Greece Plans 'Special Economic Zones' to Boost Growth (Reuters) Greece plans to set up "special economic zones" to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday. The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference. "We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports," Hatzidakis said. Spain's Catalonia to Ask for Aid From Madrid (WSJ) Catalonia, Spain's most indebted region, said Tuesday it will ask for €5.02 billion ($6.27 billion) in financial assistance from the Spanish government's liquidity program, as it struggles to pay for basic services such as hospitals, schools and care homes. Catalan government spokesman Francesc Homs said at a news conference that the government will ask for the funding to "face debts maturing in the coming months." ECB's Draghi Stuck At The Office, To Skip Jackson Hole Symposium (WSJ) "ECB President Mario Draghi had hoped to attend the annual economic symposium in Jackson Hole organized by the Federal Reserve Bank of Kansas City, but has decided not to go to Jackson Hole, due to the heavy workload foreseen in the next few days," an ECB spokesperson wrote in an email. Leonardo DiCaprio To Bare All In 'Wolf Of Wall Street' (NYDN) “There will be some pretty illicit sex scenes coming up,” said a set insider. “It involves four guys and two girls.” And there’ll even be a little guy-on-guy action in one of the orgies — but DiCaprio won’t be in those. Not that there would be anything wrong with that. Scorsese’s film follows the rise and eventual imprisonment of drugged-out real-life former stockbroker Jordan Belfort, who is now a motivational speaker and says he has been sober since his life imploded in the go-go late ’90s and he went to prison. The movie started shooting in the Financial District over the weekend and there’ll be more filming in midtown this week. Later this month, the action will move to a Hamptons estate. DiCaprio was spotted rehearsing at Bank of America with co-star Jonah Hill. Matthew McConaughey also stars, as Belfort’s mentor. “They were incognito and Leo didn’t take his sunglasses off the entire time,” said a Merrill Lynch source. There are some scenes you can bet will be shot strictly behind closed doors. “We have a scene in an office with a troupe of hookers during a coffee break,” the set insider told us. “They are in the process of casting a ton of beautiful models, who are willing to bare it all, to portray escorts and strippers,” our source said. “The girls have to be incredibly hot.” Connecticut Homes Biggest Losers As Wall Street Cuts (Bloomberg) Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales. Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors. Hero Reagan’s Compromise Would Collide With Tea Party Certitude (Bloomberg) Ronald Reagan remains the modern Republican Party’s most durable hero. His memory will be hailed as The Great Uncompromiser by those who insist the GOP must never flag in its support for smaller government, lower taxes and conservative social values. His record tells a different story. During Reagan’s eight years in the White House, the federal payroll grew by more than 300,000 workers. Although he was a net tax cutter who slashed individual income-tax rates, Reagan raised taxes about a dozen times. His rhetoric matched that of many of today’s most ardent Christian conservatives, yet he proved to be a reluctant warrior on abortion and other social issues. Perhaps most tellingly, he was willing to cut deals, working closely with Democratic leaders such as House Speaker Tip O’Neill of Massachusetts to overhaul Social Security and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois to revamp the tax code. Ann Romney Takes Biggest Stage Yet To Humanize Husband (Bloomberg) Mitt Romney’s likability gap was evident in a Washington Post/ABC News poll released yesterday. The poll, taken Aug. 22-25, showed 27 percent of registered voters find Romney to be more friendly or likable among the two candidates, compared with 61 percent for the incumbent. Kidney for Ohio patient's transplant put in trash (AP) A nurse accidentally disposed of a kidney from a living donor this month at an Ohio hospital, and doctors tried unsuccessfully for at least two hours to resuscitate the organ in what medical experts describe as a rare accident, health officials said. "Human error rendered the kidney unusable," University of Toledo Medical Center spokesman Toby Klinger said Saturday, but he declined to give more details, citing the hospital's investigation into what happened and its respect for the privacy of the patients involved. But one of the doctors involved told Dr. David Grossman, a Toledo-Lucas County health commissioner, that a nurse disposed of the kidney improperly. Two nurses have been placed on paid administrative leave while the hospital reviews what happened, Klinger said.

