Internal BNY Mellon Documents Show Panic (WSJ)
An informant in a state fraud case against Bank of New York Mellon Corp. has provided prosecutors a rare inside peek into how the bank allegedly scrambled to contain the fallout from a fast-growing government investigation, according to hundreds of pages of confidential documents. As investigators sought to determine whether the bank overcharged clients to execute their currency trades, a senior BNY Mellon executive nicknamed "Rambo" urged traders not to tell clients how much money they made on trading, according to the informant. Bank officials worried clients would switch to negotiating their own foreign-exchange trades, where the bank's profit margin was far lower, an internal bank memo states. The bank also altered its website, changing the wording of its trading practices. And when a veteran bank official heard about the government investigation, she said: "It's over, it's all over," according to the informant.
Hedge-fund executive Steven Cohen is bidding for the Dodgers (LA Times)
Cohen...has engaged one of America's notable sports architecture firms to propose renovations to Dodger Stadium, allied himself with one of baseball's power brokers, secured the support of at least two prominent Angelenos and met with several major league owners. He was joined in those meetings by Arn Tellem, an influential sports agent who could run the Dodgers if Cohen were to buy the team. The developments were confirmed by several people familiar with the Dodgers sale process, each of whom said he could not comment publicly. Jonathan Gasthalter, a spokesman for Cohen, declined to comment. Cohen is among the first bidders submitted to Major League Baseball for approval, according to a person familiar with the process but not authorized to discuss it. Initial bids for the Dodgers are due Jan. 13.
Facebook to Lead Biggest U.S. Internet IPO Year Since 1999 (Bloomberg)
Facebook Inc. and Yelp Inc. are set to lead the biggest year for U.S. initial public offerings by Internet companies since 1999, testing demand for IPOs after investors lost money on Zynga Inc. and Pandora Media Inc. With Facebook considering the largest Internet IPO on record and regulatory filings showing that at least 14 other Web-related companies are planning sales, the industry may raise $11 billion next year, according to data compiled by Bloomberg. That would be the most since $18.5 billion of IPOs in 1999, just before the dot-com bubble burst.
Woes Weigh On Sears, Eddie Lampert (WSJ)
The 49-year-old Mr. Lampert has struggled to retain qualified executives: Under his watch, the company c-suite has become a revolving door. Stores have been criticized for showing their age. Its once highflying shares—which peaked at $191.93 in April 2007 amid speculation that Sears would be an investment vehicle for Mr. Lampert akin to Warren Buffett's Berkshire Hathaway Inc.—plunged 27% to $33.38 Tuesday. They have lost more than half their value this year and are down 73% since the merger closed in March 2005. The market capitalization of Sears by the end of Tuesday had dropped to $3.6 billion. That is far from what Mr. Lampert envisioned when he launched an $11 billion purchase of venerable Sears, using money from Kmart, a company he had steered out of bankruptcy earlier in the decade. He predicted the merger would create a "powerful leader in the retail industry."
Japan Renews Pledge To Act Over Yen (WSJ)
In its semiannual report on foreign exchange, the Treasury also repeated its assertion that China's yuan is undervalued but again stopped short of declaring China to be a currency manipulator. But it was the harsh language toward Japan that came as a surprise to the foreign-exchange market. It also appeared to put Japanese officials on the defensive. "There is no change in our thinking regarding Japan's foreign-exchange policy, and there is no change in our stance that we will respond to excessive rises in the yen," a senior Japanese government official told reporters. "We have informed [Japan's foreign counterparts, including the U.S.] of that point through various channels, and we will explain it whenever that becomes necessary."
Get set for DSK: the movie (NYP)
Director Abel Ferrara is working on a film inspired by Dominique Strauss-Kahn, with French actor Gerard Depardieu playing the former International Monetary Fund chief who was embroiled in a sex scandal, Deadline.com reports.
Chile daily must pay readers for exploding churros (AP)
Chile's Supreme Court has ordered a daily newspaper to pay $125,000 to 13 people who suffered burns while trying out a published recipe for churros, a popular Latin American snack of dough fried in hot oil. The publisher of La Tercera must pay individual damages ranging from as little as $279 to $48,000 for one woman whose burns were particularly severe. The high court's ruling was announced Monday, seven years after the readers burned themselves while trying out the recipe. Judges determined that the newspaper failed to fully test it before publication, and that if readers followed the recipe exactly, the churros had a good chance of exploding.
