Opening Bell: 06.10.13


AstraZeneca in Deal for Pearl Therapeutics Worth Up to $1.15 Billion (DealBook)
The European drug maker AstraZeneca agreed on Monday to buy the American respiratory drug manufacturer Pearl Therapeutics for up to $1.15 billion. Under the terms of the deal, AstraZeneca will pay an initial $560 million for Pearl Therapeutics, based in Redwood City, Calif., whose products treat a number of respiratory diseases, including asthma. AstraZeneca will pay an additional $590 million if Pearl hits certain regulatory and sales targets, according to a statement from AstraZeneca.

Schwab Topping Goldman Sachs Presages Return to Stocks (Bloomberg)
Charles Schwab Corp., TD Ameritrade Holding Corp. and E*Trade Financial Corp. have climbed 38 percent on average in 2013, beating the S&P 500 by 23 percentage points and eclipsing returns in financial shares from Goldman Sachs Group Inc. to Bank of America Corp., according to data compiled by Bloomberg. The last times that happened, equity mutual funds received about $91 billion, 24 percent more than the annual average in the two decades before the financial crisis, the data show. Bulls say a rally in brokers that serve private investors means individuals are preparing to embrace shares after they pulled almost $400 billion from stock funds in the last four years. Bears say buying by individuals who missed the rally shows gains are close to peaking as another pool of untapped demand gets absorbed.

Accord Reached Over SEC Firing (WSJ)
The Securities and Exchange Commission agreed to pay $580,000 to a former employee who said the SEC retaliated against him for reporting wrongdoing at the agency. David Weber, a former supervisor in the SEC's internal watchdog office, sued the agency for $40 million in damages last fall after he was fired for carrying a handgun on a work trip, according to his lawsuit, which is resolved by the settlement. The agency earlier had placed him on leave because some employees said they felt physically threatened by him, according to a report by the Inspector General for the U.S. Postal Service, which was requested by the SEC.

SEC counsel faces whistleblower’s claims (FT)
The new chief counsel to the Securities and Exchange Commission chairman is the subject of a discrimination complaint from a former colleague at Deutsche Bank, who claims he was fired for blowing the whistle on fraud. Robert Rice joined the SEC last week, working directly for Mary Jo White, the new SEC chairman. He moved from Deutsche where he was head of governance, litigation and regulation for the Americas. Eric Ben-Artzi, a former Deutsche risk manager, filed a discrimination complaint with the US Department of Labor last year, alleging he was fired after telling the SEC that Germany’s biggest bank had hidden billions of dollars of losses with mismarked derivatives positions. ... At one meeting in May 2011, the complaint alleges that Mr Rice told Mr Ben-Artzi he would be provided “with no additional information regarding his concerns” and “admonished [him] for having put in written form (an email) that bank managers . . . appeared to be concealing information”.

Leaker’s Employer Became Wealthy by Maintaining Government Secrets (NYT)
Edward J. Snowden’s employer, Booz Allen Hamilton, has become one of the largest and most profitable corporations in the United States almost exclusively by serving a single client: the government of the United States. Over the last decade, much of the company’s growth has come from selling expertise, technology and manpower to the National Security Agency and other federal intelligence agencies. Booz Allen earned $1.3 billion, 23 percent of the company’s total revenue, from intelligence work during its most recent fiscal year.

Euro bailout Troika nears end of road with patchy record (Reuters)
An IMF source, speaking on condition of anonymity because he is still involved with the bailout programs, said the real problem with the Troika was that no one was in charge. "It's more like a soccer team with no manager and no clear definition of who plays where on the field," he said.

