Opening Bell

Opening Bell: 09.02.2014

Heady U.S. IPO Market Rolls Into Autumn (WSJ)
Chinese e-commerce giant Alibaba Group Holding Ltd. plans this month to begin a marketing roadshow for what could be the largest IPO ever, potentially raising more than $20 billion. New York office landlord Paramount Group Inc. filed preliminary paperwork last week for what may be the largest-ever debut by a real-estate investment trust. Online-storage startup Box Inc. and consumer-credit upstart LendingClub Corp. also are expected to price offerings in coming months. The anticipated flood would cap off the busiest period for new U.S. share listings in decades. Companies this year have raised $46.4 billion, the most in the first eight months of any year since 2000, according to data provider Dealogic. “We still have a ton in the hopper, and I think people are optimistic about being able to execute deals after Labor Day,” said Marc Jaffe, co-chair of the global capital-markets practice at law firm Latham & Watkins LLP.

Bootcamp For Bankers (Dealbook)
Robert Vickers struggled not to grin, but the camouflage-clad drill sergeant caught him anyway. “Get down and beat your face. Start pushing!” Air Force Technical Sgt. Elbert Fish shouted, sweat beading on his chiseled face as the sound of combat — gunfire, incoming mortar shells, air sirens and helicopter rotors — punctuated the early morning air from speakers around a grassy field here. “You call that a push-up?” After counting out 20 push-ups, Sergeant Fish yelled, “Get up. I don’t want to see that smile on your face again.” Mr. Vickers volunteered for this treatment, but not for the military. He was one of about 300 employees of USAA, the financial services firm that primarily caters to military veterans and service members, who were doing push-ups, situps and jumping jacks before work at the company’s 280-acre corporate campus. Each of them had signed up for this taste of military basic training and spent months attending seminars and extensive workouts to prepare. They spent the predawn hours running several miles in formation, exercising and marching together. Zero Day PT, named after the first day of Army basic training, is one of many things USAA does to better educate its employees about the armed services. “You serve the military best when you understand the military,” said Josue Robles Jr., the chief executive and president of USAA, who is a retired Army major general.

Can the New York Stock Exchange Be Saved? (WSJ)
The day after Jeffrey Sprecher, the chairman and chief executive of Atlanta’s Intercontinental Exchange Inc., took control of the New York Stock Exchange, he sent trusted lieutenant Thomas Farley to size up the 222-year-old icon of capitalism. On a crisp November morning, the 38-year-old Mr. Farley arrived alone at the corner of Wall and Broad streets in lower Manhattan. After walking beneath the building’s majestic colonnade and past its storied trading floor, he found signs of an institution that was showing its age. Mr. Farley says he got lost in a “rabbit warren” of hallways and wood-paneled offices. He saw little interaction among employees, and some longtimers said they had never heard of colleagues who worked a few floors away. Within minutes, Mr. Farley made a decision: gut the place. Since then, Mr. Farley and his boss have launched a bruising, top-to-bottom renovation of the former NYSE Euronext, acquired for $8.2 billion. They want to shrink the company, simplify its operations and reshape its culture.

Carlyle’s $115M ends private equity ‘collusion’ case (NYP)
Carlyle Group is the last of the private-equity giants to settle civil charges that it colluded with rivals on tens of billions of dollars worth of deals. The Washington, DC-based firm, led by David Rubenstein, agreed over the weekend to pay $115 million to settle the federal court case brought by shareholders in the target companies. Seven PE firms agreed not to step into a rival’s takeout deal, thus cheating the shareholders out of a possible robust bidding and a higher takeover price, the suit alleged. Carlyle, Goldman Sachs, KKR, Bain Capital, Silver Lake Partners, Blackstone Group and TPG Capital neither admitted nor denied guilt.

Russia Said to Prepare Transfer of $10 Billion Fund Out of Sanctions’ Reach (Bloomberg)
Russia is preparing to transfer the ownership of a $10 billion sovereign wealth fund to the central bank from a sanctioned state-development lender, according to two people with knowledge of the plan. Russian Direct Investment Fund’s co-investors, which include sovereign funds in Europe and Asia, are concerned that sanctions may affect their investments in Russia if the state lender controls the assets, according to one of the people, who asked not to be identified because the information is private.

Private jet: The new way to get to college (CNBC)
…one company is attempting to put the bling into university travel by offering a £25,000 ($41,562) package to students wanting to arrive by private jet and fast cars. Uni Baggage – an Irish company that transports student belongings across the U.K. and worldwide – has upped its game, looking to tap wealthy students who want to arrive at their new place of study in style. “Our customers are constantly asking us for the full service. Rather than just book a shipping order they want us to look after the whole process of getting to uni, so we went the extreme and did it in luxury,” Paul Stewart, founder of Uni Baggage, told CNBC by phone. Stewart said he had already received two enquiries from students wanting to take a Rolls Royce Phantom to university since launching the service on Monday morning. He could not disclose the name of the institution the students were going to, but said the package would cost them £15,000.

