Opening Bell: 5.8.15

UBS wants to be an investment bank again; Flash crash trader likely headed to Chicago; Who wants to buy Yelp?; "Calgary Airbnb 'Orgy' Was Financed With Stolen Credit Cards"; and more.
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UBS Sets Sights on U.S. Investment Banking Again (WSJ)
UBS AG, which stumbled badly the last time it pushed to expand in the lucrative U.S. investment-banking market, is again seeking to build its business here—though this time with more modest ambitions. Since the beginning of last year, UBS has boosted its ranks of senior investment bankers in the U.S. by about 25, or 20%, according to a spokeswoman. On average, other big Wall Street firms have lost about five senior bankers on a net basis in that period.

Odds not in favour of UK trader winning US extradition fight (FT)
When Navinder Singh Sarao appeared at a London criminal court this week, he told the judge he had “done nothing wrong.” Whether that is true and he is a scapegoat for US authorities seeking someone to blame for the “flash crash” will be most likely for a court in Chicago to decide. Sarao, 36, accused by US authorities of allegedly playing a role in the 2010 “flash crash,” has become the latest British resident fighting extradition and the prospect of arguing their innocence abroad. Legal experts say he does not stand much chance of staying on British soil and the recent cases of Britons challenging US extradition requests have met with little success.

Monsanto Said to Make Preliminary $45 Billion Offer for Syngenta (Bloomberg)
Monsanto Co., the world’s largest seed company, made an initial offer for Syngenta AG valuing its Swiss rival at about $45 billion, people with knowledge of the matter said.

Yelp Seeks Buyer Amid Slow Growth, Rising Costs (WSJ)
Yelp Inc. is exploring a sale as the company at the top of many Internet search results struggles to post strong growth with users and advertisers. The San Francisco-based site was willing five years ago to go it alone despite an acquisition offer from Google Inc. Today, it is working with investment bankers and sounding out potential buyers, people familiar with the matter said.

Calgary Airbnb 'Orgy' Was Financed With Stolen Credit Cards: Police (HP)
A "drug-induced orgy" that took place at a Calgary Airbnb rental was financed by fraudulent credit cards, and police are on the hunt for those responsible. Calgary police say they are using CCTV footage in an effort to determine who rented the house, and also looking for the people who used stolen credit cards to buy food and booze for the party that left the home in ruins. Homeowners Mark and Star King rented out the house in the city's northwest the last weekend in April through online accommodation service AirBnB. They were under the impression four adults would be staying at the home while attending a weekend wedding in Calgary. Instead, they returned to find their home completely trashed. Police were called to the home several times over the weekend for noise complaints, and neighbours reported that a party bus showed up at one point and the crowd grew to over 100 people. The owners came home to broken glass, ketchup, mustard and barbecue sauce, vomit and urine all over the floors and walls, couches and tables broken, cushions burned and cut, and towel racks pulled right out of the wall. Biohazardous material, condom-plugged toilets, and pools of liquor on the floor were also found. It is believed the total damages have ballooned to more than $150,000, and the U.S.-based company says it will cover the costs.

ItBit makes New York bitcoin history (NYP)
New York regulators on Thursday granted the first bitcoin exchange charter to itBit, a barely three-year old company with a deep bench of Wall Street heavy hitters. The charter, issued by the Department of Financial Services, comes as ex-bankers are increasingly looking to the digital currency as the next frontier in finance. Charles Cascarilla, itBit’s CEO — and a former Goldman Sachs analyst — told The Post that the company beefed up its board in January by bringing on Sheila Bair, former chair of the Federal Deposit Insurance Corp., former New Jersey Sen. Bill Bradley, and Robert Herz, who used to chair the Financial Accounting Standards Board.

Daniel Loeb Criticizes Warren Buffett, in a Rare Public Swipe (WSJ)
“I love how he criticizes hedge funds, yet he really had the first hedge fund,” Mr. Loeb said Wednesday at a hedge-fund industry conference in Las Vegas. “He criticizes activists. He was the first activist. He criticizes financial-services companies, yet he likes to invest with them. He thinks we should all pay more taxes, but he loves avoiding them.” Within seconds, Mr. Loeb, known for his searing letters to corporate chieftains, sounded regretful, calling his remarks “gratuitous” and a “potshot.” But his comments—and the applause and cheers that they drew in a room packed with a thousand hedge-fund managers, investors and others—show that beneath the public adulation of the Berkshire Hathaway Inc. chief lies a layer of envy and resentment in some corners of Wall Street.

