Witness Adds Thread To SAC Probe (WSJ) A government informant has implicated a prominent former trader at SAC Capital Advisors, telling federal investigators the two swapped confidential stock tips for years, according to people briefed on the matter. The connection between ex-SAC portfolio manager Dipak Patel and the undercover mole, a California-based former portfolio manager at an investment fund, hasn't previously been disclosed. Mr. Patel and his lawyer didn't respond to requests for comment...Mr. Patel, who hasn't been charged with any wrongdoing, was a technology-stock manager who worked under Mr. Cohen for years before leaving in 2010. Obama To Name White As SEC Chief (WSJ) President Barack Obama on Thursday will name Mary Jo White, a former star prosecutor who pursued terrorists and mobsters in New York, to lead the Securities and Exchange Commission, a White House official said. Barclays CEO Says Bank Was Too Aggressive, Too Self-Serving (CNBC) The bank which paid a fine of 290 million pounds for manipulating Libor and was caught up in the payment protection insurance scandal, has been trying to turn a new leaf. Jenkins, who took over as CEO in August, said the company was addressing its past mistakes. "We were too aggressive, we were too short-term focused and too self-serving," Jenkins told CNBC at the World Economic Forum in Davos. "The industry, and Barclays, got it wrong on occasions," he added. Merkel Says Europe Must Persist With Reforms (CNBC) German Chancellor Angela Merkel urged European nations to continue the economic reforms they have begun and argued that the debt crisis offered an opportunity for the bloc to become more competitive. "The political experience is that often you need pressure for political structural reforms," she told delegates at the World Economic Forum in Davos, Switzerland. "If Europe is in a difficult situation today we need to implement structural reforms now so that we may live better tomorrow," she said. Knight Capital's Profit Slides 84% (WSJ) Profit in the quarter to Dec. 31 fell to $6.5 million from $40.2 million a year earlier, with per-share earnings sliding to a penny from 43 cents, below the three-cent consensus among analysts polled by Thomson Reuters. Revenue fell 16% to $287.7 million. Jobless Claims Fall To 5-Year Low (WSJ) Initial jobless claims, a measure of layoffs, fell by 5,000 to a seasonally adjusted 330,000 in the week ended Jan. 19, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 360,000 new applications for jobless benefits last week. Two men charged with robbery, assault and battery after stealing $400 from Girl Scouts selling cookies (NYDN) Two men are being held on charges they stole nearly $400 from a group of Girl Scouts selling cookies at a store in Massachussetts. An adult supervising the Scouts suffered a broken nose and arm injuries trying to stop the men. Authorities say 22-year-old Nicholas Taverna of Greenfield and 25-year-old Cassidy Michalski of Deerfield were held on $5,000 bail each at their arraignment Tuesday on charges of unarmed robbery, assault and battery with a dangerous weapon and shoplifting. Police say the suspects stole two cellphones from the Walmart in Northampton on Saturday and tried to trade them for drugs in Holyoke. When that failed, they returned to Northampton where they had seen the 11- and 12-year-old Scouts earlier, and stole their cash box. US Lawmaker Set to Unveil Financial Revamp (Reuters) The proposal, expected as early as this week, will come from House Ways and Means Committee Chairman Dave Camp, whose panel has been exploring a broad tax code overhaul for more than a year. Camp wants to slash the top corporate tax rate to 25 percent from 35 percent and simplify the code.Critics of the current corporate tax system note that the United States has one of the steepest corporate tax rates in the world. Commerzbank to Cut 6,000 Jobs (WSJ) The cuts, representing up to 12% of the bank's 49,215 full-time staff, will affect all group levels and units, in Germany and abroad, although online bank Comdirect AG and Polish unit BRE Bank will be excluded, according to an internal memo to staff. Japan Posts Record Trade Deficit (WSJ) Japan's trade deficit nearly tripled to a record ¥6.927 trillion ($78.3 billion) last year and few expect a drastic improvement anytime soon, leaving Tokyo no choice but to carry on with efforts to boost the economy. Citigroup’s Corbat Says Environment to Stay ‘Challenging’ (Bloomberg) “People recognize the times we are in, these are challenging times,” Corbat, 52, said in an interview with with Bloomberg Television’s Erik Schatzker at the World Economic Forum in Davos today. “Things will remain challenging going forward for a period of time. Our people recognize that.” Corbat replaced the ousted Vikram Pandit as CEO at the third-biggest U.S. bank in October. He has since announced plans to fire about 11,000 employees and pull back from certain markets as he seeks to cut Citigroup’s costs and boost rewards for shareholders. Profit at the lender’s ongoing businesses slid 8 percent last year while costs rose. Citigroup cut investment bankers’ bonuses by 10 percent to 20 percent globally after a revenue slump, people with knowledge of the matter said last week. Corbat said the firm can still be “absolutely competitive,” on banker pay. “I think morale is good,” he said, without saying whether the company plans to cut more jobs. “Our employees are very confident around the strategy if you think about what’s going on in the world today.” N.J. men sue Subway, claim they've been shorted on footlong sandwiches (AP) The suit, filed Tuesday in Superior Court in Mount Holly, may be the first legal filing aimed at the sandwich shops after an embarrassment went viral last week when someone posted a photo of a footlong and a ruler on the company's Facebook page to show that the sandwich was not as long as advertised. At the time, the company issued a statement saying that the sandwich length can vary a bit when franchises do not bake to the exact corporate standards. Stephen DeNittis, the lawyer for the plaintiffs in the New Jersey suit, said he's seeking class-action status and is also preparing to file a similar suit in Pennsylvania state court in Philadelphia. He said he's had sandwiches from 17 shops measured — and every one came up short. "The case is about holding companies to deliver what they've promised," he said.

