Opening Bell: 02.11.14

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JPMorgan’s $13 Billion Accord Seen Needing Court Review (Bloomberg)
JP Morgan Chase’s $13 billion fraud settlement with the U.S. government should be blocked until a court is able to review it, a Wall Street watchdog group founded by an Atlanta hedge fund manager said. Better Markets Inc. is seeking judicial scrutiny of the accord because it’s the largest settlement “with a single entity in the 237-year history of the U.S.,” according to a complaint filed today in Washington federal court. “No one has any ability to determine if the $13 billion agreement is fair” or “if it is a sweetheart deal,” the group said in the filing. The accord, announced in November, settled allegations that the biggest U.S. lender by assets misled investors and the public when it sold bonds backed by faulty residential mortgages. U.S. and state officials blamed JPMorgan’s actions for helping to cause the credit crisis, and said the agreement didn’t shield JPMorgan or its employees from possible charges. The Justice Department “acted as investigator, prosecutor, judge, juror, sentencer and collector,” Dennis Kelleher, chief executive officer of Better Markets, said at a press conference in Washington. The agreement was “mostly designed to conceal, not reveal.”

Branson closes in on Virgin America IPO (FT)
Virgin America, the US carrier launched by billionaire entrepreneur Sir Richard Branson, is closing in on an initial public offering after recording its first profits since it was founded 10 years ago. The low-cost airline interviewed half a dozen banks last month, according to people familiar with the situation, and is understood to have appointed Barclays and Deutsche Bank for an offering which could come as soon as the second half of this year. The move comes seven years after Virgin America's maiden flight and a turnround in its profitability as it has sought to reintroduce some style into US domestic air travel, which has been marked by declining quality over the past decade. In 2013 it turned its first profit on the back of $1.3 billion of revenues. A listing would allow the company to raise new capital to expand its fleet from 53 aircraft to closer to 100 over the next decade, according to people familiar with the company's plans.

Ex-UBS Banker Lack to Enter Guilty Plea in U.S. Tax Case (Bloomberg)
A former UBS AG banker indicted in 2011 on a charge of helping wealthy Americans evade taxes has agreed to plead guilty in Florida, the latest target in a five-year U.S. crackdown. Martin Lack, a Swiss resident and independent investment adviser, is set to plead guilty on Feb. 26 in federal court in Fort Lauderdale, according to the records. Lack, who turned himself in to U.S. marshals in Miami on Oct. 14, was released on a $750,000 bond and returned to Switzerland with the consent of the U.S.

K.K.R. To Close 2 Mutual Funds (Dealbook)
The two funds, the KKR Alternative High Yield Fund and the KKR Alternative Corporate Opportunities Fund, have stopped selling shares and plan to liquidate by around March 31, according to regulatory filings on Monday. Investors will get their money back at that time. Started in 2012, the funds were part of K.K.R.’s strategy to attract capital from investors who would not be able to access traditional private equity funds, which count wealthy individuals and institutions as investors. Some of K.K.R.’s big rivals, including the Carlyle Group and the Blackstone Group, have also unrolled products aimed at retail investors. But the two K.K.R. funds were hurt by a competitive marketplace and a flawed design, according to a person briefed on the matter who was not authorized to speak publicly about it.

Legal issues didn't cause 'Flappy Bird' end, analyst says (CNBC)
Short-lived mobile game sensation "Flappy Bird" has been taken off Apple's App Store and Google Play following a series of tweets by its developer. "I can call 'Flappy Bird' is a success of mine. But it also ruins my simple life. So now I hate it," the game's developer, Nguyen Ha Dong, tweeted Saturday. The app generated $50,000 in advertising revenue daily, according to The Verge, and Reuters reported that the Android version of the game was downloaded more than 50 million times..."When people see a simple game, they expect [it] to be easy," said Max Eddy, junior software analyst at PCMag.com. " 'Flappy Bird' looked simple but was brutally, punishingly difficult. I think that threw people for a loop, and they didn't want to be defeated by something so basic." Ha was "unhappy with the coverage he'd received and was pulling the game," Eddy said. "Given that backdrop, a sequel seems unlikely."

Meet Britain's Biggest Dog: Freddy, The 7ft 4 Great Dane (HPUK)
The Great Dane has been measured at 7ft 4in (2.24m) on his hind legs by owner Claire Stoneman. Although no official measurement has yet been made, that would make Freddy as tall as world-record holder Zeus, and significantly larger than Britain's current biggest dog Samson, who is 6ft 6in (1.98m). Freddy is an incredible 41 inches (104.14cm) from his paws to his withers, the ridge between the shoulder blades, slightly shorter than Zeus' 44 inches (111.76cm). But astonishingly the gigantic dog is only an 18-month-old puppy, and while most Great Danes reach their maximum height by that age, they can continue growing until the age of three. Owner Claire Stoneman, of Leigh-on-Sea, acquired Freddy as a newborn, along with his sister Fleur. The former glamour model admits to being “dog obsessed” and says that despite his size she regards Freddy as "my baby”. "I can’t imagine life without him," Claire said. "Mum loves him too. She’s tiny, so when she first saw him she was like 'Bloody hell!' But she’s used to him now, she bosses him about."

