Judges Consider What Defines Insider Trading (WSJ)
Federal prosecutors were peppered with tough questions Tuesday on the legal underpinnings of their near-perfect record in insider-trading cases, raising the prospect that some convictions could be overturned. In an hourlong hearing in Manhattan, judges of the U.S. Court of Appeals for the Second Circuit signaled that federal prosecutors may have taken too broad a view of insider trading, saying Wall Street needs more of a “bright line” about what constitutes a crime. At issue is whether a trader, to be guilty of insider trading, must have known a tip was illegally disclosed in exchange for a reward. Prosecutors have argued they need only show that people who used insider information knew it had been disclosed in breach of a fiduciary duty.
Numericable Set to Issue Record Junk Bond (WSJ)
A French cable operator is preparing what could be the largest junk-bond sale in history—a sign of investors’ ravenous appetite for risk in an era of low rates and a mark of the profound shift in bond financing on a continent that had long borrowed heavily from its banks. Bankers working on the deal say Numericable Group SA NUM.FR +3.93% was expected to raise the equivalent of €8.4 billion ($11.6 billion) from the bond sale Wednesday, about €2 billion more than initially planned. The Numericable deal would clobber the current record junk-bond sale, the $6.5 billion issue last year by U.S. telecommunications provider Sprint Corp. So big is the Numericable offering that it was being parceled into several chunks and issued in both dollars and euros. According to a banker working on the deal, the chunks will yield between about 5% and 6.5%.
Flurry of Allergan Trading Preceded Offer (WSJ)
Investors made outsize bets on Allergan Inc. stock in the 10 days during which activist hedge-fund manager William Ackman was privately accumulating a stake in the Botox maker, according to a Wall Street Journal analysis. Mr. Ackman’s Pershing Square Capital Management LP said Monday after the close of trading that it had bought a 9.7% stake in Allergan and had joined with Valeant Pharmaceuticals International Inc. to buy Allergan. Mr. Ackman and Valeant unveiled the offer, valued at roughly $46 billion, on Tuesday, and Allergan’s stock surged 15%. Even after stripping out Mr. Ackman’s buying, the volume of stock trading in Allergan during the 10-day period before Monday’s announcement was 86% higher than its average over the previous year, according to the Journal analysis, based on trading data provided by research firm S&P Capital IQ. There is no indication investors were tipped off about Pershing’s and Valeant’s offer. And other traders could have bought based on the higher volume. But such a significant surge in trading suggests that information about the potential buyout bid could have leaked to other investors, analysts said.
Russian bank launches post-Crimea bond (FT)
A Russian bank in the oil-rich region of Tatarstan has become the country’s first lender to issue a dollar-denominated bond since Moscow’s official annexation of Crimea and the subsequent tension with western governments. Tatfondbank, which has branches across Russia, raised $70m on Tuesday through a three-year bond priced to yield 11 per cent for investors. The issue, which was privately placed, was led by Bank of America Merrill Lynch along with two Russian banks, Region Broker Company and Otkritie Capital, part of Nomos Bank. According to bankers the bond issue could indicate a thawing in Russia’s debt capital markets, which have been largely put on hold as global political discord over Ukraine escalates. Nick Darrant, head of emerging markets syndicate at BNP Paribas, said the deal showed an uptick in demand for Russian debt remained in spite of the political risks.
Einhorn Shorting Tech as ‘Cool Kid’ Stocks Show Bubble (Bloomberg, earlier)
“There is a clear consensus that we are witnessing our second tech bubble in 15 years,” the New York-based firm said in a quarterly letter to clients.
Florida Man Catches 800-Pound Shark, Fries It Up (HP)
Joey Polk landed an 805-pound mako shark while fishing off the Florida panhandle last Tuesday. Video of the epic haul captured the moment Polk and his cousins pulled the giant fish ashore — and then took the remains home to eat. The 29-year-old, who lives in Milton, Fla., told WKRG that he’d prefer to keep a low profile, and doesn’t want any unnecessary attention paid to land-based shark fishing…”The funny thing is, as I left the house to go out that night, I kissed my son and said ‘Daddy’s gonna catch up a big, big fish tonight,’ but I didn’t think it would be this big,” Polk said, according to SFGate. Polk said he doesn’t want people to get the impression that gulf waters are teeming with sharks, and he doesn’t want people to go rushing out to the beach to try and land the big fish either. He said it’s all about the sport. According to Polk, the majority of the sharks he pulls in get tagged and released. But after an exhausting, hour-long fight, Polk said that the 11-foot mako shark couldn’t be saved. “We release about 98% of what we catch… we only bring in the ones too injured to swim away,” Polk said, according to SFGate. “We tried to revive the fish and send him back out, but he was too worn out to swim.” The website reports that Polk butchered the shark and cooked it for his community. He said it fed about 250 people. Read more »