Opening Bell: 07.29.14

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Meet the SEC's 6,500 Whistleblowers (WSJ)
Retirees were the largest group with 365 tips. Investors were second with 290 complaints. Engineers came in third. But whistleblowers come from all walks of life. They include a diesel mechanic, an antiques dealer and a longshoreman; there's an agronomist, two people who listed themselves as "ex-wife" and a veterinarian. There are also a number of current and retired military servicemen and enough hospitality and service employees to suggest executives should watch what they say in restaurants, bars, hotels and taxis...Engineers, at first blush, might seem to be an odd profession for informants, but honesty, integrity and fixing errors are drilled into them during training, said Norman Fortenberry, executive director of the American Society for Engineering Education. "It's fundamental in our code of ethics," he said. The code states, among other virtues, that engineers "must be dedicated to the protection of public health, safety and welfare." "It is a matter of both personal and professional pride," Mr. Fortenberry said. The adult-entertainment industry, however, operates under an entirely different code. Among prostitutes, secrecy is sacrosanct, said Dennis Hof, proprietor of the Moonlight Bunny Ranch and other legal brothels in Nevada. "We have a sacred bond with our clients," he said. "Money can't take precedence." Mr. Hof said any of his employees would be fired and disavowed if they were to release privileged information about any of the brothels' clients. Air Force Amy, a popular Bunny Ranch mainstay whose real name is Deanne Salinger, said clients constantly reveal material, nonpublic information. At first she said she would approach Mr. Hof to see if they should invest based on any of the tips, but they agreed that it wouldn't be wise. "I dummy up a lot, I really do," she said. "I've been around a long time and you just don't talk."

BofA Deal With U.S. Is Hung Up Over Penalties Tied to Countrywide, Merrill (WSJ)
Bank of America has offered $13 billion to end the government's mortgage-securities probe, including a combination of fines and consumer assistance, which could include credit for measures such as writing down the values of mortgages for struggling homeowners. But the Justice Department is demanding billions more—and wants a bigger chunk in fines, these people said. Bank of America, which has already shelled out some $60 billion for crisis-era legal problems, has told the Justice Department it is willing to pay for the past misdeeds of Countrywide and Merrill Lynch—but not at levels it considers overly punitive, according to people familiar with the talks. Bank of America scooped up Countrywide and Merrill with the encouragement of regulators after housing troubles nearly sank both firms. It wants the penalty related to the firms' past misconduct to come in the form of consumer assistance or other so-called soft money that has a less severe impact on Bank of America's bottom line than a cash fine, these people say. The Justice Department has so far rejected Bank of America's proposal, and the U.S. could file a lawsuit within weeks if the two sides don't reach a deal, according to people familiar with the matter.

Former Goldman Options Trader Becomes Argentina Taxi King (Bloomberg)
After 23 years trading stock options at Goldman Sachs Group Inc., Merrill Lynch & Co. and his own hedge fund, Russell Abrams is piling into his most exotic gamble yet: as a Buenos Aires taxi impresario. Abrams, 48, plans to invest as much as $100 million of his own money to build a fleet of Buenos Aires cabs, undaunted by the prospects for Argentina’s second default in 13 years, the fallout from the peso’s devaluation in January, inflation of about 40 percent and the economy’s first quarterly contraction since 2012.

Startups Uber and Airbnb Court Business Travelers (WSJ)
The fast-growing technology startups this week each announced new versions of their apps geared toward booking business trips. Both companies also struck deals with Concur Technologies Inc., the expense-reporting software used by more than 20,000 companies. Appealing to corporate clients would give the young technology companies a toehold in the business travel industry, which is expected to generate $1.21 trillion in revenue world-wide this year, according to the Global Business Travel Association.

New Venture Fund Binary Capital Focuses on Mission, Not Just Metrics (Dealbook)
Binary Capital closed its first fund on July 17, raising $125 million — a hard cap — in just three and a half months. It turned away nearly half as many dollars. The goal of the fund is relatively straightforward: invest in 15 to 20 very early-stage consumer technology companies that have the potential to have a global impact. The partners plan to contribute to that impact by giving a portion of their carried interest to charitable organizations chosen by their entrepreneurs. Eventually, they also hope to team up with global nonprofit groups to use their technology and resources for causes in the developing world.

