Opening Bell: 10.31.14

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The texts that sparked the SEC pot stock probe (NYP)
A pair of investing tycoons traded giddy text messages this spring as they planned to unload a massive haul of hyped-up shares in GrowLife, a supplier to pot farmers that has come under regulatory scrutiny. “April 10 is your day! Buy two houses in Miami!” David Weiner, a Los Angeles-based penny-stock financier texted to fellow investor Fred Knoll, according to messages obtained by The Post. “Lol you are my hero,” replied Knoll, an MIT-educated Wall Street veteran. The duo were licking their chops over the April 10 expiration of a restriction against selling a massive chunk of GrowLife shares they’d acquired after giving the company a cash infusion, Knoll admitted in a brief interview Wednesday. “There was a restriction on the shares that was expiring,” Knoll said, declining to elaborate. The plan for a big payday was thwarted at the last minute, however, when the Securities and Exchange Commission halted trading of GrowLife stock at 50 cents a share before the stock opened for trading on April 10. At the time, the SEC cited “potentially manipulative transactions” in the stock. The specific reason for the SEC’s halt on GrowLife shares had been a mystery up to now — but a source confirmed that the SEC made its move after reviewing the lock-up expiration data and the text exchange.

Big Banks Brace for Penalties in Probes (WSJ)
Big banks in the U.S. and Europe are stockpiling billions to pay for a potential trans-Atlantic settlement of allegations that they manipulated foreign-exchange rates as talks heat up with regulators on both continents. The possibility of a major deal soon, instead of the firms settling with regulators one by one, is a new wrinkle in the long-running talks to settle foreign-exchange probes that have ensnared about a dozen banks in the U.S. and Europe. Several people familiar with the discussions said banks appeared more optimistic of reaching a global settlement than U.S. regulators. One person said the direction of the talks was changing by the hour.

Citigroup Legal Costs Jump as Currency Probes Accelerate (Bloomberg)
Citigroup revealed that it’s facing a U.S. criminal probe into the bank’s foreign-exchange business and took a $600 million legal charge that forced it to restate third-quarter results reported two weeks ago. The lender is cooperating with criminal and antitrust investigations by the Justice Department as well as inquiries by the Commodity Futures Trading Commission and regulators in the U.K. and Switzerland, New York-based Citigroup said today in a regulatory filing.

3 years later, some MF Global creditors get paid (Reuters)
A large group of creditors of MF Global's bankrupt brokerage unit will soon receive their first payout, as $518.7 million of checks start to be mailed out on Friday, the third anniversary of the company's Chapter 11 filing. James Giddens, the trustee liquidating the MF Global brokerage unit, on Thursday said the payout to unsecured general creditors will cover 39 percent of claims he has deemed valid. He said another $32.3 million will be distributed to some "priority'' claimants, covering all of their valid claims.

StanChart faces US sanctions probe (FT)
US authorities have reopened an investigation into Standard Chartered to determine whether the UK bank hid transactions that flouted sanctions laws as it was settling a related action two years ago, people familiar with the matter said. The inquiry is a blow for StanChart and its embattled management team. Peter Sands, one of the longest serving chief executives of any global bank, faces growing doubts about his future after this week announcing the group’s third profits warning of the year.

Fridge-raiding Teletubbie charged with burglary (UPI)
Police in Pennsylvania said a man who dressed as the yellow Teletubbie and broke into a friend's home for leftover Chinese food has been charged with burglary. Bethlehem police said Lehigh University student Terez Owens Jr., 20, was dressed as Laa-Laa, the yellow Teletubbie, when he allegedly broke into a friend's house about 2 a.m. Sunday and filled his "man purse" with leftover Chinese food from the refrigerator. The door to the residence was damaged during the break-in, police said. Officers caught up to Owens, who police said was dressed up for a nearby Halloween party, shortly after the incident, but he was released when the victim initially declined to press charges.

