Opening Bell: 08.12.14

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Ex-SAC Capital Manager Martoma Forfeiture Sought by U.S. (Bloomberg)
Former SAC Capital Advisors LP portfolio manager Mathew Martoma, convicted of orchestrating the most lucrative insider trading scheme in U.S. history, should be ordered to forfeit $9.4 million and required to pay a fine, U.S. prosecutors said. The amount sought is equal to Martoma’s 2008 bonus, and exceeds his reported net worth of $7.4 million, prosecutors said in a filing today in Manhattan federal court. Guidelines for the fine range from $20,000 to more than $570 million, representing twice the gains to SAC Capital of the illegal trades, prosecutors said. The court’s probation department recommended a fine of $20,000, they said, without making their own recommendation.

Falcone files for ‘divorce’ from LightSquared (NYP)
On Monday, Falcone filed “divorce papers” from LightSquared, his bankrupt wireless venture, in the form of a proposed plan of reorganization to lead the restructuring for LightSquared Inc., the smaller arm of the failed Reston, Va., startup. LightSquared Inc. owns a small swath of 5 megahertz spectrum, as well as the rights to the tax losses in LightSquared, which could be valued at more than $2 billion. LightSquared LP, by contrast, owns the larger, more coveted swath of L-Band spectrum. But its ability to come to life has been hampered by years of infighting between creditors, including Dish Network co-founder Charlie Ergen. Falcone was offered a chance to stay in the larger LightSquared LP restructuring if he dropped his litigation against Uncle Sam and Ergen, who he’s accused of screwing with the company so he could buy the assets on the cheap, sources told The Post. Falcone refused, and was erased from the current LP plan, which is being led by private-equity firm Fortress. Falcone’s new, smaller plan centers on a $560 million bid to restructure “Inc” along with JPMorgan. This will keep him in the spectrum game, as he plans to use the 5 megahertz of spectrum he gets from the restructuring and to buy more, a source familiar with his thinking told The Post.

Alibaba IPO Has Unusual Challenges for Bankers (WSJ)
For a start, the deal is likely to total more than $20 billion, according to people with knowledge of it. Bankers figure they will need to drum up orders for as much as four times the size of the deal from big institutional investors to create enough fervor to keep the shares rising in the days after it goes public, the people said. That will require seeking some buyers willing to pony up $1 billion or more for a slice of the deal to ensure demand.

Gross Reduces U.S. Government-Related Debt in July (Bloomberg)
The proportion of U.S. government-related debt in the $223 billion Pimco Total Return Fund (PTTRX) was 45 percent, versus 47 percent in June, data posted yesterday on the company’s website showed. That compared with 50 percent in May, the highest level since 54 percent in July 2010.

Barclays Quant Trading Unit Said to Take 60 Employees in Spinout (Bloomberg)
A Barclays trading team that’s leaving this year to start a quantitative investment firm will take 60 bank employees with it, adding to Wall Street’s migration to the $2.8 trillion hedge-fund industry. Olivier Durantel, Gregoire Schneider, Antoine Fillet and Maxime Fortin of the British bank’s nQuants unit will form the venture, according to a person with knowledge of the plans, who asked not to be identified because the information is private. The firm, which hasn’t yet been named, will use algorithms to trade mainly equities and other liquid securities globally.

Robin Williams, a Comic Force, Dies at 63 (WSJ)
Since his days on "Mork & Mindy," a fish-out-of-water tale that ran for four seasons in which he played an alien from the planet Ork, Mr. Williams demonstrated a fully formed comedic style filled with tics and habits that would become his trademarks. Those idiosyncrasies, like monologues full of non sequiturs or unexpected accents, would help him quickly become one of the world's biggest comedy stars and a favorite guest of late-night television talk shows. Even when not pictured on screen, Mr. Williams had a tendency to become the center of attention, including a celebrated turn as the voice of the madcap genie in the 1992 animated film "Aladdin." "Robin Williams was an airman, a doctor, a genie, a nanny, a president, a professor, a bangarang Peter Pan, and everything in between. But he was one of a kind. He arrived in our lives as an alien—but he ended up touching every element of the human spirit," President Obama said in a statement.

