Opening Bell: 05.20.14

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EU Files Formal Charges Against Three Banks Over Interest-Rate Cartel (WSJ)
The move comes five months after EU authorities fined six banks €1.71 billion ($2.3 billion) for colluding to manipulate key benchmark interest rates, representing the EU's largest ever penalty in a cartel case. Three banks— Crédit Agricole, HSBC, and JP Morgan —didn't settle with regulators in December over a cartel to rig the pricing of interest rate derivatives denominated in euros. It is those banks that have now been sent a so-called statement of objections, which outlines the European Commission's concerns. The EU in December settled with four other banks— Barclays, Deutsche Bank, RBS, and Société Générale —which admitted involvement in the cartel, and had their fines reduced by 10% for agreeing to settle.

Princeton’s Top Money Managers Get 46% Pay Raise in 2013 (Bloomberg)
Andrew Golden, the president of Princeton University Investment Co., the company known as Princo that manages the school’s $18.2 billion endowment, collected $3.9 million in total compensation last year. The 55-year-old’s remuneration included a 94 percent increase in retirement and deferred compensation and a 48 percent jump in bonus pay, according to the university’s latest tax return.

Ackman takes aim at Allergan CEO (NYP)
Activist investor Bill Ackman alleged in a letter Monday that Allergan Chairman and CEO David Pyott has been conducting “one-on-one” meetings with the Botox maker’s largest shareholders while refusing to allow independent directors to talk with them. Allergan last week rejected a hostile takeover bid valued at $50 billion by Valeant Pharmaceuticals, supported by Ackman, whose Pershing Square hedge fund holds a 9.7 percent stake in Allergan. The activist investor, in his letter, said Pyott has a “disabling conflict of interest” because he will likely lose his CEO position if the merger goes through. The letter was addressed to Michael Gallagher, Allergan’s lead independent director, who refused to have a private conversation with Ackman.

Swiss Face Conundrum as ECB Signals Further Stimulus (Bloomberg)
Swiss policy makers are under increasing pressure to come up with a contingency plan to curb gains in the franc that would likely result from a fresh round of stimulus from the European Central Bank next month. The Swiss National Bank already has a zero interest-rate policy, in part to keep the nation’s currency from rising beyond the 1.20 franc-per-euro cap in place since 2011. It would need to take steps to defend that level if the ECB cut rates or broadened asset purchases, according to 52 percent of respondents to a Bloomberg News survey this month.

Man Wearing "It's All Fun & Games Until The Cops Show Up" T-Shirt Is Arrested When The Cops Show Up (TSG)
The 35-year-old bank robbery suspect was wearing a t-shirt declaring “It’s all fun & games until the cops show up” when police showed up yesterday morning and arrested him as he exited an Idaho motel. Fisher and Jennifer Balfe, 19, were collared in connection with Friday’s robbery of a U.S. Bank branch in Cottonwood (pop. 900). They were each jailed on robbery, burglary, and grand theft counts. Investigators reportedly got on Fisher’s tail after receiving an anonymous tip that a man matching the suspect’s description had been spending wads of cash at a local casino.

Investors Plow Into Riskier Bonds (WSJ)
Investors have been buying up corporate bonds with a triple-C rating, a grade that analysts and investors consider highly speculative. That buying is driving up prices on those bonds and pushing down their yields, which this month fell to 8.187% on a closely watched Bank of America Merrill Lynch index—the lowest level on record. Yields fall when prices rise. Demand for those and other bonds rated below investment grade—so-called junk bonds—is helping fuel corporate merger-and-acquisition activity. Ortho-Clinical Diagnostics Inc. on May 8 sold $1.3 billion of junk notes to yield 6.625%, in part to back Carlyle Group LP's acquisition of Ortho-Clinical from Johnson & Johnson. The sale was increased from $1.15 billion.

ECB Said to Weigh Fed-Style Meeting Schedule on Policy (Bloomberg)
The European Central Bank is considering holding its meetings to set interest rates every six weeks instead of monthly, according to three people familiar with the discussions. Extending the period between monetary policy decisions could help the ECB to agree on and publish minutes before the next rate-setting session, the people said, asking not to be identified because the plans are still being discussed. The timetable echoes that of the U.S. Federal Reserve, which has eight scheduled meetings a year and publishes an account three weeks later.