Sad News for Zero-G Sex Study: The Geckos Are Dead (NBC)
Russia’s troubled experiment to study how geckos, fruit flies and other organisms reproduce in weightlessness ended with a huge downer: When the Foton M-4 satellite containing the creatures returned to Earth on Monday and the hatch was opened, researchers found that all five geckos had died. “We can’t say yet at which stage of Foton’s space flight it happened,” the RIA Novosti news agency quoted a source at the Russian Academy of Sciences as saying. Interfax quoted an unnamed source as saying the geckos were mummified and may have frozen to death. The mission has had more than its share of troubles: Foton-M4 stopped responding to commands shortly after its July 19 launch, and although full contact was restored, the satellite was left in an orbit that was more elliptical than intended. More communication problems reportedly cropped up last week. As a result, mission managers brought back the satellite earlier than planned. The news isn’t all bad, though: Scientists say the fruit flies thrived. Read more »

Opening Bell: 08.29.14

Bank of America seeks to void verdict in $1.27 billion ‘Hustle’ case (Reuters)
Bank of America Corp on Thursday asked a federal judge to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty. The bank urged U.S. District Judge Jed Rakoff in Manhattan to rule for it as a matter of law or order a new trial, arguing that the evidence at trial did not support the jury’s October 2013 verdict. Bank of America said prosecutors were required at trial to prove that loans originated by Countrywide Financial Corp in a process called “Hustle” that were then sold to government mortgage finance giants Fannie Mae and Freddie Mac were not as good as the lender represented. “The trial evidence, even viewed in the light most favorable to the government, did not prove fraud under this standard,” the bank’s lawyers wrote.

Russian Recession Risk Seen at Record High Amid Sanctions (Bloomberg)
The chance of Russia’s economy tipping into a recession is rising as the escalating crisis in Ukraine raises the risk of the government in Moscow retaliating with further import bans, according to a survey of analysts. The probability of a recession in the next 12 months rose to 65 percent from 50 percent, the highest since the first such Bloomberg survey in June 2012, according to the median estimate of 26 economists in the poll. Russia will enact additional restrictions in retribution for sanctions imposed by the U.S. and the European Union, according to 15 of 25 economists. Of those, 12 expect Russia to target cars and consumer goods.

Project Funway: Code Names Help Spice Up the Art of the Deal (WSJ)
“Project Swift” sounds like the name of a military invasion or an Olympic marathoner’s training plan. But it is actually the code name for a corporate buyout, inspired by a private-equity associate’s fondness for singer Taylor Swift. Labels like Project Token, the name Apollo Global Management LLC used to mask its purchase of children’s restaurant favorite Chuck E. Cheese, or Project Fusion, the code for Kinder Morgan Inc.’s consolidation of its oil-and-gas holdings into a single company, are designed to keep reporters, traders and even rival companies from sniffing out deal news before formal announcements are made. For the young bankers who get to choose them, code names are an amusing diversion from the financial modeling and PowerPoint presentations that fill their days. But one deal-making powerhouse is putting an end to the name game, opting instead to automate the process to avoid the pitfalls that go with the territory. Goldman Sachs Group Inc. now requires bankers to use name-generating software that offers 10 random options like Project Calculator or Project Daniel. The new system has been phased in across the bank over the past two years, according to people familiar with it.

Angry Birds Chief To Step Down (WSJ)
Finland’s Rovio Entertainment Ltd., maker of the Angry Birds mobile game, said on Friday that Chief Executive Mikael Hed will step down in January—a move that comes amid the company’s recent struggles to refresh its games lineup and revenue model. Mr. Hed will be replaced by former Nokia Corp. executive Pekka Rantala, who joined Rovio’s executive team earlier this year. Rovio and its iconic Angry Birds games franchise has struggled in recent years amid stiff competition from a new breed of mobile games developers, such as Supercell Oy and Anglo-Swedish King Digital Entertainment PLC, the maker of the “Candy Crush Saga.” Mr. Hed, 38, has tried to overhaul the Finnish company’s games revenue model, making downloads free and charging users for purchases made in the games, but recent games haven’t made much of an impact.