BofA Figures In Drug Probe (WSJ) A Mexican cocaine-trafficking cartel used accounts at Bank of America to hide money and invest illegal drug-trade proceeds in U.S. racehorses, the Federal Bureau of Investigation said. The alleged ties between the violent drug gang known as Los Zetas and the second-largest U.S. bank by assets were described in a 35-page affidavit filed in federal court in Texas last month. According to an FBI agent, a horse-buying and training business created to launder drug money had accounts at the Charlotte, N.C., bank. Libor Probe Moves To Political Arena (WSJ) The scandal over banks' manipulation of key interest rates cost the jobs of three senior financial figures last week. On Monday, the deputy governor of the Bank of England will try to ensure it doesn't derail his own career. Paul Tucker, a leading candidate to become the next governor of the Bank of England, will testify Monday afternoon before a Parliamentary committee that is examining how Barclays and other global banks improperly tried to influence interest rates like the London interbank offered rate...Barclays, after reaching a £290 million settlement with U.S. and British regulators over its attempts to manipulate Libor, sought to defend itself by releasing notes from an October 2008 phone call between Mr. Tucker and Robert Diamond. According to Mr. Diamond's notes from the call, Mr. Tucker relayed concerns from "senior" British government officials about Barclays's above-average Libor submissions. "Mr. Tucker stated…that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently," Mr. Diamond wrote to two of his colleagues the day after the call. Diamond Antithesis Seen As Key Step To Repairing Barclays (Bloomberg) The British lender faces a criminal probe and political pressure to curb or separate the investment banking unit that Diamond built up during his 16-year career at Barclays from the consumer bank. The unit generated 61 percent of the bank’s first-quarter pretax profit. At a Parliamentary hearing last week, lawmakers asked if the culture at the investment bank was “rotten” and if he lived in a “parallel universe.” Former Barclays CEO: I Too Fell for the Diamond Myth (FT) "It was a close call," Taylor says of his decision to retain Diamond as head of Barclays Capital. "I suspect the subsequent history of the business would have been very different had I asked him to go. I deserve blame for being among the first to succumb to the myth of Diamond’s indispensability, to which some in Barclays were still in thrall only a matter of days ago." SEC set to hand out up to $452M to whistleblowers (NYP) “The SEC is receiving two to three tips every day that are worth pursuing, and they’re farming them out to staffers for investigation,” said Lawrence A. West, a lawyer with Latham & Watkins. “SEC officials are eager to pay out and publicize the first whistleblower award,” said West, whose firm has gathered a number of tipsters under the new law. “Once the first award is publicized, tips to the SEC from disgruntled employees are almost certain to increase substantially.” Romney Mines Hamptons For Political Cash (NYT) EAST HAMPTON, N.Y. — A woman in a blue chiffon dress poked her head out of a black Range Rover here on Sunday afternoon and yelled to an aide to Mitt Romney. “Is there a V.I.P. entrance? We are V.I.P.” (No such entrance existed.)...what was billed as a day of elegant campaign events at the homes of the ultrarich turned out to be an afternoon of curious and clashing tableaus: protesters with their bandannas and Occupy Wall Street-inspired chants (“We got sold out, banks got bailed out!”) standing amid multimillion-dollar mansions, where live bands played “Margaritaville” and donors dined on prosciutto-wrapped melon balls...After that, Mr. Romney attended events at the Southampton homes of Clifford Sobel, the former United States ambassador to Brazil, and David Koch, the billionaire industrialist and longtime benefactor of conservative political causes. The event at Mr. Koch’s home drew about 200 protesters, who...went so far as to hire a local pilot to fly a giant red and black banner over Mr. Koch’s house, which read: “Romney has a Koch problem,” a play on the drug. (Mr. Koch’s name is pronounced the same as the word coke.) A truck, festooned with the logos of big banks like Citigroup and Wells Fargo, circled the neighborhood with a plastic dog on the roof, a jab at Mr. Romney’s much-mocked family vacation in which he traveled with his Irish setter inside a pet carrier on the roof of a car. Barclays mulls split after Libor scandal: report (MarketWatch) Board directors at U.K. bank Barclays PLC BCS -1.72% are considering splitting the company into two units, as regulatory scrutiny mounts in the wake of its role in the Libor interest-rate fixing scandal, The Sunday Times reports without citing sources. The newspaper says Barclays is examining plans to spin off its investment banking arm, which could be floated in New York, with the U.K.