Ex-Goldman Sachs janitor sues for being forced into post-Hurricane Sandy destruction (NYDN)
A former janitor at the Goldman Sachs building who helped the company batten down the hatches during Hurricane Sandy claims a drunken supervisor tossed him out the lower Manhattan headquarters — and into the aftermath of the storm. That, Mefit “Mike” Zecevic claims, was the start of a terrifying odyssey through the darkness and floodwaters back home to storm-shattered Staten Island — an ordeal that left him shivering for days and unable to function for weeks. Zecevic says Goldman Sachs’ janitorial firm, ABM Industries, then fired him for allegedly stealing $100 from the discarded shirt of a co-worker who now has his job — a charge he denies. Now Zecevic, 42, is suing ABM for $10 million and fighting to get his job back.

Obama to name Furman as chief economist (Reuters)
President Barack Obama on Monday will nominate longtime adviser Jason Furman to be his new chief White House economist, an administration official said. Furman, who will replace economist Alan Krueger as chair of the White House's Council of Economic Advisers (CEA), has a Ph.D. in economics from Harvard University and has advised Obama since his 2008 election campaign. Furman has been instrumental in formulating administration policies on taxes, the response to the U.S. recession, the formulation of a sweeping healthcare overhaul and efforts to avoid a "fiscal cliff" at the end of last year.

SoftBank and Sprint Weigh Alternatives to a Deal (DealBook)
SoftBank has staunchly defended its bid for Sprint, repeatedly assailing Dish’s offer as unworkable, and won the conditional support of an influential shareholder advisory firm. The Japanese company has argued that it can close its deal by next month, while its rival would need much more time, costing Sprint shareholders money. But SoftBank has been laying the groundwork for a potential backup plan: It has been in talks with Deutsche Telekom about potential options for the German telecommunication concern’s majority stake in T-Mobile US, according to a person briefed on the matter.

Activist investor sends Alere letter calling for unit sales (Reuters)
Coppersmith Capital Management, which holds a 5.8 percent stake in the company, has been pressuring the company to make changes since last month. The hedge fund has nominated a slate of three directors to Alere's board. The hedge fund sent the letter days after Alere put its own slate of new nominees up for election to its board, replacing all four of the board members who were expected to stand for reelection this year. Coppersmith said in the letter - which has been reviewed by Reuters - that Alere should exit non-core businesses including its health care management business, called Health Information Solutions; its consumer products joint venture with Procter & Gamble; and, possibly, its toxicology unit.

National Envelope Prepares Bankruptcy Filing (WSJ)
The envelope business is just one of many, from newspapers to books to yellow-page directories, that have had to adjust as the Internet upends habits. Email and online bill payments are some of the methods that have rendered envelopes unnecessary.

Battle Scars May Help Explain Risk Averse Corporate America (FBN)
A study from the Universities of Michigan and Washington found that cash-to-asset ratios were 3.2 to 5.4 percentage points higher for non-financial companies run by CEOs who were previously employed by a firm that experienced financial difficulties.“These findings collectively support the view that professional experience of financial difficulties pushes managers to be overly conservative and save too much,” professors Amy Dittmar and Ran Duchin wrote in the paper, which was released this month.

39-year-old ex of retired 83-year-old Wall Street exec is now on welfare — and thinks she deserves more $$$ (NYP)
Christine Jensen, 39, knew G. Bruce Leib, 83, was too old for her when they married in 2007. But she was taken by the former Wall Street exec’s apparently deep pockets. They rode horses together, and he wined and dined her at top Manhattan restaurants, including the Park Avenue Union Club. ... Now the former medical receptionist is living on the $1,000 a month the retired Morgan Stanley vice president sends her. But she’s convinced she’s owed more from their five-year union. ... Leib said he lost it all in the 2008 market crash. “She thinks I have money hidden away, but I don’t,” he said. “It’s been a very rough time for me also.”

