Wall Street Sweats Out Volcker Rule Impact on Revenue (Bloomberg)
Wall Street banks, which already shut proprietary trading units that helped fuel record profits, are girding to learn next week how much revenue the Volcker rule may cut from the $44 billion they say comes from market-making. With U.S. regulators scheduled to vote Dec. 10, the largest firms are getting little detail about the final terms of the Volcker rule’s ban on proprietary trades, and still have basic questions about what kind of market-making will be allowed, said three senior U.S. bankers. They’re also wondering whether they’ll have to change practices or curtail business in some less-liquid markets, the bankers said.
EU Fines Financial Institutions Over Fixing Key Benchmarks (WSJ)
Six financial institutions were fined €1.71 billion ($2.32 billion) by European Union regulators Wednesday for colluding in an attempt to manipulate key benchmark interest rates, the EU’s largest-ever penalty in a cartel case. The settlements involved penalties against some of the world’s biggest banks, including Deutsche Bank AG, Société Générale SA, Royal Bank of Scotland Group PLC and J.P. Morgan Chase & Co. The action brings to roughly €6 billion the total penalties levied by regulators against financial institutions in connection with probes into manipulation of the London interbank offered rate, or Libor, and other widely used financial benchmarks. Further penalties are possible.
Accuser’s credibility ripped in SAC manager trial (NYP)
Horvath earlier testified that Steinberg asked him to get “edgy, proprietary” information after trade ideas of his lost money in 2007, and Horvath said he took that to mean “nonpublic, material” info — or inside information. But Berke, getting his first shot at cross-examination of Horvath in Manhattan federal court Tuesday, used two hours of withering questions to reveal that Horvath used one of the terms even before he joined Steve Cohen’s SAC hedge fund. In a bombshell piece of evidence, a document called “Jon’s Trading Rules,” created by Horvath — which prosecutors didn’t know existed — Horvath asked himself the question, “What do I have that is proprietary?” With Steinberg barely suppressing a smile, Berke asked about “Jon’s Trading Rules.” A squirming Horvath first said it was written while he was at SAC. He then said he could not remember when he wrote it. Finally, he said, “I don’t remember creating this document.” Nor did Horvath remember the day he began working at the hedge fund, or the email Steinberg forwarded to him on his first day, Sept. 18, 2006. Written by former SAC analyst Nils Tristan, it used the word “edgy” three times to discuss the type of research information on companies SAC found useful. “If you hear something from the grapevine, there is a 90 percent chance it’s not edgy,” the email, written in 2004, said. “We no longer use that type of information.” The email also mentioned making sure information has been “triangulated by multiple proprietary sources.” Horvath conceded the words “edgy” and “proprietary” were used often during his time at SAC — and weren’t referring to illegal info — but said that Steinberg meant something different when he asked him to get that type of information in 2007. “I don’t think edgy proprietary has the same meaning as the conversation we had later,” he told the jury.
House of Morgan Divided on Junk as Returns Wane: Credit Markets (Bloomberg)
JPMorgan Chase & Co. recommends sticking with U.S. high-yield bonds next year as the best protection against rising interest rates. Morgan Stanley cautions that valuations are unattractive following a record five-year rally. Speculative-grade debt will return 5 percent in 2014 with default rates remaining below historic averages, according to analysts at JPMorgan, the largest underwriter of the notes since 2010. Investors need to lower their expectations and will see gains of 2.8 percent, Morgan Stanley said yesterday.
Deputies Looking For Men Who Stole Condoms, Family Planning Materials (ABC)
HILLSBOROUGH COUNTY, Fla. – The Hillsborough County Sheriff’s Office is looking for two men who stole about $460 worth of condoms and family planning materials. Detectives say the men stole the items from a CVS near Hillsborough Avenue and Memorial Highway around 3 p.m. on November 26. They placed the items in a backpack and left without paying. They drove off in a newer model four door white or silver Honda. Read more »