Opening Bell: 07.23.13

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SAC to Employees: Cohen Didn't Read Dell Email at Heart of SEC's Case (WSJ)
Remember this is a failure to supervise case.

A Legal Bane of Wall Street Switches Sides (DealBook)
When he left his role as Wall Street’s top federal enforcer, Robert S. Khuzami began a long courtship with a who’s who of the legal world. ... Six months later, lawyers briefed on the matter say, Mr. Khuzami has accepted a job that pays more than $5 million a year at Kirkland & Ellis, one of the nation’s biggest corporate law firms. In doing so, he is following the quintessential Washington script: an influential government insider becoming a paid advocate for industries he once policed.

In Washington's glare, Wall Street commodity trade falls under a shadow (Reuters)
Wall Street's multibillion-dollar commodity trading operations will be put under the political spotlight on Tuesday as a powerful U.S. Senate committee questions whether commercial banks should control oil pipelines, power plants and metals warehouses. The Senate Banking Committee hearing comes as Goldman Sachs, Morgan Stanley and JPMorgan Chase - which generated an estimated $4 billion in commodity revenues last year - face growing pressure from a number of investigations into their operations, and as the Federal Reserve reviews Wall Street's right to operate in raw material markets.

As Banks Retreat, Hedge Funds Smell Profit (WSJ)
Private investment funds, facing diminished returns in some other areas, have piled into the business of lending to struggling companies, part of a so-called shadow-lending system that operates under different rules than commercial banks. Hedge funds D.E. Shaw Group and Oaktree Capital Management, for example, recently set up funds to lend to small and midsize businesses, including distressed ones. ... "If you have a covenant hiccup, you're going to feel just like a tied-up goat pleading for mercy," says Michael Madden, a veteran deal maker and co-founder of private-equity firm BlackEagle Partners, which isn't involved in such lending.

'I've taken her for a McFlurry loads of times,' says horse-rider who took pony into McDonald's (Telegraph)
Christine McGrail and her daughter Olivia were told to tie up their horses after trying to use the drive-through service at the fast-food restaurant in Whitefield. Managers at the franchise told Ms McGrail, 33, who was riding stallion Dancer, and her nine-year-old girl, on pony Minnie, they weren't allowed to queue with waiting cars. The mother said she took managers "literally" when they suggested the pair dismount and enter the store - letting Olivia lead her six-year-old pony into the restaurant to the amazement of customers. Ms McGrail - who remained outside with Dancer, 24 - admits she acted "rashly" after the pony opened its bowels in front of stunned diners but claimed the treatment of horse riders was inconsistent.

Telefonica to Buy KPN’s German Unit for $10.7 Billion (Bloomberg)
Telefonica SA agreed to buy the E-Plus German wireless unit of KPN NV in a cash-and-stock deal valuing the unit at 8.1 billion euros ($10.7 billion) to become the country’s biggest mobile-phone operator by customers. The Dutch phone company will get 5 billion euros in cash and a 17.6 percent stake in the combination of E-Plus and Telefonica Deutschland Holding AG, the Spanish carrier’s German unit, which uses the O2 brand, KPN said today. The purchase would let Telefonica’s O2 surpass Deutsche Telekom AG and Vodafone Group Plc as stiffening competition in the German wireless market forces carriers to cut prices and seek mergers. Still, the elimination of a carrier by combining the third- and fourth-largest operators will face scrutiny from antitrust regulators.

Thai Billionaire Plans $2.3 Billion Infrastructure Fund I.P.O. (DealBook)
The True Corporation, the telecommunications company controlled by the Thai billionaire Dhanin Chearavanont, said on Tuesday that it would spin off 3G and broadband networks into an infrastructure fund in an initial public offering worth at least 70 billion baht — a potential record for a Thai company. True, which operates fixed-line and mobile communications networks and a pay television business in Thailand, said it planned to use the proceeds from the $2.26 billion I.P.O. to reduce debt.

Singapore funds benefit from Asian wealth (FT)
Singapore’s position as one of the world’s fastest-growing wealth management hubs was highlighted on Tuesday when it said assets under management rose more than a fifth over the past year. The Monetary Authority of Singapore, the central bank, said funds managed in the city state had risen 22 per cent to a record S$1.63tn ($1.29tn), from S$1.34tn a year previously.