Target gives ex-CEO $16M severance package (NYP)
Target’s former CEO took a steep pay cut in his final year — but he’s not going to starve. Still smarting from its embarrassing holiday credit-card data breach, Target said Monday it slashed Gregg Steinhafel’s 2013 compensation by 37 percent and trimmed $5.4 million from his retirement benefits. That left Steinhafel with just under $13 million in total compensation last year, down from $20.6 million a year earlier, the company disclosed in its annual proxy. Nevertheless, the ex-CEO will still receive a severance package valued at $15.9 million under provisions governing his “involuntary termination for reasons other than for cause,” according to the filing.

Woman's car attacked by self-identified 'high elf' battling evil (KATU)
The last thing the woman from Northeast Portland probably expected when she got up Tuesday morning was that she would be attacked by a sword-wielding elf. But that's what happened around 7 a.m. as she drove her red BMW by the intersection of Southeast 7th and Morrison. A man dressed in chain-mail with a helmet, shield and carrying a sword and staff ran into traffic and started attacking her car. She called 911, reporting that "a pirate" was attacking her car. When police got there, they detained Konrad Bass of Glendale, Oregon. Bass told officers that he wasn't a pirate but a "high-elf engaged in battle with the evil Morgoth." Morgoth is a character created by JRR Tolkien in a prequel to the Lord of the Rings stories. In the stories, he is the character from which all evil grew. Bass, who was cited for criminal mischief and transported to Providence Hospital, also told officers he had taken LSD. The woman's car had several puncture marks.

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Opening Bell: 1.19.16

Deutsche faces high-speed trading suit; Shkreli calls fraud case against him ‘fictitious’; "Woman faces jail for tagging former in-law on Facebook"; and more.