US Probes Gold Pricing (WSJ) The Commodity Futures Trading Commission is examining the setting of prices in London, in which a handful of banks meet twice daily and set the spot price for a troy ounce of physical gold, the people said. The CFTC is looking at issues including whether the setting of prices for gold—and the smaller silver market—is transparent. No formal investigation has been opened, the people said. US And UK Tussle Over Trader (WSJ) Officials in the U.S. Justice Department and the U.K. Serious Fraud Office clashed late last year in their mutual pursuit of Tom Hayes, the former UBS trader who is viewed by prosecutors in both countries as a ringleader of banks' attempts to rig the London interbank offered rate, or Libor, these people said. While jurisdictional disputes among law enforcement agencies aren't unusual, some U.S. officials worry that the friction on this case will jeopardize trans-Atlantic cooperation on future financial-fraud investigations. The spat revolves around a sequence of events that played out in rapid succession last December. The trouble began, the people said, when the U.K. government unexpectedly blocked a Justice Department request to interview Mr. Hayes, who is British and lives outside London. Then, without notifying the U.S., British fraud prosecutors on Dec. 11 arrested Mr. Hayes and two others in connection with their own probe—infuriating American officials, according to people familiar with the U.S. investigation. The U.S. prosecutors punched back the next day by filing sealed criminal fraud charges against Mr. Hayes. Banks Bow To New York On Clawbacks (WSJ) Three more top banks, including Citigroup, will broaden their clawback policies to cover more executives, increase disclosures or add potential triggers. The moves increase to six the number of leading financial companies that have bowed to pressure from the New York City's Comptroller's Office. Lehman Judge Allows 'London Whale' Subpoena in JP Morgan Fight (Dow Jones) A judge on Wednesday said Lehman Brothers Holdings Inc. creditors can subpoena Bruno Iksil in its lawsuit against J.P. Morgan, ensuring the phrase "London Whale" will stay in the lexicon for at least a bit longer. Judge James Peck of U.S. Bankruptcy Court in Manhattan said Mr. Iksil, who is in France, can be questioned over the alleged mismarking of $273.3 million in derivatives when he worked at J.P. Morgan in the days leading up to Lehman's bankruptcy. "I consider it inappropriate except for in a clear case of abuse to cut off discovery of a witness that has fingerprints all over a transaction," Judge Peck said. "And in this case, Mr. Iksil's fingerprints are on the $273.3 million transaction that took on some significance in the case." Lehman U.K. Wins $1 Billion Appeal on Hedging Contracts (Bloomberg) The ruling may result in London-based Lehman Brothers International Europe and its administrators PricewaterhouseCoopers LLP receiving an extra $1 billion, according to a written decision handed down this morning by Judge Mary Arden in the U.K. Court of Appeals. Jobless Claims Unexpectedly Fall as Labor Market Improves (Bloomberg) First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five- year low. JPMorgan exec sued over 'bullying' behavior (NYP) Plaintiff Walter Suarez, a former financial adviser, was banished to the company’s Delancey Street outpost when he complained about colleague Michael Quach, and the move cost Suarez an $80 million client list, $20 million of which was taken by JPMorgan, his lawyers claim. According to Suarez, Quach was a bully who resorted to physical violence to intimidate colleagues. Suarez, who is Hispanic, says Quach, an Asian-American, got away with the behavior because bosses preferred Asian employees. “Eventually, it got to the point of being ridiculous. This isn’t the corner bodega,” Suarez told The Post. “We’re investment people. This is a professional setting. That’s when I spoke up. “He just wasn’t a very professional person from the get-go, and I don’t think that I was the only person who felt that way.” Suarez told superiors that Quach had manhandled several staffers, including one woman who was “physically assaulted during working hours on the banking floor,” according to the lawsuit filed in Manhattan Supreme Court by attorneys Matthew Blit and Amanda Gudis. Suarez said Quach even threatened to punch him out in front of clients. 'Canada's Warren Buffett' Interested in Greece's Top Bank (Reuters) Greece's biggest lender, National Bank (NBG), said on Wednesday that Canadian investment fund Fairfax Holdings was interested in acquiring a stake in it by taking part in a planned recapitalization. Under the terms of cash-strapped Greece's international bailout, its top four lenders must issue new shares by the end of April to replenish their capital after the losses they suffered in the debt crisis from bad loans and bond writedowns. The European Union and the International Monetary Fund have set aside 27.5 billion euros ($37 billion) in bailout funds to invest in the new bank shares. But private investors must buy at least 10 percent of them or the lenders will be nationalized. NBG said in a bourse filing that Fairfax was among other investors who had expressed an interest, without giving details. Fairfax is controlled by investment guru Prem Watsa, known as the "Warren Buffett of Canada." SandRidge Gives In, Settling Proxy Fight (WSJ) SandRidge Energy agreed to fire its chief executive or give control of its board to an activist shareholder, settling a closely watched proxy battle amid an outbreak of investor unrest in the oil patch. SandRidge, an oil-and-gas producer with a stock-market value of about $3 billion, immediately appointed four directors to its board who were nominated by hedge fund TPG-Axon Capital LP, which owns 7.3% of its shares. Bofa Battles Credit Suisse for 50% Markups on State Loans (Bloomberg) The firms are among at least five lenders in talks to loan five states at least $6.5 billion this year -- more than double last year’s total -- as local governments seek to chop debt costs by replacing loans from a 1997 federal bailout that average 14.4 percent in reais. Credit Suisse is lending Mato Grosso, an agricultural state in western Brazil, $1 billion for 15 years. The loan, with a rate equal to 11.2 percent in reais and guaranteed by Brazil if Mato Grosso defaults, compares with 7.35 percent for yields of similar-maturity government debt. Private Equity Could Trigger Another Crisis: Bank of England (CNBC) The amount of leverage in the U.K. corporate sector poses a risk to the stability of the financial system and could produce the next big financial crisis over the coming years, the U.K.'s central bank has warned. White Rock woman holds 'Lying Cheating Sale' to sell all her husband's stuff while he's 'gone with his floozie' (The Province) A scorned White Rock woman held a yard sale on the weekend to get rid of her husband's stuff while he was "gone with his floozie," according to a Craigslist ad. "Husband left us for a piece of trash, selling everything while he is gone this weekend with his floozie," read the text of the ad, which was posted early Friday afternoon to the free classifieds site. The Province dropped by the yard sale on Saturday and, sure enough, bargain-hunters were sifting through the goods which included office chairs, camping gear and other offerings. The lady in charge of the sale declined to speak on the record. Her colourful Craigslist ad, however, said she was selling everything and moving after 10 years of marriage. The featured items included his favourite red leather reclining theatre-seating sofas, and "lots of tools which he didn't have a clue how to use." "I want the house empty on Monday when he returns because that will be a shock for him to see. So come pick out what you would like Saturday and Sunday at 8 a.m. "Don't come too early (like he did) because I will be thoroughly enjoying some wine with my girlfriends this evening as we clean out all this stuff and likely be nursing hangovers in the morning. So please speak softly to the ladies wearing the sunglasses." The ad discouraged clothes-buyers, "as we will have already burned those in the driveway," but it did offer to let visitors see the pile of ashes.

