Opening Bell

Opening Bell: 09.24.14

Pimco ETF Draws Probe by SEC (WSJ)
The Securities and Exchange Commission is investigating whether bond giant Pacific Investment Management Co. artificially boosted the returns of a popular fund aimed at small investors, according to people familiar with the matter, the latest challenge for the firm run by investor Bill Gross. A probe into pricing issues at Pimco has been under way for some months, the people familiar with the matter said. Mr. Gross has been interviewed by SEC investigators, the people said. Mr. Gross declined to comment for this article. The issues being scrutinized by the SEC include the way a flagship exchange-traded fund, managed by Mr. Gross, purchased and valued certain bonds. Investigators from the SEC’s enforcement division are examining whether the $3.6 billion Pimco Total Return ETF BOND +0.08% bought investments at discounted prices but relied on higher valuations for the investments when the fund calculated the value of its holdings shortly thereafter. Such a maneuver could make it seem as though the ETF had scored quick gains when it was in fact taking advantage of variations in the way some investments are valued in the bond market.

Harvard Endowment Earns 15.4% Return for Fiscal 2014 (WSJ)
Those returns exceeded internal goals and boosted the endowment’s assets to $36.4 billion as of June 30. Harvard also deepened its commitment to alternative investments in hedge funds, private equity and assets such as real estate. The nonprofit agency that manages Harvard’s money said it had received approval to increase allocations to private equity and hedge funds during fiscal 2015 to 34% of assets, up from 31%, according to a letter issued by Harvard endowment chief Jane Mendillo.

Oracle Cuts Ellison’s Stock Awards, Adds CEOs’ Incentives (Bloomberg)
Ellison’s performance-based stock award was cut by 187,500 shares, or $7.28 million based on Oracle’s closing price today, and his stock-option award for fiscal 2015 was reduced by 750,000 shares, according to a filing with the U.S. Securities and Exchange Commission. Ellison’s total compensation last year was $67.3 million, down from $79.6 million the prior year. Mark Hurd and Safra Catz were both named CEOs of the software maker on Sept. 18, while Ellison became chairman and took on the title of chief technology officer. Hurd will run sales, marketing and strategy, while Catz will remain chief financial officer and oversee legal and manufacturing operations. Each received a one-time grant of 500,000 stock options and a performance-based stock award of 125,000 shares in connection with their promotions, according to the filing.

Apple’s Tim Cook: ‘Get on board’ with climate change (CNBC)
Apple CEO Tim Cook took on the hot-button issue of climate change on Monday during the Climate Week NYC 2014 conference. Speaking during the opening day of the high-profile climate change event, Cook said people shouldn’t accept a trade-off when it comes to business and the environment. “What are the root causes?” he said. “And you are not accepting that there is a trade-off between the economy and the environment. Too many people believe you can do this or that. What we found is that both are doable. If you innovate and you set the bar high, you will find a way to do both.” Cook added: “When you realize it and you see the urgency, it is time to act now. Everyone that hasn’t been on board, that’s OK, but now is the time to get on board.”

Looking to cuddle? There’s an app for that (NYP)
The app launched on Sept. 11 allows users to set their hug preferences, including whether they like to be the big or little spoon to ensure they are matched with nearby huggers of similar tastes. Cuddlr founder Charlie Williams told The Daily Mirror newspaper that the app was only designed for a “little cuddle,” but users could take the relationship further if they pleased. “On Cuddlr, you get together straightaway, have a little cuddle, and then part ways,” he said. “If you want to hang out again, you can exchange information then and there — but you already know what kind of cuddles they give.” Read more »

Opening Bell: 09.23.14

Barclays will ‘robustly’ defend dark pool allegations: CEO (CNBC)
Jenkins said the matter was investigated fully by “internal and external resources.” “We believe our defense is strong, and we intend to defend robustly those allegations that were made against us,” he said in an interview with “Closing Bell.” “Obviously if we have made mistakes, if we have gotten things wrong, then we’ll acknowledge that, we’ll take the sanction, we’ll learn and we’ll move on but where we think we are on strong ground, then we will defend our position.” New York Attorney General Eric Schneiderman brought the lawsuit against Barclays in June, and last week he defended it in court documents filed in the case. He also reasserted allegations that Barclays employees misled clients about their exposure to high-speed and potentially predatory market participants.