-headquartered retail and commercial bank retaining its London listing. (A person familiar with the matter said the story was inaccurate.) Roubini: My 'Perfect Storm' Scenario Is Unfolding Now (CNBC) In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together in to create a storm for the global economy in 2013. “(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday. Tighter Control For Euro Banks (WSJ) The establishment of a single authority, with a single set of rules for the region's banks, is seen by Germany and other strong economies as an essential condition before they will consider sharing resources with other euro-zone countries. House-crasher sentenced after enjoying Diddy's food, cigars and toothbrush (NYP) A East New York man, busted for sneaking into rapper Sean “Diddy” Combs’ palatial East Hampton spread in April, guzzled the star’s top-shelf liquor, washed with his soap, and even used his toothbrush, officials revealed yesterday. “I brought a cheesesteak, a cheesecake, a bucket of fried chicken — which I ate at the house — and drank a ‘dollar’ bottle of Hennessy and four cans of Pepsi,” Quamine Taylor told prosecutors at his sentencing yesterday. He even slathered Diddy’s Frank’s Red Hot sauce on his grub, and drank a bottle of Hpnotiq, a vodka liqueur, he said, adding, “After I ate, I went upstairs and went to sleep.” He also smoked three of Diddy’s Dutch Masters cigars and drank a can of orange soda. Then he freshened up using Diddy’s soap and splashing on his aftershave.

Bernanke Returns to Academic Roots to Justify Fed’s Existence (Bloomberg) Bernanke will lecture to about 30 undergraduate students at George Washington University in the first of four hour-long talks on the history of the Fed as part of what public relations specialist Richard Dukas called a “P.R. offensive” to buff the central bank’s tarnished image. The Fed is being attacked from both the left and the right, with liberals criticizing it for not doing enough to bring down unemployment, and conservatives blaming it for doing too much and risking faster inflation...The lecture series -- the brainchild of the Fed and the first by a sitting chairman -- will be streamed live on the central-bank’s website and on ustream.tv. Afterwards, it will be posted on the Fed’s YouTube page. The central bank said transcripts also will be available. “I understand he’s excited about coming back and being in the classroom,” said Tim Fort, the professor in charge of the half-semester class. Mets owners could actually make money in Madoff settlement (NYP) Under the deal, Mets owners have agreed to pay back $162 million in phantom profits that they withdrew from their Madoff accounts between 2002 and 2008 — the year the Ponzi pyramid collapsed. Picard also dropped his claim that the owners were “willfully blind” to the scheme — allowing them to claim up to $178 million as victims of the fraud. Goldman Sachs Cuts Staff in Annual Review Process (Reuters) Goldman Sachs has begun a new round of staff cuts in its trading and investment banking divisions, three sources familiar with the matter said, a sign of continued cutbacks on Wall Street...The latest round of cuts is part of Goldman's annual employee review process. It's unclear how many people will be affected by the job eliminations, which began two weeks ago, because different divisions have received different targets, sources said. While management has formulated an overall plan for cost-cutting, all of the job cuts may not be completed for months, said a source familiar with the matter. Deutsche Bank Cuts Board’s Pay 19% as Profit Goal Missed (Bloomberg) Jain earned 5.81 million euros ($7.67 million) in salary and bonuses for last year, down from 7.55 million euros, Deutsche Bank said today in its financial report. Jain and the board’s other six members received 26.4 million euros compared with 32.4 million euros in 2010, when there were eight members. Jefferies Net Down 12%; Revenue Tops Forecasts (WSJ) Fixed-income trading revenue came in at $339.1 million in the quarter ended Feb. 29, up 6.6% from a year earlier and more than double what the firm booked in the prior quarter. Investment-banking revenue rose to $285.8 million, up 20% from a year earlier and 9.4% from the previous quarter. Overall, Jefferies reported a profit of $77.1 million, or 33 cents a share, compared with a year-earlier profit of $87.3 million, or 42 cents a share. Revenue increased 2.2% to $758.1 million. Analysts expected a per-share profit of 29 cents on $699 million in revenue, according to a poll conducted by Thomson Reuters. The Banker And The Cabbie: When Two Worlds Collide (Reuters) The day, December 21, 2011, had started out normally as Jennings left the kind of home - sweeping curved staircase, perfectly plumped chintz pillows, backyard swimming