Mayor Bloomberg Visits Goldman Employees After Smith Op-Ed (BW) “The mayor stopped by to make clear that the company is a vital part of the city’s economy, and the kind of unfair attacks that we’re seeing can eventually hurt all New Yorkers,” said Stu Loeser, a spokesman for the mayor. Bloomberg visited the firm Thursday and met with Chief Executive Officer Lloyd C. Blankfein and numerous employees, Loeser said. Italy Said To Pay Morgan Stanley $3.4 Billion (Bloomberg) When Morgan Stanley said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates. Italy, the second-most indebted nation in the European Union, paid the money to unwind derivative contracts from the 1990s that had backfired, said a person with direct knowledge of the Treasury’s payment. It was cheaper for Italy to cancel the transactions rather than to renew, said the person, who declined to be identified because the terms were private. Client Slams Goldman Slowness to Give Reassurances (Reuters) PG, a Dutch investment adviser that runs 300 billion euros of assets for more than 4.5 million people in the Netherlands, said it was surprised it took the Wall Street bank more than a day to offer APG any reassurance on points raised in Greg Smith's resignation letter. "We would have expected that a company that faces such a big media backlash over something so core to their business such as client trust would have instantly reached out to those clients to say something," APG spokesman Harmen Geers told Reuters. Banks Desire Assets Tied To AIG Bailout (WSJ) A potential sale of the CDOs by the New York Fed in the coming months, plus the government's recent decision to resume selling some of its AIG stock, could set the stage for the U.S. to recover the bulk of its money from the bailout before the presidential elections this year. Learning From The Spurned And Tipsy Fruit Fly (NYT) They were young males on the make, and they struck out not once, not twice, but a dozen times with a group of attractive females hovering nearby. So they did what so many men do after being repeatedly rejected: they got drunk, using alcohol as a balm for unfulfilled desire. And not one flew off in search of a rotting banana. Fruit flies apparently self-medicate just like many humans do, drowning their sorrows or frustrations for some of the same reasons, scientists reported Thursday. Male flies subjected to what amounted to a long tease — in a glass tube, not a dance club — preferred food spiked with alcohol far more than male flies that were able to mate. Buffett Awards Wall Street-Sized Pay Praised by Dimon (Bloomberg) Warren Buffett, who has said banker greed helped deepen the U.S. financial crisis, attracts the workers he wants with compensation that competes with Wall Street awards. Berkshire gave $17.4 million in 2011 compensation to Thomas P. Nerney, CEO of its United States Liability Insurance Group; $12.4 million to Geico Corp. CEO Tony Nicely and the National Indemnity Co. unit gave $9.26 million to Ajit Jain, according to filings to state regulators. Berkshire, which is set to send its annual-meeting notice to shareholders today, said in last year’s proxy that Buffett’s salary remains $100,000 at his request. St. Patrick's Day Message: Ireland Isn't Greece (CNBC) As large parts of the world turn green to celebrate St. Patrick’s Day, the Irish Prime Minister Enda Kenny has been flying the green, white and gold flag on a charm offensive around the world. enny is packing in trips to London, China and New York within a couple of weeks in an effort to carry forward the country’s gradual return to economic health, which has been based largely on attracting foreign investment. He opens the New York Stock Exchange on Monday, after visiting at the White House over the weekend. “This is a very important push for Ireland,” Irish businessman Barry Maloney, founder and general partner at venture capital firm Balderton Capital, told CNBC. Kozlowski in NYC work release (NYP) Convicted in 2005 of looting his company, Kozlowski was transferred from an upstate prison to the Lincoln Correctional Facility, a minimum-security site on Manhattan’s 110th Street near Fifth Avenue, on the north border of the park. He leaves every weekday morning to participate in a work-release program, said Peter Cutler, a spokesman for the New York State Department of Corrections and Community Supervision. Kozlowski is still serving a prison sentence of 8 1/3 to 25 years, Officials Cool On Yuan-Swap Proposal (WSJ) Amid growing interest in turning London into a trading hub for the Chinese yuan, some bankers have proposed to U.K financial authorities to adopt a tool increasingly used by China's central bank to foster yuan liquidity overseas: bilateral currency-swap agreements. The bankers are pushing for the Bank of England to sign a currency-swap deal withits Chinese counterpart, according to banking executives involved in the discussions. Such a deal, they say, could help foreign banks get hold of yuan and supply the currency to customers. DA grilling two 'hookers' and 'money launderer' in case of alleged madam (NYP) Court transcripts and other records, along with sources familiar with the case, indicate that the two alleged prostitutes and a mysterious “laundry man” — identified only as a 68-year-old Russian-American — have met privately with authorities to save their own hides and clinch a case against Gristina and her suspected cohort, Jaynie Mae Baker. One of the women has admitted privately to having turned tricks for Gristina at her alleged East 78th Street “brothel,” a source said. Prosecutors have engaged in hush-hush negotiations with alleged call girls Mhairiangela “Maz” Bottone, 30, and Catherine DeVries, 31 — who are both charged with prostitution, according to court documents — and with the alleged money launderer, named only as “John Doe” by authorities.