Morgan Stanley Trader Misses Bunnies as She Quits Playboy Club (Bloomberg)
The Morgan Stanley trader-turned-chef has quit the London club to open a restaurant and recalls the fun she had over three years, cooking for celebrities from Justin Bieber to Kate Moss. “Talk about a massive fun factor with the brand, and the stories I walked away from there,” Joo says. “It was incredible, hanging out in the Playboy Mansion in L.A. and looking after tons of rappers and footballers. ‘‘And I miss the bunnies. I love those girls. Who doesn’t love being surrounded by beautiful people? Come on!’’ To say that she has had a varied career is an understatement. Joo, 39, a Columbia engineering graduate, interned at Goldman Sachs Group Inc. She spent more than four years with Morgan Stanley in New York and San Francisco before studying at the French Culinary Institute in New York. She then moved to London and got a job as a pastry chef at Restaurant Gordon Ramsay. Television beckoned and she appeared on ‘‘Iron Chef’’ before being named executive chef when the Playboy Club returned to London in 2011. The Korean-American is now set to open a restaurant in London’s Soho in December. It will be called Jinjuu, which means ‘‘pearl’’ in Korean and will occupy a site on Kingly Street. She’s bringing her head chef from the Playboy Club, Andrew Hales, as well as pastry chef Jaime Garbutt.

Alibaba Banks Bring Home $261 Million in Fees (Bloomberg)
Alibaba Group Holding Ltd.’s underwriters raked in $300 million in fees after completing the largest initial public offering in history. The banks received 1.2 percent of the proceeds in fees, according to a regulatory filing. The total IPO size increased to $25 billion the company said today, after the underwriters exercised the option to purchase 15 percent more shares. Pulling off Alibaba’s IPO is a coup for the five lead banks, which were all given an equal stake in the deal’s success. The fee structure is different from typical IPOs in the U.S., where there’s one lead manager that is awarded much of the fees. Alibaba also used an incentive bonus to coax better performance from underwriters.

Crackdown Targets Inversions Designed to Limit U.S. Taxes (Bloomberg)
The Treasury Department announced steps that will make it harder for U.S. companies to move their addresses outside the country to reduce taxes, clamping down on the practice known as inversions. The rules, which apply to deals that closed starting [yesterday], include a prohibition on “hopscotch” loans that let companies access foreign cash without paying U.S. taxes, and impose new curbs on actions that companies can use to make such transactions qualify for favorable tax treatment. The changes will have the biggest effect on eight U.S. companies with pending inversions, including Medtronic Inc. and AbbVie Inc., which plan the two largest such deals in U.S. history. In its purchase of Covidien Plc, Medtronic is loaning some of its untaxed profits outside the U.S. to its new Irish parent company, and that transaction could be penalized by the new anti-hopscotch rule.

German Firms Go on U.S. Buying Spree (WSJ)
The forces fueling the activity include record-low interest rates and stagnation in Europe, economic growth and declining energy prices in the U.S., and expanding cash hoards at thriving German companies. “German companies want to be where their customers are,” said Dietmar Rieg, president of the German American Chamber of Commerce in New York. The latest deals bring to almost $70 billion the total value of German acquisitions announced in the U.S. so far this year, according to Dealogic. That ranks second to $77 billion in proposed takeovers by Canadian companies during a global M&A boom. German firms have already spent more on U.S. investments so far in 2014 than in every full year of the past two decades, according to Dealogic.

Man who has suffered 100 orgasms a day for past two years after slipping a disc in his back – but can’t enjoy sex (DM)
For the last two years, Dale Decker has suffered 100 orgasms a day – but has not enjoyed one. The 37-year-old is the first man to speak out about suffering persistent genital arousal syndrome. He developed the condition in September 2012 after slipping a disc in his back while getting out of a chair. While he was en route to the hospital, he suffered five orgasms. Since that moment he has been plagued by the condition, he describes as ‘disgusting and horrendous’. According to medical literature, trauma to the pelvic nerves can trigger hypersensitivity in this area. The painful pelvic condition has left him housebound and isolated, through fear of suffering a public orgasm. He said: ‘Imagine being on your knees at your father’s funeral beside his casket – saying goodbye to him and then you have nine orgasms right there. ‘While your whole family is standing behind you. It makes you never want to have another orgasm for as long as you live. Read more »

Opening Bell: 09.22.14

Financial Elite’s Offspring Start Their Own Hedge Funds (WSJ)
The scions of a number of wealthy families, including the sons of prominent Wall Street figures Howard Marks and Ken Moelis, have either recently launched hedge funds or plan to do so soon, according to people familiar with the matter. The young men (no daughters appear to be involved so far) are in some cases wagering part of the family fortune that they can thrive in one of the most lucrative—and unforgiving—fields in finance. Andrew Marks, the 28-year old son of billionaire Howard Marks, has told potential investors and industry executives he expects as much as $200 million in funding from his father along with other “friends and family” money. The fund, which he has named “Anicca” after the Buddhist doctrine of impermanence, is expected to launch later this year or next. The elder Mr. Marks founded Oaktree Capital Group OAK +0.60% LLC, a Los Angeles-based investment firm with more than $90 billion under management. Mr. Marks’s former classmate at the University of Pennsylvania, Ken Moelis’s son Jordan, plans to start a fund in Los Angeles as early as the first quarter of 2015, people familiar with the plans said. Ken Moelis took his eponymous New York investment bank public earlier this year in a deal that valued his family’s stake at $400 million. He will personally invest in his son’s fund but won’t have an ownership stake, one person said. Other young traders have started hedge funds with family money relatively recently. They include Schuster Tanger, whose family started a string of outlet malls; and Till Bechtolsheimer, 32, who nabbed about $200 million with a 10-year commitment from his grandfather Karl-Heinz Kipp, the billionaire founder of German department-store chain Massa, people familiar with the situation said. Mr. Bechtolsheimer named his New York-based Arosa Capital Management LP after his family’s adopted hometown in the Swiss Alps.

