American Investor Targets Sony for a Breakup (DealBook)
The hedge fund manager, Daniel S. Loeb, is pressing Sony to spin off part of its entertainment arm, which includes one of the biggest film studios in Hollywood and one of the largest music labels in the world, responsible for movies like “Skyfall” and artists like Taylor Swift. Mr. Loeb — known for ousting Yahoo’s former chief executive and luring Marissa Mayer away from Google to run the company — also signaled that he would accept a seat on Sony’s board. His hedge fund has quietly amassed a stake of about 6.5 percent in Sony, making it one of the biggest shareholders. The holding, made up of stock and derivatives, is valued at about $1.1 billion.
Proxy Firm to Goldman Shareholders: Vote Against Compensation (Reuters)
Goldman Sachs Group shareholders should vote against the company's executive compensation proposal because the bank has "failed to link pay with performance," proxy advisory firm Glass Lewis said in a report on Monday. ... "To the best of our knowledge, the company does not utilize an objective, formula-based approach to setting short-term executive compensation levels," Glass Lewis said. "Rather, the compensation committee determines annual cash bonuses on a purely discretionary basis."
US hedge funds turn bullish on the euro (FT)
“When you are living at the centre of the crisis, you feel the impact directly. Whereas in the US we have some growth, and things are getting better”, says Ray Nolte, chief investment officer of the $8bn fund of funds group SkyBridge. ... Meanwhile, former bears on Europe’s single currency have been converted. The head of one large hedge fund says he no longer sees a break-up as likely following the actions of the ECB last year, which launched a bond-buying programme designed to save the euro: “They have done enough, we don’t see a collapse as a likely scenario in the near term any more.”
Ex-Trader Alters Legal Team (WSJ)
Fabrice Tourre's legal team has a new co-captain. John Coffey, a veteran litigator and onetime candidate for New York attorney general, said he has joined the legal fight to clear the former Goldman Sachs Group executive of civil fraud charges levied in 2010 by the Securities and Exchange Commission. ... "I'm very excited to work alongside Pamela, and I really like this case," Mr. Coffey said of Mr. Tourre's coming trial. "I very much view this case as David versus Goliath."
France set to tax smartphones to protect culture in digital age (FT)
France is preparing to tax smartphones, tablets and all other internet-linked devices to help fund the production of French art, films and music. ... “Companies that make these tablets must, in a minor way, be made to contribute part of the revenue from their sales to help creators,” said Aurélie Filippetti, culture minister. The new tax could be included in next year’s budget, she added. The report said it was legitimate for the authorities to intervene to “correct excessive imbalances” in the digital economy. “They can use taxation to make actors that don’t directly exploit content, but which profit from its circulation, contribute to its creation.”
Robin Hood Scene: Jones, Cohen, Cohn, Sting, Paul Simon (Bloomberg)
“It’s a great organization doing great things. There’s nothing like it,” [Steve] Cohen said. “It’s about passion, commitment and perseverance,” [Paul Tudor] Jones said. “And community,” Cohen said. “I want to second what Steve said,” Jones said. “Honestly, Robin Hood is an army, it’s a movement. You walk in this room and you feel it.” “Whatever Paul says,” said Gary Cohn, president of Goldman Sachs Group Inc. standing nearby.
Detroit emergency manager says city 'clearly insolvent' (Reuters)
In his first official report, Emergency Financial Manager Kevyn Orr presented a grim view of Detroit's problems. The city faces a $162 million cash shortfall because of pension deals that outstrip its ability to pay, and a $60 million operating deficit, all amidst a cityscape of abandoned homes and businesses, broken streetlights and fractured services, the report said. Orr said talks would begin promptly with unions and creditors, and he told the Detroit Free Press editorial board that he should know by the end of June whether the city's finances can be repaired without a bankruptcy filing.
Ex-BlackRock Manager Said to Be Arrested in U.K. Probe (Bloomberg)
Former BlackRock Inc. (BLK) fund manager Mark Lyttleton was arrested April 30 as part of an insider trading probe by the U.K. Financial Conduct Authority, two people familiar with the matter said. Lyttleton was detained along with an unidentified woman in west London, said one of the people, both of whom declined to be identified because the matter isn’t public. ... Lyttleton, who was based in BlackRock’s London office, ran funds including BlackRock UK Dynamic Fund, with 558 million pounds ($855 million) in assets, and BlackRock UK Absolute Alpha Fund with 383 million pounds in assets, until March. He left BlackRock March 28, according to one of the people.
Currency Investors Turn to Unlikely Pair (WSJ)
The bet is that Australia's economy, and its currency, will suffer as Chinese demand cools for raw materials like iron and coal. Mexico, with closer ties to the resurgent U.S. economy, is seen as more insulated if commodities prices fall. ... "It is a good way to express not only the relative view between Australia and Mexico, but a global macro view," said Alessio de Longis, portfolio manager of the Oppenheimer Currency Opportunities Fund, which has $51.4 million under management. "You're expressing a view of Asia versus North America, China versus U.S., commodities versus equities."
Watchdog probes 1m US swap contracts (FT)
A top US financial regulator has launched a broad inquiry into the legitimacy of more than 1m energy and metals transactions by the biggest traders in commodities markets over the past two years. The Commodity Futures Trading Commission has issued a “special call” asking Wall Street banks and other traders to provide documents that would prove recent derivatives transactions known as “exchanges of futures for swaps” were legal. Lawyers at the CFTC enforcement division are also scrutinising the trades for possible violations. ... The new inquiry centres on whether large traders and market-makers used unregulated over-the-counter swaps markets to trade what were in fact futures, strictly regulated contracts that are economically identical to swaps. Trading futures off an exchange is illegal, and regulators are concerned that traders may have used these deals, known as EFSs, to agree prices that did not reflect the market.
In Deal Race, Bankers Play the Field (WSJ)
[B]anks, and their clients, are wrestling with the proper etiquette around alliances in rival bids and asking: When is it OK to work on two sides of a bidding contest? The issue has drawn special attention in a takeover market in which deals are sparse, competition is intense and deal makers say they are more sensitive than ever to scrutiny around potential conflicts of interest. ... "You want banks to be able to do this," said Robert Profusek, a partner at Jones Day who heads the law firm's mergers-and-acquisitions practice, referring to banks working on multiple bids. "It keeps deals more competitive and is better for shareholders," he said. But he added: "Sometimes there are client-relationship issues."
Woman Removed from Plane for Singing Whitney Houston Songs (People)
An American Airlines flight from Los Angeles International to New York's John F Kennedy Airport was forced to make an emergency landing in Kansas City Friday after an unidentified woman refused to stop singing Whitney Houston songs. Local Missouri station KCTV 5 broadcast one passenger's stealth video showing authorities escorting the would-be crooner off the plane as she was still wailing Houston's iconic cover of Dolly Parton's "I Will Always Love You." According to airport spokesperson Joe McBride, the woman was subdued on the aircraft by a federal air marshal who put her in handcuffs and removed her from the plane.
Rich Manhattan moms hire handicapped tour guides so kids can cut lines at Disney World (NYP)
Some wealthy Manhattan moms have figured out a way to cut the long lines at Disney World — by hiring disabled people to pose as family members so they and their kids can jump to the front, The Post has learned. The “black-market Disney guides” run $130 an hour, or $1,040 for an eight-hour day. ... Passing around the rogue service’s phone number has become a shameless ritual among Manhattan’s private-school set, a source said.