Falcone’s tactics in buying steel company draw fire (NYP)
Phil Falcone couldn’t play by the rules on Wall Street — so now he’s playing where there aren’t any rules. That’s the charge from critics as the hedge fund tycoon moves to take over a little known but profitable steel fabricator whose shares are traded in the loosely regulated over-the-counter market. Falcone, who last year agreed to an $18 million settlement with federal regulators for misconduct that got him barred from the securities industry for five years, is using ruthless tactics to acquire the company, Phoenix-based Schuff International, on the cheap, according to rankled investors. Last week, Falcone’s new investment vehicle, HC2, created this spring from a shell company that’s also off the exchanges, floated a tender for Schuff shares to consolidate its ownership in the firm. That’s less than three months after a surprise May 30 announcement that HC2 had acquired a 65 percent stake.

Residents Of Noiva Do Cordeiro, Almost All-Woman Town, Seek Bachelors (HP)
Life is pretty sweet for the women of Noiva Do Cordeiro. According to the Telegraph, they have constructed a society in the southeast part of Brazil that is communal, egalitarian and almost all-female. But some of the women in the town say it would be nice to have a few more dudes in the mix. “I haven’t kissed a man for a long time,” Nelma Fernandes, 23, told the Telegraph. “We all dream of falling in love and getting married. But we like living here and don’t want to have to leave the town to find a husband. We’d like to get to know men who would leave their own lives and come to be a part of ours. But first they need to agree to do what we say and live according to our rules.” Read more »

Opening Bell: 08.28.14

Mega-IPO to rekindle the ‘bromance’ behind Alibaba’s rise (Reuters)
Masayoshi Son’s nose for an investment has turned a $20 million start-up punt on Alibaba into a stake worth maybe $50 billion or more as the Chinese e-commerce giant co-founded and led by Jack Ma heads to what could be the biggest U.S. tech IPO of all time. Son, CEO of Japanese telecoms firm SoftBank Corp, also put money into a young Yahoo Inc, co-founded by Jerry Yang, in 1995, and Yahoo’s subsequent investment in Alibaba saw Ma, Son and Yang build Alibaba Group Holding Ltd [IPO-BABA.N] into one of world’s biggest internet companies as China’s e-commerce market took off. “It was the look in his eye, it was an ‘animal smell’,” said Son of his decision to back Ma when they first met in 2000. “It was the same when we invested in Yahoo … when they were still only 5-6 people. I invested based on my sense of smell,” he quipped in a group media interview in May. Under pressure from investors, Yang quit Yahoo in early 2012 and gave up his seat on Alibaba’s board. He is now a founding partner of AME Cloud Ventures, a San Francisco venture fund. But next month, the three poster boys for Asian technology entrepreneurship, bound by a shared ambition and a taste for sushi and golf, are set to be reunited on Alibaba’s board following the firm’s long-awaited New York IPO.

Plan to slow ‘Flash Boys’ already has some holes (NetNet)
The Securities and Exchange Commission announced the proposal Tuesday in which 1,200 small-cap firms will be divided into three equal-sized groups with different standards governing each. One group—the “control”—essentially would trade the same as before; the second would see stock prices quoted in 5-cent increments, as opposed to the penny increments currently used; and the third also would trade in 5-cent increments but also would follow a “trade-at” requirement in which trading centers couldn’t match prices unless they display the best bid or offer. Ostensibly, the program’s goal is to “enhance market quality for smaller capitalization stocks for the benefit of investors and issuers,” according to the SEC. More practically, the changes are aimed at thwarting high-frequency traders who have used the lightly traded small-caps to skim profits by getting lower prices on purchase and higher prices on sales than their slower competitors…Inside the market, the SEC’s effort got points for effort but still raised some worries. “What does concern me is there are a bunch of exceptions thrown in there, particularly on test group three,” said Joe Saluzzi, a partner in Themis Trading and outspoken advocate for trading reform. “There may be a need for some, but that to me smells a little bit like some interests are now being put into the rule.”

JPMorgan, Four Other Banks Hit by Hackers: U.S. Official (Bloomberg)
Computer hackers targeted JPMorgan Chase & Co. (JPM) and at least four other banks in a coordinated attack on major financial institutions this month, according to a U.S. official. The attack led to the theft of customer data that could be used to drain accounts, according to another person briefed by U.S. law enforcement. The two people, who asked not to be identified because the investigation is continuing, discussed the incident after Bloomberg News reported a breach on banks earlier today. Hackers targeted customer and employee information, said a third person involved in the investigation, who was also briefed by the government. The theft involved gigabytes of data, said several people familiar with the attacks. The scale indicates a potential for significant financial fraud. Most thefts of financial information involve retailers or personal computers of consumers. Stealing data from big banks is rare, because they have elaborate firewalls and security systems.