Marijuana Is a Welcome Wedding Guest in Colorado and Washington State (NYT)
Earlier this month, when Ellen Epstein arrived at the Devil’s Thumb Ranch in Tabernash, Colo., for the wedding of her friends Lauren Meisels and Bradley Melshenker, she, like the other guests, found a gift bag waiting for her in her hotel room. But rather than a guide to activities in the area or a jar of locally made honey, the canvas bag contained a rolled joint, a lighter and lip balm infused with mango butter and cannabis, along with this note: “We wanted to show you some of the things we love the best.” [...] All of the floral arrangements, including the bride’s bouquet, contained a variety of white flowers mixed with marijuana buds and leaves. Mr. Melshenker and his groomsmen wore boutonnieres crafted out of twine and marijuana buds, and Mr. Melshenker’s three dogs, who were also in attendance, wore collars made of cannabis buds, eucalyptus leaves and pink ribbons. Before going into dinner, the guests were given a baby marijuana plant in a ceramic pot with their name and table assignment written on a card in green ink, in the kind of stylish script you might find on a container of artisanal goat cheese. The tables were named after different strains of marijuana, like Blue Dream, Sour Diesel and Skywalker (the groom’s favorite strain). Ms. Epstein, who was seated at Skywalker, said that everyone at her table, where the ages ranged from 40 to 70, passed around a device similar to an electronic cigarette — except that it contained hash oil instead of nicotine. “It didn’t feel weird or bizarre,” she said. “It kind of becomes a new cocktail.”

Traders Bemoaning Losses Detect Volatility Reprieve (Bloomberg)
Currency traders are detecting the first signs of what they’ve been waiting for all year: a revival in volatility that may help trim their losses. Tensions in Ukraine and Gaza, together with interest-rate increases from New Zealand to South Africa (SARPRT), are helping push up a measure of price swings by the most since January. Volatility had flattened in recent months as policy makers continued to provide unprecedented amounts of cheap cash to spur growth. While rising volatility increases uncertainty and risk, it also creates opportunities for traders to profit on changes in exchange rates. Parker Global Strategies LLC’s index of currency returns rose 0.5 percent last week in its biggest gain since March.

Activists Peltz, Icahn Reap $556 Million on Dollar Stores (Bloomberg)
Peltz’s Trian Fund Management LP earned an estimated $368 million on its investment in Family Dollar Stores Inc. (FDO), which Dollar Tree Inc. of Chesapeake, Virginia, agreed to acquire for about $8.5 billion. Fellow activist Icahn will reap $188 million for two months of saber-rattling, regulatory filings show.

Los Angeles Clippers Sale to Ballmer May Proceed: Judge (Bloomberg)
The record $2 billion sale of the Los Angeles Clippers to former Microsoft Corp. Chief Executive Officer Steve Ballmer is headed toward completion without the consent of Donald Sterling, capping three months of controversy over the billionaire owner’s racist comments. California Superior Court Judge Michael Levanas in Los Angeles yesterday issued a tentative decision that Shelly Sterling has sole authority to sell the National Basketball Association franchise to Ballmer. She had removed her husband of 58 years from control of the family assets based on the findings of two doctors that he’s mentally incapacitated. The ruling brings Ballmer a step closer to taking ownership of what witnesses called a “trophy asset” at a three-week trial pitting the Sterlings against each other.

Citi to hire 100 bankers in Asia, eyes more business from smaller clients (Reuters)
Citigroup plans to hire as many as 100 bankers in a renewed push into Asia-Pacific commercial banking, following in rival HSBC's footsteps with a strategy that focuses on selling smaller corporate clients a wider range of products. Global banks like Citi and HSBC are now concentrating on small to medium-sized clients due to a dwindling number of $10 billion-plus IPOs from Chinese state-owned companies - deals which had sustained investment banks in the region over the last decade.

Pavlok Wristband Shocks You If You Don't Complete Fitness Goals (HP)
Need that extra motivation to get in shape? A fitness wristband due out in 2015 will zap you if you miss a workout. Pavlok's bracelet also has other kinds of negative reinforcement to get you off your duff, but it's the electric shock that's getting the buzz. "Sometimes crazy works," Pavlok CEO Maneesh Sethi says in a promotional video. For some, the gizmo might provide sticker shock as well. An alpha prototype , available now, costs $249.99. A unit on preorder for early 2015 costs $149.99.

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