Euro Seen Having Another Bumpy Ride in 2012 (CNBC)
“The problems with the euro will express themselves most clearly against the dollar,” Simon Derrick, chief currency strategist, BNY Mellon, said. “I thought we would bottom out towards the end of this year, but that looks optimistic now.” He believes the euro will finish 2012 in the low 1.20 range against the dollar.
Hedge-Fund Millionaire Diggle Bets on Farms, Life Sciences (Bloomberg)
Stephen Diggle, who co-founded a hedge fund that made $2.7 billion in 2007 and 2008, plans to open his personal farmland portfolio to investors and start a fund that will trade life-sciences companies. Diggle will transfer the farm assets from his family office to Singapore-based Vulpes Investment Management, which he set up in April after liquidating his previous firm’s volatility funds. Diggle’s family also holds “significant stakes” in life sciences, including biotechnology companies, which will be moved to a fund he plans to set up next year, the 47-year-old said. “Everything that we are investing in personally is available to investors,” Diggle said in an interview. “We have got capital committed, we are focused on a number of things where we think there’s a compelling opportunity to make money.” Diggle is widening his new firm’s investments after starting a volatility fund in May and taking over the Russian Opportunities Fund and Testudo Fund from Artradis Fund Management Pte, which he and co-founder Richard Magides closed in March. Once Singapore’s biggest hedge-fund manager, Artradis’s funds, which sought to profit from price swings, lost $700 million as volatility declined in 2009 and 2010. “The one thing I didn’t want to do was to spend the rest of my life talking about how great 2008 was,” Diggle said. “You have to move on and find new challenges. That’s what gets you up in the morning.”
BofA, Debt Collector Harassed Widow (WSJ)
Bank of America Corp. and a debt collector it hired to go after deceased customers' debts violated state law by repeatedly calling a Florida woman about paying the credit-card bill of her late husband, a Florida state-court judge ruled this month. Judge Keith R. Kyle in Lee County, Fla., found that collection attempts by West Asset Management, an Omaha, Neb., firm working on behalf of Bank of America, amounted to harassment.
Obama Picks Bipartisan Pair For Fed Board (WSJ)
The nominees are Jeremy Stein, 51 years old, a Ph.D. economist who did a five-month stint in the Treasury and White House early in the Obama administration, and Jerome Powell, 58, who was undersecretary of the Treasury for domestic finance under President George H.W. Bush. If confirmed by the Senate, Mr. Stein would bolster the Fed's academic expertise in both monetary policy and financial regulation. Mr. Powell, who has worked in investment banking in New York and private equity in Washington, D.C., would fill a different niche; the Fed board has been without a Wall Street veteran since Kevin Warsh, a Morgan Stanley alumnus, left in April.
N. Korea Has Huge Funeral for Kim; World Watches Anxiously (Reuters)
Bleak pictures from state television showed a funeral cortege led by a limousine carrying a huge picture of the 69-year old, who died on Dec. 17, passing serried ranks of olive green-clad soldiers whose bare heads were bowed in homage in the main square of the snow-covered capital. A hearse carrying the coffin was led by a weeping Kim Jong un, the son and heir, accompanied by Jang Song-thaek, his uncle and a key power-broker in the transition, and Ri Yong-ho, the army chief of staff. "Seeing this white snow fall has made me think of the general's efforts and this brings tears to my eyes," Seo Ju-rim, a red-cheeked, weeping female soldier, told North Korean television, referring to Kim. One of the myths surrounding Kim Jong-il was that he could control the weather and state media has reported unusually cold and wild weather accompanying his death.
Wendy’s Adds Foie Gras Burger in Japan Return (Bloomberg)
Wendy’s Co., the third-biggest U.S. fast-food chain, added goose-liver pate and truffles to burgers as it invests as much as $200 million on a return to Japan two years after leaving the country. The Japan Premium sandwich sells for 1,280 yen ($16) at Wendy’s in Tokyo’s Omotesando luxury shopping district, the first of a targeted 100 shops. “We think the fast-food market here is ready for something different,” Ernest Higa, chief executive officer of Wendy’s Japan LLC, said in an interview at the restaurant’s opening yesterday.
Programming Note: We’re on an abbreviated vacation-esque schedule this week (opening/closing wraps and limited updates whenever the urge to reach out and touch you moves us). We still want to hear from you, though, so if anything happens that you think might tickle our fancy, do not hesitate to let us know.