FBI Examining Whether Russia Is Tied to JPMorgan Hacking (Bloomberg)
The sophistication of the attack and technical indicators extracted from the banks’ computers provide some evidence of a government link. Still, the trail is muddy enough that investigators are considering the possibility that it’s cyber criminals from Russia or elsewhere in Eastern Europe. Other federal agencies, including the National Security Agency, are now aiding the investigation, a third person familiar with the probe said.

Square Said in Talks for Funding at $6 Billion Valuation (Bloomberg)
Square Inc., the mobile-payments startup co-founded by Twitter Inc. Chairman Jack Dorsey, is in talks to raise financing at a $6 billion valuation, according to a person with knowledge of the matter. The San Francisco-based company is seeking about $200 million, with some of the funding coming from the Government of Singapore Investment Corporation, said the person, who asked not to be identified because the matter is private. That would push Square’s valuation up from about $5 billion earlier this year.

Amish Beard-Cutting Convictions Reversed (WSJ)
A federal appeals court on Wednesday overturned the criminal convictions of 16 Amish men and women in a series of beard and hair cuttings, finding error in how the jury was instructed on determining whether a hate crime occurred. In a 2-to-1 ruling, the U.S. Court of Appeals for the Sixth Circuit reversed the convictions on federal hate-crime charges and returned the case to the lower court. A spokesman for Steven M. Dettelbach, U.S. Attorney for the northern district of Ohio, said his office disagrees with the ruling and is reviewing its options, which include appealing the ruling, retrying the cases or dismissing the charges. The case against members of the eastern Ohio community of Bergholz involved a series of attacks in which other Amish were physically restrained while their hair and beards were shorn. Prosecutors charged those involved under the federal hate-crime law because the Amish consider the length of their hair a sign of religious devotion and the cuttings were to enforce a particular view of the religion. A jury in September 2012 found the 16 defendants guilty of hate crimes, including Bishop Samuel Mullet Sr., who was sentenced later to 15 years. They all appealed the hate-crime conviction, but Wednesday’s ruling doesn’t affect the convictions of certain defendants on charges such as concealing evidence. Read more »

Opening Bell: 08.27.14

Legroom Gadget Maker Sees Sales Jump After Air-Rage Case (Bloomberg)
The Knee Defender, a gadget that blocks airplane seats from reclining, got a global boost after a scuffle between two passengers forced a United Airlines jet to make an unscheduled landing. The gizmo’s website crashed today after traffic surged, and sales rose “substantially” for the $21.95 plastic clips that have been on the market since 2003, said the inventor, Ira Goldman. While a product that interferes with another flier’s comfort may rub some people the wrong way, the issue is airlines’ legroom cutbacks, Goldman said. Carriers are shrinking space between rows — Spirit Airlines Inc.’s allotment is about 10 percent less than the industry standard — and using thinner cushions to squeeze more people into coach cabins. “They don’t have Plan B for the fact that a lot of people, when they sit down in their seat at the gate, their knees already are hitting the seat-back in front of them,” Goldman said in a telephone interview from Washington. The Knee Defender hit the headlines because of an in-flight squabble on United Flight 1462, which had to touch down on Aug. 24 in Chicago en route to Denver from Newark, New Jersey. One person installed a device that prevented the passenger in front of him from reclining, said Charlie Hobart, a spokesman for United Continental Holdings Inc. The Associated Press, citing an anonymous law enforcement source, gave a more-graphic account: Upset that her seat was locked, one traveler threw water at a man who employed a Knee Defender and refused to remove it at the request of a flight attendant.

Tim Hortons’ Canadian Fans Leery of American Hookup (Bloomberg)
“I don’t like the idea of an American company buying a Canadian company — it’s our brand,” Crosgrey, 60, said as she sipped a Tim Hortons coffee with three creams at a food court in downtown Toronto. “Timmy’s is always trying new things, adapting, they always have good service, and you always get your coffee fast no matter how long the lineup is. Burger King may screw it up.”

