Opening Bell

Opening Bell: 04.15.14

Citigroup CEO Vows to Fix Regulatory Problems as Bank Logs Higher Profit, Beats Estimates (WSJ)
Speaking after Citigroup reported better-than-expected first-quarter earnings Monday, Mr. Corbat faced more than a dozen questions from analysts on the bank’s recent failure to win regulatory approval to return capital to shareholders. “Is the Fed denial a wake-up call for Citi or not?” CLSA analyst Michael Mayo asked. “We’re wide awake,” Mr. Corbat replied after declaring earlier, “I want, and I know shareholders deserve, an industrial-strength, permanent solution that paves the way for sustainable capital return over time.”

Stockbrokers Who Fail Test Have Checkered Records (WSJ)
More than 51,500 stockbrokers failed a basic exam needed to sell securities at least once, according to data that Wall Street regulators don’t disclose to investors, and those who repeatedly failed have on average worse disciplinary records. The more times a broker failed, the higher the average total of black marks was, such as criminal charges and firings, a Wall Street Journal analysis of the data found. Those who failed the test more than twice, for example, were 77% more likely to report a felony or financial-related misdemeanor than brokers who passed the exam on the first try, and about 55% more likely to have been terminated.

Mt. Gox founder won’t appear in U.S. for questions about bankruptcy case (Reuters)
Mark Karpeles, the founder of Mt. Gox, said he would not come to the United States to answer questions about the Japanese bitcoin exchange’s U.S. bankruptcy case, Mt. Gox lawyers told a federal judge on Monday. In the court filing, Mt. Gox lawyers cited a subpoena from the U.S. Department of Treasury’s Financial Crimes Enforcement Network, which has closely monitored virtual currencies like bit coin. “Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena. Until such time as counsel is retained and has an opportunity to ‘get up to speed’ and advise Mr. Karpeles, he is not willing to travel to the U.S.”, the filing said.

Regulators Weigh Curbs on Trading Fees (WSJ)
SEC officials, including some commissioners, are considering a trial program to curb fees and rebates they say can make trading overly complex and pose a conflict of interest for brokers handling trades on behalf of big investors such as mutual funds.

NY attorney general probes Herbalife: sources (NYP)
New York Attorney General Eric Schneiderman is investigating Herbalife over claims it is a pyramid scheme, The Post has learned. At least two whistleblowers have come forward and given Schneiderman’s investigators sworn testimony, sources said. The New York lawman has also fielded complaints from former Hispanic Herbalife distributors who say they were defrauded by Herbalife, sources said.

Berlusconi Given Community Service for Tax Fraud (NYT)
Former Premier Silvio Berlusconi must spend at least four hours a week in the service of the elderly to repay society for his tax fraud conviction, the first sentence against him ever confirmed by Italy’s highest court. The one-year assignment, announced by a Milan court on Tuesday, curtails Berlusconi’s ability to participate in the upcoming European election campaign — a point of contention among his political allies…The court stipulated that Berlusconi must spend most of his time in the Lombard region, where he lives, but granted permission to travel to Rome from Tuesday to Thursday each week. He must spend at least four straight hours one day a week at an elderly center, the court said. The document did not identify the center, or specify what Berlusconi would do there. Berlusconi was sentenced to four years for tax fraud, reduced to one year for a general amnesty. The one-year community service order may eventually be reduced by 45 days…The media mogul is on trial for political corruption in Naples and under investigation in Milan for witness tampering in trials relating to sex-fueled parties at his villa near Milan. Read more »

Opening Bell: 04.14.14

Europe’s top banks cut 80,000 more staff in post-crisis overhaul (Bloomberg)
Europe’s largest banks cut their staff by another 3.5 percent last year and the prospect of a return to pre-crisis employment levels seems far off, despite the region’s fledgling economic recovery. Spurred into action by falling revenue, mounting losses and the need to convince regulators they are no longer “too big to fail”, banks across the globe have shrunk radically since the 2008 collapse of U.S. bank Lehman Brothers sparked the financial crisis. Last year, the tide of bad news began to turn for European banks, which are among the region’s largest employers. Helped by recovering economies and receding fears for the euro zone’s future, the benchmark Stoxx Europe 600 Banks index .SX7P rose 19 percent, outpacing the 17.4 percent increase in multi-sector stocks. But despite the improved outlook, Europe’s 30 largest banks by market value cut staff by 80,000 in 2013, calculations by Reuters based on their year-end statements showed.