Ackman Applauds Call For Herbalife Investigation (AP) The National Consumers League said that it wants the FTC to investigate the claims against Herbalife as well as the vitamin and supplement products company's responses. Ackman alleged in December that Herbalife was a pyramid scheme and made a bet the stock would fall, arguing that the company makes most of its money by recruiting new salespeople rather than on the products they sell. Herbalife disputes that. In a statement late Tuesday, Pershing Square Capital Management's Ackman said that he was pleased that the NCL was requesting an FTC investigation and believes it will show that the company is a pyramid scheme. On Wednesday, Herbalife said in a statement that "We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife." Troika, Cyprus In Talks To Shrink Bailout Package (WSJ) Officials from the troika of lenders—the European Commission, the European Central Bank and the International Monetary Fund—are working with the Cypriot government to bring the headline figure for the bailout package to about €10 billion ($13.03 billion), two officials said. The aid package had been earlier expected to be as much as €17 billion—with just shy €10 billion of that going for bank recapitalizations. Big Sugar Set For Sweet Bailout (WSJ) The U.S. Department of Agriculture is considering buying 400,000 tons of sugar—enough for 142 billion Hershey's Kisses—to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The action aims to prop up tumbling U.S. sugar prices, which have fallen 18% since the USDA made the nine-month operations-financing loans beginning in October. The purchases could leave the price-support program with an $80 million loss, its biggest in 13 years, said Barbara Fecso, an economist at the USDA, in an interview. U.S. Tax Cheats Picked Off After Adviser Mails It In (Bloomberg) Everybody knows the danger of sending things inadvertently in an e-mail. Beda Singenberger’s case shows you also have to be pretty careful when you mail things the old-fashioned way. Over an 11-year period, federal prosecutors charge, Swiss financial adviser Singenberger helped 60 people in the U.S. hide $184 million in secret offshore accounts bearing colorful names like Real Cool Investments Ltd. and Wanderlust Foundation. Then, according to a prosecutor, Singenberger inadvertently mailed a list of his U.S. clients, including their names and incriminating details, which somehow wound up in the hands of federal authorities. Now, U.S. authorities appear to be picking off the clients on that list one by one. Singenberger’s goof has already ensnared Jacques Wajsfelner, an 83-year-old exile from Nazi Germany, and Michael Canale, a retired U.S. Army surgeon, court records show. Another customer, cancer researcher Michael Reiss, pleaded guilty, though his court records don’t mention the list. White Pressed On Past Representing Banks (WSJ) Since 2002, President Barack Obama's pick to become chairman of the Securities and Exchange Commission has worked for the law firm Debevoise & Plimpton LLC, where she often represented large corporations and banks. Members of the Senate Banking Committee, often from the president's own party, pressed her to guarantee that her law-firm work wouldn't stop her from taking on Wall Street's wrongdoers. "What have you done [in] the last decade that ordinary investors can look at and be assured that you will advocate for them?" Sen. Sherrod Brown (D., Ohio) asked Ms. White. Wearing a bright red jacket, her hands neatly folded on the table before her, Ms. White said her work at Debevoise "hasn't changed me as a person." Killer Ukrainian dolphins on the loose (JustinGregg) After rebooting the Soviet Union’s marine mammal program just last year with the goal of teaching dolphins to find underwater mines and kill enemy divers, three of the Ukrainian military’s new recruits have gone AWOL. Apparently they swam away from their trainers this morning ostensibly in search of a “mate” out in open waters. It might not be such a big deal except that these dolphins have been trained to “attack enemy combat swimmers using special knives or pistols fixed to their heads.” Dimon’s Extra $1.4 Million Payout Hangs on Fed Decision (Bloomberg) That’s how much extra income Dimon could get from his stake of about 6 million shares if his New York-based bank raises its payout as much as analysts predict. The sum dwarfs the combined $73,300 of new annual dividends at stake for his CEO peers at Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co., based on forecasts compiled by Bloomberg. Bankers will find out whether they get any boost tomorrow when the Fed announces which capital plans at the 18 largest U.S. lenders won approval. Regulators have pressed firms since the 2008 credit crisis to give executives more stock and less cash to align their interests with those of shareholders. CEOs are poised to get a windfall if payouts increase and shares rise -- or to suffer with their investors if results sputter. BofA Ordered to Pay Ex-Merrill Banker Jailed in Brazil (Bloomberg) Sao Paulo’s 26th labor court said it was “incontrovertible” that the imprisonment was because of his position as a junior financial consultant at Merrill Lynch, now a division of Charlotte, North Carolina-based Bank of America, according to a document published in the nation’s official Gazette earlier this month. Caiado wasn’t convicted of any wrongdoing. Caiado, 42, was jailed in June 2006 in a Curitiba federal prison over allegations he helped Merrill’s clients make illegal overseas money transfers. His arrest was part of an investigation that resulted in indictments of 18 bankers at Credit Suisse AG and UBS AG in Brazil. Merrill fired Caiado nine months later, saying the dismissal was part of a restructuring. Carlyle Group Lowers Velvet Rope (WSJ) In the latest effort by private-equity firms to broaden their customer base, Carlyle Group is letting some people invest in its buyout funds with as little as $50,000. The move comes as other large firms—known for offering exclusivity to big-money clients—have broadened their investment offerings in search of fresh sources of funds. KKR, for example, recently began offering mutual funds investing in bonds, with minimum investments set at $2,500. Blackstone Group launched a fund last year that for the first time lets affluent individuals invest in hedge funds and has told regulators it plans to offer another fund, though it hasn't disclosed many details about the forthcoming offering. Greenland Votes for Tougher Rules for Foreign Investors (WSJ) Voters in Greenland have elected a new ruling party