LinkedIn rise bucks social network trend (FT)
Shares in LinkedIn rose 2 per cent in after-hours trading following its quarterly earnings release, bucking a trend set by other social media stocks which have suffered this earnings season despite beating expectations. The social network for professionals, which boasts more than 300m users, also surpassed estimates, reporting earnings per share of 52 cents, compared with the average analysts’ forecast of 47 cents, excluding the cost of stock-based compensation and amortisation due to acquisitions. Revenue of $568m, 45 per cent higher than the third quarter of 2013, was also higher than the consensus forecast of $558m. Unlike Facebook and Twitter, which depend on advertising revenue, LinkedIn generates most of its revenue from subscriptions it sells to recruiters, which give them extra tools in their search for candidates.

Advice from Buffett's 30-year-old right-hand woman (CNBC)
Tracy Britt Cool, 30 and just named CEO of wholly owned Berkshire Hathaway subsidiary Pampered Chef, began her journey to the Oracle of Omaha from a childhood on a fruit-and-vegetable farm in Manhattan, Kansas. "At around 10 years of age, I had my own farmer's market stand," recalled Cool, speaking with CNBC..."I hired my friends and set their wages, set the prices of fruit and vegetables, and I realized I liked all those aspects of business and that's what I wanted to go into," Cool said. It wasn't until 2006, when Cool graduated from Harvard Business School and met Buffett that she wrote him a letter offering to be a "gal Friday" of sorts in Omaha if he agreed to let her pick his brain on investment and business topics. Buffett ended up creating a role for Cool to join Berkshire a few weeks after she had accepted her first post-business school offer with another company. Now, in addition to running Pampered Chef, Cool is a board member at Heinz, Benjamin Moore and Johns Manville—among her many duties helping to oversee Berkshire's sprawling investments and subsidiaries.

World Bank’s Kim Announces About 250 Net Job Cuts (Bloomberg)
“Staffing decisions are always challenging,” Kim said in a memo to staff today. “But we feel confident that the changes we are making will help us better align our staffing to our strategy, which is what our clients want and what we must deliver.” He said about 500 reductions would be made from 2015 to 2017 “through attrition, redeployment, and redundancies,” and about 70 available open positions canceled, and 250 to 300 new hires made in the reorganization.

Efforts to replace Fed hawks Plosser, Fisher pick up speed (Reuters)
Two regional Federal Reserve banks have taken steps to replace their hawkish presidents, Charles Plosser and Richard Fisher, whose departures early next year could change the tenor of debate within the U.S. central bank's policy-setting committee. The Philadelphia Fed said on Thursday it had hired executive search firm Korn Ferry to find a successor to Plosser, 66, who will retire on March 1 after more than eight years at the helm. A committee of Philadelphia Fed directors working with Korn Ferry will consider "a diverse group of candidates from inside and outside" the Fed, it said. Fisher, 65, will retire by April after about a decade as the Dallas Fed's president.

Matt Taibbi’s First Look exit reveals worker unrest (NYP)
Clashes over budgets, editorial direction and mission plagued the company this summer and a complaint filed with management last month against star recruit Matt Taibbi by a female employee over Taibbi’s “verbally abusive and unprofessionally hostile” management style has First Look in disarray, according to a report Thursday on one of the media company’s sites...Omidyar’s big bucks wooed Taibbi to jump from Rolling Stone to help start a First Look Web publication called Racket...First Look President John Temple “conducted an investigation, and … determined that while none of the alleged conduct rose to the level of legal liability, the grievance bolstered their case that Taibbi should not be the manager of Racket,” according to the story.