Opening Bell: 07.09.12

BofA Figures In Drug Probe (WSJ) A Mexican cocaine-trafficking cartel used accounts at Bank of America to hide money and invest illegal drug-trade proceeds in U.S. racehorses, the Federal Bureau of Investigation said. The alleged ties between the violent drug gang known as Los Zetas and the second-largest U.S. bank by assets were described in a 35-page affidavit filed in federal court in Texas last month. According to an FBI agent, a horse-buying and training business created to launder drug money had accounts at the Charlotte, N.C., bank. Libor Probe Moves To Political Arena (WSJ) The scandal over banks' manipulation of key interest rates cost the jobs of three senior financial figures last week. On Monday, the deputy governor of the Bank of England will try to ensure it doesn't derail his own career. Paul Tucker, a leading candidate to become the next governor of the Bank of England, will testify Monday afternoon before a Parliamentary committee that is examining how Barclays and other global banks improperly tried to influence interest rates like the London interbank offered rate...Barclays, after reaching a £290 million settlement with U.S. and British regulators over its attempts to manipulate Libor, sought to defend itself by releasing notes from an October 2008 phone call between Mr. Tucker and Robert Diamond. According to Mr. Diamond's notes from the call, Mr. Tucker relayed concerns from "senior" British government officials about Barclays's above-average Libor submissions. "Mr. Tucker stated…that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently," Mr. Diamond wrote to two of his colleagues the day after the call. Diamond Antithesis Seen As Key Step To Repairing Barclays (Bloomberg) The British lender faces a criminal probe and political pressure to curb or separate the investment banking unit that Diamond built up during his 16-year career at Barclays from the consumer bank. The unit generated 61 percent of the bank’s first-quarter pretax profit. At a Parliamentary hearing last week, lawmakers asked if the culture at the investment bank was “rotten” and if he lived in a “parallel universe.” Former Barclays CEO: I Too Fell for the Diamond Myth (FT) "It was a close call," Taylor says of his decision to retain Diamond as head of Barclays Capital. "I suspect the subsequent history of the business would have been very different had I asked him to go. I deserve blame for being among the first to succumb to the myth of Diamond’s indispensability, to which some in Barclays were still in thrall only a matter of days ago." SEC set to hand out up to $452M to whistleblowers (NYP) “The SEC is receiving two to three tips every day that are worth pursuing, and they’re farming them out to staffers for investigation,” said Lawrence A. West, a lawyer with Latham & Watkins. “SEC officials are eager to pay out and publicize the first whistleblower award,” said West, whose firm has gathered a number of tipsters under the new law. “Once the first award is publicized, tips to the SEC from disgruntled employees are almost certain to increase substantially.” Romney Mines Hamptons For Political Cash (NYT) EAST HAMPTON, N.Y. — A woman in a blue chiffon dress poked her head out of a black Range Rover here on Sunday afternoon and yelled to an aide to Mitt Romney. “Is there a V.I.P. entrance? We are V.I.P.” (No such entrance existed.)...what was billed as a day of elegant campaign events at the homes of the ultrarich turned out to be an afternoon of curious and clashing tableaus: protesters with their bandannas and Occupy Wall Street-inspired chants (“We got sold out, banks got bailed out!”) standing amid multimillion-dollar mansions, where live bands played “Margaritaville” and donors dined on prosciutto-wrapped melon balls...After that, Mr. Romney attended events at the Southampton homes of Clifford Sobel, the former United States ambassador to Brazil, and David Koch, the billionaire industrialist and longtime benefactor of conservative political causes. The event at Mr. Koch’s home drew about 200 protesters, who...went so far as to hire a local pilot to fly a giant red and black banner over Mr. Koch’s house, which read: “Romney has a Koch problem,” a play on the drug. (Mr. Koch’s name is pronounced the same as the word coke.) A truck, festooned with the logos of big banks like Citigroup and Wells Fargo, circled the neighborhood with a plastic dog on the roof, a jab at Mr. Romney’s much-mocked family vacation in which he traveled with his Irish setter inside a pet carrier on the roof of a car. Barclays mulls split after Libor scandal: report (MarketWatch) Board directors at U.K. bank Barclays PLC BCS -1.72% are considering splitting the company into two units, as regulatory scrutiny mounts in the wake of its role in the Libor interest-rate fixing scandal, The Sunday Times reports without citing sources. The newspaper says Barclays is examining plans to spin off its investment banking arm, which could be floated in New York, with the U.K.-headquartered retail and commercial bank retaining its London listing. (A person familiar with the matter said the story was inaccurate.) Roubini: My 'Perfect Storm' Scenario Is Unfolding Now (CNBC) In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together in to create a storm for the global economy in 2013. “(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday. Tighter Control For Euro Banks (WSJ) The establishment of a single authority, with a single set of rules for the region's banks, is seen by Germany and other strong economies as an essential condition before they will consider sharing resources with other euro-zone countries. House-crasher sentenced after enjoying Diddy's food, cigars and toothbrush (NYP) A East New York man, busted for sneaking into rapper Sean “Diddy” Combs’ palatial East Hampton spread in April, guzzled the star’s top-shelf liquor, washed with his soap, and even used his toothbrush, officials revealed yesterday. “I brought a cheesesteak, a cheesecake, a bucket of fried chicken — which I ate at the house — and drank a ‘dollar’ bottle of Hennessy and four cans of Pepsi,” Quamine Taylor told prosecutors at his sentencing yesterday. He even slathered Diddy’s Frank’s Red Hot sauce on his grub, and drank a bottle of Hpnotiq, a vodka liqueur, he said, adding, “After I ate, I went upstairs and went to sleep.” He also smoked three of Diddy’s Dutch Masters cigars and drank a can of orange soda. Then he freshened up using Diddy’s soap and splashing on his aftershave.

Opening Bell: 4.7.16

April rate hike unlikely; Hedge funds vs. pirates; Man leads police on high-speed chase as Uber driver naps; and more.