that has pledged to toughen up on foreign investors looking to take advantage of the nation's wealth of natural resources. The Social Democratic Siumut party collected 43% of the votes in an election held Tuesday, enabling the party to leapfrog the ruling Inuit Ataqatigiit, which over the past four years has worked to open up the secluded country to mining companies and others capable of advancing industry. Greenland is believed to have a vast supply of untapped rare-earth minerals, oil, gas and other resources. Blankfein On Trader Talent Hunt At Morgan Stanley (NYP) The Goldman Sachs CEO is taking dead aim at Morgan Stanley’s most prized assets — its best and brightest employees — after his rival decided to defer pay for senior bankers. Blankfein, as a big game hunter, recently landed 13-year Morgan Stanley veteran Kate Richdale, head of its Asia Pacific investment banking business. The CEO’s talent hunt is continuing, sources said. Goldman currently is in selective talks with other Morgan Stanley bankers and has also lured a handful of traders from the bank. Golfer Survives Fall Into Course Sinkhole (AP) Mark Mihal was having a good opening day on the links when he noticed an unusual depression on the 14th fairway at Annbriar Golf Club in southern Illinois. Remarking to his friends how awkward it would be to have to hit out of it, he went over for a closer look. One step onto the pocked section and the 43-year-old mortgage broker plunged into a sinkhole. He landed 18 feet down with a painful thud, and his friends managed to hoist him to safety with a rope after about 20 minutes. But Friday's experience gave Mihal quite a fright, particularly after the recent death of a Florida man whose body hasn't been found since a sinkhole swallowed him and his bedroom. "I feel lucky just to come out of it with a shoulder injury, falling that far and not knowing what I was going to hit," Mihal, from the St. Louis suburb of Creve Coeur, told The Associated Press before heading off to learn whether he'll need surgery. "It was absolutely crazy."

Barney Frank cries foul in government's lawsuit against JPMorgan (Reuters) Democratic Congressman Barney Frank defended the largest U.S. bank on Monday, saying in a statement that the government was wrong to go after JPMorgan Chase & Co for the alleged misdeeds of Bear Stearns. Frank, who served as chairman of the House Financial Services Committee during the Bear Stearns acquisition, said federal and state officials should reconsider holding financial firms liable for the wrongdoing of institutions they absorbed at the government's urging. "The decision now to prosecute J.P. Morgan Chase because of activities undertaken by Bear Stearns before the takeover unfortunately fits the description of allowing no good deed to go unpunished," said Frank, who was also the co-author of the 2010 Dodd-Frank financial reform law. New York Attorney General Eric Schneiderman sued JPMorgan, the nation's largest bank by assets, on October 1 over mortgage-backed securities packaged and sold by Bear Stearns. Hedge Funds Hot For Ailing Greece's Debt (WSJ) Ever since Greece completed a debt restructuring in March that turned €200 billion in bonds into about €60 billion, distressed-debt investors—many at U.S. hedge funds—have been picking them over. Hedge-fund analysts have flooded Greek finance officials with requests for information. Prices have climbed. Third Point LLC, based in New York, crowed about Greece in its investor letter earlier this month, citing the resilience of the bonds of fellow bailout-recipient Portugal. "We expected Greece to keep its head up and undergo a similar metamorphosis," the letter said. Ever since Greece completed a debt restructuring in March that turned €200 billion in bonds into about €60 billion, distressed-debt investors—many at U.S. hedge funds—have been picking them over. Hedge-fund analysts have flooded Greek finance officials with requests for information. Prices have climbed. Third Point LLC, based in New York, crowed about Greece in its investor letter earlier this month, citing the resilience of the bonds of fellow bailout-recipient Portugal. "We expected Greece to keep its head up and undergo a similar metamorphosis," the letter said. Billionaire Wilbur Ross Interested In Buying Spanish Bank Assets (Bloomberg) Ross’s WL Ross & Co., which holds about 10 percent of Bank of Ireland and teamed up with Richard Branson to buy part of Northern Rock Plc, is in talks “almost every week” with representatives of the large Spanish banks, he said in an interview in Abu Dhabi, without naming potential targets. “Maybe next year will be the year for Spain,” he said. “We’ve been doing a lot of work in Spain. We’ve put a lot of time and effort into Spain but haven’t put any money in yet.” Doom Heralded at Hayman by Widening Trade Deficit (Bloomberg) Japan’s worsening trade gap will make it harder to service the world’s largest debt, fulfilling part of the doomsday scenario that Hayman Capital Management LP is betting on. The nation’s 10-year note yield may rise toward 10 percent from the world’s third-lowest of 0.79 percent, while the yen weakens, said Richard Howard, who oversees Dallas, Texas-based Hayman’s Japan-focused fund with J. Kyle Bass. That would represent the developed world’s second-highest borrowing costs after Greece, and a surge to that level by the end of 2013 would cause losses of 42 percent for investors purchasing the securities now, data compiled by Bloomberg show. Regulators Crash Over Volcker Definitions (WSJ) The SEC and a trio of banking regulators are butting heads over how to define the buying and selling of securities on behalf of clients, known as market-making, as well as over banks' ability to invest in outside investment vehicles such as hedge funds, according to officials close to the discussions. Since brokers, which are overseen by the SEC, conduct market-making activities, the SEC is pushing for more influence over the issue, these people said. Police: Woman fakes her own kidnapping to get day off work (WOAI) An officer on patrol went to check out a car parked near Ray Ellison and Five Palms around 6:30 p.m. on October 10th. When the officer looked inside the car, he spotted 48-year-old Sheila Bailey Eubank bound with rope. An arrest warrant affidavit states Eubank told police a man jumped into her car around 6:15 a.m. while she was at a Security Service Federal Credit Union ATM near Loop 1604 and Bandera Road. Eubank said the man held her an knife point and forced her to drive him to various locations for what she believed were drug deals. She told officers he then assaulted