'Wasting Time on the Internet' Is Now an Actual College Class (Motherboard)
Next semester at the University of Pennsylvania, students will walk into a classroom, pull out their laptops, their smartphones, their tablets, and sit there, for three hours, doing what they no doubt do pretty often: Waste time on the internet. The Ivy League school's newest creative writing class is trying to remove the stigma from an activity that millions of people do on a daily basis, in an attempt to explore how our minds might work when we're totally aimlessly clicking through reddit or Facebook or Buzzfeed or watching porn or doing whatever the hell people do in their free time. "I'm very tired of reading articles in the New York Times every week that make us feel bad about spending so much time on the internet, about dividing our attention so many times," Kenneth Goldsmith, a world-renowned poet and the course's professor, told me. "I think it's complete bullshit that the internet is making us dumber. I think the internet is making us smarter. There's this new morality built around guilt and shame in the digital age."

Man accused of stealing chainsaw by hiding it under his shirt (WPTV)
A Port St. Lucie man is under arrest after police say he attempted to steal a chainsaw by placing it under his shirt and walking out of a local lawn equipment store. According to Port St. Lucie Police, Anthony Brian Ballard is facing a charge of grand theft. Police said he went into Treasure Coast Lawn and asked for change for a dollar, then tried to conceal a chainsaw under his shirt and leave without paying for the merchandise. Investigators then said Ballard got onto a stolen bicycle and fled from the area of 1802 SW Bayshore Drive. A store employee tracked down Ballard and witnessed him drop the chainsaw in a vacant lot. Ballard was eventually caught by a store employee who held him in custody until police arrived.

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Opening Bell: 5.27.15

Greece not getting money any time soon; RBS will (probably) pay another $4.5 billion fine; FIFA arrests; Hank Greenberg; Activists v. Tech; "NYPD boss spent $60K on dance studio for cops"; and more.

By Federalreserve (FED_9638) [Public domain], via Wikimedia Commons

Opening Bell: 6.16.16

Turnaround bankers are so hot right now; Janet Yellen say sit tight; Man converts tree stump into tribute to Boston sports teams; and more.

