Misery Widespread At Hedge Funds (WSJ)
This month’s turmoil in financial markets has been a “bloodbath” for hedge funds, inflicting large losses at an array of multibillion-dollar firms in the industry’s worst stretch since late 2011. It isn’t unusual for one segment of the $2.8 trillion hedge-fund world to find itself caught in a downdraft. But in October, the pain has been widespread. There were casualties among funds that make bets based on their fundamental analysis of companies, events like takeovers and broad economic trends. The losses came amid sharp volatility in stocks, bonds, currencies and commodities. Top firms including Jana Partners LLC, Discovery Capital Management LLC and Paulson & Co. have posted losses ranging from 5% to 11% for the month, according to investors...One hedge-fund manager told clients Monday that market activity reminded him of a “familiar plotline” from the “Jaws” movies. “An idyllic investment environment amid an improving economy…and then cue the music…dun-dun…dun-dun…dun-dun,” Paul Westhead, chief executive of $4 billion fund Rimrock Capital Management LLC, wrote in a letter to investors.
Fed to Banks: Shape Up or Risk Breakup (WSJ)
Federal Reserve officials sent a warning shot across Wall Street on Monday, telling bank executives they must do more to curb excessive risk-taking and improve employee behavior at their firms or face stiff repercussions, including being broken into smaller pieces. Federal Reserve Gov. Daniel Tarullo and Federal Reserve Bank of New York President William Dudley , in closed-door speeches Monday to bank executives gathered at the New York Fed, said Wall Street must clean up its behavior and image, according to copies of their remarks provided by the Fed. The regulators made it clear they aren’t satisfied with bank’s efforts in the six years since the financial crisis shattered public trust in big banks, citing ongoing probes of banks for currency-market and interest-rate manipulation, tax evasion and efforts to skirt international sanctions. Mr. Dudley raised the specter of breaking up big banks, saying if firms don’t prove they can comply with the law, “the inevitable conclusion will be reached that your firms are too big and complex to manage effectively. In that case, financial-stability concerns would dictate that your firms need to be dramatically downsized and simplified so they can be managed effectively.”
Private Equity Titans Open Cloistered World to Smaller Investors (Dealbook)
Carlyle, the Washington-based giant that Mr. Rubenstein co-founded in 1987, is at the forefront of an effort to open the cloistered and risky world of private equity to doctors, lawyers, well-heeled entrepreneurs and others with a brokerage account or, one day, a robust 401(k). The firm is close to establishing a new way to give individual investors direct access to a selection of Carlyle’s private equity funds, according to people briefed on the matter who were not authorized to speak publicly about the private fund-raising campaign in progress. Not just anyone can jump in. Investors — who must be so-called qualified purchasers, or those who own at least $5 million in investible assets — are required to commit a minimum of $250,000, which is divided evenly across four of Carlyle’s current funds. But the structure sharply lowers the bar on a per-fund basis for direct investment with Carlyle.
Heroin blamed in Google prostitute murder case (AP)
Defense attorneys for a high-priced prostitute accused of giving a Google executive a fatal dose of heroin on his yacht say their client had also injected herself, clouding her judgment...Gerald Christensen, Tichelman's second attorney, says the death was an accident and not malicious. Police say surveillance video shows Tichelman gather her belongings, casually step over the body of 51-year-old Forrest Hayes to finish a glass of wine, clean up a counter, then lower a blind before leaving the yacht on Nov. 23.
Microsoft CEO Nadella Received Pay Package of $84 Million (Bloomberg)
Microsoft Chief Executive Officer Satya Nadella was given a compensation package worth as much as $84.3 million for the software maker’s latest fiscal year, about 11 times his pay from the previous year. Nadella was named CEO about five months before the end of the year, which ended in June. He was granted share awards potentially worth $59.2 million in connection with his promotion to CEO, according to a filing today. He also received a one-time retention award worth $13.5 million. The disclosure of Nadella’s compensation follows a gaffe about raises he made earlier this month at a women’s conference. He said he was advised early in his career to stop bucking for a promotion and that those who take the long view will eventually be rewarded. He later apologized for those statements, saying that they didn’t help to close the gender gap in pay.
Cops: Losers Of Beer Pong Match Opened Fire On Fellow Texas Partygoers (TSG)
The 1:20 AM shooting Sunday took place at a residence in Ames, a city 45 miles from Houston. According to the Liberty County Sherriff's Office, investigators are searching for two men who allegedly shot up the party after losing at the beer pong table. Deputies identified the suspects as Decoris “Red” Rucker, 24, and Chris “Crazy Chris” Hackett. Rucker and Hackett were among a group of five men who became upset after losing a backyard beer pong game. The men, witnesses said, ran from the home while firing wildly at partygoers. An 18-year-old woman was shot in the thigh during the gunfire. Rucker, Hackett, and the other men fled in a 2006 Buick.
SEC Is Steering More Trials to Judges It Appoints (WSJ)
The Securities and Exchange Commission is increasingly steering cases to hearings in front of the agency’s appointed administrative judges, who found in its favor in every verdict for the 12 months through September, rather than taking them to federal court. The winning streak comes amid a marked shift at the agency toward trying cases that are more complex before its administrative law judges. Historically, the SEC had more often turned to these judges for relatively straightforward legal actions, such as barring stockbrokers who had been convicted of criminal fraud. Thanks in part to enhanced powers granted in the 2010 Dodd-Frank financial-reform bill, the SEC lately has been using the administrative judges for complicated cases, including several involving insider trading.
Apple Projects Another IPhone-Fueled Record for Holidays (Bloomberg)
Cook has increasingly honed all of the elements for a strong holiday quarter, stacking them in Apple’s favor. He has moved most of the company’s product debuts toward the end of the year, shifting away from some gadget introductions that used to happen in the spring. Starting with the iPhone 4s and the iPad mini in 2011 and 2012, Apple began introducing products before the shopping season. This year, he unveiled the iPhone 6 and 6 Plus, as well as Apple Pay, in September, followed by an event this month to show off new iPads and Macintosh computers.
Warren Buffett just lost about $1 billion on this (CNBC)
The plunge in IBM shares Monday after its weak earnings results cost the Oracle of Omaha dearly. The stock fell $13.06, and Buffett held about 70.2 million shares as of June 30, according to the most recent SEC filings. That means the sharp decline cost him $916.5 million—a drop in the Berkshire Hathaway bucket, to be sure, but still noteworthy. (At IBM's lows of the day, he was down as much as $1.08 billion). In April, after a prior weak earnings report, Buffett told CNBC he had not "soured" on IBM, that he had bought more stock this year and that he had not sold a share.
Father of the bride: daughter of ex-Barclays exec marries in south of France (NYDN, earlier)
Nell Diamond, a former Deutsche Bank analyst, married Deutsche managing director Ted Wasserman at the Hotel du Cap-Eden-Roc in Antibes, France.
Alleged drunk driver thought jail was a bar (UPI)
Police in Michigan said an alleged drunk driver pulled into the county jail parking lot and thought she had arrived at another bar. The Van Buren County Sheriff's Office said the 39-year-old Hartford woman, whose name was not released, pulled into the county jail parking lot just after 2 a.m. Sunday and was seen trying to convince her boyfriend to get back into her vehicle. Deputies said the woman smelled heavily of alcohol and a breathalyzer test indicated her blood alcohol content was more than twice the legal limit of .08. Police said the woman admitted to investigators she had been out drinking at a bar and she had believed the parking lot was for another bar.