Holiday Bell: 12.27.13

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Falcone Regains Upper Hand In LightSquared Bid (NYP)
Phil Falcone is taking what likely is one last shot to save his biggest investment, and his Harbinger hedge fund. On Christmas Eve, he met the 5 p.m. deadline — by four minutes — to present a new restructuring plan to hold onto his bankrupt telecom provider, LightSquared. Falcone is partnering with Fortress Investment Group’s Wes Edens, who has committed to inject $1.25 billion in new equity into LightSquared. That is as long as the FCC approves LightSquared’s application to grant it access to a new spectrum band in exchange for him giving up his right to deploy a band the FCC has blocked him from using. That FCC decision is still likely more than six months away, making Falcone’s plan less than certain to fly through the bankruptcy court. The 11th-hour move by Falcone steals the momentum from Dish’s Charlie Ergen — who has presented a competing $2.2 billion offer...If Falcone prevails, he may conversely seek to refuse to pay Ergen his $1 billion in LightSquared’s debt — at least until a lawsuit over the legality of his purchase is resolved.

Millions of Tons of Metals Stashed in Shadow Warehouses (WSJ)
Banks, hedge funds, commodity merchants and others are stashing tens of millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses that span the globe. These facilities are known to some in the industry as "shadow warehouses" because they are unregulated and don't disclose their holdings. They operate outside the London Metal Exchange system of warehouses, the traditional home for these metals. As of October, a record seven million to 10 million tons of aluminum were being housed in these facilities, in countries as far apart as Malaysia and the Netherlands, according to estimates from several analysts.

Martoma’s lawn faint shows guilt: prosecutors (NYP)
Former SAC Capital Advisors portfolio manager Mathew Martoma doesn’t want jurors in his upcoming insider trading trial to know he fainted when FBI agents first approached his Florida mansion, court papers show. The disgraced hedge fund honcho — accused of participating in the biggest inside trade ever — passed out on his front lawn after two G-men approached him on Nov. 8, 2011, and told him they wanted to talk about his involvement in the alleged 2008 felony.
Prosecutors, in a flurry of filing ahead of the scheduled Jan. 6 start of Martoma’s trial, maintain the fainting is “evidence of his consciousness of guilt.” But defense lawyers told the judge that talk of the faint would add up to taint. Fainting has been admitted as circumstantial evidence of consciousness of guilt in only one case, Martoma’s lawyers noted. “Evidence of Mr. Martoma’s fainting is not probative of his guilt or innocence and would serve only to distract the jury with sensational but irrelevant facts,” they wrote in a Dec. 23 memo supporting their motion to exclude the fainting evidence.

Latin America’s Rout Seen Extending Into Next Year (Bloomberg)
Foreign investors are betting the worst rout in Latin American currencies since 2008 will extend into next year as commodity export prices slump and rising U.S. bond yields lure money out of the region. The Bloomberg JPMorgan Latin America Currency Index of the region’s six most-traded currencies fell 9.6 percent this year and touched 94.6 today, within 1 percent of a four-year low. International investors boosted wagers to a record $21.7 billion this week that Brazil’s real will keep falling, data compiled by BM&FBovespa SA show. Analysts surveyed by Bloomberg only forecast Mexico’s peso will avoid further losses in the region next year.

600 People Involved in Movie Theater Brawl (ABC)
Five teenagers were arrested when a 600-person brawl broke out in a Florida movie theater's parking lot on Christmas night. Described by police as a "melee," the fight occurred around 8:30 p.m. on Wednesday outside the Hollywood River City 14 movie theater in Jacksonville when a group tried to storm the theater's doors without purchasing tickets, police said. Several had rushed an off-duty police officer working as a security guard. The officer "administered pepper spray to disperse the group, locked the doors and called for backup, following protocol," said Lauri-Ellen Smith, a spokeswoman for the Jacksonville Sheriff's Office. Soon after the pepper spray was used, "upward of 600 people moving throughout a parking lot about the size of a football field began fighting, disrupting and jumping on cars," she said. Sixty-two police officers were called to the scene to break up the brawl, "sequestering them and separating them," Smith said. Only minor injuries and damage to property were reported. No gunshots were fired, according to Smith.

