Opening Bell: 12.5.14

Author:
Publish date:
Updated on

JPMorgan Said to Place U.S. Mortgage Securities Trader on Leave (Bloomberg)
JPMorgan Chase & Co. (JPM) put another of its mortgage-bond traders on leave, the latest in a string of suspensions amid regulatory scrutiny of the market, according to three people with knowledge of the move. The employee, Joshua Banschick, was told not to come in during the past week, said the people, who asked not to be named because the decision wasn’t public. The trader has worked at JPMorgan since 2008, after spending about a year at Bear Stearns Co., the securities firm bought by the bank that year with assistance from the Federal Reserve, according to Financial Industry Regulatory Authority records. Banschick, who hasn’t been accused of any wrongdoing, declined to comment when reached on his mobile phone.

Greenspan Says He Would Pre-Empt Asset Bubbles Financed by Debt (Bloomberg)
Former Federal Reserve Chairman Alan Greenspan, who was blamed by some economists for overheating equity and housing prices in the 1990s and 2000s, said that were he in the job today, he would take pre-emptive action to tackle asset bubbles if they were financed by leverage. Greenspan, who argued in office that it was better to clean up after an asset bubble had burst rather than artificially prick it, told delegates at a conference hosted by Citigroup Inc. in London today that he believed that argument is correct when a speculative boom isn’t financed by debt, mentioning the 1987 stock market crash as an example. If the overheating was caused by leverage, however, “then you’re going to have problems,” he said.

Uber’s Investor Club Adds Two Hedge Funds, Qatar’s Sovereign Wealth Fund (Digits)
New investors in the ride-sharing startup’s $1.2 billion round of funding included Middle East sovereign wealth fund Qatar Investment Authority and two hedge funds, Valiant Capital Partners and Lone Pine Capital, according to people familiar with the matter. One of the world’s oldest and largest venture-capital firms, New Enterprise Associates, also bought shares in the round, people briefed on the deal said.

U.S. Probes Och-Ziff Fee Paid in Libyan Dealings (WSJ)
U.S. investigators probing Och-Ziff Capital Management Group LLC’s dealings in Libya are focused on a multimillion-dollar payment by the big hedge-fund firm they believe was funneled in part to a friend of Col. Moammar Gadhafi’s son, said people briefed on the inquiry. The scrutiny is part of a broad, three-year foreign bribery investigation by the Justice Department and Securities and Exchange Commission into how Wall Street firms obtained investments from the regime of the former dictator, who was deposed and killed in the country’s 2011 revolution. A key part of the Och-Ziff investigation relates to a fee that Och-Ziff paid to the company of a London middleman for help winning a $300 million investment in Och-Ziff funds from the Gadhafi regime, the people briefed on the matter said. Och-Ziff, which has $47 billion in assets under management, has told the government its lawyers vetted the agreement and believes it was a perfectly legal placement fee, the people said.

Warren Buffett, Reluctant PAC Man, Is Ready for Hillary (Bloomberg)
The Oracle of Omaha gave the maximum donation allowed to Ready for Hillary last quarter, his first-ever check to the sort of independent political groups that he's scorned in the past. Buffett, who is the third richest man in the world, gave $25,000, the most any individual can donate under the committee's self-imposed cap, according to a person familiar with Ready for Hillary's post-election financial disclosure report. The group has raised more than $11 million to finance its efforts to lay the groundwork for a Clinton presidential campaign.

Bill Gross Muses on Nursery Rhymes and Domestic Abuse in Latest Investment Letter (Dealbook)
In his latest investment outlook note, published on Thursday, Mr. Gross uses nursery rhymes as a lens for viewing global monetary policy, and he expounds at length on modern social mores. He also makes an allusion to the N.F.L. and the league’s recent domestic abuse cases. The letter begins with a quote from the Punch and Judy rhyme in “Mother Goose.” “Ah, nursery rhymes! Intended for kids no less!” Mr. Gross says. “The above little ditty could serve as a modern day N.F.L. domestic playbook, I suppose, while a century ago it was but one of many ‘lesson plans’ on what not to do when you grow up.”

School used strippers to lure students: suit (AP)
Prosecutors say a for-profit Florida college used exotic dancers as admissions officers, falsified documents and coached students to lie on financial forms as it fraudulently obtained millions of dollars in federal money. The Florida attorney general and the US Attorney’s Office in Miami announced Wednesday that they were joining an ongoing civil lawsuit against FastTrain College and former owner Alejandro Amor, 56. FastTrain is now defunct. It operated seven Florida campuses and was based in Miami. The complaint says that from at least January 2009 through June 2012, FastTrain and Amor bilked the US Department of Education out of millions of dollars with falsified grant applications. The complaint says strippers on at least one campus tried to attract young male students.