Opening Bell: 04.04.13

Bank of Japan Launches Easing Campaign (WSJ) At his inaugural policy board meeting Thursday, Haruhiko Kuroda convinced the nine-member panel to agree to a major expansion of government bond purchases, including buying longer-term debt, which is designed to drive down longer-term rates. The BOJ also broke free from some self-imposed limits that the previous leadership under Masaaki Shirakawa adhered to. "Our stance is to take all the policy measures imaginable at this point to achieve the 2% price stability target in two years," Mr. Kuroda said at a news conference following the two-day meeting, one of the most closely watched in the central bank's recent history. ECB holds fire on rates (FT) The European Central Bank kept its main refinancing rate on hold at 0.75 per cent on Thursday, hours after the Bank of Japan stunned investors with a dramatic easing plan that will see it double its monetary base over two years. ... The ECB has been reluctant to cut its own interest rates further, which might involve moving into negative territory on its 0 per cent deposit rate, and would face difficulty adopting a quantitative easing programme itself. Yet inflation has been falling below the bank’s 2 per cent target, unemployment is at a record high and the 17-nation bloc remains in recession. Weekly Jobless Claims Get Weaker as Outlook Dims (Reuters) Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said on Thursday. It was the third straight week of gains in claims. Coming on the heels of data on Wednesday showing private employers added the fewest jobs in five months in March, the report implied some weakening in job growth after hiring accelerated in February. Enron's Jeff Skilling Could Get Early Release From Prison (CNBC) Former Enron CEO Jeffrey Skilling, who is serving a 24-year prison term for his role in the energy giant's epic collapse, could get out of prison early under an agreement being discussed by his attorneys and the Justice Department, CNBC has learned. Skilling, who was convicted in 2006 of conspiracy, fraud and insider trading, has served just over six years. It is not clear how much his sentence would be shortened under the deal. MF Global Trustee's Report Blasts Former CEO Corzine (WSJ) A risky business strategy, failure to improve inadequate systems, as well as "negligent conduct" by former Chief Executive Officer Jon S. Corzine and others contributed to the unraveling of MF Global Holdings Ltd., a new report said Thursday. The report, released by Louis J. Freeh, the trustee for MF Global Holdings—the parent company of the U.S. brokerage firm MF Global Inc. and other units—laid much of the blame at Mr. Corzine's feet, accusing him of implementing trading strategies with minimal oversight and exceeding board-approved limits for some European trades the company made under his stewardship. Nightclub dancer "Ruby" stands up for Berlusconi outside court (Reuters) Carrying a large sign reading "The Ruby case: Are you not interested in the truth any more?", she said she had been used as part of a deliberate campaign against Berlusconi by magistrates and sections of the press. "Today I realize that there is a war under way against him that I do not feel part of, but which has dragged me in and injures me," she said, reading a prepared statement. "I do not want to be a victim of this situation." KKR to Carlyle Target $3.6 Trillion in 401(k)s Accounts (Bloomberg) Carlyle Group LP (CG), Blackstone Group LP (BX) and KKR & Co. (KKR), which usually open their doors only to clients willing to commit at least $5 million, are lowering that threshold or offering investments directly to individuals, an effort to attract fresh cash amid lackluster fundraising. Their ultimate goal: a slice of the $3.57 trillion Americans have accumulated in their 401(k) retirement plans. ... “We definitely would like to be part of 401(k) platforms,” Michael Gaviser, a managing director responsible for individual investor products at KKR, which oversees $76 billion, said in an interview at the firm’s New York headquarters. “We think about it every day because there’s so much demand.” Tiger Cubs Report a Rough Q1 (II Alpha) The first quarter was especially tough for long-short hedge fund managers - and the biggest, most prominent Tiger Cubs were not immune. ... New York-based Tiger Global, for example, was up only 2.5 percent in March and 5 percent for the first three months. Moscow Tries to Reinvent Itself as Financial Hub (NYT) “The idea is to upgrade the position of Moscow in ratings, to become closer to the leaders of innovation and to the big boys of international financial centers,” Andrei V. Sharonov, the deputy mayor for economic affairs, who led a roadshow tour promoting the city in Asia, said in an interview. ... Certainly Moscow has a lot of wooing to do. A city of traffic-clogged highways and sprawling concrete apartment blocks, Moscow is widely known as a singularly difficult place to do business. It did attract the big banking houses from New York and London after the fall of Communism. But cronyism, the lack of transparency and shady accounting gave companies pause. Weak courts and selective enforcement encouraged companies to conduct business outside Russia. North Korea Warns U.S. It’s Authorized Nuclear Attack (Bloomberg) North Korea stepped up threats against the U.S, authorizing its military to conduct a potential “smaller, lighter and diversified nuclear strike” while again restricting South Korean access to a joint industrial zone. Mark Zuckerberg’s Childhood Website Was Slightly Uglier Than Facebook (DI) "The only site where a yellow eye blinks at you." Norwegian schools reschedule exams amid Bieber fever (AFP) Bieber, who is 19, sparked chaos in Oslo in May last year when dozens of teenagers chased the singer's car in the hope of following him to a free concert at a location that was only revealed at the last minute.