A new king of Kickstarter about to be crowned (CNBC)
With a little less than three days before the Coolest Cooler campaign ends, the project raised $10,211,436 as of late Tuesday afternoon. It’s well on its way to surpassing Pebble’s $10, 266,845. Created by Ryan Grepper, the high-tech cooler is part blender, part waterproof bluetooth summer DJ speaker system, part USB recharge station, and yes, also a cooler to keep your stuff cold, with an LED light, cutting board and bottle opener. Although it may seem hard to believe that a cooler—the bread-and-butter of low-tech companies like Coleman—could be the most-funded project ever in a Kickstarter universe of gamers and wearable device nerds, don’t think for a second there wasn’t a lot of hard work that went into this success story. In fact, evolving the cooler has been a passion of Grepper’s for a decade, he told CNBC. “Nine or 10 years ago, I was making a blender out of a weed wacker, putting an old car stereo into a cooler.” His early experiments didn’t work, but Grepper—who is a member of the CNBC Tech Crowd Council—did realize technology could transform a cooler into something even the cool kids might coo over. Grepper didn’t give up easily either. The Coolest Cooler failed the first time he rolled it out on Kickstarter in November 2013. “We weren’t successful,” he said. “We thought tailgating folks would want it, and Christmas would work. But I hadn’t done enough homework.” The failure—the first incarnation of the Coolest Cooler raised a little over $102,000 of a $125,000 goal, connected Grepper with enough people to give him the confidence to expand the project’s design and Kickstarter campaign. By the time the Coolest Cooler rolled out its second bid for crowdfunding fame, on July 8, Grepper had learned a few valuable lessons about finding success on Kickstarter. “I learned that Kickstarter and crowdfunding is a visual medium and people want to see what they are getting and we weren’t there the first time. I took the design to the stage you see it at now.” Timing is also key—when it comes to a cooler, summer rules over Santa and Sunday football tailgating. “The cooler market is hot in the summer,” Grepper said. “That was one of those hindsight realizations.”

Hutchin Hill, Citadel See Assets Jump as Pensions Call (Bloomberg)
Neil Chriss is hitting his stride. The math doctorate turned hedge-fund manager founded Hutchin Hill Capital LP more than six years ago and built it to cater to large investors. After posting annualized returns of 12 percent, about six times the average of his peers, he finds himself in the sweet spot for fundraising. Hutchin Hill’s multistrategy approach is the most popular hedge fund style this year, helping the New York-based firm double assets by attracting $1.2 billion.

Casino Loses 21K After Armored Car Drives Off With Money On Roof (AP)
An armored car company will reimburse an Atlantic City casino after nearly $21,000 fell from the roof of one of its trucks. Police tell The Press of Atlantic City an internal investigation by GardaWorld found no wrongdoing. The company picked up the cash at the soon-to-be-closed Revel casino on Aug. 6. Surveillance video showed the bag holding the cash on the roof as the truck left Revel. The bag was still on the roof when the truck pulled away from nearby Resorts Casino Hotel. A search failed to recover the money. Read more »

Opening Bell: 08.26.14

Ackman Gains 30% With Burger King, Herbalife Wagers (Bloomberg)
Since Ackman’s three-hour presentation in Manhattan on July 22 that sent Herbalife’s stock soaring, the company has slumped 26 percent after reporting disappointing earnings. Ackman’s $1 billion bet that the firm’s shares will collapse has helped spur the money manager to his best year since 2009. Pershing Square Capital Management LP’s oldest fund has gained about 30 percent this year, according to a person with knowledge of the returns, compared with the average 2.5 percent for the hedge-fund industry. He’s done it through big wagers on a small group of companies. Yesterday, Ackman’s firm made $203 million on Burger King Worldwide Inc. after the fast-food chain said it was in talks to buy Tim Hortons Inc.

Warren Buffett to Help Finance Burger King’s Takeover of Tim Hortons (WSJ)
Investor Warren Buffett is helping finance Burger King Worldwide Inc.’s planned takeover of Canadian coffee-and-doughnut chain Tim Hortons Inc., according to people familiar with the matter, in a surprise twist that could add to investors’ enthusiasm for the deal. The Berkshire Hathaway Inc. BRKB +0.35% chairman and chief executive would invest in the deal in the form of preferred shares, some of the people said. Berkshire is expected to provide about 25% of the deal’s financing, one of the people said. The exact structure of Mr. Buffett’s participation in the deal remains unclear, and the discussions are ongoing.

Hedge Funds Sue to Get Argentine Bond Payment in London (Dealbook)
A group of hedge funds, including George Soros’s Quantum Partners and J. Kyle Bass’s Hayman Capital, is seeking a 226 million euro interest payment on Argentine bonds from Bank of New York Mellon that was blocked by a United States judge last month. In a lawsuit filed in London against Bank of New York, the trustee handling Argentina’s bond payments, the hedge funds contend that the bank’s London unit must release money that was deposited by Argentina for its euro-denominated bondholders. The money was part of a $539 million interest payment that Judge Thomas P. Griesa of the Federal District Court in Manhattan prevented the trustee from paying last month. The latest lawsuit, filed last Thursday, poses a challenge to the scope of Judge Griesa’s ruling and will further complicate what has been a long and drawn out battle between the government of Argentina and a group of New York hedge funds that have waged a court battle that has lasted years.