Swiss private bank Lombard Odier signs up to U.S. tax deal (Reuters)
Lombard Odier & Cie on Friday became the latest Swiss bank to say it would work with U.S. officials in a crackdown on Swiss lenders suspected of helping wealthy Americans evade taxes through hidden offshore accounts. The Geneva-based bank with 203 billion Swiss francs ($227 billion) in client assets is the biggest privately-held firm so far to say publicly it will take part in a government-brokered scheme to make amends for aiding tax evasion. The deal between the United States and Switzerland is part of a U.S. drive to lift the veil on bank secrecy in the Alpine country, the world's largest offshore finance center with more than $2 trillion in assets.

Herbalife spent $1.34M on lobbying in 2013 (NYP)
Herbalife is spreading around the cash to beat back Bill Ackman’s claim it is a pyramid scheme. The controversial protein shake seller this year for the first time spent more than $1 million lobbying in Washington, DC. The multilevel marketing (MLM) company has long been known for its strong presence in the nation’s capital — but the $1.34 million it spent in 2013, as of Oct. 28, dwarfs its typical spending, records show. The previous record was in the election year of 2008, when it spent $880,000, according to the Center for Responsive Politics. It spent $810,000 in 2012.

China Banks Keep The Fees Flowing (WSJ)
Wall Street made millions of dollars taking Chinese banks public during the boom years when the economy was riding high and the country's lenders were reaping big profits. Those same investment banks are raking in fees again, but this time by helping China's financial system raise capital as it grapples with bad debts and thin capital bases. "Is China the gift that just keeps on giving for investment banks?" asked Keith Pogson, financial-services managing partner for Asia Pacific at Ernst & Young. "Overall, probably not as originally was hoped, but does it keep giving, yes."

Anthony Weiner's sexting partner Sydney Leathers wants to go to Bill de Blasio's New Year's Day inauguration (NYDN)
The sex kitten who deflated Anthony Weiner’s dreams of running the Big Apple wants to shimmy her way into the hottest political event of the season. Sydney Leathers popped up on Twitter Thursday to try to score a ticket to Mayor-elect Bill de Blasio’s Jan. 1 inauguration — arguing that she rescued the city from a Mayor Weiner...“In my mind, de Blasio will bring me out like a show pony & give me a key to the city for saving it from Weiner,” she tweeted. “If you’re not taking me as your date to de Blasio’s inauguration, I hate you,” she wrote in another cheeky post, trying to extend her 15 minutes of fame.

Programming Note: We're on an abbreviated, vacation-esque schedule. Opening/closing wraps and sprinkles of moral support should we be struck with the urge to reach out and touch you (or Wilbur Falcone takes Sydney leather's to DeBlasio's inauguration).

