At Goldman, Board Samples New Guard (WSJ)
Goldman Sachs Group Inc. has stepped up its efforts to groom a new generation of leaders, as it broadens the list of executives who could eventually run the Wall Street firm. As part of those plans, Lloyd Blankfein, Goldman’s chairman and chief executive, has been arranging private dinner meetings between younger managers and the firm’s directors, according to people familiar with the matter. The gatherings, which began last year, are designed to showcase the executives’ expertise on a variety of topics that fall outside formal reviews of their businesses and share the firm’s views on important issues, the people said…The push comes as Mr. Blankfein, who took over in 2006 when Henry Paulson became Treasury secretary, has shown no interest in stepping down soon. “A job like this is hard to come by,” Mr. Blankfein, 59 years old, said in November at an industry conference. “I’ll be slow to get out of it.” Were Mr. Blankfein to retire suddenly, Gary Cohn, the firm’s 53-year-old president, remains the board’s choice for the top job, people familiar with the matter said. But the open-ended nature of Mr. Blankfein’s commitment increases the chance that Mr. Cohn’s window to run the firm will close before a successor is needed, current and former Goldman executives said…The board dinners thus far have featured leaders of the firm’s major divisions, including Pablo Salame, co-head of Goldman’s securities arm, as well as others such as Paul Russo, co-COO of equities, and Anthony Noto, a technology banker who left the firm in June and was recently named finance chief at Twitter Inc., a former client, the people said.
Returns From Activist Hedge Funds Are Causing a Stir (WSJ)
Activists are once again at the top of the hedge-fund heap, after a profitable stretch of clashes with companies around the world. Activist managers gained 6.5% in the first half of the year, almost double the total for the average hedge fund, according to data to be released this week by research firm eVestment. Activist investing, in which managers buy stakes in companies and then agitate for changes in the form of buybacks, divestitures or management shakeups, was also the top-performing strategy among hedge funds in 2013. The fund managers could earn millions for themselves—and billions for their investors—if the gains stick through the end of the year.
Soros Hedge Fund Sued by Ex-Manager Seeking Back Fees (Bloomberg)
George Soros’s hedge fund was sued by a former portfolio manager who claims the firm wrongfully withheld at least $19.5 million in unpaid fees after firing him without explanation eight months into the job. Aaron Cowen, who joined Soros Fund Management LLC in 2010 after serving as portfolio manager and chief investment officer at SAC Capital Advisors LP, had a “stellar” track record at Soros’s firm before being terminated in November 2011, according to a complaint in Manhattan state Supreme Court. “Shockingly, Cowen’s employment was terminated despite his positive returns, when other Soros portfolio managers were failing,” according to the complaint filed July 3 and made public today. Soros, 83, invited Cowen to his home in South Hampton, New York, days after the termination and told the former employee during a 30-minute conversation that he didn’t know why he’d been fired, according to the complaint.
American Apparel, Charney Sued Over Alleged Misconduct (Bloomberg)
American Apparel Inc. (APP) and ousted Chief Executive Officer Dov Charney were sued by shareholders over claims directors ignored Charney’s misconduct that violated the company’s sexual harassment and discrimination policies. The lawsuit cites a June 18 letter by directors suspending Charney as CEO and describing how he authorized severance packages to former employees, and raises and bonuses for current employees, in exchange for agreements protecting him from personal liability for sexual misconduct. American Apparel, a Los Angeles-based maker of casual clothing, has racked up about $270 million in net losses since 2010 and had to raise capital several times. The removal of Charney, who has grappled with sexual-harassment allegations and drawn flak for suggestive advertising, has added to the turmoil.
The Letters That Warren G. Harding’s Family Didn’t Want You to See (NYT)
in 1964, after the historian Francis Russell gained access to letters from Harding to his longtime mistress, Carrie Fulton Phillips, the Harding family sued to halt their publication. Rumors of the affair were not new, but the letters — written between 1910 and 1920, before Harding assumed the presidency — confirmed the infidelity in startling detail. The Harding family feared that publishing them would further tarnish Harding’s legacy and hurt the entire family…In 106 letters, many written on official Senate stationery, Harding alternates between Victorian declarations of love and unabashedly carnal descriptions. (While Phillips’s notes and some drafts of her letters have been preserved, her actual replies were not.) The president often wrote in code, in case the letters were discovered, referring to his penis as Jerry…Sept. 15, 1913: “Wouldn’t you like to get sopping wet out on Superior — not the lake — for the joy of fevered fondling and melting kisses? Wouldn’t you like to make the suspected occupant of the next room jealous of the joys he could not know, as we did in morning communion at Richmond?…Oh, Carrie mine! You can see I have yielded and written myself into wild desire. I could beg. And Jerry came and will not go, says he loves you, that you are the only, only love worthwhile in all this world, and I must tell you so and a score or more of other fond things he suggests, but I spare you.” Read more »