her, tried to choke her with a rope, and then tied her up and left her in her car. However, officers discovered a lottery ticket in Eubank's purse that was purchased that day during the hours she claimed she was being held. Investigators reviewed surveillance video from the store where the lottery ticket was purchased and found out she had entered the store by herself and appeared "healthy, unhurried, and pleasant with the clerk." Investigators then reviewed video from the Security Service Federal Credit Union where Eubank claimed she was abducted. The video showed withdrawing money from the motor ATM, but there were no signs that anyone else was with her. Police say when Eubank was confronted by investigators, she eventually admitted her story was false and that she simply wanted a day off from work and wanted attention. BofA CEO Moynihan Declares Victory Over Capital Doubters (Bloomberg) Bank of America now has the “top capital” among peers and is capable of paying a bigger dividend, said Chief Executive Officer Brian T. Moynihan. The bank has fulfilled a goal Moynihan drilled into subordinates since his first day on the job: building a “fortress balance sheet,” he said in an Oct. 17 staff meeting at the company’s Charlotte, North Carolina headquarters. “We’re going to officially declare victory on one of those operating principles,” Moynihan said in the town-hall style meeting. “The reason why is, we have the top capital in the industry, the top liquidity in the industry.” People have stopped asking if the bank needs more funds to absorb losses and now want to know when investors will get the excess, he said. Word-Smith: Greg's Book Has 0 Sachs Appeal (NYP) Among the mistakes in the book, sources noted, was Smith’s description of a town-hall meeting last year hosted by Goldman’s co-heads of investment banking — South African Richard Gnodde and Michael “Woody” Sherwood...Smith said one question from a Goldman employee during the 2011 meeting was: “What is the firm doing to address the fact that the culture is dying and our reputation is deteriorating?” According to Goldman, a female referenced in Smith’s book as a “power-hungry” managing director — identified as “Georgette” — was the individual who posed the question about culture. Georgette presented the question as: How is the firm addressing “the perception of the deteriorating culture,” according to a recording of the event, reviewed yesterday by The Post. Smith also writes about a follow-up question demanding “what specifically” the bank was doing — and that it was followed with uncomfortable laughter before some fumbling about over which executive should field the query. There was no follow-up question in the recording of the meeting. Smith embellished that aspect of the book and omitted that “Georgette” — a woman whom Smith worked with and dubbed the “Black Widow” for her cutthroat manner — was the source of the question about values because it undermined his narrative, a source inside the company said. Low Rates Pummel Bank Profits (WSJ) "The longer the Fed stays down at these levels the more it will hurt banks," said Scott Lied, the chief financial officer of ENB Financial Corp, an Ephrata, Pa., institution that has eight branches and 225 employees. "It's painful." Gupta Sentencing Set For Tomorrow (NYP) Prosecutors say Gupta, convicted by a jury in June, deserves as long as 10 years in prison. Gupta seeks probation. Gary Naftalis, a lawyer for Gupta, argued his client’s crime was an “aberrational” event in a “lifetime of good works” that merited a punishment for a man who has suffered an extraordinary fall from grace. He asked Rakoff to impose a term of community service, suggesting Gupta work with troubled youth in New York or with the poor in Rwanda. Theater Thief Costs Movie-Goers Tens of Thousands In Credit Card Fraud (Courant) A man who may have stolen as much as $70,000 a week by slithering beneath theater seats while movies were playing and lifting credit cards from women's' pocketbooks was convicted Monday of fraud and identity theft crimes. Anthony Johnson, 49, and a string of accomplices used the stolen cards to collect thousands of dollars in cash advances from Connecticut's gambling casinos and to make tens of thousands of dollars more in retail purchases in Connecticut and elsewhere, authorities said. On a "good" weekend, Johnson collected $50,000 to $70,000 from the scheme, one of his accomplices testified last week at his trial at U.S. District Court in Hartford. He had to settle for $30,000 or $40,000 on a bad weekend, the accomplice said. The accomplice, who agreed to cooperate with authorities, said Johnson, of Philadelphia, typically worked with women accomplices. They bought tickets to motion pictures likely to be popular with female audiences and chose seats from which they could watch how women in the audience stored their pocketbooks. "Once the movie started, Johnson crawled on the floor, removed credit cards from the stored purses, and returned the wallet to the purses," according to an FBI affidavit. "Johnson crawled in this manner around the theater until he was done…"

Bank Of America Reaches Settlement In Merrill Lynch Acquisition-Related Class Action Litigation (BW) Under terms of the proposed settlement, Bank of America would pay a total of $2.43 billion and institute certain corporate governance policies. Plaintiffs had alleged, among other claims, that Bank of America and certain of its officers made false or misleading statements about the financial health of Bank of America and Merrill Lynch. Bank of America denies the allegations and is entering into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation. Greece Seeks Taxes From Wealthy With Cash Havens in London (NYT) At the request of the Athens government, the British financial authorities recently handed over a detailed list of about 400 Greek individuals who have bought and sold London properties since 2009. The list, closely guarded, has not been publicly disclosed. But Greek officials are examining it to determine whether the people named — who they say include prominent businessmen, bankers, shipping tycoons and professional athletes — have deceived the tax authorities by understating their wealth. Libor Riggers May Be Criminal, Even If Acts Not Illegal at Time (CNBC) Those who took part in the manipulation of the London interbank offered rate (Libor), the key benchmark rate, could face criminal prosecution even though Libor manipulation is not yet a criminal offense. Martin Wheatley, who is advising the U.K. government on what changes could be made to Libor to stop manipulation