Erin Brockovich arrested while boating in Nevada (AP)
Environmental activist Erin Brockovich, portrayed by Julia Roberts in a 2000 movie about her fight over the pollution of a California town, was arrested on suspicion of boating while intoxicated at Lake Mead near Las Vegas, authorities said Sunday. ... A game warden noticed she was struggling and needed assistance while trying to moor her motor boat at the Las Vegas Boat Harbor, he said. Brockovich had been out on the boat with a male companion but was alone when she tried to dock it. "She was not sure how to maneuver the boat into the dock," Lyngar told The Associated Press. "It's a simple thing if you can think clearly. But if you add alcohol and unfamiliarity of the area, it can all cause serious problems."


Opening Bell: 5.26.15

Vatican Bank makes it rain; "Is a 35-year-old mathematician the modern face of financial crime?"; Greece is still screwed; Wife bonus wives "panicked"; Cops chase student driver vehicle going 110 mph; and more.

Opening Bell: 03.11.13

EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (Bloomberg) European leaders grappling with political deadlock in Italy and spiraling unemployment in France will turn to a financial rescue for Cyprus in an effort to stave off a return of market turmoil over the debt crisis. European Union leaders will meet for a March 14-15 summit in Brussels to discuss terms for Cyprus, including the island nation’s debt sustainability and possibly imposing losses on depositors. That comes as Italy struggles to form a government after an inconclusive Feb. 24-25 election and as concern over the French economy mounts with unemployment at a 13-year high. Spain's Bailout Fund Said to Seek Help on Bank Strategy (WSJ) Spain's bank bailout fund is seeking to hire advisers to help shape a long-term strategy for dealing with its portfolio of nationalized lenders, a week after calling off an auction of one of the most troubled banks. People briefed about the plan said the fund, known by its Spanish acronym FROB, will make contact with strategic consultants, and possibly with investment banks, once the plan has been approved by the FROB's board of directors. Is There Life After Work? By Erin Callan (NYT) "I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left...I have often wondered whether I would have been asked to be C.F.O. if I had not worked the way that I did. Until recently, I thought my singular focus on my career was the most powerful ingredient in my success. But I am beginning to realize that I sold myself short. I was talented, intelligent and energetic. It didn’t have to be so extreme. Besides, there were diminishing returns to that kind of labor. I didn’t have to be on my BlackBerry from my first moment in the morning to my last moment at night. I didn’t have to eat the majority of my meals at my desk. I didn’t have to fly overnight to a meeting in Europe on my birthday. I now believe that I could have made it to a similar place with at least some better version of a personal life. Not without sacrifice — I don’t think I could have “had it all” — but with somewhat more harmony. I have also wondered where I would be today if Lehman Brothers hadn’t collapsed. In 2007, I did start to have my doubts about the way I was living my life. Or not really living it. But I felt locked in to my career. I had just been asked to be C.F.O. I had a responsibility. Without the crisis, I may never have been strong enough to step away. Perhaps I needed what felt at the time like some of the worst experiences in my life to come to a place where I could be grateful for the life I had. I had to learn to begin to appreciate what was left. At the end of the day, that is the best guidance I can give. Whatever valuable advice I have about managing a career, I am only now learning how to manage a life." Paper Trail Goes Cold in Case Against S&P (Reuters) In early 2007, as signs of distress began appearing in securities backed by residential mortgages, executives at Standard & Poor's began advising analysts responsible for rating mortgage bonds that they should put the phrase "privileged and confidential" on emails to one another. Analysts working for the McGraw Hill Cos division also were discouraged from doodling on notepads and official documents during meetings to discuss pending deals and existing ratings, several former S&P employees said. That was not the first time S&P had tried to caution employees about paper trails. In 2005, a full two years before the housing market began to melt down, several top S&P managers attended an off-site meeting at hotel in Old Saybrook, Connecticut, to discuss ways to increase the fees it collected from Wall Street banks for rating mortgage bonds. A former S&P executive said that after the meeting, employees were instructed to discard any notes they had taken from the meeting. InTrade Shuts Down (WSJ) InTrade, the