Man Pleads Guilty to Passing Tips in ‘Post-it’ Insider Trading Ring (Dealbook)
Federal prosecutors in New Jersey contend that Mr. Metro and Mr. Tamayo met at various bars and restaurants in Midtown Manhattan. Mr. Tamayo then wrote the stock symbols for companies on which he had inside information on either Post-it notes or napkins, prosecutors said. Later, Mr. Tamayo met up with Mr. Eydelman, a Colts Neck, N.J., resident, and showed him the notes, according to authorities. Mr. Eydelman memorize the ticker symbols, and then Mr. Tamayo put the notes in his mouth and swallowed them to destroy the evidence, prosecutors said.

Hedge Funds Caught in Iceland’s Failed Banks Closer to Pay Date (Bloomberg)
Hedge funds caught in Iceland’s $85 billion banking failure may be closer to getting repaid. The administrators overseeing claims against bankrupt lender Glitnir Bank hf say there are signs recent talks with a government committee will make it easier to complete creditor settlements…The main obstacle to repaying creditors has been Iceland’s concern that any outflow of money would drag down the krona and derail efforts to remove capital controls. Yet Glitnir now says it has presented a payment model to policy makers that allows offshore creditors to be reimbursed without disrupting the exchange rate. The plan affects $4.55 billion in cash and cash equivalents, or more than half Glitnir’s total assets and about one-third the island’s gross domestic product, according to the bank’s winding-up committee.

Silver Lake Reaps a Golden Return on Its Alibaba Stake After the I.P.O. (Dealbook)
Thanks to $500 million in investments made in 2011 and 2012, Silver Lake now sits on a stake worth more than $5.1 billion, after having reaped $278.8 million by selling a fraction of its holdings.

Pabst not moving to Russia (NYP)
Panic broke out this week across America — from hipster bars in Brooklyn to living-room sofas in Denver — when it was revealed that Pabst has been purchased for more than $700 million by a firm called Oasis Beverages. Scant info was available about Oasis in the announcement, but the company’s Web site notes that it operates breweries in Moscow, Kazakhstan and Belarus. With little else to go on, news outlets ran with the connection: “Pabst Blue Ribbon is Defecting to Russia,” the Huffington Post warned, while the Daily Beast said Pabst “will now take orders from Russia.” But Oasis, whose site indicates it is based in Cyprus, “will be strictly a passive investor with a minority stake” in Pabst, alongside minority holder TSG Consumer Capital, a New York private-equity firm, a source close to the situation said. The more precise truth, according to people close to the deal, is that majority ownership and control of Pabst is going not to Oasis but to its chairman, an American beer entrepreneur named Eugene Kashper. According to a written statement this week, Kashper will become CEO of Pabst, which will keep its corporate headquarters in Los Angeles.

The Suitsy: the suit that lets you go to work in a onesie (Guardian)
Have you ever wished that you could combine the comfort and practicality of a onesie with the social acceptance of a casual business suit? If so, you are probably part of the generation that will lead to humanity’s downfall, but anyway: good news! The Suitsy is here, to answer your prayers. Designed by Jesse Herzog, a financier from San Francisco, the Suitsy promises “a revolution in apparel for the modern gentleman”. It looks like a typical business suit worn over a white shirt (tie, shoes and belt not included). But the sleeves poking out from under the jacket cuffs don’t go anywhere; the shirt front is connected directly to the blazer; and, hidden behind the buttons down the front, is a zipper that runs from the neck to the base of the fly. Herzog says he had the idea around six months ago, and found a seamstress who would help him realise his dream. “At first,” he says, “she thought it was crazy, but when it actually worked, she thought it was fantastic.” The product is aimed at businessmen – “people that appreciate class, convenience and comfort” – and Herzog says he often wears it himself. “It feels great, and no one knows it isn’t a real suit. Its debut was at the rehearsal dinner for my wedding.” Herzog hasn’t designed any other clothing, but he ran a popular hot-dog shack called Zog Dogs until 2013, which briefly became famous for launching a hot dog into space. He is now looking for support to bring the Suitsy to a wider audience. He’s put the idea, and a video of the prototype, on crowdfunding site Betabrand, where it has attracted 400 votes in three days. Read more »

Opening Bell: 09.19.14

Alibaba Group Said to Raise $21.8 Billion in Record U.S. IPO (Bloomberg)
The company and shareholders including Yahoo! Inc. sold 320.1 million shares for $68 each, according to a statement, after offering them for $66 to $68. The sale — which values Alibaba at $167.6 billion — is already the largest by any company in the U.S. and has the potential to break the global record if additional shares are sold to underwriters.