pool and a Ferrari in the garage - that makes many New Yorkers deeply jealous, and headed to the steel-and-glass tower in midtown Manhattan where he directed the firm's bond business...Morgan Stanley has already placed him on leave. The firm's spokesman declined to comment, other than to say no decision has been made regarding Jennings' longer-term status at the firm. One top-ranking Morgan Stanley executive, though, said he "does not stand a chance of getting his job back." Deutsche Bank Sued In US Over Libor (CNBC) Deutsche Bank said it received subpoenas and requests for information from U.S. and European Union agencies as part of a global probe into interbank offered rates and that it was also being sued over alleged dollar interbank rate manipulation...The inquiries relate to periods between 2005 and 2011, the bank said, adding it was cooperating with the investigations. Geithner Warns Europe Against Draconian Austerity (Reuters) "Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms," Geithner said in remarks prepared for delivery to the House Financial Services Committee on Tuesday. "If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity," he said. Wall Street Can Learn From The Goldman Flap (WSJ) Rather than extolling Goldman's "client-driven" culture, as they did in their response to Mr Smith last week, Mr Blankfein and his No. 2 Gary Cohn should have seized the opportunity to explain how the business of finance really works. Jobseekers Get Asked For Facebook Passwords (AP) Bassett, a New York City statistician, had just finished answering a few character questions when the interviewer turned to her computer to search for his Facebook page. But she couldn't see his private profile. She turned back and asked him to hand over his login information. Bassett refused and withdrew his application, saying he didn't want to work for a company that would seek such personal information. Jon Hamm sticks to his guns in calling Kim Kardashian an 'idiot (NYDN) NBC “Today” show host Matt Lauer asked the AMC retro-series actor to clarify the earlier comments he made to Elle UK about Kardashian being a famous-for-being-famous “idiot,” which the reality starlet called “careless.” “I don’t think it was careless. I think it was accurate,” he told Lauer.

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Citigroup Profit Beats Analysts’ Estimates On Investment Bank (Bloomberg) Citi reported a 12 percent drop in second-quarter profit that beat analysts’ estimates on revenue from advising on mergers and underwriting stocks and bonds. Net income declined to $2.95 billion, or 95 cents a share, from $3.34 billion, or $1.09, a year earlier, the New York-based bank said today in a statement. Excluding accounting adjustments and a loss from the sale of a stake in a Turkish bank, earnings were $1 a share, compared with the average estimate of 89 cents in a Bloomberg survey of 18 analysts. HSBC Seeks To Evict Occupiers In Hong Kong (WSJ) HSBC said Monday it is seeking the right to evict an encampment of protesters that has been occupying the ground floor of the bank's Hong Kong headquarters since October, drawing inspiration from the Occupy Wall Street protests in New York last year. Libor Flaws Allowed Banks To Rig Rates Without Conspiracy (Bloomberg) FYI: “It is far easier to manipulate Libor than it may appear,” Andrew Verstein, a lecturer at Yale Law School, said in a paper to be published in the Winter 2013 issue of the Yale Journal on Regulation. “No conspiracy is required.” States Join Libor Probe (WSJ) Prosecutors in New York and Connecticut are investigating whether their states incurred losses as a result of interest-rate manipulation by banks, a probe that could lead to a wider multistate enforcement action, according to New York officials. The joint probe by New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen could lead to civil enforcement action, including possible breaches of antitrust and fraud laws, the officials said. Libor Probe May Yield Criminal Charges By September (Bloomberg) Barclays traders involved in allegedly manipulating Libor rates between 2005 and 2007 may be charged by U.S. prosecutors before the Labor Day holiday on Sept. 3, said a person familiar with the Justice Department investigation in Washington. Zuckerberg’s Loan Gives New Meaning To The 1% (Bloomberg) The Facebook founder refinanced a $5.95 million mortgage on his Palo Alto, California, home with a 30-year adjustable-rate loan starting at 1.05 percent, according to public records for the property. Missteps Doomed Barclays Leaders (WSJ) Mr. Diamond's downfall may have been hastened because the U.S.