CFTC Is Set to Ease Rules on Trading Swaps Overseas (WSJ)
CFTC officials are expected to reach an agreement with counterparts in the European Union as early as this week, these people said, to allow U.S. firms to trade swaps on European platforms as long as those systems are governed by swaps rules that are comparable to those ushered in as part of the 2010 Dodd-Frank law. Critics say the agreement will encourage banks to move more swaps trading overseas to escape strict U.S. regulations intended to bring more transparency to the opaque financial products. Swaps, which were at the heart of the 2008 crisis, are complex contracts that allow financial firms and their clients to hedge against risks or bet on an asset's value.

Blankfein Says China’s Expansion to Have ‘Huge Consequences’ (Bloomberg)
“The China growth story is going to be the story of the next 30-40 years,” Blankfein said in an interview with Bloomberg Television’s John Dawson from Hong Kong while attending the Goldman Sachs Global Macro conference. “We really need that growth in China to occur.”

Fannie-Freddie Fate Rests in Courts (WSJ)
Since last summer, the Treasury Department has faced a host of shareholder lawsuits over changes it made in 2012 to the terms of the bailout agreements with the mortgage-finance giants in 2008, when the government seized the firms as they neared collapse. The plaintiffs say that the Treasury wasn't authorized to make the changes—which required Fannie and Freddie to send all of their profits to the Treasury—and that the move amounted to unlawful seizure of private property. The Treasury "has effectively nationalized the companies and ensured that they will never return to private ownership" using steps that are "plainly unlawful," said Theodore Olson of Gibson, Dunn & Crutcher LLP, at a conference last week. Mr. Olson, who served as solicitor general through 2004, is representing Perry Capital LLC, a hedge-fund firm that filed suit last July. The government has argued that the plaintiffs don't have standing to challenge its decisions because the rescue legislation barred shareholder claims and that the cases don't have merit. "Treasury committed and provided hundreds of billions of dollars to rescue the entities," the government said in its response last month. "Having gained that benefit, the shareholders cannot credibly claim that the [Constitution] demands that Treasury compensate them further for their investment."

Private equity firm founder arrested in $9.3M theft (NYP)
The founder of a New York private equity firm was indicted Monday for allegedly stealing $9.3 million from investors and spending it on jewelry, a luxury car and rent, according to Manhattan prosecutors. West Point grad Lawrence Penn III is accused of siphoning dough from Camelot Acquisitions to a shell company set up by his pal Michael Ewers – who was also charged in the scheme that ran from 2010 to 2013. The diverted cash was made to look like payments for Ewer’s services but actually served as a front, prosecutors said. Penn, 44, allegedly used the stolen loot for credit card payments, cash withdrawals, luxurious office space, rent for two apartments, jewelry and even a fancy car. He turned himself in and pleaded not guilty at his arraignment Monday in Manhattan Supreme Court wearing a sharp pinstriped suit and red tie.

Trapped Bobsledder Gets Stuck Again (NYP)
American bobsledder Johnny Quinn...who made headlines by breaking down his stuck bathroom door at the Olympic Village, said Monday he and some compatriots were trapped in an elevator. Quinn, a former NFL player, is competing in the two- and four-man bobsled events. Two days ago, his bathroom door wouldn’t open after he took a shower, and “with no phone to call for help, I used my bobsled push training to break out,” he said on Twitter. Monday, he posted pictures of the inside of an elevator, saying he was stuck with teammate Nick Cunningham. “No one is going to believe this, but we just got stuck in an elevator,” he wrote on Twitter.