Goldman Sachs must face $120 million suit over mortgage securities: court (Reuters)
New York's top state court on Thursday revived a bond insurer's $120 million lawsuit claiming Goldman Sachs Group Inc lied about a pool of securities backed by subprime mortgages during the period leading up the financial crisis. The New York Court of Appeals in a 5-2 decision said the suit by ACA Financial Guaranty Corp ACAFG.UL should move forward because the insurer had raised issues about the role of billionaire John Paulson's hedge fund in a collateralized debt obligation called Abacus. ACA Financial said Goldman had deceived it into believing hedge fund Paulson & Co was a long investor in Abacus when it knew Paulson was betting the underlying mortgages would fail.

Bank of America directors lose support from shareholders (Reuters)
Four Bank of America Corp directors on the board's governance committee received unusually small majorities of votes for re-election at this week's annual meeting, according to tallies the company released on Thursday. None received more than 71.9 percent of the votes cast, compared with each last year receiving at least 98 percent.

Puerto Rico faces battle to avoid default (FT)
...last week the island’s House of Representatives voted down the sales tax bill, despite the Government Development Bank — in practice Puerto Rico’s finance ministry — warning that doing so would scupper its chances of returning to bond markets and lead to a government shutdown within three months. The aborted vote triggered a rout in Puerto Rico’s bonds, and many analysts and investors now fear that a default and restructuring is now inevitable.

Cops: Drunken Indiana Man Driving Lawn Mower Had Whopping Blood Alcohol Content (TSG)
In what appears to be a record for drunken lawn mower joyriding, an Indiana man’s blood alcohol content was nearly six times the legal limit, according to cops who received reports that the suspect was driving in traffic with his daughter on his lap. Trevor Bates, 27, was cited Saturday after witnesses called 911 to report that an intoxicated man was driving a lawn mower erratically on an Evansville street. Police report that Bates had a .445 blood alcohol content (the legal limit is .08).

Related

Opening Bell: 8.14.15

Flash crash trader out on bail; Hedges funds screwed on China; Tsipras needs a friend; "Man Clogs Casino Pipes With Counterfeit Chips Worth $2.7 Million"; and more.

Opening Bell: 4.27.15

Greece may demote finance minister Yanis Varoufakis in talks; Deutsche Bank to cut $3.8 billion in costs; Flash Crash investigators probably missed a lotta clues; "Teen Suspended For Bomb-Themed 'Promposal' Calls Punishment 'Racist'"; and more.