-born investment banker, who became chief executive at the start of 2011, had never won acceptance by Britain's political and financial establishment. When the rate-fixing scandal erupted, Mr. Diamond had few allies. It wasn't for lack of trying. Mr. Diamond enthusiastically embraced British culture and tried to overcome his reputation as a brash American. Mr. Diamond, a native of Concord, Mass., supported the Chelsea Football Club, handing out trophies himself when the team won England's premier soccer league in 2010. A month before the Libor settlement, Mr. Diamond hosted British aristocrats and Barclays' clients at the annual Chelsea Flower Show, providing Champagne and canapés as his guests inspected elaborate gardens and floral arrangements...But Mr. Diamond, age 60, was criticized for his lofty pay packages, as well as perceived risks in the investment-banking business he built. He sometimes appeared tone deaf in a country still angry about the role of banks in the financial crisis. "There was a period of remorse and apology," he told Parliament last year. "That period needs to be over." Activists Go After Big Game (WSJ) William Ackman's $2 billion bet that he can boost the value of consumer-products giant Procter & Gamble Co. reflects a new era of activist investing, in which no company is too big a target and restless institutional investors are more willing to rock the boat. Mr. Ackman's Pershing Square Capital Management LP owns a little more than 1% of P&G's shares. A few years ago, that would have been considered too small a stake in too big a company to exert much influence on management, the board or other investors. Tax Cuts Perpetuate Inequality, Should End: Summers (CNBC) The United States should not extend Bush-era tax cuts for the wealthiest Americans even as the so-called ‘fiscal cliff’ looms because it will perpetuate income inequality, says Larry Summers, former U.S. Treasury Secretary. Instead, these revenues should go towards strengthening public education and ensuring that low-income students are presented with equal opportunities as their wealthy counterparts so that they can participate in the economy. Tax breaks for the wealthy cannot continue to exist because it leads to a “perpetuation of privilege”, Summers said in the editorial in the Financial Times on Sunday. Unless steps were taken to “responsibly” increase the burden on those with high income and redistribute the proceeds, the trend toward inequality will continue, he said. Devils On The (B)rink (NYP) New Jersey Devils owner Jeff Vanderbeek is talking to private-equity firms and hedge funds about buying into his financially strapped team, according to sources close to the situation Vanderbeek is looking to sell a majority stake, but keep operating control, sources said. The talks, coming three weeks after the 55-year old former Wall Street executive seemed close to inking a deal with an investor to save the team, are leading some in the financial world to believe the deal has fallen apart. If that’s so, it would be a terrible break for Vanderbeek, who is facing an Aug. 14 deadline to get the Devils’ financing in order...Creditors are owed $80 million. Downgrade Anniversary Shows Investors Gained Buying U.S. (Bloomberg) When Standard & Poor’s downgraded the U.S. government’s credit rating in August, predictions of serious fallout soon followed. Republican presidential candidate Mitt Romney described it as a “meltdown” reminiscent of the economic crises of Jimmy Carter’s presidency. He warned of higher long-term interest rates and damage to foreign investors’ confidence in the U.S. U.S. House Budget Committee Chairman Paul Ryan said the government’s loss of its AAA rating would raise the cost of mortgages and car loans. Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said over time the standing of the dollar and U.S. financial markets would erode and credit costs rise “for virtually all American borrowers.” They were wrong. Almost a year later, mortgage rates have dropped to record lows, the government’s borrowing costs have eased, the dollar and the benchmark S&P stock index are up, and global investors’ enthusiasm for Treasury debt has strengthened. Woman tells police man sucked her toe at Grovetown Walmart (AC) The 18-year-old said she was shopping when a man, who looked to be in his late 30s or early 40s, walked up and asked if her toenails were painted, according to a Columbia County Sheriff’s Office incident report. After replying yes and questioning why he wanted to know, the woman was asked if she’d watched America’s Funniest Home Videos. The man told her he was with the TV show and if she complied with his requests, everything she purchased that day would be free. She said she reluctantly agreed to let him take a photo of her foot. He asked if he could kiss her foot as part of the prank and she agreed. The man guided her to an area behind a clothing rack, dropped to the floor, grabbed her ankle and told her, “Don’t worry. I don’t bite.” He then started sucking on her big toe. The woman said she screamed at him to stop. Before the man ran from the store, he told her, “It tasted so good, though.”