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Holiday Bell: 11.23.12

FBI Tried To Flip Trader Against Cohen (WSJ) A year before the government charged Mathew Martoma with insider trading, it tried to get him to turn against his former boss, Steven A. Cohen. Federal agents, including Federal Bureau of Investigation case agent Matthew T. Callahan, turned up at the Boca Raton, Fla., home of Mr. Martoma, a former portfolio manager at an affiliate of SAC Capital Advisors L.P. Agents tried and failed to persuade him to be a cooperating witness in the government's effort to build a criminal case against Mr. Cohen, the founder of SAC and one of the biggest names in the hedge-fund world, said people close to the case...The government's attempt to engage Mr. Martoma as a cooperating witness shows the high level of focus placed on Mr. Cohen, whose $14 billion fund has posted some of the best returns on Wall Street. It also demonstrates how the government has been unable so far to implicate Mr. Cohen in Mr. Martoma's alleged wrongdoing...Each of the two securities fraud charges against Mr. Martoma carry a maximum of 20 years in prison; federal sentencing guidelines, based on the amount of the alleged illegal profits, recommend a sentence of 15 to 19 years. By contrast, most people who have pleaded guilty to insider trading and cooperated with the government have been sentenced to little or no jail time. Mr. Martoma is married with children. "Twenty years is a very long time in prison," said Thomas Gorman, a partner at Dorsey & Whitney LLP in Washington, referring to the sentence Mr. Martoma could serve if convicted. "There will be an enormous amount of pressure to earn a cooperation credit to try to mitigate that." Cohen’s ’Elan Guy’ Martoma Dropped Ethics for Hedge Fund (Bloomberg) Martoma got his undergraduate degree at Duke University in Durham, North Carolina, according to the university registrar. During his first year, he was inducted into Phi Eta Sigma, an honors society for freshmen who attain at least a 3.5 grade point average, according to the university registrar. He graduated in December 1995. Less than two years later, he went off to Harvard Law School in Cambridge, Massachusetts. He wrote two medical-ethics papers, one of which identifies him as a member of Harvard Law’s class of 2000 and as the former deputy director of the National Human Genome Research Institute’s Office of Genome Ethics. He left Harvard in December 1998 without attaining a degree, according to the school’s registrar, and attended Stanford Business School, where he joined three alumni groups including MBA Class of 2003, according to university records. In 2001, he changed his name from Ajai Mathew Mariamdani Thomas...Former colleagues, who asked not to be named because the fund is private, said the Martoma, who stood almost six feet tall, had a quiet demeanor and left little impression except for an outsized trade that earned him the name “the Elan guy.” Trading Case Casts a Deeper Shadow on a Hedge Fund Mogul (NYT) Thus far, any potential evidence against Mr. Cohen is entirely circumstantial. The government's complaint includes e-mails about secretly selling the Elan and Wyeth shares through esoteric methods like algorithms and dark pools. But that is common practice among large, sophisticated funds that do not want to alert competitors or move the stock too much. Moreover, while SAC dumped its large positions in the two stocks quickly - raising the question of what prompted it to do so - Mr. Cohen is known for a rapid-fire trading style. He frequently moves aggressively in and out of stocks while processing gobs of information fed to him by his underlings. It would be difficult for a jury to infer anything incriminating just from the way these trades were executed. The government in this case also lacks the powerful wiretap evidence that it has used to convict dozens others, including Raj Rajaratnam, the head of the Galleon Group. Greek Bond Buyback In Doubt (WSJ) The rally in outstanding Greek bonds has made any buyback plan more expensive, eroding the impact it would have on Greece's debt. It raises the challenge for euro-zone finance ministers to seal a deal at their next meeting on Monday that would both plug holes in Greece's €246 billion ($316.95 billion) bailouts and bring the country's debt load to a more manageable level. S&P Confirms France's AA-Plus Rating (WSJ) The decision removes the immediate threat of another downgrade of France, though S&P kept a negative outlook on the country's debt. That indicates a one-in-three chance of a cut in France's credit rating during 2013. Diamond, Dimon’s Early Risks Made Them Better: Adoboli (Bloomberg) Adoboli, who was jailed Nov. 20 for causing the largest unauthorized trading loss in British history, said in an e-mail exchange with Bloomberg News that Jamie Dimon, Bob Diamond and Yassine Bouhara, the former co-head of global equities at UBS, all lost large amounts of money at some point in their careers. The more senior you are the easier it is to avoid getting slammed to the wall,” Adoboli wrote in a Nov. 