in the future, said that U.K. regulator the Financial Services Authority (FSA) is considering prosecuting those who took part under “broad principles of conduct.” He also recommended that the government should give the FSA power to prosecute future Libor manipulation. Libor Furor: Key Rate Gets New Scrutiny (WSJ) "There's a concern that if you're going to base financial decisions on a particular interest rate" it should be a measure that responds to changes in market conditions, "and that's not Libor," said Andrew Lo, a finance professor at the Massachusetts Institute of Technology. Macquarie Bonuses Whack Profit (WSJ) Macquarie Group may have lost its reputation as the Millionaire’s Factory as profits slumped since the onset of the global financial crisis, but according to Citigroup analysts the bank’s net profit could have been 60% higher last financial year if not for a dramatic rise in bonus payments to staff...Wes Nason estimates that while the bank’s return on equity fell to 6.8% last financial year-–hitting its lowest level since it listed in the first half of fiscal 2012 and compared with a 10-year average of 18.4%—-its average bonus payments almost tripled to A$73,000 a head, up from A$26,000 in 2009. Replacement referee Lance Easley stands by touchdown call (NYDN) Lance Easley has been vilified for awarding the Seattle Seahawks a touchdown on its Hail Mary pass in the closing seconds of Monday night’s game against the Green Bay Packers even though pretty much everyone in the country saw that the pass had been intercepted. “I processed everything properly,” Easley told the Daily News Thursday. “It was supported on video. But the bad thing is, people don’t understand the rules in that whole play. “But that play rarely ever happens, it rarely happens in the field of play and it never happens in an NFL game,” he added. “And here I got stuck in the middle of it.” The call was reviewed on instant replay — and, amazingly, upheld, despite the refs also missing a pass interference infraction by a Seattle player. Since then the 52-year-old Bank of America banker has been swept up in a whirlwind of national outrage — one that forced the NFL to end a seven-week lockout of its unionized refs early Thursday. But Easley said he and his replacements did a good job in their stint in zebra stripes. “I know where I stand,” he said. “Everything I did ... I got support from all the referees and everything, and replay and our league office and anybody else that understands the rules and how those plays function. Spanish Rescue May Throw Crisis Spotlight on Italy (Reuters) Italian government bonds risk being thrown back into the spotlight of the euro zone debt crisis once Spain decides to request aid and secures central bank support for its debt. A partial bailout for Madrid would probably trigger the European Central Bank's bond-buying plan, lowering Spain's borrowing costs and increasing investor appetite for riskier assets in general, including debt issued by Italy. But Italy could then return to the forefront of market concern as the next weak link. "The risks increase that you will get a contagion into Italy," said David Keeble, global head of fixed income strategy at Credit Agricole. Cyber Attacks On Banks Expose Computer Vulnerability (WSJ) Cyber attacks on the biggest U.S. banks, including JPMorgan Chase & Co. and Wells Fargo & Co., have breached some of the nation’s most advanced computer defenses and exposed the vulnerability of its infrastructure, said cybersecurity specialists tracking the assaults. The attack, which a U.S. official yesterday said was waged by a still-unidentified group outside the country, flooded bank websites with traffic, rendering them unavailable to consumers and disrupting transactions for hours at a time. Such a sustained network attack ranks among the worst-case scenarios envisioned by the National Security Agency, according to the U.S. official, who asked not to be identified because he isn’t authorized to speak publicly. The extent of the damage may not be known for weeks or months, said the official, who has access to classified information. Fitch Ratings Cuts China, India 2012 Growth Forecasts (CNBC) In its September Global Economic Outlook, the ratings agency said it now expected China’s economy, the world’s second largest, to grow 7.8 percent this year, down from a forecast of 8 percent made in June. It also lowered its forecast for economic growth in India to 6 percent in the financial year ending in March 2013 from a previous estimate of 6.5 percent. CIT Chief Tries To Rescue Reputation (NYP) John Thain yesterday said he brought up executive compensation at the time his firm was getting bailed out by taxpayers not for selfish reasons but to determine how much control Washington would have over his company. “One of the issues we were worried about at the time was, if you take government money how much say does the government have in how you run your business?” Thain said during an interview on CNBC. Days earlier, Thain was trashed by former bank regulator Sheila Bair, who, in her upcoming book, “Bull By the Horns,” accuses the Wall Street veteran of being fixated on pay during the height of the financial Armageddon. Bair, the former Federal Deposit Insurance Corp. boss, wrote that Thain “was desperate for capital but was worried about restrictions on executive compensation.” “I could not believe it. Where were this guy’s priorities?” she wrote, referring to Thain. The CEO, who was tapped to run the troubled lender in 2010, also addressed during the CNBC interview rumors that CIT was looking to sell itself to a large bank. “It’s absolutely not true,” Thain said yesterday. Canada Cheese-Smuggling Ring Busted (BBC) A Canadian police officer was among three people charged as the country's authorities announced they had busted a major cheese-smuggling ring. A joint US-Canadian investigation found C$200,000 (£125,600) of cheese and other products were illicitly brought over the border into southern Ontario. The smugglers sold large quantities of cheese, which is cheaper in the US, to restaurants, it is alleged. The other two men charged were civilians, one a former police officer. The charges come three days after CBC News first reported the force was conducting an internal investigation into cheese smuggling. A pizzeria owner west of Niagara Falls told CBC that he had been questioned by police over the issue, but assured them he had not bought any contraband dairy. "We get all our stuff legit," said the restaurateur. "We thought it was a joke at first. Who is going to go around trying to sell smuggled cheese?"