LightSquared Lenders Pressure Falcone (WSJ) If Mr. Falcone doesn't agree to eventually leave LightSquared's board and make way for new executives and directors at the wireless communications firm, lenders are likely to balk and the company could end up filing for bankruptcy protection, they said. Shareholders Rebuke Barclays, Credit Suisse on Pay (Reuters) More than a quarter of Barclays shareholders look set to vote against the British bank's controversial pay plan for bosses and Credit Suisse is also facing a backlash as investors seek a greater share of profits. Stormy annual shareholder meetings at both banks got underway on Friday with many attendees complaining executives are getting too big a slice of bank income at their expense...Barclays Chairman Marcus Agius apologized for badly communicating the bank's pay strategy and promised to "materially" increase the dividend shareholders receive, helping to lift the bank's shares more than 4 percent. But he was heckled during his speech to a packed hall of about 2,000 shareholders and his comments about pay were greeted with laughter in some quarters. Renowned short-seller bets against Fortescue (SMH) Hedge fund short-seller Jim Chanos has singled out Fortescue Metals as a "value trap" stock, telling a New York conference that shares in billionaire Andrew Forrest's company will fall "materially." In a presentation this month to Grant's Spring Conference, a private investment forum, Mr Chanos, the boss of Kynikos Associates, told investors he feared iron ore miner Fortescue has "a somewhat promotional management team." Goldman Banker Probed For Alleged Leaks To Galleon (WSJ) U.S. prosecutors and securities regulators are investigating whether a senior Goldman investment banker gave Galleon hedge-fund traders advance word of pending health-care deals, according to people familiar with the matter. The banker, whom the people identified as Matthew Korenberg, is a San Francisco-based managing director for Goldman, a senior post. Among the merger deals being scrutinized by Los Angeles federal prosecutors and the Securities and Exchange Commission is the 2009 acquisition by Abbott Laboratories of Advanced Medical Optics, a Santa Ana, Calif., medical-device maker—a deal in which Mr. Korenberg advised Advanced Medical Optics, the people say. Another is the acquisition of APP Pharmaceuticals Inc. by Fresenius, announced in July 2008, in which Goldman advised APP, they say. Unlikely Allies (NYP) Billionaire hedge-fund mogul and Republican stalwart Paul Singer is in an odd position of late — asking the Obama administration for help to keep troubled mortgage lender ResCap out of bankruptcy. Singer, whose Elliott Associates owns debt in the mortgage lender, a unit of Ally Financial, asked Treasury Secretary Tim Geithner in recent weeks to use the government’s 74-percent stake in Ally to press for an alternative financial cure. An out-of-bankruptcy solution would help Elliott, to be sure, but would also assist the White House by keeping a unit of one of its high-profit bailouts from outright failure. But Singer, so far, hasn’t gotten any satisfaction. Geithner, insiders said, doesn’t want to use Treasury’s muscle to stop the likely Chapter 11 filing because it could be interpreted as the government overstepping its bounds. Spain Urges Focus On Reforms After Downgrade (WSJ) The government has embarked on a plan of far-reaching reforms to overhaul the economy, including new labor laws and a cleanup of the banking sector. Mr. Jiménez Latorre said these reforms will pay dividends in the medium- to long-term. The S&P ratings action "just focuses on the immediate effects," which won't be positive, Mr. Jiménez Latorre said. Dream Stenographer / Lucid Dreaming Partner (Craigslist) "I possess the wonderful gift of regularly occuring and incredibly vivid lucid dreams. In these dreams I have written Pulitzer Prize winning novels, bioengineered the cure for HIV, and brokered a lasting Israeli-Palestinian peace agreement. I have also composed Grammy winning albums. The only problem is humanity hasn't and can't benefit from my accomplishments because I forget how I achieved them shortly after waking. As a modern Renaissance man and philosopher scientist, my conscience cannot be at peace knowing I'm not doing everything possible to save my fellow human beings. Therefore I would like to a hire a dream stenographer to write down my ideas so that I may share them with the world. You, the dream stenographer, will sleep within arm's reach of me on selected nights when I feel my mind is operating at its peak performance level. Sleeping is mandatory as I'm not able to reach my optimum dream state when someone is watching me sleep. Remaining within arm's reach at all times is also mandatory so that I may wake you as quickly as possible to begin recording my stream of consciousness.Qualified applicants will be excellent note takers with unrivaled penmanship." KKR Earnings Beat Expectations (WSJ) Economic net income, a measure of private-equity firms' profitability that analysts follow because it includes both realized and unrealized investment gains, was $727.2 million, or 99 cents a share, compared to $742.5 million, or 96 cents a share, in the year-earlier period. The earnings came in at the top end of analysts' estimates, with a consensus economic net income of $486.6 million, or 74 cents a share, according to Thompson Reuters. NYSE CEO 'very disappointed' to lose out on Facebook listing (DJ) Just so you know. Wells Fargo to Buy Merlin Securities Prime Brokerage (Bloomberg) The purchase is Wells Fargo’s first foray into prime brokerage services and the bank will use the business as a foundation to expand, said Christopher Bartlett, head of equity sales and trading at the San Francisco-based lender. Prime- brokerage includes services such as lending, clearing trades and record-keeping that help hedge fund managers run their firms. Bartlett wouldn’t say how much Wells Fargo paid and a statement set to be released later today didn’t disclose the terms. Bo Xilai's Son Ticketed in Porsche (WSJ) Disputing a notion common in China that he lives a lavish lifestyle, Mr. Bo wrote to the Harvard Crimson on Tuesday saying he wished to address "rumors and allegations about myself." Among other things, "I have never driven a Ferrari," he wrote. The Wall Street Journal reported in November, based on people familiar with the episode, that Mr. Bo, the grandson of an illustrious Communist leader of the Mao era, arrived at the U.S. ambassador's residence in Beijing in a red Ferrari last year to pick up the daughter of the then-ambassador...Massachusetts Department of Transportation records show Mr. Bo was stopped by police for allegedly running stop signs in December 2010 and May 2011, one of them at 2:20 a.m., and for speeding in February 2011. The license plate of the car, which the Journal learned from someone familiar with the matter, showed it was a black 2011 Porsche Panamera registered to someone at his address.

IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. Buffett Joined by 12 Families Pledging Wealth to Charity (Bloomberg) Twelve families promised to donate most of their wealth to philanthropy, joining the Giving Pledge initiative started by Warren Buffett and Bill and Melinda Gates. The families include hedge-fund manager Bill Ackman and his wife Karen, Tesla Motors Inc.’s billionaire owner Elon Musk and film producer Steve Bing, according to an e-mailed statement from the initiative. Arthur M. Blank, Edgar M. Bronfman, Glenn and Eva Dubin, Red and Charline McCombs, Michael Moritz and Harriet Heyman, John and Ginger Sall, Henry and Susan Samueli, John A. and Susan Sobrato, John Michael Sobrato, and Ted and Vada Stanley also signed the pledge. Aiming for Clarity, Fed Still Falls Short in Some Eyes (NYT) But as Mr. Bernanke prepares to meet the press for the fifth time Wednesday afternoon, after a scheduled meeting of the Fed’s policy-making committee on Tuesday and Wednesday, there are reasons to doubt that the efforts are increasing public understanding of monetary policy. Experts and investors have continued to disagree about the plain meaning of the Fed’s recent policy statements. Some say the increased volume of communication is creating cacophony rather than clarity. Political criticism of the Fed has continued unabated. Man's nightmare since NYPD labeled him ‘Gentleman Groper’ (NYP) A citywide manhunt ensued after four Manhattan women were fondled in tony neighborhoods in a 35-day stretch. On April 13, authorities paraded their main suspect past snapping cameras. He defied the conventional image of a creepy perv. He was young, handsome, well-dressed, affluent, educated, a churchgoer. A gentleman groper. That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"

J.P. Morgan’s Investor Day: Cut That Headcount (Deal Journal) JP Morgan is looking to cut another $1 billion out of its expenses this year, including somewhere around 4,000 jobs, according to a new presentation...And that may not be all the cuts. In a separate presentation on the consumer bank and mortgage operations the bank expects to cut costs in mortgage banking by $3 billion over this year and next year and cut headcount there by between 13,000 and 15,000. Banks Face Hurdle In Libor Fight (WSJ) Next week, lawyers for Barclays PLC, Royal Bank of Scotland Group PLC, UBS AG and more than a dozen other banks still under investigation are expected to ask a federal-court judge to throw out many of the suits, which seek class-action status. The suits, filed in civil court in California and New York by plaintiffs ranging from a retired cable-car driver in San Francisco to the city of Baltimore, have been piling up for nearly two years. They seek damages that could reach into the tens of billions of dollars from financial institutions that help determine the London interbank offered rate, or Libor. Barclays, RBS and UBS already have paid about $2.5 billion, and admitted wrongdoing, to settle rate-rigging allegations by U.S. and U.K. regulators. In court filings, lawyers for the 16 banks accused of wrongdoing say the lawsuits have no legal validity. The lawyers say regulatory settlements reached so far don't support the central allegation in most of the civil suits that banks engaged in illegal, anticompetitive behavior. Berlusconi Concedes as He Weighs Alliance (Bloomberg) Former Italian Prime Minister Silvio Berlusconi acknowledged rival Pier Luigi Bersani’s narrow victory in the lower house of Parliament and said he’s open to a broad alliance to avoid a second election. “Everyone needs to think what good can be done for Italy and this will take some time,” Berlusconi said in an interview with Canale 5, a station owned by his Mediaset SpA broadcaster. The country can’t be left without a government, he said. Lew gettin’ close: Senate panel to OK as next Treasury boss (NYP) Treasury Secretary-nominee Jack Lew will get the green light to replace Tim Geithner despite taking heat during and after his confirmation hearing over a loan he received from New York University. The 57-year-old former White House chief of staff has enough votes from the Senate Finance Committee, headed by Max Baucus (D-Mont.), to pass a vote today that will likely lead to his confirmation, sources said. A full Senate vote is likely to be scheduled in a couple of days and held sometime next week. Larry Summers: Sequestration 'Meat Cleaver' Is Irresponsible (CNBC) Avoiding the "sequester" is "round three" in the debt-reduction debate, former Clinton Treasury Secretary Lawrence Summers told CNBC Tuesday, arguing for a "balanced approach" because President Barack Obama has agreed to more