High-Frequency Traders Set for Curbs as EU Reins In Flash Boys (Bloomberg)
European Union lawmakers are poised to approve some of the toughest restrictions in the world on high-frequency trading, the first crackdown in the aftermath of Michael Lewis’s latest book, “Flash Boys.” The curbs are part of revamped EU markets legislation spanning from commodity derivative speculation to investor protection. The high-frequency trading limits include standards meant to keep the price increment for securities from being too small, mandatory tests of trading algorithms and requirements that market makers provide liquidity for a set number of hours each day.

CME Gave High-Frequency Traders Peek at Market, Lawsuit Claims (Bloomberg)
The Chicago-based company, owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, offers futures based on interest rates, equity indexes, currencies, energy products and agricultural commodities. The plaintiffs, in their complaint against CME and CBOT, allege “a fraud on the marketplace” and seek class-action status on behalf of exchange users. CME denied their accusations in a statement. Sometime after the start of 2007, the CBOT and CME began letting HFTs peek “at all orders to buy and sell futures contracts before they were reflected” to the rest of the market, according to the complaint filed April 11 in federal court in Chicago. That glimpse occurred “before the person or entity entering the buy or sell order received confirmation that their order was received — in other words before anyone other than the HFTs were privy to this information.”

Hedge Funds Wield Risky Legal Ploy to Milk Buyouts (WSJ)
When Dole Food Co. sold itself last year to its founder for $1.2 billion, many market watchers saw just another in a string of buyouts. A few investors saw an opportunity to squeeze the buyers for potentially millions of dollars more, using an arcane—but increasingly popular—legal process known as appraisal. Merion Capital LP bought 7.5 million shares of the fruit company in the days before Dole’s October stockholder meeting. It rejected the $13.50-a-share deal price and, alongside three other hedge funds, is seeking more in court through appraisal. Dole’s buyout highlights the rise of “appraisal arbitrage,” in which hedge funds buy shares of companies on the brink of a buyout and ask a judge to award them a higher price. These lawsuits have risen sharply as a growing group of investors looks to extract more money from corporate takeovers.

Gisele audited by IRS after making Forbes ‘rich list’ (NYP)
Gisele Bundchen has revealed that she was audited by the IRS just because she was placed on the Forbes Supermodel Rich List. “It’s sad, because the people who write these things don’t have my bank-account details,” she laughs. “I do OK, I earn plenty, but not as much as they say. I’ve already been audited by the IRS because of this list, and, truthfully, whether I’m on this list or not doesn’t interest me,” the Brazilian supermodel told Vogue magazine on Friday. Mrs. Tom Brady went on to say she’s no different than you or me. “I’ve got the same interests, the same day-to-day life, as any woman. I want to raise my children well, be a good wife and work. This is what I value: Are my children educated, is my husband happy, are people feeling positive energy from me? There should be a magazine to quantify knowledge, understanding and love for people: That is power.” Read more »

Opening Bell: 04.11.14

Investor Group Seeks Court OK to Buy, Revive Bankrupt Bitcoin Exchange Mt. Gox (WSJ)
A group of investors with Hollywood ties is seeking to revive bankrupt bitcoin-trading exchange Mt. Gox, according to people familiar with the matter. The investor group, which includes Brock Pierce, a former child actor-turned technology entrepreneur, is offering a token payment of one bitcoin, or about $400, to buy the exchange outright, according to these people. The acquisition must be approved by a Japanese bankruptcy court. Mt. Gox collapsed in February after disclosing that 750,000 bitcoins belonging to customers had vanished, along with an additional 100,000 bitcoins owned by the virtual-currency exchange. Since then, about 200,000 bitcoins have been recovered and are part of the exchange’s assets. The investor group hopes to revive the exchange and set aside 50% of its transaction fees to pay back burned customers and other creditors over time, according to documents filed to the Japanese bankruptcy court and reviewed by The Wall Street Journal…According to people familiar with the plan, the group is justifying the low price because of the “information vacuum” over Mt. Gox’s 550,000 missing bitcoins, currently worth about $220 million. It isn’t possible to place a value on the lost coins, they said.