JPMorgan Sued On Mortgage Bonds (WSJ) New York's top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase, alleging widespread fraud by the company's Bear Stearns unit in the sale of mortgage-backed securities. The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis. Greece's Creditors Look Askance At Cutbacks (WSJ) Greece's international lenders cast doubt on parts of Athens' plans to save billions of euros through new cutbacks and tax measures, throwing a potential wrench in the government's efforts to reach a quick deal to unlock new aid for the country. The troika of Greece's international inspectors—the European Commission, the International Monetary Fund and the European Central Bank—rejected as much as €2 billion ($2.57 billion) of austerity measures, a senior finance ministry official said. Spain Adds $32 Billion Power-System Bailout to Bank Rescue (Bloomberg) After Spain’s rescue of its banks and cash-strapped regions, the 2013 budget reveals a bailout of the power industry to cover 25 billion euros ($32 billion) of debt accumulated by the electricity system. The spending blueprint released two days ago adds 100 billion euros to the nation’s debt from the rescue packages by the end of 2012, driving its ratio to gross domestic product up 16.8 percentage points to 85.3 percent of total output. Fed Chief Takes On Critics (WSJ) Some Republican lawmakers and foreign government officials say the Fed's policies, by lowering the U.S. government's borrowing costs, take pressure off the White House and Congress to restrain the growing deficit. "I find this argument unpersuasive," Mr. Bernanke said in a speech to the Economic Club of Indiana. "The responsibility for fiscal policy lies squarely with the administration and the Congress." Moreover, he said, "using monetary policy to try to influence the political debate on the budget would be highly inappropriate." Woman who chomped off boyfriend's testicles back in court for breaching non-contact order after he took her (NYDN) Martin Douglas required emergency surgery and 19 stitches to re-attach his scrotum after the drunken assault by his then-girlfriend Maria Topp. But after rekindling their unlikely romance Topp says she was 'stabbed in the back' by Mr Douglas after he reported her to police for breaching her restraining order. Topp, 45, admitted unlawfully and maliciously inflicting grievous bodily harm as her trial at Newcastle Crown Court was about to start last October. The mother-of-four was handed a 12-month sentence, suspended for 18 months, plus a restraining order which banned her from contacting Mr Douglas. However, after a ‘chance’ encounter in Newcastle in March this year, the pair got back together again. Topp, 45, had a ‘friendly chat’ with her ex-flame when they bumped into each other in Yates’ wine bar in the city centre. She then sent Mr Douglas a text asking ‘Do you still love me?’ Topp and Mr Douglas resumed their old relationship, which fizzled out again in June this year at which point Mr Douglas reported Topp’s breach of her restraining order. Merrill Plots Raid On Vulnerable Rival (WSJ) In a raid that stands out even in Wall Street's aggressive recruiting culture, Merrill Lynch is arming some managers with lists of top Morgan Stanley Wealth Management brokers who are considered ripe for defection, according to people familiar with the firm's recruiting. The so-called "mapping" of Morgan Stanley brokers shows the Bank of America Corp. unit is pushing to capitalize on technological and reputational blows at Morgan Stanley, according to these people. Morgan Stanley is coming off a tumultuous computer system conversion and Facebook's botched initial public offering, which has left investors nursing billions of dollars in losses. Merrill Lynch has enlisted some of its 11 market executives—regional managers who report to brokerage head John Thiel—to call top-grossing Morgan Stanley brokers. Those calls typically are made by lower-ranking workers such as branch managers, these people said. Yahoo CEO Marissa Mayer has baby boy, becomes first-time mom (NYP) CEO Marissa Mayer is a mom after giving birth last night, her husband, Zachary Bogue, posted on Twitter. “Baby boy Bogue born last night. Mom (@marissamayer) and baby are doing great — we couldn’t be more excited!” Bogue tweeted this morning...Mayer has said she is taking a few weeks of “working” maternity leave and is expected to bring her son to work. Ex-Madoff Workers Face More Charges in Fraud Indictment (Bloomberg) Five longtime employees of Bernard Madoff’s former investment firm face more charges related to the jailed con man’s Ponzi scheme, which the government claims got its start in the 1970s. U.S. Attorney Preet Bharara in Manhattan yesterday released a revised indictment expanding the charges against former Madoff employees Daniel Bonventre, Annette Bongiorno, Joann Crupi, Jerome O’Hara and George Perez. The indictment adds to the 17 criminal counts filed against the former employees in November 2010, for a total of 33 counts. Bacon Shortage Is ‘Overblown,’ Economists Say (ABC) If you started stocking your freezer with bacon to prepare for the upcoming pork shortage, you can start cooking some of it. Economists are telling consumers to expect a slight rise in price but not the “overblown” price increase in recent news reports. “It seems alarmist,” said Purdue University economist Christ Hurt, in response to the prediction that pork prices would double by the end of next year. While Hurt says pork prices might increase only 4 or 5 percent, though he notes that the drought has caused feed prices to go up sharply. “The one thing we don’t want to do is scare consumers,” he says, suggesting people try other types of meat if they are trying to save money.

Blankfein has lymphoma; UBS sued over Puerto Rico; Greece closes in on $3.4 billion; "Woman, 27, Arrested For Pooper Scooper Attack On Her Live-In Boyfriend": AND MORE.