After IPO, Alibaba plans to pour cash into movies (NYP)
Studio heads are expecting an influx of investment dollars from Asia, thanks to the Chinese e-commerce giant, which is poised to pull off the biggest public stock sale in history on Thursday. Japan’s Softbank — which owns more than a third of Alibaba Group Holdings and is sitting on a large pile of cash as a result — has been visiting the bamboo-decorated executive suites of film studios with an eye toward winning a role in the movie business, sources said. “The Japanese have started to take an interest,” one source said. “They’ve talked to Jeffrey Katzenberg’s DreamWorks Animation.”

Regulators Probe Goldman’s Internship for Brother of Libyan Ex-Official (WSJ)
The Securities and Exchange Commission is reviewing the New York-based bank’s decision in June 2008 to hire as an intern the brother of Mustafa Zarti, then deputy chief of the Libyan Investment Authority, the people said. The move came after Goldman entered into more than $1 billion worth of trades with the authority, and just as the firm’s relationship with the Libyan fund had begun to sour. The investigators are also reviewing why the brother, Haitem Zarti, was allowed to remain at the firm for almost a year, long after most Wall Street internships last, the people added. A Goldman spokesman confirmed that Haitem Zarti had interned for the firm’s investment-banking arm and said his hiring wasn’t related to its dealings with the Libyan authority. Mr. Zarti was allowed to remain at Goldman for almost a year because he had performed well, the spokesman added. Mustafa Zarti has previously said there was nothing wrong with the internship. Haitem Zarti couldn’t be reached for comment, and an SEC spokesman declined to comment. Mustafa Zarti couldn’t be reached for comment.

Scotland Rejects Independence as U.K. Wins Reprieve (Bloomberg)
Scotland voted to stay in the U.K. in a referendum on independence, stepping back from a breakup of the 307-year-old union while wringing promises of more financial power from Prime Minister David Cameron. After a count through the night, 55.3 percent of Scottish voters supported the “no” campaign against 44.7 percent who backed independence. The pound surged overnight as the Better Together campaign posted a wider margin of victory than suggested in opinion polls, before falling back. There was a record turnout of more than 90 percent in some of the 32 regions.

RBS and Lloyds Surge as Scotland Votes to Stay in U.K. (Bloomberg)
RBS jumped 3.1 percent to 368.2 pence at 9:21 a.m. in London trading, extending its weekly gain to 5.3 percent. Lloyds gained 2.1 percent to 77.43 pence, and TSB Banking Group Plc climbed 2.3 percent to 293 pence…Contingency plans to move to England are “no longer required,” RBS said in a statement today. RBS and Lloyds, both domiciled in Edinburgh, said last week they would move to England if Scots chose to dissolve the 307-year-old union. Analysts estimated a move south may have cost each lender as much as 1 billion pounds ($1.6 billion).

Gold iPhones at $3,600 as China Delay Fuels Black Market (Bloomberg)
Liu Min stands a few feet from an Apple Inc. store in Beijing hawking something that can’t be bought inside: the new iPhone 6. While the device debuted today in the U.S., Hong Kong, Japan and Australia, there is no release date set for the world’s biggest smartphone market. That creates an opportunity for Liu, who promises two-day delivery of a 16-gigabyte iPhone 6 for 8,000 yuan ($1,303) — almost double the price on Apple’s Hong Kong website. “It’s going to be a while before the new iPhone comes to China officially, so if you want it now, you have to pay up,” Liu said, pacing outside the Sanlitun district store selling screen protectors. “Give me a call if you want one.” Liu, who wouldn’t discuss his supply chain, wasn’t alone. Four vendors nearby offered the 128-gigabyte iPhone 6 for delivery on Sept. 20 at the equivalent of about $2,441, compared with the Hong Kong price of about $927.