Citigroup CEO faces grilling over failed plan, missed target (Reuters)
As Citigroup Chief Executive Mike Corbat prepares to talk to investors on Monday about the bank’s biggest failure during his 18-month tenure, his biggest struggle may be with how little he knows about the reason he failed. The U.S. Federal Reserve said on March 26 that it had rejected Citigroup’s request to boost its dividend and buy back more shares. The news was a stinging blow to Corbat, who was charged with improving the bank’s relationship with regulators in October 2012, when he was named the new CEO. The Fed still had not explained as of earlier this week why Citigroup failed to win approval, a bank executive told Reuters. Corbat, he said, has little information as to what went wrong and why. Corbat, through a spokesman, declined to comment.

JPMorgan crashes Goldman’s date with eBay (CNBC)
Earlier Thursday, eBay issued a surprise press release announcing an end to an ugly battle with Icahn, who had built up a large position in the online auctioneer and was demanding a spinoff of its payment-processing company, PayPal, and the addition of two candidates he had selected to eBay’s board. Along the way, Icahn had called out Donahoe for demonstrating “inexcusable incompetence” and eBay had criticized Icahn for airing accusations that were “false and misleading.” As part of a newly-inked agreement, however, Icahn was withdrawing both demands before eBay’s upcoming annual meeting in exchange for naming telecom industry veteran David Dorman as an independent director to the auctioneer’s board. And apparently, eBay had [Jimmy Lee, a longtime banker at JPMorgan Chase] to thank for the amicable settlement. “A week ago, Jimmy Lee, who is the vice chair of JPMorgan, called me and said he had been meeting with Carl on something completely unrelated, but he saw opportunity for some sort of compromise,” said Donahoe in a CNBC interview about an hour before the markets opened. “So he encouraged both of us to spend more time together, which is what we did over the weekend” – leading, ultimately, to Thursday’s pact. A few hours later, Icahn said much the same thing. “Jimmy Lee did a great job over the weekend back and forth, back and forth as a catalyst,” he said. This point was not lost on Icahn, who wondered aloud why Goldman’s bankers had never contacted him. “It’s not that I personally have anything against Goldman. I just think their approach to this, at least where I’m concerned, is completely wrongheaded and there should be much more peace than war in these things.”

Greece Gets Strong Demand for Bond (WSJ)
Greece sold more than $4 billion worth of bonds to eager investors Thursday, marking a milestone for a country that over the last four years had convulsed global markets, imperiled the euro and precipitated the biggest default in history. Greece’s absolution by investors is a stark demonstration of how much those markets have improved since the dark days of the euro-zone crisis, and a reflection of a mounting belief that Greece has turned a corner after six years of painful recession. “People are starting to look at Greece again in the investible universe,” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland in London.

As Judge OKs SAC Plea, Pursuit of Cohen Appears to Cool (WSJ)
On Thursday, a federal judge approved a guilty plea entered on behalf of SAC and a landmark insider-trading settlement with the firm. Prosecutors and the Federal Bureau of Investigation have eyed Mr. Cohen for years, but haven’t been able to mount a criminal case against him personally. While prosecutors aren’t barred under terms of the settlement from indicting Mr. Cohen or other SAC traders, no new charges are imminent, according to a person familiar with the matter.

‘Game of Thrones’ a budding inspiration for baby names (NYP)
In 2012, there were 146 babies named “Khaleesi,” the title of “queen” that Targaryen took on after marrying a Dothraki leader, according to Social Security Administration data analyzed by Vox.com. The name has been slowly climbing up the baby-naming charts since 2010, when fewer than five babies were given the moniker. Now it’s more popular than traditional names like “Betsy” and “Nadine.” But Targaryen’s first name has proven less popular, with only 21 babies being called “Daenerys” in 2012, the same data showed. That’s not the only “Game of Thrones”-inspired name out there: More than 700 babies were named Arya in 2012, the first name of orphan Arya Stark. The name was used prior to the hit cable show, but it has risen in popularity in recent years. Read more »

Opening Bell: 04.08.14

Citi Is Bracing to Miss a Profit Target (WSJ)
Citigroup Inc. is warning investors it may miss a key profitability target after the Federal Reserve rejected the bank’s capital plan last month, people familiar with the matter say. The Fed on March 26 shot down the New York bank’s proposal to boost its dividend and ramp up stock buybacks, saying it had failed to measure potential risks to its operations during a severe economic recession. The rejection makes it unlikely Citigroup can hit its 2015 goal for return on tangible common equity.