Miss Bumbum 2014 Contestants Hope To Have Brazil's Best Butt (HP)
In Brazil, the “Miss Bumbum” contest is a nationwide annual undertaking to find the best derriere. This year's 27 contestants, who represent the country’s different states, were announced last week. “Miss Bumbum 2014” will start in São Paulo on August 11. Brazilians have until November to vote online and determine the 15 finalists for the finale. This year the pageant will have a historic first after twins Rafaella and Graziella Fornazieri, representing Alagoas and Ácre respectively, entered the contest. Dai Macedo, a 25-year-old model with a 42-inch bottom, was crowned “Miss Bumbum 2013.” "It's a lot of work, a lot of devotion," Macedo told Agence France-Presse by way of an interpreter after winning the title. "I denied myself a lot of things. No nightclubs. No sweets. I went to the gym Saturdays and Sundays."

Kinder Morgan Deal Risks Big Tax Bills for Investors (WSJ)
Because Kinder Morgan Energy Partners is organized as a partnership that benefits from substantial deductions, the taxes on its substantial quarterly payouts were deferred. When the units are sold or exchanged—as they will be in the reorganization—the deferred taxes come due. "In this deal, one group of stakeholders will owe tax so that the company as a whole can benefit," said Robert Willens, an independent tax expert in New York. Most of that income will probably be taxed at ordinary rates, which are higher than long-term capital-gain rates, said Robert Gordon, a tax strategist who heads Twenty-First Securities Corp. in New York. The tax could be especially unwelcome for investors who planned to hold the units until death, when they could skip paying the deferred taxes. In effect, Mr. Gordon said, these people will owe tax they wouldn't otherwise have had to pay. The individual impact would vary widely, depending on when the units were bought and other factors, he said.

Standard Chartered to scour records for money laundering, with penalty at stake (Reuters)
Standard Chartered Plc will soon begin sifting through a mountain of data for signs of possible money laundering or other criminal activity, as a result of faults in the software critical to its anti-money laundering compliance program, two sources with knowledge of the matter said. The outcome of this review could affect any penalties regulators impose on the bank for anti-money laundering lapses.

Derivatives Reincarnate Boosting Debt Wagers in New Era (Bloomberg)
Wall Street is starting to return to the financial innovation that helped extend the debt rally seven years ago before exacerbating the worst financial crisis since the Great Depression. The instruments are springing back to life as investors seek new ways to boost returns that are being suppressed by central bank stimulus. At the same time, they’re allowing hedge funds and other investors to bet more cheaply on a plunge after a 145 percent rally in junk bonds since 2008.

Dominique Ansel’s Latest Creation: Peanut-Butter-Stuffed Pretzels Shaped Like Lobster Tails (Grub Street)
...the latest: a pull-apart pretzel shaped like a lobster tail, stuffed with buttercrunch and peanut butter and served salted with whipped brown-butter-honey sauce on the side. Here's the idea: The pretzel lobster — Pretzer? Lotzel? — bears a resemblance to the Italian pastry known as a lobster tail; it's a pretzel through and through, with bits stuffed with buttercrunch brittle and housemade peanut butter. The design is such that you're supposed to pull the pretzel apart in segments. The "tail" is sprinkled with Maldon salt, and in a nod to its lobster-tail inspiration, it comes with a pot of whipped brown butter and honey on the side.