Cops: Customer Pointed Gun At Drive-Thru Worker And Demanded A Hamburger (TSG)
“Give me a hamburger or I’ll shoot you.” That is what Dechazo Harris, gun in hand, allegedly said to a Florida drive-thru worker with whom he quarreled over an order. According to police, Harris, 27, ordered a midnight meal via a drive-thru speaker at a Checkers in West Palm Beach earlier this year. When he drove to the pick-up window, he sought to submit a second order. However, Checkers manager Rontavious Tarver, 20, explained to Harris (seen below) that if he wanted to place another order, he would have to drive around to the speaker and place it there. In response to that direction, Harris, cops charge, pulled out a gun and pointed it at the Checkers employee. As he began to exit his vehicle, Harris threatened the worker, “Give me a hamburger or I’ll shoot you.” He added, “Bro, you don’t know who I am.” Read more »

Opening Bell: 09.18.14

Alibaba IPO Gives Insiders Rare Chance to Sell Early (WSJ)
A swath of early investors in Alibaba Group Holding Ltd. will be able to sell more than $8 billion worth of shares on the day the Chinese e-commerce company goes public, an unusual arrangement that is influencing how bankers price the offering. Insiders and other investors in companies staging initial public offerings are generally required to hold on to shares for several months, in “lockup” arrangements banks design to help protect the stock’s price in its early days. But with Alibaba, a number of shares equal to about a third of what could be sold in the deal aren’t covered by such restrictions, according to the company’s public filings. In contrast, no pre-IPO shares of Facebook Inc. were allowed to be traded when the social-media company made its market debut.

London Finance Empire Seen Dominating After Scots Vote (Bloomberg)
The Scottish nationalists’ narrative is that of London as disinterested overseer, having shrunk from what Salman Rushdie in the “Satanic Verses” described as the “capital of vilayat” (foreign) for the once-colonized, to the capital of the shriveled Great Britain. At stake is London’s relationship to what remains: Wales, Scotland, Northern Ireland and those scattered appendages of past glory, the 14 British Overseas Territories, which replicated and improved on the financial secrecy of the City to become outposts of London’s empire of money. Bloated with the talented young and the moneyed old, London, at least in the measurable currency of investment and capital, is impervious to the departure of Scotland. “London’s power is also from other metrics, like the concentration of state-funded institutions, or the diversity of its population,” said Richard Bell, a professor at the University of Maryland in College Park who teaches a course on London and the British Empire. “London will continue to hold a special place in the global imagination, even though it may be modestly diminished economically.”

Charlie Gasparino Weighs In On Hedge Fund Manager AssGate (Twitter, earlier)

Jobless Claims in U.S. Decline to Two-Month Low of 280,000 (Bloomberg)
The number of Americans filing applications for unemployment benefits plunged last week to a two-month low, a sign the labor market continues to strengthen. Jobless claims decreased by 36,000 to 280,000 in the period ended Sept. 13, the Labor Department said today in Washington. The median forecast of 52 economists surveyed by Bloomberg called for a decline to 305,000. Those already collecting unemployment benefits fell to a more than seven-year low.

Fed Plots Cautious Course on Rate Rises (WSJ)
The Federal Reserve took two steps toward winding down the historic easy-money policies that have defined its response to the financial crisis, but stopped short of the move markets are awaiting most: signaling when interest rates will start to rise. With the economy gradually improving, U.S. central-bank officials plan to end the bond-buying program known as quantitative easing after October, hoping to finally stop expanding a six-year experiment in monetary policy that has left the Fed holding more than $4 trillion of Treasury and mortgage bonds. The Fed on Wednesday also detailed a new technical plan for how it will raise short-term interest rates, something most officials currently don’t intend to do until next year. The central bank has kept the federal-funds rate near zero since December 2008 and offered assurances along the way about rates remaining low, another part of its varied efforts to boost the post-financial-crisis economy.

Man Says Stripper Chocolate Chambers Robbed Him Outside Club Boom Boom (TSG)
A South Carolina man told cops that a stripper known as Chocolate Chambers robbed him early yesterday after he refused to buy her an expensive drink inside Club Boom Boom. Derrick Lashawn Sinclair, 31, told police that he was attacked by Chambers late Monday night when he exited the Spartanburg nightspot. The woman, Sinclair said, pounced and “next thing I know I’m on the floor, she knocked me down and took my money.” Sinclair said that his cash was inside a “crown bag,” an apparent reference to the velvet bag in which Crown Royal whiskey is packaged. Police noted that Sinclair smelled of booze and “spoke with a slurred speech” when reporting the attack by Chambers, whom he described as a black female. Sinclair acknowledged that he was still “timpsy” from the prior night’s revelry. Read more »

Opening Bell: 09.17.14

Barclays Hid Traders’ Role After Questions: Schneiderman (Bloomberg)
Barclays hid the role of high-frequency traders in its dark pool even after the bank said it had shut off clients who engaged in suspect activity, New York Attorney General Eric Schneiderman said. Schneiderman sued Barclays in New York State Supreme Court in Manhattan in June, accusing Britain’s second-largest bank of bilking its own customers in order to expand its dark pool. The bank in July asked the court to dismiss the case, saying that the suit is based on factual errors and fails to show any investors were harmed.