Intrade’s New Gamble Is Sports Betting (BusinessWeek)
Contests on Tradesports will consist of a series of markets, where players buy stock based on events within a game. To not run afoul of the law, players cannot simply buy stock on whether the San Antonio Spurs will win; the position must also include a bet on, say, how many rebounds Tim Duncan will pull down. A pot is set in advance, and the stocks can be traded throughout the game. When the final buzzer sounds, players holding stock with the highest combined value win the pot. The company takes a cut of the entry fees.

Bank Regulators Set Vote on Big Jump in Capital Requirements (WSJ)
Under the new “leverage ratio,” scheduled for a vote by the Federal Deposit Insurance Corp. and the Federal Reserve, the eight biggest U.S. firms would have to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books—not just the risky ones…The biggest companies would be required to maintain loss-absorbing capital worth at least 5% of their assets, and their FDIC-insured bank subsidiaries would have to keep a minimum leverage ratio of 6%. The amounts, which are line with what banks expected from regulators, compare with the 3% set out by international accord. For the largest banks, satisfying the new requirement will likely be manageable in the near term, but analysts warned it could constrain future growth since it would limit each bank’s ability to increase its asset base, forcing it to either raise more cash from investors or shed assets elsewhere if it begins to bump up against the ratio’s limits.

Tech Firms May Find No-Poaching Pacts Costly (Dealbook)
A high-stakes negotiation is taking place in Silicon Valley among some of the biggest names in the industry — Apple and Google among them — over accusations that they were involved in a collusion to prevent their employees from being hired at rival companies. The employees filed a class-action suit, contending that the illegal hiring practices cost employees $9 billion in lost wages. Now the companies are locked in mediation sessions, hoping to settle the case in the next several weeks. The question being whispered all over town now is how much will Apple, Google, Intel and Adobe ultimately have to pay? The companies privately scoff at the $9 billion figure that the plaintiffs are seeking, contending it amounts to extortion. The employees, who number about 100,000, suggest that the facts are so damning against the companies — and so embarrassing — that they won’t settle for anything less than a blindingly high number.

Cohen firm has new name, still makes big money (CNBC, earlier)
In an internal email issued Monday morning, the company’s president, Tom Conheeney, praised employees for their loyalty…In a telling line of the morning’s memo, Conheeney spoke of the mark the former hedge fund had made in the business. “At its best, SAC was looked upon as the industry’s leading long/short hedge fund, the place where everyone wanted to work and be,” he wrote. “Our goal, certainly my goal, is to see us reach those heights as Point72, but in a manner that no one can ever claim is the result of anything other than your hard work, integrity and smarts.”

Woman Allegedly Calls Cops To Complain About Weed Quality (AP)
Lufkin police Sgt. David Casper said Monday that an officer went to the home of 37-year-old Evelyn Hamilton to hear her complaint that the dealer refused to return her money after she objected that the drug was substandard. Casper says she pulled the small amount of marijuana from her bra when the officer asked if she still had it. She was arrested Friday on a charge of possession of drug paraphernalia. Hamilton said Monday she spent $40 on “seeds and residue.” She says she called police when she got no satisfaction from the dealer’s family. Read more »

Opening Bell: 04.07.14

Fallout From High-Frequency Trading Hits Brokerages (WSJ)
Shares of E*Trade Financial Corp., Charles Schwab Corp. and TD Ameritrade Holding Corp. tumbled last week amid concerns that regulators would ban a practice that allows brokerages to collect hundreds of millions of dollars a year in revenue by selling orders to middlemen who use high-frequency strategies to trade with the brokers’ customers.