Why Amazon Is Paying $1 Billion to Help People Watch Video Games (BusinessWeek)
There are a few reasons Amazon would want Twitch, some of them Amazon-specific, others more general. First, a primer on Twitch. It’s a website on which people watch other people play video games. Some of the people playing are experts; others aren’t even all that good. To understand why Amazon would pay for a website such as this, you have to accept one fact: People like watching other people play video games. This consistently baffles many non-gamers, but it’s true. Twitch, founded in 2011 as part of now-defunct Justin.tv, has 55 million unique monthly users, and 7 million people log onto the website each day. While Web entertainment is reputedly all about short attention spans, Twitch users stick around for nearly two hours per day on average. Any company that attracts such deep levels of engagement is going to appeal to Silicon Valley’s acquirers, not least because advertising to those people could be very lucrative. And Amazon is increasingly interested in building its advertising business.

Quake leaves Napa Valley vintners with dregs (NYP)
The cherished $13 billion Napa Valley wine industry in California is picking up the pieces after it was ravaged by a 6.0 magnitude earthquake Sunday that left winemakers scrambling to salvage their last remaining bottles of red and white. “We’re wading around in a sea of Cabernet,” Henry Hill & Company wine warehouse owner Bill Hill told NBC News. Hill said his company’s building — which housed nearly 1,000 barrels of wine, including the pricey and highly sought after Cabernet Sauvignon — felt the full brunt of the earthquake and suffered “severe” damages. The epicenter of the earthquake was only six miles Southwest of Napa, which is home to approximately 430 wineries that contribute to an enormous industry with an annual economic impact of $50 billion, NBC News reports.

British man fined for fake kidnapping claim so he could stay out partying (NYDN)
A man has been fined by police after he told his girlfriend he had been kidnapped just so he could stay out all night partying. Officers spent seven hours searching for the man from Bolton, in northwest England, on Friday. His girlfriend had gone to the cops after he told her he was being held against his will over a debt. Instead he was at a house party. The 32-year-old was found after police checked closed-circuit TV footage taken close to his home, reported the BBC. “Considerable resources and time went into finding this man, who it transpires made the entire thing up so he could stay out and party,” Det. Insp. Jo Clawson said. “This is without doubt one of the most foolish and irresponsible incidents I have been involved in.” Read more »

Opening Bell: 08.22.14

Argentina slams U.S. Judge Griesa for ‘imperialist’ attitude (Reuters)
Argentina on Friday accused the U.S. judge who called the country’s new debt restructuring plan illegal of making “imperialist” comments against the South American nation. Latin America’s No. 3 economy tipped into its second default in 12 years in July after U.S. District Judge Thomas Griesa blocked payments to holders of debt issued under U.S. law that was restructured following its record default in 2002. Griesa ruled that measures announced by Argentina’s president this week to make debt payments locally and push bondholders to bring their debt under Argentine law violated past court rulings. But he stopped short of holding the country in contempt. Argentine Cabinet Chief Jorge Capitanich said U.S. District Judge Thomas Griesa’s choice of words were “unfortunate, incorrect and even, I would say, imperialist expressions”. The government has pulled no punches in its stinging criticism of Griesa. It has accused the judge of abusing Argentina’s national sovereignty and of siding with the U.S. investment funds who rejected large writedowns in the wake of 2002 and are suing the country for full payment on their bonds.

RBC Weighs Opening Itself to More Risk (WSJ)
The bank’s capital-markets business, after fighting for years to become a global player, threatens to become a victim of its own success. Earnings from capital markets, which the company on Friday said contributed nearly 27% to its overall profit, are bumping up against a self-imposed limit that is key to the risk control on which Canada’s banks built their recent reputation. When David McKay, the new chief executive of the bank, met with the board of directors for their annual offsite strategy session last month, they spent hours wrestling with the dilemma: how and whether to adhere to a pledge by RBC’s previous CEO to limit capital markets’ contribution to approximately 25% of total earnings, according to two people familiar with the discussions.

Citigroup Faces Curbs on Hedge-Fund Sales (WSJ)
The curbs, which haven’t previously been reported, result from the Aug. 5 approval of a settlement between Citigroup and the Securities and Exchange Commission of claims related to the bank’s earlier sale of certain debt products. The setback for Citigroup is partly due to timing. Other banks with similar settlements have been able to escape the restrictions because they came before a change in the law last year. Over the past two weeks, Citigroup has been sending letters to hedge-fund firms informing them that the bank is no longer able to steer investors to their funds. In the letter, Citigroup said it is working to resolve the issue with the SEC. Under the rules, the SEC has to issue a waiver to allow Citigroup to resume hedge-fund sales to clients.