Credit Suisse Loans Draw Fed Scrutiny (WSJ)
Credit Suisse is under fire from U.S. regulators over concerns the bank isn’t heeding warnings to stop making loans regulators see as risky, according to a person familiar with the matter. The Swiss bank in recent weeks received a letter from the Federal Reserve demanding the bank immediately address problems with its underwriting and sale of leveraged loans, or high-interest-rate loans used by private-equity firms and others to finance purchases of companies, among other uses. The letter to Credit Suisse, known as a Matters Requiring Immediate Attention, found problems with the bank’s adherence to guidance issued last year, warning banks to avoid deals that included too much debt or too few protections for the lenders in case of a default, according to the person familiar with the matter.

With Calpers Quitting Hedge Funds, Other Investors Reflect (Dealbook)
For the $2.8 trillion hedge fund industry, the size of the Calpers investment is minuscule. But losing it is important because Calpers has long been a trendsetter among public pension plans, and the reasons for its decision resonate with many public workers, retirees and the plans’ trustees: Hedge funds can just seem too complicated and costly. “A lot of the employees’ labor unions will applaud this,” said Christopher J. Ailman, chief investment officer of California’s big pension fund for teachers. He said organized labor tended to be wary of Wall Street in general; big fees for hedge fund managers are seen as siphoning away money from public workers. His crosstown rival, Ted Eliopoulos, chief investment officer at Calpers, indicated that he expected the decision to have a ripple effect. “We certainly had a very thoughtful and deep conversation with our peers in the institutional investor network, as well as a wide variety of talented active external managers, and so we considered those opinions in forming our own conclusion,” Mr. Eliopoulos said.

Goldman Sachs’s Oryza Asia Hedge Fund Said to Top $1 Billion (Bloomberg)
Goldman Sachs Investment Partners, set up to allow clients to invest with some of the bank’s top proprietary traders, raised about $1 billion for its first Asia hedge fund, said two people with knowledge of the matter. The fund, named Oryza Capital LP, informed investors in June that it would stop taking additional money after capital committed had reached its capacity, said the people, who asked not to be identified because the information is private. The Asia-focused equity long-short fund started in September 2013 with an initial capital of $80 million, according to a document sent to potential investors.

German Court Lifts Ban on Uber Ride Service (NYT)
A court in Frankfurt overturned a nationwide ban against the company’s car-sharing service in Germany, lifting, for now, one of the most severe legal restrictions that Uber had faced anywhere in the world since it was founded in 2009. The temporary injunction on the service, which allows drivers to connect with potential passengers through a smartphone application, had been imposed by the court at the end of last month before a hearing could be held. After the hearing on Tuesday, judges announced that Uber, a start-up company based in San Francisco, could now operate in Germany. The judges were sympathetic to the arguments of Taxi Deutschland, a trade body that had brought the initial case against Uber, claiming that the service competed unfairly with local taxis, said Arne Hasse, a spokesman for the Frankfurt court. But he said that while the association was right in bringing the case and requesting the injunction, the group had waited too long to file the case, and therefore the injunction had to be lifted.

Papa Murphy’s Employee Admits Rubbing Scrotum On Pizza Was ‘Stupid’ (HP)
A Texas teen employed at a Papa Murphy’s pizza franchise faces criminal charges after a customer caught him in the act of rubbing his scrotum on an uncooked stuffed-crust Hawaiian pizza that he’d ordered, according to the Austin American-Statesman. When the customer asked Austin Symonds how old he was, he replied that he was 18, KEYE reports. “So you are old enough to know better than to put your balls on someone’s pizza,” the customer said, according to the station. “Yes,” Symonds replied. “Man, I am really sorry, that was stupid.” Symonds was apparently upset that an order had come in just before closing time. He allegedly admitted to police that he’d probably have fulfilled the order with the tainted pizza if he hadn’t been caught. Symonds is charged with tampering with a consumer product. He was released on $10,000 bail. Read more »

Opening Bell: 09.16.14

Olive Garden defends unlimited breadstick policy (AP, earlier)
Olive Garden is defending its practice of giving customers as many breadsticks as they want, saying the policy conveys “Italian generosity.” The remark is part of a response by the chain’s parent company, Darden Restaurants, to a nearly 300-page criticism released by hedge fund Starboard Value last week. Starboard took Olive Garden and its management to task for a litany of issues, including its liberal distribution of breadsticks to customers, its failure to salt the water used to boil its pasta and even the length of the asparagus it serves. Darden’s 24-page response doesn’t specifically address each of Starboard’s criticisms, but states that the company is already implementing a variety of strategies to improve Olive Garden’s performance. The company says it has introduced new menu items to underscore value, for instance, and is testing new ordering technologies using table-top tablets…As for its breadsticks, Starboard said last week that Olive Garden was being wasteful because servers weren’t sticking to the policy of providing one breadstick per customer, plus an extra for the table. The investor said servers lacked “training and discipline” and were bringing out too many breadsticks at a time, which also led to cold breadsticks. Starboard noted that it wasn’t calling for Olive Garden to stop giving away unlimited breadsticks, but simply exercise more control in how they’re distributed. Starboard also said servers were overfilling salad bowls and using too much dressing, which it said drives up costs. In its response Monday, Darden said that “Olive Garden’s salad and breadsticks have been an icon of brand equity since 1982.” The company didn’t say whether it would change the way salad and breadsticks are brought out, however.