India clamps down on gold imports (FT)
The Reserve Bank of India has enforced new limits on gold imports in an attempt to control the country’s current account deficit and ease pressure on the depreciating rupee. The central bank announced late on Monday that 20 per cent of imported gold must be set aside for export with the remainder going to the jewellery industry. The new restrictions come into force with immediate effect and require that 20 per cent of imported gold is held in customs bonded warehouses – overseen by the customs authority like a deposit scheme – and only when 75 per cent of that stock has been exported can a further round of imports take place.

Prices Fuel Outrage in Brazil, Home of the $30 Cheese Pizza (NYT)
For Brazilians seething with resentment over wasteful spending by the country’s political elite, the high prices they must pay for just about everything — a large cheese pizza can cost almost $30 — only fuel their ire. “People get angry because we know there are ways to get things cheaper; we see it elsewhere, so we know there must be something wrong here,” said Luana Medeiros, 28, who works in the Education Ministry. ... But economists say much of the blame for the stunningly high prices can be placed on a dysfunctional tax system that prioritizes consumption taxes, which are relatively easy to collect, over income taxes.

I said do not disturb! Luv-guv Eliot Spitzer ordered cops to back off on nights he met with call girls (NYP)
The then-governor was so determined to carry out his illicit late-night trysts, he’d try to sneak out undetected by his taxpayer-funded security detail — and even had police bosses issue directives reminding troopers that he prized his privacy on out-of-town sleepovers. “Please inform whoever the [overnight shift] is that they should not be hanging around in the governor’s hallway,” former State Police Capt. Lisa Galbraith wrote in one missive to Spitzer’s minders. ... In February 2008, Galbraith said, she was notified by a trooper that Spitzer had ditched his Washington, DC, hotel room. That same week, Spitzer paid $4,300 for his infamous liaison with Ashley Dupré.