Opening Bell: 08.22.12

Public Pension Funds Named To Lead ‘London Whale’ Lawsuit (Bloomberg) U.S. District Judge George Daniels in Manhattan ruled today that lawsuits against the New York-based bank should be consolidated into a class action. The pension funds allege they lost as much as $52 million because of fraudulent activities by JPMorgan’s London chief investment office. The lead plaintiffs named by Daniels are the Arkansas Teacher Retirement System, Ohio Public Employee Retirement System, School Employees Retirement System of Ohio, State Teachers Retirement System of Ohio, Oregon Public Employee Retirement Fund and the Swedish pension fund Sjunde AP-Fonden. Pressures Intensify On Merkel (WSJ) The Greek government, struggling with depression-like conditions that have pushed the economy to the brink, is likely to need many billions of euros of additional aid to avoid bankruptcy. If Athens doesn't get the money, it may be forced to leave the euro, an outcome that would undermine financial markets' tenuous confidence in other vulnerable southern euro members, including Spain and Italy. An expansion of Greece's €173 billion ($213.4 billion) bailout that was agreed to this spring faces adamant opposition in Ms. Merkel's center-right coalition in Germany's parliament, the Bundestag. Her junior coalition partners are especially against lending Greece more money, threatening to leave her either without a governing majority—or without a plausible way to cover Athens's funding gap. "It is one of the hardest dilemmas she has faced as chancellor," said an adviser to Ms. Merkel. The chancellor is set to meet with French President François Hollande on Thursday and Greek Prime Minister Antonis Samaras on Friday, meetings the chancellor's aides say will help determine Berlin's course. Austria's AAA Rating Under Attack From East and West (CNBC) Of the three major credit rating agencies, only Fitch Ratings still rates Austria triple-A with stable outlook. Moody’s Investors Service put Austria’s top notch rating on negative watch in February, while Standard & Poor’s downgraded the country to double-A plus with negative outlook in January. Facebook Challenged By Swedish Count’s Jet-Set Website (Bloomberg) The BestofAllWorlds site, which starts Aug. 27, will allow users to mingle online with like-minded people, find restaurants and nightlife in city guides and discover who’s attending events such as Art Basel in Miami and England’s Royal Ascot horse racing, said Erik Wachtmeister, whose father was a Swedish ambassador to the U.S. “Facebook is a monopoly in the social sphere, but it only gives little value,” Wachtmeister said in an interview in London. “We can deliver clever filters, cut through the mess and get information that’s relevant and we can trust.” Fed Probes RBS Over Dealings With Iran (FT) The UK bank is being probed by being probed by the Federal Reserve and Department of Justice after volunteering information to them and U.K. regulators about 18 months ago, several people close to the situation said. The bank uncovered the alleged failings after Chief Executive Stephen Hester initiated an internal review not long after his arrival three years ago...The probe marks the latest blow for RBS following a series of mishaps including an IT failure, widespread mis-selling of retail and small-business products and its involvement in the scandal over the alleged manipulation of Libor interest rates Suspect asks DeLand doughnut shop worker for pen to write robbery note (NYP) An embarrassed Atlantic City casino is suing 14 gamblers — including two Big Apple residents — demanding they return the whopping $1.5 million they collectively won after realizing the mini-Baccarat table they were playing at was using unshuffled decks of cards. The sharp-eyed gamblers racked up a staggering 41 winning bets in a row at the Golden Nugget after seeing cards in the eight-deck shoe coming out in sequence and adjusted their wagers accordingly — as the clueless croupiers kept on dealing. Stunned casino workers swarmed the hot table suspecting the players of cheating — but only later realized that the cards that had been ordered as pre-shuffled from a Missouri company “were not shuffled at all,” a Golden Nugget spokeswoman said yesterday. “The gamblers unlawfully took advantage of the Golden Nugget when they caught on to the pattern and increased their bets from as little as $10 to $5,000,” the casino said in a written statement...It has been met with a countersuit from three of the bettors, including Queens resident Ping Lin, who allegedly managed to collect $50,000 from the casino, and Brooklyn cook Hua Shi, who allegedly collected $149,000. They claim they should be allowed to cash in chips they won and keep the cash they already managed to collect. Nomura Retrenches, Mends Fences (WSJ) Nomura's new leaders are discussing the future of that global push as well as how to repair the company's relationship with financial authorities. On the table are deep cuts in overseas operations and a possible change to a controversial compensation plan, among other policy options, that could shift away from the globalization strategy set by former Chief Executive Kenichi Watanabe and his deputy Takumi Shibata through the acquisition of Lehman Brothers' European and Asian businesses in 2008, say people close to the talks. Last Man Standing Means Europe Investment Banks Resist Shrinking (Bloomberg) Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to reviveprofit. Dealmaking fees may drop 25 percent this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008. Florida couple arrested after swinger’s party takes violent turn (NYDN) Tina Michelle Norris, 39, and her boyfriend James Albert Barfield, 56, both invited guests over to their home for sex Sunday night, the Hernando Today reported. But Norris got mad when she saw her boyfriend in bed with another woman and Barfield lost his cool when he saw his girlfriend under the sheets with two other men, according to the newspaper. The pair quickly got physical, with Norris sustaining a bloody lip and Barfield suffering multiple scratch marks on his neck and back, cops told Hernando Today. Police got quite the eyeful when they arrived at 6 a.m. to arrest the couple, both of whom were still donning their birthday suits. Norris was "very intoxicated and uncooperative" and refused to put her clothes back on, Deputy Cari Smith wrote in her affidavit. Barfield was also nude when Smith arrived at the home. A roommate, who was sleeping in a separate room of the house at the time of the incident, said she awoke to shouting and yelling. She went out into the hallway and found Norris and Barfield "pushing and shoving each other from one end of the house to the other (while) breaking things in the process," Smith wrote.