Alibaba Boosts Possible IPO to $21.8 Billion Amid Demand (Bloomberg)
Alibaba raised the amount it’s seeking in its initial public offering to as much as $21.8 billion, coming a step closer to breaking a global fundraising record after investors showed strong interest in the shares. China’s biggest e-commerce company is now offering the shares for $66 to $68 apiece, according to a regulatory filing yesterday, compared with an initial range of $60 to $66 each. The company and its backers including Yahoo! Inc. (YHOO) plan to offer 320.1 million shares.

Alibaba IPO Is a Bonanza for Select Firms (WSJ)
The initial public offering of Alibaba Group Holding Ltd. this week will be a bonanza for a group of previously undisclosed investors who snapped up preferred shares in the Chinese e-commerce company that were sold in the run-up to its public debut. Roughly two dozen investors bought convertible preferred shares in Alibaba through a little-noticed $1.7 billion private offering in 2012, including sovereign-wealth funds, Asian hedge funds, one of the banks that managed the deal and other big asset managers, people familiar with the matter said. They stand to profit handsomely from the investment—and their potential payday got a little bigger Monday, when bankers pitching the shares to investors moved their price even higher. Based on the anticipated price for stock in the Alibaba listing, which is on track to begin trading Friday, those preferred shares will have more than tripled in value, making the investors big winners in an IPO that could raise $25 billion, a record amount.

Calpers Pulls All $4 Billion in Hedge Funds, Citing Costs (Bloomberg)
The California Public Employees’ Retirement System plans to divest the entire $4 billion that it invested with hedge funds, saying they’re too expensive and complex. The decision to eliminate 24 hedge funds and six hedge fund-of-funds, isn’t related to the performance of the program, interim Chief Investment Officer Ted Eliopoulos said yesterday. The board of the $298 billion pension, known as Calpers, hasn’t decided where to invest the money after the pullout, which will take about a year, he said.

Spider-Man, Batman Arrested After Alleged Times Square Brawl (HP)
Two costumed characters in New York City’s Times Square were arrested on Saturday night along with a third man for allegedly fighting, according to multiple reports. The two characters were doing what costumed heroes do these days — hustling for tips on a street corner in exchange for photos — when two men started yelling and gesturing at them. The New York Post reports that 23-year-old Thomas Rorke allegedly grabbed Batman — aka 41-year-old Jose Escalona-Martinez — from behind and shouted, “I’m gonna fuck you, Batman.” Then, he allegedly grabbed Spider-man — aka 35-year-old Abdel Elkahezai — on the rear. His Spider Sense clearly tingling, Elkahezai allegedly sprayed Rorke with his webbing, or at least his prop Silly String, the paper reported. Soon enough, punches were thrown. Rorke appears to have gotten the worst of it, with CBS New York reporting that he was socked repeatedly in the face and chest. “He (Rorke) was intoxicated and messing with Batman and they got into it,” a rival Spider-man, 50-year-old Paul Smith, told the New York Daily News. “Everybody, no matter what costume they are wearing, has the right to protect themselves. It’s like Stand Your Ground in Florida,” he told the newspaper. All three were arrested. Read more »

Opening Bell: 09.15.14

Bank adviser pay catching up with traders (FT)
Senior advisory bankers’ pay in London has risen almost on to a par with traditionally higher-earning traders, underlining the shifting fortunes of these distinct businesses within investment banks. UK-based managing directors working on deals and capital raisings have seen total pay rise by a fifth to an average of £586,000 last year, according to data compiled for the Financial Times by Emolument, a pay comparison group. By contrast, senior traders have suffered an average 13 per cent cut to £602,000 after a sharp drop in bonuses, the self-reported numbers from hundreds of staff at 10 European and US investment banks show. It puts a spotlight on the resurgent clout of advisory bankers, after a dearth of dealmaking in the wake of the financial crisis placed them squarely in the shadows of profit-churning bond traders. A sharp increase in takeovers as well as debt and equity issuance by companies and other clients since last year has reversed the fortunes of corporate financiers. At the same time, their colleagues on trading floors have seen profit opportunities squeezed by tighter regulation, lower trading volatility, a ban on proprietary trading, the move towards electronic trading and several manipulation scandals.