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Goldman No.1 in Investment Bank Fees (Bloomberg Markets) Total investment banking fees for all financial institutions in 2011 were $49.1 billion, matching the $49.1 billion from 2010. Total deal volume also matched 2010, at $6.9 trillion. Goldman took the top spot in the ranking even as its total fees fell in 2011 to $3.46 billion from $3.6 billion in 2010. Goldman is also No. 1 in M&A fees for the eighth consecutive year. JPMorgan dropped to No. 3 from No. 1 in the overall ranking. Morgan Stanley held on to the No. 2 spot, with $3.26 billion in overall fees, down 11 percent from the prior 12 months. Investors With 39.3% of Greek Debt Will Swap (Bloomberg) The thirty members of the private creditor-investor committee for Greece who plan to participate in the swap hold an aggregate 81 billion euros of Greek debt, or 39.3 percent of the Greek debt eligible for the swap, according to the email. Obama pitches CEOs on economic growth (Politico) President Barack Obama pitched his proposals for economic growth to an audience of CEOs Tuesday, including Bank of America chief executive Brian Moynihan and Jamie Dimon of JP Morgan Chase. The president hailed his proposed investments in infrastructure and training and pointed to common ground with the business community, including the signing of free trade agreements and allowing Russia into the World Trade Organization, according to a pool report. Obama said he will go anywhere in the world to secure markets for American goods, and, noting a large order inked by Boeing, quipped, "I expect a gold watch upon my retirement" for all the planes he's helped sell around the world. "Obviously we've got a long way to go," he said. But, he said "the economy is speeding up." The gathering of the Business Roundtable, an association of CEOs, drew roughly 100 chief executives. But while there was polite applause when Obama was introduced, the pool report noted, “the CEOs sat silent for most of his remarks.” Private Sector Adds 216,000 Jobs (WSJ) Private-sector jobs in the U.S. increased 216,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The gain was close to expectations of 215,000 put forth by economists surveyed by Dow Jones Newswires. Alleged accomplice of Manhattan 'madam' indicted, remains on the lam (NYP) Accused millionaire madam Anna Gristina had an alleged partner in crime -- gorgeous strawberry-blonde Jaynie Baker, who three sources told The Post yesterday is Gristina's indicted but unapprehended accomplice. "She was running the operation with Anna," said one source with knowledge of the operation. Asked where Baker, 30, of Brooklyn, is currently, the source answered, "Nobody knows." Baker and Gristina are both charged with felony promoting prostitution for allegedly co-running an Upper East Side-based escort service that offered premium call girls to a millionaire clientele. "This was the gold standard of escort services," said a second source with knowledge of the operation. "These were high-end models who cost $2,000 a visit, and were worth every penny." World’s Richest Lose $11.3B, Mittal Falls Off Index (Bloomberg on Bloomberg) The 20 richest people on Earth lost a combined $11.3 billion yesterday as global markets fell after European economic growth slowed and investors weighed Greece’s chances of getting bondholders to accept a debt swap. Warren Buffett’s fortune fell $407.3 million, dropping his net worth to $43.9 billion. The chairman of Omaha, Nebraska- based Berkshire Hathaway Inc. (BRK/B), his investment holding company, ranks third on the Bloomberg Billionaires Index, a daily ranking of the world’s richest people. Bernanke Seen Accepting Faster Inflation as Fed Seeks Jobs Boost (Bloomberg) The Fed chairman told lawmakers last week that an increase in energy costs will boost inflation “temporarily while reducing consumers’ purchasing power.” He also said the central bank will adopt a “balanced approach” as it pursues its twin goals of price stability and full employment, which it defines as a jobless rate of between 5.2 percent and 6 percent. “The chairman seemed to suggest they will tolerate a misdemeanor on inflation as unemployment continues to fall toward their goal” over several years, said Mark Spindel, chief investment officer at Potomac River Capital, a hedge fund that manages $250 million in Washington. President Presses for Action on the Buffett Rule (WSJ) President Barack Obama took an aggressive tack on taxes at a White House news conference Tuesday, suggesting that Congress adopt his proposal for a so-called Buffett rule this year. It would require very high income earners—those making $1 million a year or more—to pay at least 30% of their income in federal tax. Newt Gingrich: 'I am the tortoise' of the 2012 Republican primary (The Hill) Newt Gingrich heralded himself as the "tortoise" of the 2012 Republican primary after a strong win in Georgia — the state he represented for two decades in Congress — and pledged to fight on for the Republican presidential nomination despite an otherwise poor showing in the Super Tuesday contests. "There are lots of bunny rabbits who run through — I am the tortoise. I just take one step at a time," Gingrich told a crowd of supporters in Atlanta.