14 e-mail. “Funny thing is though, losing money seems to make you better at making money. Perhaps that’s why traders who lose money always get rehired, as long as they still have their risk appetite.” Canada Police Arrest Man Who Told Kids Santa Isn't Real (Star) As Christmas-themed floats slowly rolled down Princess St. during Kingston’s annual Santa Claus parade, an intoxicated man shouted blasphemous lies to shocked children: Santa doesn’t exist. The man, whose gelled hair “looked like a set of devil horns protruding from his head,” was reported to Kingston police, Const. Steve Koopman said. Police arrested a 24-year-old man around 6 p.m. “It was pretty despicable that someone, during this time of the year, would tell kids Santa isn’t real — which of course we would argue,” Koopman said. Higher Gas-Tax Idea Joins Fiscal-Cliff Talks (WSJ) Other industries also are moving to have initiatives attached to a budget deal—as part of either a short-term agreement this year or a longer-term plan reached next year to overhaul spending and taxes. Casinos are pushing a measure to legalize Internet poker games nationally. Small banks are pressing to extend a program that gives unlimited federal guarantees to certain bank deposits. Governors want additional aid to cover destruction wrought by Hurricane Sandy. The financial industry is pushing to loosen regulations on complex financial derivatives. "Basically, you've got a bunch of people waiting in the wings to stick the collection plate out and grab whatever they can grab," said Dan Kish, senior vice president for policy at the Institute for Energy Research, which advocates for free-market energy policies. Jain Gets Silent Treatment as Bankers Eat Humble Pie (Bloomberg) Deutsche Bank co-Chief Executive Anshu Jain says telling people he works in banking is a conversation-killer at parties, as the industry fails to convince the general public that it’s changing. “If you go to a party these days, you’re asked what you do and you say you’re a banker, people go all quiet,” Jain said before a conference on Europe’s finance industry began in Frankfurt. “We’re still the subject of anger.” Judge Rules For Singer (Reuters) A federal judge has ordered Argentina to pay holders of defaulted bonds, including Paul Singer’s Elliott Management, immediately, a blow to the country’s efforts to overcome a 2002 debt crisis that has raised fears of another default. In a ruling Wednesday, Judge Thomas Griesa lifted a previous order stalling payments to so-called holdout investors who refused to take part in two swaps of defaulted debt. Argentina’s president, Cristina Fernandez, has said her government will not pay “one dollar,” and Griesa’s ruling cited threats by Argentina’s leaders to defy his rulings in the decade-old dispute. Germany Halts Swiss Tax Deal (WSJ) The bilateral treaty was vetoed by the left-leaning Social Democrat and Green opposition parties in the Bundesrat, which represents Germany's 16 states. The treaty's opponents argue that it is too lenient on tax evaders. We want a treaty that is "more painful to Swiss banks and German tax evaders," Norbert Walter-Borjans, the Social Democrat finance minister of the German state North Rhine-Westphalia said in a debate in the upper house preceding the vote Friday. A ‘Whale’ of a Chase is on (NYP) JPMorgan Chase turned its chief investment office into a proprietary-trading unit that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their suit against the bank. JPMorgan contended the unit’s primary role was managing risk when in fact it was engaging in trades to generate profit for the bank, the funds said in an amended complaint filed in Manhattan federal court. CEO Jamie Dimon “secretly transformed the CIO from a risk management unit into a proprietary-trading desk,” the plaintiffs said. The pension funds allege they incurred losses in their holdings because of trades by the chief investment office and Bruno Iksil, known as “the London Whale.” Porn star vows night of passion if Barcelona wins (NYDN) Colombian-born Janeira Ventura said she would give "any Barca fan who dares" the "night of their lives" if Lionel Messi, Andres Iniesta and co. fire them to the top of La Liga by the end of the season. The adult actress told Mundo Deportivo, "If we win the league this year, I pledge publicly to spend a night of passion with any Barcelona member or supporter who dares. "How can they prove they support the team? It's easy, by showing me the membership card or photos and tickets to a game. They just have to contact me on my website." The 27-year-old was born in Barranquilla, moved to Spain when she was a baby and now lives in Toronto. She added, "I've been a Barcelona fan since I was little, I love the team, the way they play, and above all I love the players. The most sexy ones? Messi, Xavi and Puyol." Her obsession extends to having two cats, who are called Leo and Messi, and plans to tattoo the Argentine striker's name "in a secret place" when she returns to Spain in 2013. She also wants to convince Barcelona bosses to let her be their "official club porn star."