Ackman gets needed Allergan votes (NYP)
Activist Bill Ackman has the votes to call a special shareholders meeting of Allergan shareholders, and a federal trial isn’t going to stop him, a California federal judge said Thursday. Judge David Carter mentioned the votes in a order denying the botox maker’s motion to expedite its case against Ackman, his Pershing Square hedge fund and Valeant, a Canadian drug company. Allergan claims the trio broke insider trading rules by taking “substantial steps” to engage in a hostile takeover before Ackman revealed Pershing Square owned 9.7 percent of Allergan shares. Allergan requested an expedited trial, saying a verdict was necessary before calling the special shareholders’ meeting Ackman has been organizing to oust six of the company’s directors. The ousters would pave the way for acceptance of Valeant’s $53 billion offer. Allergan has to call a special shareholders’ meeting within 120 days after at least 25 percent of shareholders request the meeting in a Delaware court.

“I Ate Taco Bell’s Entire New Dollar Menu in One Sitting, and Here’s What I Learned” (AW)
They rang me up for the 11 items. I handed over $12.99. And a short drive later, I arrived home with two satisfyingly hefty sacks of warm, damp, processed food. It was time to get started…Beefy Mini Quesadilla: It’s more like a melted beef and cheese soft taco than a quesadilla, but it’s actually pretty good. Surprisingly spicy thanks to its creamy chipotle sauce, it’s one of the few Taco Bell items I can think of in recent memory that didn’t require Fire Sauce. Is it worth $1? Definitely, though without the spicy sauce it would be a 75-center at best…Cheese Roll-Up: This is literally just half-melted cheese on a tortilla. It’s the kind of thing my 2-year-old would order, unroll out of curiosity and then slowly push toward the center of the table. Is it worth $1? No way. This is the toast sandwich of Taco Bell cuisine…Spicy Tostada: I’m officially full, and at any other point in my life, this is where I would stop. But this is legitimate journalism here, so I soldier on to the one item I’ve been most looking forward to: the Spicy Tostada. It’s basically a one-layer Mexican Pizza, which I’ve been a fan of since forever. In true Taco Bell to-go style, the tostada and its toppings have been slammed into the corner of the box, making the whole sloppy mess impossible to pick up with your hands. But I’ve got two whole napkins at the ready, so I do it anway. After getting through the gloppiest portion, I fold the rest into a sort of overstuffed hard taco, which really highlights how much more food you’re getting than with the rest of the menu. It’s earnestly good, but I’m officially in pain. Is it worth $1? Oh, hell yeah. Maybe $2. Read more »

Opening Bell: 08.21.14

BofA to Pay $16.65 Billion to End U.S. Mortgage Probes (Bloomberg)
Bank of America Corp. will pay $16.65 billion to end federal and state probes into mortgage bond sales, the harshest penalty yet related to loans that fueled the 2008 financial crisis, the Justice Department said. The settlement, which includes $7 billion in consumer relief and $9.65 billion in cash, resolves civil investigations by federal and state prosecutors, the U.S. said today. “This constitutes the largest civil settlement with a single entity in history, addressing conduct uncovered in more than a dozen cases and investigations,” Attorney General Eric Holder said at a press conference in Washington today.

Family Dollar Spurns Dollar General Bid on Antitrust Concern (Bloomberg)
Family Dollar Stores Inc. (FDO) spurned a $9 billion offer from Dollar General Corp. in favor of a lower bid from Dollar Tree Inc. (DLTR), saying it was concerned the Dollar General deal wouldn’t be able to pass antitrust hurdles. The board rejected the Dollar General proposal and reaffirmed last month’s pact to merge with Dollar Tree, according to a statement today from the Matthews, North Carolina-based company. Dollar Tree has agreed to pay about $8.5 billion, excluding debt. “Our board reviewed, with our advisers, all aspects of Dollar General’s proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed,” Chief Executive Officer Howard Levine said in the statement.

Standard Chartered Could Face Legal Action By U.A.E Clients (WSJ)
Standard Chartered may face legal action in the United Arab Emirates brought by clients whose accounts will be closed by the bank after it was slapped with a $300 million fine related to alleged lapses in anti-money-laundering controls, the U.A.E. Central Bank said Thursday. Standard Chartered’s settlement with the New York state regulator, announced Tuesday, required among other things that the bank improve its monitoring of certain small and medium-size business relationships at its U.A.E. locations. The U.A.E. central bank estimates between 1,400 and 8,000 clients could be affected. The central bank said Standard Chartered was liable to legal action because of the “material and moral damage” company owners may suffer as a result of having their accounts closed. It said its consumer protection unit is ready to receive and consider complaints from the bank’s affected customers.