Opening Bell: 12.19.12

UBS In $1.5 Billion Libor Fine (WSJ) As part of the deal, UBS acknowledged that dozens of its employees were involved in widespread efforts to manipulate the London interbank offered rate, or Libor, as well as other benchmark rates, which together serve as the basis for interest rates on hundreds of trillions of dollars of financial contracts around the world. UBS's unit in Japan, where much of the attempted manipulation took place, pleaded guilty to one U.S. count of fraud. Authorities on Wednesday painted a picture of "routine and widespread" attempts by UBS employees to rig Libor and the euro interbank offered rate, or Euribor. The U.K. Financial Services Authority said it had identified more than 2,000 such attempts between 2005 and 2010 with the participation or awareness of at least 45 UBS traders and executives. Regulators on Wednesday released a trove of internal UBS emails and other communications—many of them colorful and expletive-laden—in which bank traders, sometimes with the knowledge of their managers, sought to manipulate the rates in order to boost their trading profits or mask the Swiss bank's mounting financial problems in 2008. UBS Traders' 'Humongous' Libor-Fixing Boasts (CNBC) The FSA documents suggest a macho trading culture on the UBS trading floor. Trader A also said: "if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today ... I will ****ing do one humongous deal with you ... Like a 50,000 buck deal." Traders and brokers implicated in the scandal referred to each other as "the three muscateers [sic]" and "captain caos [sic]." SAC's top consumer trader draws scrutiny from U.S. authorities (Reuters) U.S. authorities are examining trading by one of SAC Capital Advisors' most successful portfolio managers, Gabriel Plotkin, as part of a probe into the $14 billion hedge fund firm's investment in Weight Watchers International Inc last year, according to a person familiar with the investigation. Plotkin, a specialist in consumer and retail stocks who makes investment decisions for more than $1.2 billion worth of assets, is among several SAC portfolio managers whose trades are being investigated, said the source, who did not want to be identified. The source would not name the other managers. Federal authorities are trying to determine whether any of SAC Capital's retail and consumer portfolio managers traded Weight Watchers shares based on non-public confidential information about the diet company, said the source and another person familiar with the investigation. The two sources said it is too soon to conclude if there was any insider trading. Authorities have not charged Plotkin with any wrongdoing. Banks See Biggest Returns Since ’03 as Employees Suffer (Bloomberg) Shareholders, impatient for the industry to boost profit, were rewarded as Wall Street firms cut jobs and pay, and exited businesses. The shrinking unnerved employees, who watched the chiefs of two big banks lose their jobs and others contend with a drop in deal making and stock trading, stiffer regulations, trading losses, rating downgrades and scandals involving interest-rate manipulation and money laundering. “There’s always grumbling on Wall Street, which is pathetic given how overpaid we all are, but there is a level of angst this year that is just unprecedented,” Gordon Dean, who left a 26-year career at Morgan Stanley (MS) to co-found a San Francisco boutique advisory firm this year, said in a telephone interview. “It’s just a profound sadness and dissatisfaction.” Greek Bond Bet Pays Off for Hedge Fund (FT) One of the world's most prominent hedge funds is sitting on a $500 million profit after making a bet that Greece would not be forced to leave the euro zone, bucking the trend in a difficult year for the industry. Third Point, headed by the billionaire US investor Dan Loeb, tendered the majority of a $1 billion position in Greek government bonds, built up only months earlier, as part of a landmark debt buyback deal by Athens on Monday, according to people familiar with the firm. The windfall marks out the New York-based firm as one of the few hedge fund managers to have profited from the eurozone crisis. Standard and Poor's, the rating agency, raised its assessment of Greece's sovereign debt by several notches on Tuesday, citing the euro zone's"strong determination" to keep the country inside the common currency area. Fitch Warns US Could Lose AAA If 'Fiscal Cliff' Hits (Reuters) "Failure to avoid the fiscal cliff.. would exacerbate