Pimco’s problems grow as pension funds take fright (FT)
One of the first investors in Pimco’s $232 billion Total Return fund has begun looking for an alternative fixed income manager as concerns over the world’s biggest bond house escalate. The Orange County Employees Retirement System, situated just 12 miles from Pimco’s headquarters in California, has instructed an investment consultant to search for an “additional” domestic fixed income portfolio manager. The $11.5 billion pension scheme has invested in Pimco chief executive Bill Gross’s Total Return strategy since 1982, but it has put the fund on watch due to “organisational and personnel issues” at the company.

BlackRock Reshuffles Management (WSJ)
BlackRock Inc. took a big step toward picking a successor to co-founder and Chief Executive Laurence D. Fink on Sunday, announcing a reshuffling of the management ranks that will elevate a number of executives to prominent roles at the world’s largest asset-management firm. In a call with employees Sunday afternoon, Mr. Fink and President Robert Kapito stressed that Mr. Fink, 61 years old, would remain with the firm for years to come. But the New York firm laid out its most sweeping managerial overhaul in years. Among other moves, it added a new co-president and tapped a new chief operating officer, while promoting a number of other executives, including its company heads in Asia and New York. Mr. Kapito, 57, long has been seen as the heir apparent to Mr. Fink, and the moves are seen as strengthening that position, according to people at the company. He has been president of the firm since 2007…Among the biggest moves, the firm promoted Charlie Hallac, the New York-based company’s chief operating officer, to the new position of co-president alongside Mr. Kapito, who will remain in that role.

The Best Dirt From 15 Central Park West (NYM)
Billionaires Carl Icahn and Daniel Loeb allegedly tussled over a $45 million apartment; Loeb won by not blinking at the astronomical price. Icahn supposedly offered half the asking, a story he dismisses, saying he only wanted one of two units that could be combined: “There was no hondling,” Icahn is quoted in the book. “Bullshit.” (“Page Six” reports that Loeb was upset that Gross and his book are being feted at the building via a party hosted by political cartoonist and resident Ranan Lurie and his wife, Tamar; it’s still scheduled to take place as of this writing.)

Legendary Man U coach headed to Harvard Business School (NYP)
Alex Ferguson, the legendary British soccer manager for Manchester United who is famous for his volcanic temper, is bringing his coaching techniques to Harvard Business School. Ferguson, who retired from managing ManU last year, will teach in Harvard’s executive-education program, the school said this week. Ferguson, 72, is the most successful manager in British soccer and was knighted in 1999.

Australian groom banned from getting married after showing up drunk (NYDN)
Jake Francis Brookes, 41, was reportedly still drunk from his bachelor party when he rocked up at Exeter Uniting Church in Adelaide in February. Witnesses said he was swaying, bruised and sporting torn clothes. It led Reverend Ian Hunter to refuse to proceed with the ceremony because it was “unethical.” This resulted in a “minor altercation” between Brookes and Hunter – which ended after cops were called, according to the Adelaide Advertiser. Brookes was then arrested and charged with disorderly behaviour and resisting arrest – while his wife-to-be decided to cut her losses and end the relationship. He appeared in Port Adelaide Magistrates Court for a preliminary hearing on Thursday. Afterwards, he told reporters outside: “I miss her to bits – she is always in my heart.” “She wants me to be the best I can possibly be…I had my bucks night the night before bro, I mean come on, we are all men here,” he added. Read more »

Opening Bell: 04.04.14

Australia Model Curbs Speed as CEO Says U.S. Too Far Gone (Bloomberg)
In Australia, where high-frequency trading firms are half as pervasive as in the U.S., the head of the biggest stock exchange has a message for Americans who would rein them in: forget it. “The way the U.S. market structure has been set up creates serious problems,” Elmer Funke Kupper, the chief executive officer of Sydney-based ASX Ltd., told Bloomberg News on the sidelines of a conference March 24. Efforts to rectify that are “very late and unlikely to succeed,” he said. Advantages that are hard to replicate in the U.S. help Funke Kupper curb speed traders. Australia restricts alternative exchanges, solidifying ASX’s near-monopoly and reducing high-frequency arbitrage. By contrast, American trading is spread across more than 50 venues. ASX doesn’t offer payments to traders for orders, unlike in the U.S., where a system of fees and rebates known as maker-taker helps keep HFT in business.