Ireland-based website that allows users to place wagers on non-sports-related upcoming events, announced on Sunday that it is shutting its site down. In an official statement, the company does not go into great detail as to why it is closing its doors, only that it is related to “financial irregularities which, in accordance with Irish law,” require InTrade to cease operations until resolved. “At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded,” the company said. Commodities Squeeze Banks (WSJ) The sharp fall in commodity revenue has already claimed some victims. UBS AG, the Swiss bank that has been under pressure to cut costs and improve its performance, last year closed all its commodities-trading desks aside from those dealing in precious metals. Goldman, UBS, Deutsche Bank, and Barclays have all suffered departures of senior commodity traders to hedge funds and independent trading companies over the last several months. Average staffing in commodities trading declined 5.9% last year at major banks, according to Coalition. Artist Teaches George W. Bush How To Paint (Fox5) An artist in Cumming, GA spent a month teaching former President George W. Bush how to paint. Bonnie Flood said that President Bush has a passion for painting and shows real potential as an artists. "He started off painting dogs. I think he said he painted 50 dogs," Flood said. "He pulled out this canvas and started painting dogs and I thought, 'Oh my God, I don't paint dogs!" Flood, who does most of paintings at her home in Cumming, occasionally conducts workshops in Florida. That's where the former President heard about her. The next thing she knew, she was packing up her paints to spend a month in Boca Grande with President Bush. She said that she spent about six hours a day with the President, mixing paints and teaching him proper brush strokes. She says she wasn't intimidated but admits she really didn't know what to call him until she found the magic number. "I called him '43' because that's the way he signed his paintings. "When I really wanted him to do something, I would say, 'Mr. President you know that you don't do it that way.'" She says the President learned quickly and soon started painting fewer dogs and more landscapes. "He has such a passion for painting, it's amazing," Flood said. "He's going to go down in the history books as a great artist." Hostess Creditor, Private-Equity Firms Show Interest in Twinkies Brand (Reuters) Hostess Brands creditor Silver Point Capital and hedge fund Hurst Capital have expressed interest in buying Hostess's snack cake brands, including Twinkies, the New York Post reported. Paulson Said to Explore Puerto Rico as Home With Low Tax (Bloomberg) John Paulson, a lifelong New Yorker, is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5 billion he has invested in his own hedge funds, according to four people who have spoken to him about a possible relocation. More US Profits Parked Abroad (WSJ) A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40% of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011. Twitter, Social Media Are Fertile Ground For Stock Hoaxes (Reuters) "Twitter pump and dump schemes are obviously something for the market to be concerned about, even if they are just a new way for people to do schemes that have been done forever," said Keith McCullough, chief executive officer at Hedgeye Risk Management in New Haven, Connecticut. He uses Twitter and has more than 22,000 followers. In such hoaxes, anonymous users set up accounts with names that sound like prominent market players, issue negative commentary, and spark massive declines. The selling that follows shows how the rapid spread of information on social media can make for volatile trading, and is a warning to investors who trade on news before fully verifying the source. SEC: Goldman Cannot Ignore Proposal to Split Chairman, CEO Roles (Reuters) SEC staff sent a letter to Goldman internal counsel Beverly O'Toole this week, saying the agency is "unable to concur" with Goldman's view that the shareholder proposal does not warrant a vote. El Paso Sheriff's deputies arrest 2 ice cream men for possession of pot (EPT) Saturday afternoon, Sheriff's deputies spotted a purple ice cream truck with a cracked windshield and an expired registration sticker along the 8600 block of Alameda. During the traffic stop, one of the occupants left the vehicle and led deputies on a brief foot pursuit before being caught. Two tupperware bowls containing a green leafy substance, believed to be marijuana, was found on the man, who was identified as 19-year-old Elijah Sanchez. The second occupant, identified as 29-year-old Anthony Arellano, was also charged with possession of marijuana after deputies found marijuana inside the vehicle. Arellano has been arrested in the past for numerous felony charges and a previous possession of marijuana charge in 2006, deputies said.