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Opening Bell: 09.19.14

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Alibaba Group Said to Raise $21.8 Billion in Record U.S. IPO (Bloomberg)
The company and shareholders including Yahoo! Inc. sold 320.1 million shares for $68 each, according to a statement, after offering them for $66 to $68. The sale -- which values Alibaba at $167.6 billion -- is already the largest by any company in the U.S. and has the potential to break the global record if additional shares are sold to underwriters.

After IPO, Alibaba plans to pour cash into movies (NYP)
Studio heads are expecting an influx of investment dollars from Asia, thanks to the Chinese e-commerce giant, which is poised to pull off the biggest public stock sale in history on Thursday. Japan’s Softbank — which owns more than a third of Alibaba Group Holdings and is sitting on a large pile of cash as a result — has been visiting the bamboo-decorated executive suites of film studios with an eye toward winning a role in the movie business, sources said. “The Japanese have started to take an interest,” one source said. “They’ve talked to Jeffrey Katzenberg’s DreamWorks Animation.”

Regulators Probe Goldman's Internship for Brother of Libyan Ex-Official (WSJ)
The Securities and Exchange Commission is reviewing the New York-based bank's decision in June 2008 to hire as an intern the brother of Mustafa Zarti, then deputy chief of the Libyan Investment Authority, the people said. The move came after Goldman entered into more than $1 billion worth of trades with the authority, and just as the firm's relationship with the Libyan fund had begun to sour. The investigators are also reviewing why the brother, Haitem Zarti, was allowed to remain at the firm for almost a year, long after most Wall Street internships last, the people added. A Goldman spokesman confirmed that Haitem Zarti had interned for the firm's investment-banking arm and said his hiring wasn't related to its dealings with the Libyan authority. Mr. Zarti was allowed to remain at Goldman for almost a year because he had performed well, the spokesman added. Mustafa Zarti has previously said there was nothing wrong with the internship. Haitem Zarti couldn't be reached for comment, and an SEC spokesman declined to comment. Mustafa Zarti couldn't be reached for comment.

Scotland Rejects Independence as U.K. Wins Reprieve (Bloomberg)
Scotland voted to stay in the U.K. in a referendum on independence, stepping back from a breakup of the 307-year-old union while wringing promises of more financial power from Prime Minister David Cameron. After a count through the night, 55.3 percent of Scottish voters supported the “no” campaign against 44.7 percent who backed independence. The pound surged overnight as the Better Together campaign posted a wider margin of victory than suggested in opinion polls, before falling back. There was a record turnout of more than 90 percent in some of the 32 regions.

RBS and Lloyds Surge as Scotland Votes to Stay in U.K. (Bloomberg)
RBS jumped 3.1 percent to 368.2 pence at 9:21 a.m. in London trading, extending its weekly gain to 5.3 percent. Lloyds gained 2.1 percent to 77.43 pence, and TSB Banking Group Plc climbed 2.3 percent to 293 pence...Contingency plans to move to England are “no longer required,” RBS said in a statement today. RBS and Lloyds, both domiciled in Edinburgh, said last week they would move to England if Scots chose to dissolve the 307-year-old union. Analysts estimated a move south may have cost each lender as much as 1 billion pounds ($1.6 billion).

Gold iPhones at $3,600 as China Delay Fuels Black Market (Bloomberg)
Liu Min stands a few feet from an Apple Inc. store in Beijing hawking something that can’t be bought inside: the new iPhone 6. While the device debuted today in the U.S., Hong Kong, Japan and Australia, there is no release date set for the world’s biggest smartphone market. That creates an opportunity for Liu, who promises two-day delivery of a 16-gigabyte iPhone 6 for 8,000 yuan ($1,303) -- almost double the price on Apple’s Hong Kong website. “It’s going to be a while before the new iPhone comes to China officially, so if you want it now, you have to pay up,” Liu said, pacing outside the Sanlitun district store selling screen protectors. “Give me a call if you want one.” Liu, who wouldn’t discuss his supply chain, wasn’t alone. Four vendors nearby offered the 128-gigabyte iPhone 6 for delivery on Sept. 20 at the equivalent of about $2,441, compared with the Hong Kong price of about $927.

Cops: Customer Pointed Gun At Drive-Thru Worker And Demanded A Hamburger (TSG)
“Give me a hamburger or I’ll shoot you.” That is what Dechazo Harris, gun in hand, allegedly said to a Florida drive-thru worker with whom he quarreled over an order. According to police, Harris, 27, ordered a midnight meal via a drive-thru speaker at a Checkers in West Palm Beach earlier this year. When he drove to the pick-up window, he sought to submit a second order. However, Checkers manager Rontavious Tarver, 20, explained to Harris (seen below) that if he wanted to place another order, he would have to drive around to the speaker and place it there. In response to that direction, Harris, cops charge, pulled out a gun and pointed it at the Checkers employee. As he began to exit his vehicle, Harris threatened the worker, “Give me a hamburger or I’ll shoot you.” He added, “Bro, you don’t know who I am.”

Larry Ellison to Step Aside as Oracle CEO (WSJ)
It is unclear how Oracle will fare long-term with Mr. Hurd and Ms. Catz at the helm. The duo effectively have run day-to-day operations at Oracle for several years with Mr. Ellison tending to focus on technology, a role he will continue to play. As executive chairman and the owner of a quarter of the company's shares, worth $48 billion, Mr. Ellison won't be walking away from its Redwood City, Calif., headquarters.

U.S. Treasury Market Goes Off Script (WSJ)
The softness of longer-term yields highlights concerns shared by many analysts and policy makers about the uneven growth of the U.S. economy and falling expectations for inflation. Investors broadly expect the Fed to raise the fed funds rate next year for the first time since 2006. But many analysts say that even a small uptick in rates could slow the economy and send already-low inflation further below the Fed's target.

Citigroup Tells Appeals Court of Its Argentina Quandary (Dealbook)
Argentina is holding a gun to the head of Citigroup, a lawyer for the bank told a three-judge panel in Manhattan on Thursday. The bank has found itself in an awkward position: It must decide between defying a New York court order or a sovereign government, a move that it says would result in “grave sanctions” from Argentina. “We’re going to obey, and if we obey, we have a gun to our head and the gun will probably go off,” Karen Wagner, a lawyer representing Citigroup, said. The bank is the latest financial group to be caught in the battle between a group of bondholders and Argentina that prompted the country’s default this summer and threatens to engulf financial institutions which have until now watched from the sidelines. Standing before a three-judge panel of the United States Court of Appeals for the Second Circuit, Ms. Wagner argued that the bank would suffer “serious and imminent hazard” if it obeyed a ruling from United States court judge that blocks it from making payments to bondholders.

Costumed characters blow-off NYPD’s summit (NYP)
A police summit with Times Square’s costumed menaces to help keep them out of handcuffs was a total bust — with just nine characters showing up and refusing to have a dialogue, sources told The Post. The plan was to meet with and educate the aggressive Elmos, Batmen and Cookie Monsters who prey on tourists in the Crossroads of the World to prevent more arrests. “But the meeting was a waste of time. They were in their little costumes, [and] they didn’t give a s–t about what we had to say,” a source said of the meeting. Instead, they played hardball with New York’s Finest — bringing an unidentified lawyer with them to the meeting Wednesday evening on the Duffy Square bleachers. The NYPD took the meeting far more seriously, with its contingent including Susan Herman, deputy commissioner of collaborative policing, and other NYPD brass. “They said, ‘We have nothing to say. Talk to her, [our] rep,’ ” the source said of the characters.

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France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.