As Investors Salivate, Alibaba May Raise Price of I.P.O. (Dealbook)
Only five days into the company’s global journey to promote itself to prospective buyers, its underwriters have told their sales staffs that they plan to close orders for the stock sale by Wednesday, people briefed on the matter said on Friday. And with that intense interest — shown by the huge lines of investors who waited to spend even an hour with Alibaba’s senior management — comes the possibility that the company’s bankers may eventually raise the price range for the offering, pushing it past a fund-raising goal of $21.1 billion. That could make Alibaba the biggest initial offering in history, surpassing the $22.1 billion that the Agricultural Bank of China raised four years ago. But the people briefed on the matter, who spoke on the condition of anonymity, cautioned that no plans had been set and that the price range might remain within the already disclosed $60 to $66 a share, which values the company at roughly $163 billion at the high end. A final decision will be made Thursday, when underwriters are expected to price the offering after examining its order book. Alibaba would then begin trading the next day on the New York Stock Exchange.

Samsung accuses rival LG exec of vandalizing washing machines (Reuters)
Samsung Electronics Co Ltd has accused the head of rival LG Electronics Inc’s home appliances business of damaging Samsung washing machines at retail stores in Germany and asked Seoul prosecutors to investigate. Samsung, in a statement on Sunday, said it asked the Seoul Central District Prosecutors’ Office to investigate LG employees who the company says were seen deliberately destroying several of its premium washing machines on display at two stores earlier this month ahead of the IFA electronics show in Berlin. “It is very unfortunate that Samsung had to request that a high-ranking executive be investigated by the nation’s legal authorities, but this was inevitable, as we concluded that we had to get to the bottom of this incident,” Samsung said.

Brazil’s Batista Faces Criminal Charges (WSJ)
When Brazil’s best-known businessman was hit with criminal charges over the weekend involving billions of dollars in soured deals, he didn’t appear to miss a beat. Instead, Eike Batista was roaming the world scouting for business opportunities. “Yesterday he was in Qatar,” said one of Mr. Batista’s lawyers, Sergio Bermudes, in a telephone interview Sunday. “It was a business trip.” The attorney said Mr. Batista had also planned to go to South Korea and would return to Brazil probably by Friday. When the entrepreneur lands, he will be facing one of the biggest challenges of his life. Prosecutors in Rio de Janeiro last week charged Mr. Batista with financial crimes and requested the freezing of 1.5 billion Brazilian reais ($641 million) in assets belonging to the businessman and people close to him, according to documents posted on the public prosecutor’s website on Saturday. Federal officials accuse Mr. Batista of manipulating financial markets and taking advantage of privileged information when selling shares of his distressed oil company, formerly known as OGX Petróleo e Gás Participações SA.

Austrian billionaire Richard Lugner, 81, marries 24-year-old Playboy model (NYDN)
Richard Lugner, 81, tied the knot with fiancee Cathy Schmitz at a palace on Saturday, claiming “hopefully, this time it’s the right thing.” The pair have been dating since February. Prior to the pair getting hitched, Lugner said “apart from the age difference, everything fits,” reported The Local.

Palin’s Camp Weighs In: We Brawled, But Someone Else Started It (TPM)
The website Real Clear Politics spoke to what it described as a “source close to the Palin family” who offered the Palins’ side of the physical, bloody altercation that took place on Sept. 6 at a house in Anchorage. The article said the source’s description “diverge[d] significantly” from what had been reported elsewhere, but the anonymous portrayal essentially confirmed the broad outlines of the fight, including that Sarah Palin herself was present and was shouting as it all went down. On Friday, TPM published a detailed account of the brawl based on reports from several news outlets as well as our own reporting. Two named eyewitnesses reported seeing the former Alaska governor at the party, including one who said he saw Palin’s husband Todd, son Track, and daughter Bristol were involved in multiple melees with other party guests that night. One anonymous source said Sarah Palin was “nearly crawling on top of people” while screaming and shouting profanities. The source who spoke to Real Clear Politics for its article on Saturday said, however, there were a few details the Palin family saw differently, including how the fighting began. The RCP source confirmed that Sarah Palin’s son, Track Palin, was the first family member involved in the fight, and Todd Palin, Sarah’s husband, was the next member to intervene. But the source said Track Palin was not the one who picked a fight with his sister Willow Palin’s ex-boyfriend. The former boyfriend allegedly “tried to get in” the Palin’s stretch Hummer limousine after some “questionable behavior,” leading Track to get involved, according to the source. The source said four men then began fighting with Track, after which Todd Palin intervened and ended up bleeding from the fight. The source also said Track Palin ended up with four cracked ribs. While RCP’s account was vague on some details, previous reports said there were at least two separate fights at the party that involved the Palins. One of the altercations, according to eyewitness Eric Thompson, who spoke to multiple news outlets, involved Sarah Palin’s daughter, Bristol Palin, who was seen punching the host of the party multiple times. Read more »