U.S. Banks Expected to Post Weaker Earnings (WSJ)
Among the six largest U.S. banks and securities firms, J.P. Morgan, Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. are expected to post a smaller profit than in the same quarter a year earlier. Analysts predict Morgan Stanley’s earnings will be little changed. The five companies all have seen their estimates fall in the past six weeks.

Bitcoin’s Boosters Struggle to Shore Up Confidence (WSJ)
Jeremy Allaire, a longtime technology entrepreneur who is setting up a bitcoin service for consumers, compares the chaotic environment to the Internet’s earliest days. “The amateur-hour enthusiasts that started bitcoin companies in the first generation are being weeded out in a totally appropriate fashion and…replaced by legitimate companies that are working with the financial industry and government,” he says. “There is still more shaking out that needs to happen.” Mr. Murck says the Bitcoin Foundation is encouraging rules that would help prevent “more bad outcomes.” At a February meeting of state banking regulators, he said the bitcoin industry “is being held to a higher standard than other payment systems.” He added: “As far as I’m concerned, that’s fine.” He says he has never thought about quitting his job because he still believes in bitcoin and thinks the trade group is effective. Mr. Murck has two more reasons to help investigators and root for a rebound in the value of bitcoins. He is paid in bitcoins—and was a Mt. Gox customer when the exchange collapsed. He won’t say how many of his bitcoins are missing. “It isn’t an insignificant amount,” he says with a sigh.

China regulator to run stress tests on banks: paper (Reuters)
The China Banking Regulatory Commission (CBRC) has said it will conduct regional and national stress tests after banks saw a spike in bad loans last year, the Shanghai Securities News reported on Friday, reflecting growing creditworthiness concerns.

JPMorgan Folds London Whale Office Into Another Unit (Bloomberg)
The chief investment office will be folded into the New York-based bank’s Treasury unit, Chief Operating Officer Matt Zames said in an internal memo obtained yesterday by Bloomberg News. Craig Delany will lead the new group as global chief investment officer and treasurer, Zames said.

The Legacy of JPMorgan’s Blythe Masters (BusinessWeek)
As outlined in Gillian Tett’s book, Fool’s Gold, a group of math wizards that included Masters at JPMorgan in the mid-1990s set out to eliminate the risk of lending money by developing a new type of contract that banks could use to insure against the possibility that a loan wouldn’t be repaid. As Bloomberg Businessweek’s Paul M. Barrett put it in a review of Tett’s book, it worked like this: “Bank A, worried about a loan it has made, strikes a derivative deal to pay a fee to Bank B in exchange for Bank B’s promise to compensate Bank A if the loan sours. Bank A sheds some of the uncertainty related to its loan and feels emboldened to make fresh loans. Bank B assumes some of the risk but immediately enjoys the fee income.” These became known as “credit derivatives,” and they would soon be used to insure millions of low-quality mortgages, mixed into batches like cookie dough, divided into pieces, and sold to investors all around the world. When the real estate market crashed in 2007, so did all those derivatives, causing financial carnage too extensive to enumerate. Masters has spent the years since trying to distance herself from the damage her creation inadvertently caused. Is it her fault that her innovation was so badly misused and exploited by others?

Deputies break window to wake alleged drunk driver stopped at light (Wesh)
Deputies said they were forced to break a driver’s window when the man blacked out with a burrito in his hand at a traffic light early Monday morning in Volusia County. A witness first noticed 36-year-old Daniel Hernandez when he allegedly hit a curb and swerved in and out of his lane, according to the Volusia County Sheriff’s Office. The witness followed Hernandez, who allegedly stopped about 50 feet from the traffic light at Doyle Road and Courtland Boulevard and fell asleep, deputies said. Hernandez allegedly sat at the light holding a half-eaten Taco Bell burrito for at least 15 minutes before deputies arrived at the scene. After attempting to wake Hernandez by knocking on the window, officials were forced to break the window, but Hernandez kept sleeping. According to the arrest report, paramedics rubbed Hernandez for two to three minutes to wake him. Read more »