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Opening Bell: 08.27.12

RBS May Be Bigger Libor Culprit Than Barclays, Says MP (Guardian) John Mann, a Labour MP on the Treasury select committee, said "City insiders" had suggested RBS's involvement may be "noticeably worse" than Barclays.' [...] Mann's comments came as a former RBS trader claimed that the bank's internal checks were so lax that anyone could change Libor rates. Court documents filed in Singapore show that Tan Chi Min, who is suing RBS for wrongful dismissal, claimed that in 2008 a trader for the bank, Will Hall, changed the Libor submission even though he was part of the Japanese yen swap desk in London. The papers show that Tan, who worked for RBS in Singapore, raised the issue at his disciplinary meeting last September, saying the bank's internal procedure in London seemed to be that "anyone can change Libor". Spain Expects to Tap About $75 Billion in Rescue Financing for Its Banks (NYT) Spain expects to use about 60 billion euros, or $75 billion, of the 100 billion euros of bank rescue financing offered by European finance ministers in June, according to the Spanish economy minister, Luis de Guindos. UK Investment Bankers Prefer Singapore (FT) The southeast-Asian city state has become the most favored location for investment bankers who are based in London, research by financial services recruitment firm Astbury Marsden shows. Of the 462 investment bankers that were asked, 31 percent said they would most like to work in Singapore. By comparison, only a fifth preferred New York and only 19 percent opted in favor of London. In the year before, 22 percent named London as their preferred location, underlining how the British capital has lost some appeal among investment bankers amid tighter regulation and a clampdown on bonuses. “A fast growing, low tax and bank friendly environment like Singapore stands as a perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York,” said Mark Cameron, chief operating officer at Astbury Marsden. “Far more London-based bankers are now more willing and able to relocate the 6,700 miles to Singapore.” Another Madoff Name Nix (NYP) The second of Ponzi-schemer Bernie Madoff’s daughters-in-law is asking a court for permission to shed her now notorious married name. Deborah West Madoff, who started divorce proceedings against Bernie’s son Andrew back in 2008, has sought permission in Manhattan Supreme Court to revert to her maiden name. The couple have two children. She’s not the first in the family to do so: in 2010, her sister-in-law made a similar court application. Suits Mount In Rate Scandal (WSJ) It won't be easy for the plaintiffs to win in court even though financial institutions are likely to reach settlements with regulators in coming months totaling billions of dollars, according to people close to the Libor investigation. The plaintiffs must prove that banks successfully manipulated interest-rate benchmarks such as the London interbank offered rate, or Libor, and caused the plaintiffs to suffer a loss. Still, some investors and analysts are forecasting huge damages despite the legal hurdles. In a July report, Macquarie Research estimated that banks face potential legal liability of about $176 billion, based on the assumption that Libor was "understated" by 0.4 percentage points in 2008 and 2009. Carlyle Group marketed $25 million deal without license: Kuwaiti firm (AP) A Kuwaiti company suing the Carlyle Group over a $25 million investment that went bad is now accusing the private equity firm of marketing the deal without a license as it seeks to have its case heard in Kuwaiti courts. The latest claim by Kuwait's National Industries Group adds a new twist to its more than two-and-a-half year legal challenge to Carlyle, and could complicate the American company's relationships with other wealthy Mideast investors. NIG's lawsuit focuses on a Carlyle investment fund that was one of the earliest casualties of the financial crisis when it collapsed in 2008. The fund has been the subject of multiple lawsuits against Washington-based Carlyle. Couple in court for disturbing the peace for 'screaming, moaning and swearing during seven-hour sex romps five nights a week' (DM) Jessica Angel and Colin MacKenzie had been issued with an order requiring them to prevent ‘screaming, loud moaning, swearing and raised voices’ after police were called to their flat 20 times in just four months. However, following further complaints from neighbours, the couple were charged under the Environmental Protection Act. They face a £3,000 fine if convicted...Mr MacKenzie, 45, from Sturt, South Australia, said: ‘How can you live in a place where you can’t have sex? It’s ridiculous. Anyway, it’s mostly Jessie. The sex goes from four to seven hours, five nights a week. I’ll probably die of a heart attack – she’s almost killing me.’ German Official Opposes European Debt Purchases (NYT) The president of the German central bank said in an interview published Sunday that he remained staunchly opposed to government bond purchases by the European Central Bank, a position that could make it more difficult to deploy a weapon many economists believe is essential to saving the euro. But in a sign that the mood in Germany could be shifting, Chancellor Angela Merkel adopted a more dovish tone during a separate interview. She told members of her governing coalition to stop talking about Greece leaving the euro. “We are in a decisive phase in the battle against the euro zone debt crisis,” Ms. Merkel told ARD television. “Everyone should weigh their words very carefully.” Fed mulls open season on bond buys to help economy (Reuters) The Federal Reserve is considering a new approach to unconventional monetary policy that would give it more leeway to tailor the scale of its stimulus to changing economic winds. While fresh measures are not assured and the timing of any potential moves are still in question, some officials have said any new bond buying, or quantitative easing, could be open-ended, meaning it would not be bound by a fixed amount or time frame. "I am inclined to think that if the Fed decides on more QE it would be of the open-ended variety," said Michael Feroli, chief U.S. economist at JPMorgan and a former Fed economist. BlackRock Bullish On Thai Bonds, Region’s Worst (Bloomberg) BlackRock is bullish on Thai bonds, Asia’s worst-performing in 2012, saying the central bank has room to ease monetary policy as a global slump cools demand for exports from Southeast Asia’s second-largest economy. Former SC Gov. Mark Sanford to wed ex-mistress Maria Belen Chapur (NYDN) "Yes, we are engaged, and I'm both happy and excited for what that means," Sanford said in a statement obtained by CNN. "I have long expressed my feelings for her, she's a wonderful person. My closest friends have met and love her, and I look forward to introducing her to still many more that have yet to do so." The conservative Republican's political aspirations were dashed in 2009 when he disappeared from South Carolina for five days under the pretense that he was hiking the Appalachian Trail. The father of four, who was once thought to be a potential 2012 presidential contender, later admitted that he was actually visiting Chapur, who he professed to be his "soul mate." "I've been unfaithful to my wife," Sanford said at the time. "I developed a relationship with what started as a dear, dear friend from Argentina."