rather than diminish the uncertainty over fiscal policy, and tip the US into an avoidable and unnecessary recession," Fitch said in its 2013 global outlook published on Wednesday. "That could erode medium-term growth potential and financial stability. In such a scenario, there would be an increased likelihood that the U.S. would lose its AAA status." Science explains Rudolph's red reindeer nose (CNET) A collection of Dutch scientists contributed to a paper titled "Microcirculatory investigations of nasal mucosa in reindeer Rangifer tarandus (Mammalia, Artiodactyla, Cervidae): Rudolph's nose was overheated." According to the paper, "The exceptional physical burden of flying with a sleigh with Santa Claus as a heavy load could have caused cerebral and bodily hyperthermia, resulting in an overworked nasal cooling mechanism that resembles an overheated cooling radiator in a car: Rudolph suffered from hyperemia of the nasal mucosa (a red nose) under more extreme heat loads during flight with a sleigh." Of course, scientists don't like to put all their scientific eggs into just one basket of science. The paper's authors acknowledge other theories for the red nose, including the common cold, alcoholic intoxication, or a parasitic infection of the nostrils. GM To Buy Back Stock From Treasury (WSJ) GM said it will purchase 200 million shares of stock held by the U.S. Treasury Department in the first step of the government's eventual exit from the auto maker within the next 12 to 15 months. The auto maker will pay $5.5 billion for the shares in a deal that is expected to close by the end of the year. The repurchase price of $27.50 a share represents a 7.9% premium over the closing price on Dec. 18. Berlusconi Says Italy May Be Forced to Leave the Euro Zone (Reuters) "If Germany doesn't accept that the ECB must be a real central bank, if interest rates don't come down, we will be forced to leave the euro and return to our own currency in order to be competitive," Berlusconi said in comments reported by Italian news agencies Ansa and Agi. Knight, Getco Confirm Merger (WSJ) The $1.8 billion deal for Knight, which values the firm at $1.4 billion plus $400 million in debt held by Getco, will create a trading powerhouse ranking as one of the largest players on U.S. exchanges and the main trading partner of online brokerage firms that service everyday investors. Porsche Executives Charged Over VW Bid (WSJ) Prosecutors have charged the former top executives of Porsche Automobil Holding SE with allegedly manipulating financial markets during the company's attempt to take over Volkswagen AG in 2008, lawyers representing the executives said Wednesday. A court in Stuttgart must now decide whether to open criminal proceedings against Porsche's former chief executive Wendelin Wiedeking and former finance chief Holger Härter, who are suspected of misleading investors when they denied trying to take over VW in 2008. Market manipulation in Germany can be punished with up to five years' imprisonment. From early March to October of 2008, Porsche issued at least five statements denying it was trying to raise its stake in Volkswagen to 75%, but the prosecutors allege that Messrs. Wiedeking and Härter had already decided to try to raise the stake and were preparing for the move by purchasing buy options on ordinary and preference shares of Volkswagen. The denials induced investors to sell or make bets the shares would fall by so-called short selling, the prosecutors said, which benefited Porsche by lowering the share price ahead of the planned takeover. Spanx Bandit On The Loose After JCPenney Heist (TSG) An unknown thief (or thieves) stole a whopping $4182 worth of the popular body shapers from a JCPenney in Vero Beach, according to an Indian River County Sheriff’s Office report. The Spanx theft was reported Friday afternoon after a JCPenney employee noticed “the empty rack in the women’s undergarment section.” The worker noted that the Spanx stock had been there the prior evening. A subsequent search of the store revealed that about 100 Spanx “were taken along with their plastic hangers.” The purloined undergarments--tan and black tops and bottoms--were from Spanx’s Assets Red Hot Label line, police reported. A JCPenney store manager gave cops an itemized list of the boosted body shapers, but it appears the Spanx Bandit will escape unscathed. Due to a lack of witnesses, evidence, or store surveillance video, no further investigative activity could be undertaken by a sheriff’s deputy.