeopardize his relationship with Pimco. First, there is supposed to be a transition period to protect clients that have stakes in the products managed by a departing portfolio manager. Normally this period is at least weeks if not months. Second, the announcement from Janus was supposed to be coordinated with a simultaneous announcement from Pimco, which didn’t happen. Third, there’s normally an understanding that there will be no competition for some period of time, the person said.

Pimco moving away from Bill Gross model, CEO says (Reuters)
Pimco is moving away from a founder-led model and the $2 trillion asset manager’s flagship fund, formerly run by co-founder Bill Gross “does not define Pimco,” CEO Doug Hodge said on Sunday. “Over the last five years, we have expanded into far more parts of the fixed income market and into other asset classes and other geographies, so the Pimco Total Return Fund does not define Pimco,” Hodge said. “It’s an important flagship product of this firm but it is not our only strategy.” Hodge and Dan Ivascyn, who takes over for Gross at the Newport Beach, California-based firm as group chief investment officer, told Reuters in an interview that they have been speaking to clients all weekend about the new leadership. Pimco is a unit of Munich-based Allianz.

Billions Fly Out the Door at Pimco (WSJ)
Pacific Investment Management Co. suffered roughly $10 billion of withdrawals following the Friday departure of co-founder Bill Gross, a person familiar with the matter said, a sign of how quickly Mr. Gross’s surprise move is reshaping the bond-investing landscape. Pimco is bracing for more outflows on the heels of the veteran investor’s departure after months of internal strife over his leadership. At the same time, some managers say they remain committed to the firm. Some within the Newport Beach, Calif., investment firm are projecting it will lose at least $100 billion or more in assets due to withdrawals, the person familiar with the matter said, and some analysts peg the estimate higher.

American Apparel Names New Interim CEO, CFO (WSJ)
Scott Brubaker, an Alvarez & Marsal managing director, will serve as interim CEO while the maker of jeans and T-shirts searches for a permanent successor to Dov Charney, the company’s founder. Mr. Charney was removed as CEO in June over allegations of misconduct. He is currently serving as a consultant at the company while a special board committee reviews the results of an investigation into allegations that he misused company funds and allowed nude photos to be published on the Internet of a former employee who had sued him alleging sexual harassment. Mr. Charney’s lawyer has called the allegations baseless.

Goldman Sachs bars traders from trading (NYP)
Goldman Sachs said it’s now barring its investment bankers from trading individual stocks and bonds, a source told Bloomberg News. Goldman employees were notified on Friday of the change, which takes effect immediately, the source said. They also aren’t allowed to invest in activist or event-driven hedge funds, the person said. Previously, bankers needed approval before they could invest in individual stocks. The change came on the same day that a former employee at the New York Federal Reserve Bank released examiner’s recordings of her ex-colleagues’ dealings with Goldman Sachs.

Bodybuilding Christian Swingers From Florida Start Spouse-Swapping Website (HP)
If you like Jesus, pumping iron and pumping/getting pumped by acquaintances bound by holy matrimony, there’s a website just for you. It’s called Fitness Swingers, and it’s the brainchild of Cristy Parave and her husband, Dean, who dreamed up the site after reportedly having a threesome with this wife and her female friend…The Florida couple, who met at a bodybuilding competition, are interested in sharing their beliefs and their spouses with others who feel similarly. They started their online network 7 years ago, and haven’t looked back. The pillars of their relationship: A commitment to their faith, to fitness, and to the ideals of the swinger lifestyle. Dean Parave told Barcroft Media that he doesn’t think that his swinger lifestyle conflicts with his Christian beliefs. In fact, he considers it a kind of ministry. “So far today, God hasn’t told me, ‘Dean stop that, it’s a sin. I don’t want you to do that.’ Until he does that, I’m going to keep trying to help as many people as I can,” he told Barcroft. Christy said she needed a little convincing that it was moral at first, but now she’s totally convinced that god is on their side. Read more »

Opening Bell: 09.26.14

Pimco’s Bill Gross to Join Janus Capital to Manage Bond Fund (!!!) (Bloomberg)
Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Co., will join Janus Capital Group Inc., the company said. Gross will start Sept. 29 and will start managing the Janus Global Unconstrained Bond Fund starting Oct. 6, according to a press release distributed by BusinessWire today.

Bill Gross Leaves Pimco for Janus (WSJ)
“I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization,” Mr. Gross said in a statement released by Janus. “I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets.”

Bill Gross leaves Pimco for Janus (Reuters)
The announcement comes just days after the Wall Street Journal reported that U.S. securities regulators were investigating Pimco and Gross in connection with an exchange traded fund he also managed at Pimco.

Wall Street scared new Attorney General could be Preet (NYP)
Attorney General Eric Holder is heading to the exit door — and that’s making Wall Street nervous. Executives in the financial services industry see Manhattan US Attorney Preet Bharara as a possible successor — and with his tough-on-corporate-crime history believe a renewed focus Wall Street could be coming to Washington. Holder, after six years atop the Justice Department, is seen as not interested in highlighting white collar crimes. “[Holder] was pretty easy on Wall Street,” Marc LoPresti, a corporate and securities lawyer in New York, told The Post…Bharara, who has held his position since 2009, has successfully prosecuted more than 80 insider-trading cases, including former Galleon Group head Raj Rajaratnam, ex-SAC Capital trader Matthew Martoma, and forced a guilty plea from SAC Capital itself.