Opening Bell: 02.05.13

Barclays CEO Vows To Improve Bank's Ethics (WSJ) Chief Executive Antony Jenkins said Tuesday he is "shredding" the legacy of the bank's self-serving culture by improving its ethics and moving beyond the misconduct issues that have cost it billions of pounds. Mr. Jenkins told a U.K. parliamentary group that his efforts so far include changing the way employee bonuses are calculated and abolishing commissions on financial-product sales. He said the changes would take time to produce results, but that ultimately he wants to eliminate a culture that at times has been "too short-term focused, too aggressive and on occasions, too self-serving." "Our resolve and intent behind this is absolute," Mr. Jenkins said. McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (Bloomberg) The U.S. Justice Department filed a complaint Monday in federal court in Los Angeles, accusing McGraw-Hill and S&P of mail fraud, wire fraud and financial institutions fraud. Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the U.S. seeks civil penalties that can be as high as $1.1 million for each violation. Earlier today, the company’s shares tumbled the most in 25 years when it said it expected the lawsuit, the first federal case against a ratings firm for grades related to the credit crisis. “It’s a new use of this statute,” Claire Hill, a law professor at the University of Minnesota who has written about the ratings firms, said in a phone interview today from Minneapolis. “This is not a line to my knowledge that has been taken before.” Dell Nears $25 Billion Deal To Go Private (WSJ) Late Monday, Mr. Dell was in talks with Microsoft Corp and private-equity firm Silver Lake Partners to offer shareholders between $13.50 and $13.75 a share, said people familiar with the matter, about a 25% premium to Dell's stock price in January before the possibility of a deal became public. The buyout, if approved by shareholders, would be the largest such deal since the financial crisis. It also would be an admission by Mr. Dell that he wasn't able to pull off the changes needed to improve his company's revenue and profit under Wall Street's glare. The buyout would give Mr. Dell the largest stake in the company, ensuring that the 47-year-old is the one who gets to oversee any changes. Gross: Beware 'Credit Supernova' Looming Ahead (CNBC) The head of the Pacific Investment Management bond giant has issued an ominous forecast in which he worries that the global central bank-induced credit bubble "is running out of energy and time." As a result, investors will have to get used to an atmosphere of diminishing returns and portfolios that will hold more hard assets like commodities and fewer less-tangible financial assets like stocks. "Our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic," Gross said in his February newsletter. Obama to Meet With CEOs of Goldman, Yahoo, Other Firms (Reuters) President Barack Obama will meet with chief executives from 12 companies including Goldman Sachs Group's Lloyd Blankfein and Yahoo's Marissa Mayer on Tuesday to discuss immigration and deficit reduction, according to a White House official. "The president will continue his engagement with outside leaders on a number of issues, including immigration reform and how it fits into his broader economic agenda, and his efforts to achieve balanced deficit reduction," the official said Monday. Other chief executives include Arne Sorenson of Marriott International, Jeff Smisek of United Continental Holdings, and Klaus Kleinfeld of Alcoa. A Billion-Dollar Club And Not So Exclusive (NYT) an unprecedented number of high technology start-ups, easily 25 and possibly exceeding 40, are valued at $1 billion or more. Many employees are quietly getting rich, or at least building a big cushion against a crash, as they sell shares to outside investors. Airbnb, Pinterest, SurveyMonkey and Spotify are among the better-known privately held companies that have reached $1 billion. But many more with less familiar names, including Box, Violin Memory and Zscaler, are selling services to other companies. “A year from now that might be 100,” said Jim Goetz, a partner at Sequoia Capital, a venture capital business. Sequoia counts a dozen such companies in its portfolio. It is part of what he calls “a permanent change” in the way people are building their companies and financers are pushing up values. The owners of these companies say the valuations make them giddy, but also create unease. Once $1 billion was a milestone, now it is also a millstone. Bigger expectations must be managed and greater uncertainty looms. Donald Trump to sue Bill Maher after bet feud (Politico) Donald Trump filed a lawsuit Monday in California against liberal comic Bill Maher, suing him for $5 million after Trump says Maher did not follow through on a $5 million public bet he made on “The Tonight Show.” “I don’t know whether this case will be won or lost, but I felt a major obligation to bring it on behalf of the charities,” Trump said in a public statement first obtained by POLITICO. Last month, Maher said on NBC to Jay Leno that he would pay $5 million to Trump’s charity of choice if he provided a birth certificate proving that he’s not “spawn of his mother having sex with orangutan.” It was similar to an offer Trump made to President Barack Obama during the presidential campaign season, in which Trump wanted Obama to release his college records. Trump’s statement continued: “Bill Maher made an unconditional offer while offer while on The Jay Leno Show and I, without hesitation, accepted his offer and provided him with the appropriate documentation. Money-Market Funds Best By Excess Cash (WSJ) Money-market funds have a high-quality problem: investors are entrusting them with too much cash. The flood of money is prompting the funds, which buy short-term, top-rated debt, to seek higher returns in investments that until recently were seen as too risky, including French bank debt. Investors plowed $149 billion into U.S.