Hipster-hater made 400+ fake 911 calls to get rid of cool kids (NYP)
A Brooklyn curmudgeon so irritated by the noisy hipsters on his trendy Williamsburg block that he called cops more than 400 times will need earplugs where he’s likely headed next — prison. Louis Segna, 53, was convicted Wednesday of faking emergency calls of a subway explosion in the Bedford Avenue station and violence at nearby bars. He could face seven years in prison. “Nine-one-one, what’s your emergency?” a dispatcher asked during one false call from the 6-foot, 300-pound Segna at 1:30 a.m. Dec. 31, 2012. “Uh, yeah, in Brooklyn there’s a bar called Spike Hill. I went in there and they got the music blasting, and I went in there to try to talk to them, and some guy pushed me out and pulled a knife on me,” Segna stuttered. “A white guy, he has a black leather jacket.” Responding police found no knife-wielding customers, court papers state. The day before, Segna told another dispatcher, “There’s a bar called Station, and there were shots there.” “How many shots you heard?’’ the dispatcher asked. “Two or three … There’s a lot of screaming there now. I can see some people running. I’m going to get off the call, I’m getting out of the area now,” Stegna said, lying about the gunfire. Segna was annoyed by the new residents of his increasingly gentrified neighborhood, his lawyer said outside court after Segna was found guilty. Read more »

Opening Bell: 08.20.14

Argentina’s Bonds Decline on Plan to Offer Local-Law Swap (Bloomberg)
Argentina’s bonds sank to a two-month low after the government said it plans to pay foreign-currency notes locally to sidestep a U.S. court ruling that blocked payments and caused its second default in 13 years. The government will submit a bill to Congress that lets overseas debt holders swap into new dollar-denominated bonds governed by domestic law, President Cristina Fernandez de Kirchner said in a nationwide address yesterday. Payments will be made into accounts at the central bank instead of through Bank of New York Mellon Corp., the current trustee.

Standard Chartered Said to Probe Failures on Lawsky Fine (Bloomberg)
Standard Chartered Plc (STAN) is probing why anti-money laundering controls implemented as part of a 2012 deal with New York’s banking regulator missed numerous suspicious transactions, a person with knowledge of the matter said. The so-called accountability review could lead to firings over the compliance failures that cost the bank another $300 million in fines yesterday, according to the person, who asked not to be identified because the investigation is private. Standard Chartered said that it’s “begun extensive remediation efforts,” without elaborating.

Harvard Wall Streeters Buy Minor-League Dragons for $40 Million (Bloomberg)
Minor-league baseball’s Dayton Dragons have been sold to Palisades Arcadia Baseball LLC, which is led by three Harvard University friends and graduates, according to a news release announcing the transaction. The new ownership group, which is led by Nick Sakellariadis, Greg Rosenbaum and Michael Savit, paid a minor-league record $40 million for the team that had been owned by Mandalay Baseball Properties LLC. Sakellariadis recently retired after a 35-year investment banking career at Citigroup-related companies, according to the news release. Rosenbaum is president of Palisades Associates, Inc., a merchant banking and investment firm, and Savit is a minority owner of the National Basketball Association’s Memphis Grizzlies.

Islanders’ Owner Announces He Will Sell N.H.L. Team to an Investment Group (NYT)
The Islanders’ owner, Charles B. Wang, announced Tuesday that he would sell the team to Jonathan Ledecky, a former owner of a minority stake in the Washington Capitals, and Scott Malkin, a London-based investor. Wang said in a statement that he would initially sell the group led by Ledecky and Malkin a “substantial minority interest,” pending N.H.L. approval, and that Ledecky and Malkin would become majority owners of the Islanders in two years. Financial details were not announced, and Wang did not reveal how much of a stake he would retain after surrendering majority control of the team. Wang had been listening to offers for the team since at least March. One of the suitors, Andrew Barroway, a hedge fund manager, thought he had a handshake deal to buy the Islanders for $420 million. Last week, he filed suit against Wang, accusing him of reneging on the sale and raising the asking price to $548 million so that he could pursue an agreement with another buyer. Barroway is seeking $10 million in damages.

Man Gets Stuck In Highchair (HP)
Video of the bloke, identified only as Darren, has captured the attention of many. The incident reportedly took place at a hotel lobby in Cambridge, England. His attempts to escape as his friends watch, help and laugh will astound, but the topper is when he takes off his pants. “No one wants to see that,” one pal can be heard saying. Even as Darren appears to get agitated, onlookers still cannot conceal their mirth. CNN reported that friends, who put Darren there in the first place, were finally able to extricate him by “dismantling” the high chair with keys. Read more »