BATS Faces Record SEC Fine Over Direct Edge’s Actions (WSJ)
Securities and Exchange Commission investigators are nearing a settlement of about $12 million to $13 million with BATS Global Markets Inc. over how its Direct Edge Holdings LLC exchanges handled customer orders, these people said. The current record fine for an exchange came in May 2013, when Nasdaq OMX Group Inc. agreed to pay $10 million to settle securities-law violations tied to its handling of the chaotic Facebook Inc. public offering a year earlier. The SEC’s Direct Edge investigation has focused on certain “order types,” instructions that exchanges provide to determine how customers’ buy and sell orders are handled. That includes instructions such as whether or when an order should be executed. Order types, which have proliferated in recent years, have come under increased scrutiny amid concerns that certain market players are gaining an advantage by getting more information than other traders about how order types work.

Former Zillow worker sues over pen!s pic, culture of misogyny (NYP)
Zillow’s maps have no doubt featured a frat house or two, but an explosive lawsuit filed by a former employee claims the online real estate outfit actually operates out of one — “an ‘adult frat house’ where sexual harassment and misconduct are normalized, condoned, and promoted by male managers.” Male supervisors in Zillow’s Irvine, Calif., office “ranked [the former employee] according to her breast size, sent pictures of their penis to her, and demanded sexual gratification and obedience,” the suit, filed by Rachel Kremer in a California federal court, alleges. Kremer’s direct supervisor not only belittled her but harassed her, it is alleged. The supervisor nicknamed a new employee “Rachel 2.0” because he felt she was like “Rachel but with bigger breasts and less miles on her,” the suit claims. Zillow executives, moreover, reportedly boasted the office’s culture produced “more sexual encounters than Match.com” and its Tinder-like obsession with hooking up led to the office’s internal directory being called “Zinder,” Kremer, who worked at Zillow for 26 months, claims in the suit.

E.C.B.’s Draghi Hints at More Stimulus in Future for Europe (NYT)
Mr. Draghi and the central bank did not take concrete action on Thursday. Instead, he offered assurances that more aggressive stimulus was just around the corner, perhaps the type of large-scale bond purchases used by the United States Federal Reserve. The question is how long the European Central Bank and Mr. Draghi can merely hint at actions yet to come. There were already signs of doubt on Thursday, as European stocks were down broadly even before Mr. Draghi’s news conference ended. “At some point, they will lose credibility,” said Mark Zandi, chief economist at Moody’s Analytics. “They still have time, but time is running out.”

Adams Hill Fund Founded by Ex-SAC’s Schwartz Said to Close (NYP)
Adams Hill Partners, started in 2012 by former SAC Capital Advisors money manager Andrew Schwartz, plans to shut after assets dwindled, according to two people familiar with the matter. The hedge fund firm, which specializes in bets on and against stocks, had about $150 million as of October, down from a peak of $425 million last year, said one of the people, who asked not to be identified because the information is private.

Woman Defies Court Order Prohibiting Loud Sex (HP)
A woman who was ordered by a British court to be quiet during coitus is making her point loud and clear: She refuses to stop screaming during sex. Caroline Cartwright, 53, of Sunderland, England is apparently so noisy with her husband of 38 years, that a British judge in 2010 ordered her to keep it down because neighbors complained. The order, known as an Anti-Social Behavior Order (ASBO), banned Cartwright from shouting, screaming or vocalizing when getting down and dirty for a 4-year period. Now she is speaking out about her carnal controversy. On Wednesday, she discussed her lusty legal problems on ASBO and Proud, a TV special on Channel 5, a British TV network. “It’s not as if I’m having sex and think ‘Oh, I’m making too much noise. I better be quiet,’" she said in the special, according to the Sunderland Echo. The ASBO was issued after police came to the Cartwright home more than 30 times to silence the passionate couple. Cartwright also breached a noise abatement order five times, and was given suspended jail terms of eight weeks and 12 weeks for violating the ASBO, UPI.com reports. The problem was exacerbated when the Cartwrights bought a bed with an iron headboard that banged against the wall, the paper reports...With the ASBO lifted, Cartwright will keep doing what comes naturally with her husband. "As far as I'm concerned, that's what you should be doing. Just relax. Go with the flow," she said, according to the Mirror.

Related