SAC Capital Faces Second Deal Probe (WSJ)
The SEC is trying to determine whether SAC's CR Intrinsic unit used inside information to profit from Johnson & Johnson's 2009 takeover of Cougar Biotechnology Inc., the people said. The civil inquiry also encompasses whether an "expert network" business that is part of an investment bank leaked nonpublic information to traders, the people said. The hedge fund held 7,800 Cougar shares at the end of 2008. By March 31, 2009, SAC owned 632,291 shares, according to SEC filings. Johnson & Johnson announced its Cougar deal on May 21 of that year. SAC also is facing a criminal probe by federal prosecutors in New York examining trades made in an account overseen by the fund's billionaire founder, Steven A. Cohen, according to court documents and people familiar with the matter. Representatives for SAC, Mr. Cohen, Johnson & Johnson and Cougar declined to comment. SAC has said it is cooperating with the probe. The SEC hasn't accused SAC or the other entities involved in the Cougar probe of wrongdoing. It is unclear whether the inquiries, which have been ongoing for more than a year, will result in any charges.
Protests Show Capitalism 'Nearly Broken' (Bloomberg)
The protesters camping in London in support of the Occupy Wall Street demonstrators may be right and capitalism risks losing its “license to operate,” Generation Investment Management LLP’s David Blood said. Blood, who worked at Goldman Sachs Group Inc. (GS) for 18 years before starting fund manager Generation with former U.S. Vice President Al Gore in 2004, said the protesters’ message is that the financial system is “broken” and “unfair.” “In many respects, their concerns are right, and their assessment of where we’ve got to is right,” Blood, 52, said yesterday at a debate at St. Paul’s Cathedral, London, near where the protesters have gathered. “The problem is that capitalism itself is broken or nearly broken.”
Investment Banking's Uncertain Future At UBS (NYT)
The abrupt resignation of Oswald J. Grübel as chief executive last month over the trading loss left the new investment banking strategy mainly in the hands of Mr. Zeltner and Mr. Kengeter, the head of investment banking, who came from Goldman Sachs three years ago. UBS’s interim chief executive, Sergio P. Ermotti, came to UBS only in April and it was unclear whether his role would be made permanent. “What they are trying to do has never been done before,” Christopher Wheeler, an analyst at Mediobanca, said. “They want to shrink the investment bank by choice, which means unwinding positions without loss and running down their books while keeping the morale among staff, and it’s unclear who’s running the shop.”
Howard Camping, Rapture Prophet, Hedges New Bet (SF Gate)
"I do believe we're getting very near the very end," Camping, 90, said during a podcast recorded earlier this month and posted on his Family Radio website. "Oct. 21, that's coming very shortly, that looks like it will be, at this point, it will be the final end of everything." After his last apocalyptic prediction failed to materialize, Camping said he was "flabbergasted" and was reconsidering his calculations.
On SS Morgan, It's Half-Steam Ahead (WSJ)
The unit's 61% compensation ratio is something of a millstone for Morgan. It pushed the firm's overall ratio to 57% when the effect of the accounting quirk is excluded. That compares with a ratio of 44% at Goldman Sachs. Plus, while both Morgan and Goldman can ratchet down compensation in their banking and trading units, most of the brokerage compensation is based on formulas that are hard to change. So while Morgan's stock doesn't deserve to trade at its current "going out of business" discount of about 40% to tangible book value, it runs the risk of being becalmed at a lowly valuation even when there is a chance for smoother sailing.
Barney Frank Supports Protests, Raises Wall Street Cash (Politico)
The Massachusetts Democrat is heading to New York hoping to raise tens of thousands of dollars Thursday at a fundraiser at the home of Charles Myers, a senior investment banking advisor at Evercore Partners. Myers is one of several Wall Street execs listed on the invite soliciting up to $2,500 from attendees for Frank’s reelection committee...Frank, the co-author of the sweeping financial regulatory reform bill signed into law last year, said in a recent interview with POLITICO that he didn’t see any conflict between supporting the protests and taking financial services money. “If you take money from them, but you don’t vote [for] the things they want, how does that put you in conflict?” Frank questioned.
Wall Street Has Worst Quarter Since Crisis (Bloomberg)
Qaddafi Captured by Libya’s NTC Forces, State TV Reports (Bloomberg)
“We have captured the criminal who destroyed this country,” according to a statement aired by the channel. “Libya is joyous, Libya is celebrating.”
Steven Slater Gets A Year Of Probation And Fine For 2010 Jetblue Incident (NYP)
Steven Slater, the former JetBlue flight attendant who made a dramatic take-this-job-and-shove-it exit from his job in August 2010 when he grabbed some beers, deployed his JetBlue plane's emergency chute on the JFK tarmac and slid right of his job after a fight with a testy passenger, graduated today from a court-ordered mental health program, and walked away with a sentence of a year's probation for misdemeanor attempted criminal mischief in his notorious case. The sandy-haired unemployed Slater was also ordered to cough up $10,000 in restitution to JetBlue -- in hefty $831.25 a month payments. When asked if he'd ever fly JetBlue again, Slater said "not until hell freezes over."