U.K. Regulators Hold Talks With Banks on Settling Forex-Rigging Probe (WSJ)
FCA officials, including Chief Executive Martin Wheatley, told the bank officials that the regulator’s goal is to reach a group settlement with the six banks in the next eight weeks, one person said, although that timetable could be delayed. The FCA told the banks that they should each expect to pay the U.K. regulator more than the £160 million ($261 million) that UBS paid in 2012 to settle the U.K.’s probe into interest-rate rigging, the people said.

Woman Drives 12 Blocks With Traffic Officer On Hood Of Car (HP)
A San Francisco woman faces charges of assault with a deadly weapon and misdemeanor hit and run after she allegedly struck a traffic officer who was issuing her a citation, then drove 12 blocks with the man on the hood of her car. Witness Allison Yates said she snapped a photo of the incident as driver Bo Mounsombath, 33, sped by with the attendant clinging onto her car the morning of Sept. 18…”I saw her go by and realized there was a guy on the hood on his back, hanging on kind of spread-eagled. She turned right from that far left lane across all lanes of traffic,” Yates told Hoodline. “She was screaming, he was screaming, it was insane.” Yates’ photo is outrageous, but so are the details in the case. Police caught up with Mounsombath on Market Street, about a mile from where the incident started. According to KTVU, the officer told investigators that he saw Mounsombath take a street sweeping ticket from another car and place it on hers. He walked up to give her a ticket, then Mounsombath stepped on the gas, striking him and a motorcycle before leaving the lot. The officer held on. Mounsombath told KRON that the officer asked her to “do things instead of getting a parking citation which led me to believe he was posing as a meter maid.” The woman told KTVU that the officer had asked for her phone number, felt sexually harassed, and fled out of fear. She said she didn’t mean to hit the officer. Read more »

Opening Bell: 09.25.14

Goldman Sachs-Led Group Near Deal to Buy Messaging Startup Perzo (WSJ)
Wall Street firms led by Goldman Sachs Group Inc. are close to a deal to create an instant-messaging service to rival that of Bloomberg LP. A buyout of messaging startup Perzo Inc. could be announced as soon as next week, according to people familiar with the matter. While it could be months before the firms have a product ready for trading desks, the project is gaining momentum, the people say. The number of banks and money managers working with Goldman on the purchase has swelled to 14 in recent weeks, as Wall Street’s search for an alternative to the data and media giant’s chat services turns rivals into allies. Banks and money managers have long relied on Bloomberg terminals to keep their employees up to speed on market moves and to help them communicate with one another electronically. But increasingly they have griped about the $20,000-a-year price tag that Bloomberg charges for each terminal, and the data company’s refusal to sell many services on an a la carte basis.

JPMorgan tops investment bank league table in first half (Reuters)
JPMorgan was the top performing investment bank in the first half of the year, making $11.5 billion in revenue and ranking first for both its fixed income and deals advisory businesses, data showed on Thursday. The U.S. bank ranked ahead of Goldman Sachs and Deutsche Bank, who shared second place, according to industry analytics firm Coalition. They were followed by Bank of America Merrill Lynch and Citi, then Morgan Stanley in sixth, Credit Suisse seventh, Barclays eighth, UBS ninth and then BNP Paribas.

Lucarelli pleads guilty to insider trading (NYP, earlier re: attire)
Lucarelli, the cocaine-addled former Wall Street executive, pleaded guilty Wednesday to using inside information to pocket nearly $1 million in fraudulent profits. The former investor-relations honcho, on his 52nd birthday, admitted using advance knowledge of clients’ upcoming quarterly results to profitably trade in those stocks. Lucarelli made more than the usual ripple of news caused by common white-collar crooks because after his initial appearance in Manhattan federal court in August, he was seen on video running away from reporters in his sweatpants and a tanktop. He must have been late for a very important meeting that afternoon, because he ran right out of his flip-flops and continued east down Pearl Street barefoot — barely missing a beat.

Griesa to decide whether Argentina’s in contempt of court (NYP)
Federal judge Thomas Griesa has agreed to hold a hearing Friday to decide whether to find the country in contempt for passing a law to allow bondholders to swap their bonds into local Argentine law bonds to avoid paying a small group of so-called holdout creditors, including Singer, some $1.6 billion. The hearing was requested by the holdout group, which has proposed sanctions of $50,000 a day and attorney’s fees, which at this point probably are in the tens of millions of dollars. Most Argentine bondholders did not get the $539 million in interest payments due in June because Argentina refused to follow the court’s order that the country pay the holdouts at the same time they paid the others. The case stems from Argentina’s debt default in 2001. After the default, 93 percent of the bondholders agreed to exchange their debt for bonds with a 70 percent haircut, while a few hedge funds held out for the full 100 percent. On Friday Argentina will have to show why it should not be held in contempt for violating the US federal court orders.

Teacher Resigns After Allegedly Talking Of Robots Killing Misbehaving Students (AP)
U-T San Diego reported Tuesday that Tuyet-Mai Thi Vo was allowed to resign last year and receive a $92,000 settlement instead of being fired. Oceanside Unified School District officials investigated complaints that Vo said in 2012 that if robots were teachers, she would program them to shoot students when they misbehaved. The district report says the 48-year-old told her class she would program robots to kill all of the students. The teacher maintains the allegations are untrue, and she has a positive recommendation letter from then-Superintendent Larry Perondi to vouch for her ongoing fitness for the classroom. Read more »