-based money-market funds between the start of November and Jan. 30, bringing total assets under management to $2.695 trillion, close to the most since mid-2011, according to the Investment Company Institute. Knight Capital Group to Cut Workforce by 5 Percent (Reuters) Knight Capital, which recently agreed to be bought for $1.4 billion by Getco, will lay off 5 percent of its global workforce as part of efforts to restructure the automated trading firm, according to a regulatory filing released on Monday. FTC Corrects Language On Herbalife (NYP) The Federal Trade Commission yesterday corrected an earlier statement regarding a “law enforcement investigation” into Herbalife. In response to a Freedom of Information Act request by The Post, the FTC said some complaints against the company were withheld because the information was “obtained through a law enforcement investigation.” The agency said yesterday that the language in its letter accompanying the FOIA request was incorrect and it should have said that the exemption from disclosure was related to “foreign sources.” FTC spokesman Frank Dorman defined “foreign sources” as government entities, including law enforcement agencies, and the exemption relates to information-sharing between the FTC and these foreign government agencies. The FTC said that it “may not disclose any material reflecting a consumer complaint obtained from a foreign source if that foreign source has requested confidential information.” The agency said it could not confirm, or deny, an investigation into the nutritional supplements company. Hedge Fund Mogul, Swiss Villagers Clash Over Ski Slopes (Bloomberg) Since hotelier Tobias Zurbriggen can remember, the business of running Saas-Fee has been a local affair. Now, the Swiss ski resort neighboring the Matterhorn is feeling the heat from a New York-based financier. Edmond Offermann, a nuclear scientist turned millionaire working for hedge fund Renaissance Technologies LLC, invested 15 million Swiss francs ($16.4 million) in 2010 to revive Saas- Fee’s struggling ski-lift company. “It’s like a hobby, which completely got out of control,” Offermann, 53, said in an interview from Long Island, New York. He wants to shake things up by managing hotels and the ski-lift operator in one company controlled by a single chief executive. JPMorgan Joins Rental Rush For Wealthy Clients (Bloomberg) The firm’s unit that caters to individuals and families with more than $5 million, put client money in a partnership that bought more than 5,000 single family homes to rent in Florida, Arizona, Nevada and California, said David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank. Investors can expect returns of as much as 8 percent annually from rental incomeas well as part of the profits when the homes are sold, he said. Man Allegedly Tries To Walk Out Of Costco With 24 Quarts Of Oil — Strapped To His Body (CBS) Jorge Sanchez, 35, was spotted about 4:30 p.m. trying to leave a Burbank Costco without paying for the oil. Store employees gave chase and officials said they lost Sanchez after he jumped a fence at the west side of the Costco parking lot. Burbank Police Sgt. Darin Ryburn told CBS2/KCAL9 reporter Andrea Fujii that nine of the 24 quarts were recovered during the foot chase. Authorities said Sanchez walked into the Costco and went straight to the oil aisle. He allegedly grabbed a couple of cases and emptied them. Said Ryburn, “He proceeded to hide the quarts of oil in his pants, socks, and in his shirt.” Sanchez was later apprehended near Beachwood Drive and Monterey Avenue, about eight blocks from the store. Officials said he was arrested on suspicion of burglary charges. Margo Martin was a witness to the apprehension. “All of a sudden, I hear ‘Get down on the ground’ and there is this man laying in our driveway.” Witnesses thought the man was running funny and weren’t sure why. Witness Manuel Atlas said, “He looked kind of heavy and out of shape.” Police said Sanchez was also running funny because he still had 15 quarts of oil strapped to him. Police said he used a bungee cord to strap the bottles down.

Opening Bell: 10.23.12

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…"

Opening Bell: 4.22.15

Flash Crash trader fighting extradition; Greece is good on cash 'til June; BNY profit rises; "An enraged Colorado man shot his computer multiple times for failing to work properly"; and more.

Opening Bell: 5.6.15

Flash crash overhaul going nowhere fast; JP Morgan to settle forex investigation; Nas is an investor in 40 startups; "Bearded men defend their facial feces traps"; and more.

Opening Bell: 4.23.15

Alexis Tsipras and Angela Merkel to meet; Deutsche Bank to pay $2.14 Billion over Libor; Flash crash trader spurs debate about spoofing; "New York's 'noisiest lovers' revealed"; and more.

By Apavlo at English Wikipedia (Transferred from en.wikipedia to Commons.) [Public domain], via Wikimedia Commons

Opening Bell: 10.7.16

Pound flash crash; Twitter's no good very bad day; Qatari hearts Deutsche Bank; Vanilla Ice vows to ride out Hurricane Matthew; and more.