Opening Bell: 04.03.14

Moody’s Is No-Show in Bond Deal Rating (WSJ)
When the sale of more than $1 billion in commercial-mortgage bonds went off without a hitch last week, one name was conspicuously missing from the prospectus: Moody’s Investors Service. The ratings firm, known for adopting more-cautious stances than its rivals, has been a mainstay on such deals during the aftershocks of the financial crisis. But with investors scrambling to buy higher-yielding bond deals, the underwriters on this one took a gamble that they could still sell the securities without the rater’s seal of approval. When the market was tougher, bankers “were not willing to [sell a bond] without putting a Moody’s rating on it,” said Lea Overby, head of commercial-mortgage-backed securities research at Nomura Securities International. “It’s worth a shot to try it now” given the market’s strength, she said.

Judge tosses man’s claim of ownership of Facebook (AP)
A federal judge has officially closed the book on a New York man’s multibillion-dollar lawsuit claiming half-ownership of Facebook. Judge Richard Arcara has granted Facebook and founder Mark Zuckerberg’s motion to dismiss Paul Ceglia’s lawsuit. Last week’s ruling affirms a magistrate judge’s recommendation from a year ago saying the lawsuit should be thrown out because the contract Ceglia based it on was faked. Ceglia is from Wellsville. He claimed he and Zuckerberg signed a 2003 software development contract that included a provision entitling him to half-ownership of Facebook in exchange for startup money for the budding company. Facebook lawyers say the two had a contract but references to Facebook were slipped in for the lawsuit.

Morgan Stanley CFO says companies need more female executives (Reuters)
Morgan Stanley Chief Financial Officer Ruth Porat on Wednesday called on government and corporate leaders to encourage the promotion of women into senior business roles, saying the number of women in top positions at U.S. corporations is “an embarrassment.”

Yelp Reviews Brew a Fight Over Free Speech vs. Fairness (WSJ)
In early 2012, Joe Hadeed, owner of Hadeed Carpet Cleaning Inc., arrived at his office atop a 70,000-square-foot warehouse in Springfield, Va., to discover a critique posted on Yelp.com: “Lots of hype, a mediocre cleaning and a hassle at the end. Don’t go with Joe!” wrote a “Mike M.” A few days later, another review, by “M.P.” popped up: “I will never use them again and advise others to proceed with caution!” it said. Over the next several weeks, a string of similarly harsh reviews replaced more-favorable comments “as if someone had flipped a switch,” said the 47-year-old Mr. Hadeed, in an interview last month at his offices, where trucks drop off carpets to be washed, rinsed and dried…Following the rash of negative Yelp reviews, business sank 30% in 2012, Mr. Hadeed says. Last year, Hadeed cleaned just 20,000 carpets, down from 29,000 in 2011. Revenue fell to $9.5 million from $12 million in 2011. Mr. Hadeed said the business has let 80 workers go and sold six trucks, reducing its fleet to 54…In July 2012, Hadeed sued the seven reviewers for defamation, and demanded that Yelp turn over their true identities. So far, both the Alexandria Circuit Court and the Virginia Court of Appeals have sided with Mr. Hadeed, holding Yelp in contempt for not turning over the names. Yelp in January appealed to the state Supreme Court, arguing that the reviews are protected under the First Amendment and that Mr. Hadeed offered scant evidence that they were fakes. This month the Supreme Court could issue an order granting or denying Yelp’s appeal, or schedule a hearing in Richmond, which could take place in the next 90-120 days.

Rachel Canning, teen who sued parents, picks college (USAT)
Rachel Canning, the New Jersey high school senior who made national headlines after suing her parents last month, has chosen a college. The 18-year-old Canning announced on her Facebook page in a public post Saturday that she plans to attend Western New England University as a biomedical engineering major on a $56,000 scholarship. “Decision made. WNE U class of 2018 BME Major w/ 56,000$ scholarship,” read the Facebook post. The post had more than 145 likes before it was removed or restricted to the public at about 1:30 p.m. Tuesday…Canning sued her parents, Sean and Elizabeth Canning of Lincoln Park, for child support and college costs, filing a lawsuit on Feb. 24 in Superior Court in Morristown, N.J. After the judge denied Canning’s claim for immediate assistance on March 4, she moved back in with her parents March 11, and dropped her lawsuit the following day. Read more »