Holiday Bell: 03.29.13

SAC Capital Advisors Trader Charged With Fraud (WSJ) Early Friday morning, Federal Bureau of Investigation agents arrested a longtime SAC Capital portfolio manager on insider-trading charges, making him the most senior employee of one of the nation's most prominent hedge funds to be snared in the government's sprawling probe. Michael Steinberg, 40 years old, was led out of his building on New York's Park Avenue in handcuffs around 6 a.m. Mr. Steinberg has worked at Stamford, Conn.-based SAC since 1997 and at its Sigma Capital Management unit in New York since 2003, dealing closely with SAC's billionaire founder Steven A. Cohen. "Michael Steinberg did absolutely nothing wrong," his lawyer, Barry H. Berke, said in a statement Friday. "His trading decisions were based on detailed analysis" and information "he understood had been properly obtained through the types of channels that institutional investors rely upon on a daily basis." Mr. Steinberg was charged Friday with conspiracy to commit securities fraud and four counts of securities fraud, alleging that he made illegal trades in Dell and Nvidia Corp. based on information relayed to him by a Sigma Capital analyst. He faces as much as 20 years in prison on each fraud charge. He is expected to appear in Manhattan federal court later Friday. The Securities and Exchange Commission also separately filed a civil lawsuit against him in Manhattan federal court on Friday. "Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity," a SAC spokesman said Friday. SAC’s Steinberg Arrested as Probe Gets Closer to Cohen (Bloomberg) Jon Horvath, who worked for Steinberg, pleaded guilty in September, admitting that he provided illegal tips to his portfolio manager, who then traded on them...Two days before Dell was set to report second-quarter 2008 earnings, Horvath e-mailed Steinberg and another portfolio manager to warn that the computer maker would miss earnings estimates. “I have a 2nd hand read from someone at the company,” Horvath said in the Aug. 26 e-mail, which provided details on gross margins, expenditures and revenue. “Please keep to yourself as obviously not well known.” Steinberg replied, “Yes normally we would never divulge data like this, so please be discreet. Thanks.” Judge Sullivan concluded in December that e-mail and instant messages he reviewed showed that Steinberg could have known information he used for trades came from insiders. “The e-mails that were relayed to Steinberg do indicate to me that he understands the source of the information that he’s getting and he’s trading on it,” Sullivan wrote. “All of that indicates this is inside information from the company that’s not available anywhere else.” Cypriots Cast Blame As Banks Open (WSJ) President Nicos Anastasiades on Thursday ordered the creation of a three-member committee to investigate the roots of the economic malaise engulfing the island. The committee will be chaired by three former judges from Cyprus's supreme court, including Georgios Pikis, the court's former president and a former member of the International Criminal Court in The Hague. Cyprus Says Threat Contained, No Plan to Leave Euro (Reuters) FYI. BofA Tops Financial-Complaint List (WSJ) Bank of America accounted for the largest share of consumer complaints lodged with the Consumer Financial Protection Bureau over the past 16 months, highlighting the challenges the nation's second-largest bank faces as it tries to simplify its sprawling operations. Illinois Man Charged In 21-Ton Cheese Heist (ABC) Veniamin Balika, 34, of Plainfield, Ill., was accused of stealing 42,000 pounds of Muenster cheese from a Wisconsin cheese company. He was arrested at a Bergen County rest area on the New Jersey Turnpike on Monday, the result of a joint investigation with the Saddle Brook New Jersey Police Department and the New Jersey State Police. “He was charged with receiving stolen property and fencing,” New Jersey State Police Sergeant Adam Grossman told ABCNews.com. Balika allegedly attempted to sell the load of 1,135 cases of cheese at the rest area. Morgan Stanley's Porat Passes On Treasury Post (NYP) Morgan Stanley’s chief financial officer has taken herself out of the running for the No. 2 job at the Treasury Department after months of speculation that she was all but certain to join the Obama administration. The 56-year-old high-profile Wall Streeter, who had been the top candidate to work alongside Treasury Secretary Jack Lew, called the White House late Wednesday to remove her name after fretting about possibly being raked over the coals during a Senate confirmation hearing, sources told The Post. Putin May Cap Golden Parachutes After $100 Million Payout (Bloomberg) President Vladimir Putin proposed limiting severance payments to Russian executives, after a former KGB colleague was granted about $100 million when he stepped down as the head of OAO GMK Norilsk Nickel. While so-called golden parachutes should “stimulate top- class managers” to work efficiently, “sensible limits” are needed, Putin said at a meeting of his People’s Front movement in Rostov-on-Don today. Capping such payments would comply with global standards, Putin said. France's Hollande Hits Companies With 75% Wealth Tax (Reuters) French President Francois Hollande declared on Thursday that companies would have to pay a 75 percent tax on salaries over a million euros after his plan for a "super-tax" on individuals was knocked down by the constitutional court. Deutsche Bank probe finds incomplete data given to prosecutors (Reuters) An internal investigation at Deutsche Bank has found that incomplete data related to a carbon tax fraud probe were handed over to prosecutors, German magazine Der Spiegel said on Friday. The probe is one of several legal headaches with which Germany's biggest lender is grappling. For CEOs, Buyout Game Can Be Second Act (WSJ) Less than two months after agreeing to leave Chesapeake under pressure from shareholders over his free-spending ways, Aubrey McClendon is meeting with private-equity investors and others to discuss potentially teaming up for new ventures, according to several people familiar with the discussions. Mitt Romney Thinks His Grandkids’ Names Are Ridiculous (Daily Intel) "A few months ago we had twins come in, and you can't believe what they're named: Winston and Eleanor. [Laughs.] I mean, it's going back to the glorious days of the thirties and forties, I guess. But these are just darling little infants, and to have such big names on them is really something, although they call them Ellie and Win ... When I heard Winston and Eleanor, I thought, It sounds like two English bulldogs, but they're adorable children."

Holiday Bell: 2.16.15

Greece; Apple self-driving car; HSBC sorry about tax evasion; bank hackings; "Man and woman have afternoon sex in front of shoppers after first meeting"; AND MORE.