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Opening Bell: 04.02.13

Cyprus Finance Minister Sarris Resigns After Brokering Rescue (Bloomberg) Cyprus Finance Minister Michael Sarris quit the government today after helping clinch the final terms of an international aid agreement to stave off a financial collapse of the island. Sarris told reporters in Nicosia that he resigned due to a committee set up today to investigate the reasons that led to Cyprus’s economic crisis. Sarris has served as chairman of Cyprus Popular Bank Pcl, the second-largest lender, which has been shut as part of the financial rescue. Fannie Logs Record Profit (WSJ) Fannie Mae reported an annual profit of $17.2 billion on Tuesday, its first annual profit since 2006 and its largest annual profit ever, boosted by the housing market's turnaround and sustained declines in the number of soured home loans. Fannie's profit compares with a year-earlier loss of $16.9 billion. Fannie and its smaller sibling, Freddie Mac, posted banner earnings for 2012 because rising home prices have allowed them to set aside much less to cover the cost of defaulting home loans. Bank of America Finds Profit in Foreign Tax Credit Moves (Bloomberg) Bank of America Corp. more than doubled its profits in 2012 -- with some help from the tax code. What the bank calls “restructuring” of its non-U.S. operations yielded $1.7 billion in foreign tax credits, or 41 percent of the $4.2 billion the company reported in 2012 earnings, according to securities documents including the form 10-K it filed Feb. 28. While the maneuvers didn’t provide an immediate cash tax benefit for Bank of America, the foreign tax credits count toward net income under accounting rules. Goldman Unit To Seek Risk (WSJ) Goldman Sachs is launching a specialty finance company to invest in high-risk debt primarily of midsize U.S. companies with no credit ratings. The New York firm said in a filing with the Securities and Exchange Commission late Friday that it plans to offer shares in the new unit, Goldman Sachs Liberty Harbor Capital LLC, "as soon as practicable after the effective date of this registration statement." SEC Ex-Chief Lands at Consultant (WSJ) Promontory Financial Group LLC is expected to announce Tuesday that it has hired Ms. Schapiro, who was chairman of the Securities and Exchange Commission for nearly four years. "In my case, there's no revolving door…I won't ever be going back to government," the 57-year-old Ms. Schapiro said in an interview. She decided that after spending "28 of the last 32 years as a regulator," now was the "right time…to do something different." Mothers brawl during Seattle zoo Easter egg hunt (SPI) A fight between two women during an Easter egg hunt at Woodland Park Zoo led to a bloody nose and several crying children Sunday, according to police and a witness. The incident began about 1 p.m. when a woman allegedly pushed a child aside as her own child was scrambling toward some brightly colored eggs, police spokesman Jonah Spagenthal-Lee said. “The shoving sparked a confrontation between the first woman (the supposed shover) and the second child’s mother, who began fighting and had to be separated three or four times,” Spagenthal-Lee said in a statement. “The brawl left the first woman with a bloody nose.” The children, mostly 4- to 6-year-olds, were subjected to foul language. The bloody scene left several children crying. Judge Questions Fairness of Citigroup $590 Million Settlement (Reuters) A Manhattan federal judge on Monday signaled he will not rubber-stamp Citigroup's proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets. U.S. District Judge Sidney Stein asked lawyers for the bank and its shareholders to address several issues at an April 8 fairness hearing, including requested legal fees and expenses of roughly $100 million, and the absence of payments by former Citigroup executives. Argentine-bond tango heats up (NYP) The yearly cost to insure the debt in the credit default swaps market for five years jumped by nearly 10 percent yesterday after President Cristina Kirchner and her government refused to come up with a better offer for bondholders led by hedge fund billionaire Paul Singer’s Elliott Management. A New York appeals court is expected to rule that Argentina must pay the Elliott group $1.44 billion, and its latest proposal indicated that it will not, which could push its bonds into default. Nasdaq Accepts Credit Rating Risk in Quest to Expand (Bloomberg) For Nasdaq OMX Group Inc., the benefits of expanding into electronic bond trading justify the risk of a lower credit rating. The second-biggest operator of American equity exchanges agreed yesterday to acquire eSpeed, a platform for U.S. Treasuries, from BGC Partners Inc. (BGCP) for $750 million cash, or $1.2 billion should sales goals be met. Moody’s Investors Service said Nasdaq’s Baa3 senior rating may be cut following the deal. Hampton Waffle House employee charged for April Fool’s joke (WTKR) A Hampton Waffle House employee is now charged after officers say she played an April Fool’s joke on them. Susan Tinker is charged for lying about a robbery. Police say around 6 a.m. Monday morning, Tinker called to report the robbery at the restaurant on West Mercury Boulevard. Police say they got to the scene and spent more than an hour investigating. While waiting for the manger to get there to review surveillance tape, they figured out there was no robbery. Tinker told police it was all an April Fool’s joke. But officers say this was no laughing matter. A spokesperson for the Waffle House says they do not tolerate this kind of behavior and Tinker is no longer employed there.

Opening Bell: 4.15.15

SEC settles with ex-Freddie execs; Shopify IPO; Regulators still working on TBTF; "Man Pretends He's A Cop, Pulls Over Actual Cops"; and more.

Opening Bell: 9.15.15

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Opening Bell: 2.12.15

Hedge funds love currencies again; Kyle Bass is going after pharma patents; Goldman Sachs is a special snowflake; Dominique Strauss-Kahn: I’m ‘rougher’ in bed than most men; AND MORE.