spending cuts than revenue during the process. In a "Squawk Box" interview, Summers said the funding constraints of the Budget Control Act of 2011 — which resolved that year's debt ceiling crisis — were round one. "You had spending cuts that were far larger from the discretionary side, that were far larger than anything [on revenue] that happened in December. Right now, we're way in balance toward more spending cuts." Dominique Strauss-Kahn seeks to ban 'half-man half-pig' book (Telegraph) The "biographical novel" by Marcela Iacub, a lawyer and journalist, recounts her seven-month affair with the 64-year-old Mr Strauss-Kahn last year. It is due to be published on Wednesday under the title, Belle et Bête, or Beauty and Beast. But the one-time Socialist presidential hopeful will this morning seek to have the book banned for "violation of the intimacy of private life" and the author and her publisher fined 100,000 euros (£88,000) in damages...In the work, she claims Mr Strauss-Kahn would have transformed the Elysée Palace into a "giant swingers' club" had he been elected French president. In fresh accounts by those who have read the book yesterday, the last chapter narrates the pair's final encounter, ending in Miss Iacub receiving treatment in casualty after "the pig" left her with an "eaten ear". Mr Strauss-Kahn has slammed the work of a woman who "seduces to write a book, claiming to have amorous feelings to exploit them for financial gain". Gupta's Gotta Pay GS $6.2 Million (NYP) Former Goldman Sachs director Rajat Gupta was ordered yesterday by a Manhattan federal judge to fork over a whopping $6.2 million to repay the Wall Street bank for legal fees it spent during the government’s probe of Gupta’s insider-trading case. The 64-year-old fallen star was convicted last year of giving up secrets he learned while on Goldman’s board to his pal and hedge fund honcho Raj Rajaratnam. Among the counts, the jury found Gupta guilty of giving Rajaratnam a tip on Warren Buffett’s $5 billion investment in Goldman in the throes of the financial crisis. Gupta, the former head of consulting firm McKinsey, is out on bail while he appeals the ruling. Goldman had requested restitution of $6.9 million — and submitted 542 pages of billing records from its lawyers at Sullivan Cromwell. Yahoo’s Mayer Risks Productivity With Work-From-Home Restriction (Bloomberg) Jackie Reses, Yahoo’s executive vice president of people and development, sent a memo last week asking employees with work-from-home arrangements to make their way to the company’s offices, starting June. “To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” according to the memo, whose contents were confirmed by a Yahoo employee who asked not to be identified because it’s not a public document. “Speed and quality are often sacrificed when we work from home.” At a time when Mayer is under pressure to jump-start growth and create innovative products, the shift may compromise Yahoo’s ability to attract employees seeking the freedom to work outside the office -- a perk offered by many of the company’s competitors. Research suggests that working from home enhances productivity, said Jody Thompson, co-founder of workforce consultant CultureRx. BP Oil-Spill Trial Begins (WSJ) Both Transocean and the Justice Department focused part of their opening statements on a 10-minute ship-to-shore phone call between two BP engineers, Donald Vidrine and Mark Hafle, less than an hour before the blast. From the rig, Mr. Vidrine allegedly talked about unusual results from a test designed to ensure the cement sealing in the bottom of the well was successful. Investigators later found that rig workers misinterpreted the results of the test. Dennis Rodman Bound For North Korea (Reuters) Retired U.S. basketball player Dennis Rodman is to visit North Korea to film a television documentary and will arrive in the capital Pyongyang on Tuesday, the Associated Press reported. Rodman, now 51 years old, won five NBA championships in his prime, achieving a mix of fame and notoriety for his on- and off-court antics. Thirty-year-old North Korean leader Kim Jong-un, who has launched two long-range rockets and carried out a nuclear weapons test during his first year in power, is reported to be an avid NBA fan and had pictures taken with players from the Chicago Bulls and Los Angeles Lakers during his school days in Switzerland. "At a time when tensions between the two countries (the United States and North Korea) are running high, it's important to keep lines of communication open, no matter how non-traditional those channels are," AP quoted Shane Smith, the founder of VICE, which is to make the TV series, as saying.