EU Fines Microsoft $732 Million (WSJ) The European Commission said it was imposing the fine after the U.S. software giant became the first company to break a voluntary agreement with regulators, which would have allowed at least 15 million consumers to pick alternatives to its Internet Explorer browser. The penalty is the latest episode in over a decade of wranglings between the EU and Microsoft, which has already seen the commission fine Microsoft €1.6 billion for failing to provide rivals with information at fair prices and for tying its media player to its operating system. Fed Holds Ground On Stress Tests (WSJ) The first component of the release, data on how banks will fare in an economic downturn, is slated for after U.S. stock markets close on Thursday. The second part, the Fed's response to buyback-and-dividend requests, is scheduled for publication a week later. Some executives warn that the delay could boost volatility in bank shares, as traders speculate on what the first round of results might mean for bank capital plans. Others warn of shareholder lawsuits if banks fail to disclose any information they receive, even informally, from regulators on the capital plans. Stress Tests Seen Boosting U.S. Bank Shareholder Payouts (Bloomberg) The six largest U.S. banks may return almost $41 billion to investors in the next 12 months, the most since 2007, as regulators conclude firms have amassed enough capital to withstand another economic shock. Lenders including Citigroup and Bank of America will buy back $26.4 billion in shares, up from $23.8 billion, according to the average estimate of three Wall Street analysts. An additional $14.5 billion will be paid out in dividends, $3.4 billion more than 2012, separate estimates show. The payouts are contingent on approval by the Federal Reserve. Forbes Hits Back at Saudi Prince Over Rich List (CNBC) A spat between Saudi billionaire Alwaleed Bin Talal and Forbes over the exact fortune of the prince has taken another bizarre twist. After the prince announced a severing of ties due to what he argued were flawed valuation methods, Forbes has now responded with an in-depth investigation, hitting back by describing his estimates as an "alternate reality". Forbes went on to say that the valuation of Kingdom Holding, the publicly traded company of Prince Alwaleed, gyrated for reasons "that, coincidentally, seem more tied to the Forbes billionaires list than fundamentals". In the lengthy piece published on Wednesday, the magazine also details its relationship with Prince Alwaleed since it began in 1988, recounting what it classified as "intermittent lobbying, cajoling and threatening" to influence his net worth listing over the years. AIG to Start Loan Investment Unit as Housing Rebounds (Bloomberg) AIG plans to buy loans backed by its United Guaranty Corp. unit, the largest seller of traditional private mortgage insurance last year, according to Donna DeMaio, 54, the unit’s chief executive officer. The debt will be held as long-term investments by AIG insurance companies. “You’re cutting the middle man out of the securitization process,” DeMaio said, referring to bonds that package home loans. The yield on an individual mortgage “is better than if you just bought the paper backed by the whole loan.” Two Hedgies Top The Field (NYP) Stephen Mandel and David Tepper earned more money for clients than any other hedge-fund manager in 2012, LCH Investments said. Mandel’s Lone Pine Capital made about $4.6 billion; Tepper’s Appaloosa Management made $3.3 billion. Traders Flee Asia Hedge Funds as Job Haven Turns Dead End (Bloomberg) Asian hedge-fund assets are 28 percent below their 2007 peak, according to data provider Eurekahedge Pte. Globally, money overseen by the funds increased 21 percent since 2007 to a new high of $2.3 trillion as of December, data from Chicago- based Hedge Fund Research Inc. show. A total of 296 Asian hedge funds liquidated in the two years to December, 33 more than the number that started. On a global basis, 1,839 new funds outnumber those that shut by 371, according to Eurekahedge. Ikea recalls cakes in 23 countries after sewage bacteria found (Telegraph) The furniture giant admitted on Tuesday that coliform bacteria had been found in two batches of almond cake from a supplier in Sweden. It comes after Chinese customs officials announced that they had destroyed a batch of 1,800 cakes after finding it contained high levels of coliforms which failed to meet hygiene standards. Coliforms, common bacteria which are found in faeces as well as soil and water, do not normally cause serious illness but are a sign of contamination which can indicate the presence of more harmful bacteria such as E.coli. It comes after Ikea recalled meatballs and sausages from 24 countries due to fears they could have been contaminated with horse meat. Oil Trader Ex-Wife Shouldn't Get Offshore Assets: Lawyers (Bloomberg) An oil trader’s ex-wife shouldn’t have any claim to properties held by offshore companies in which he invested as part of a 17.5 million-pound ($26.4 million) divorce settlement, lawyers said at a hearing in the U.K.’s highest court. The three Isle of Man-based companies, including Petrodel Resources Ltd., are “not relevant as a party to the litigation,” Tim Amos, the lawyer representing the companies, said today. The firms have asked the seven-judge panel of Britain’s Supreme Court to dismiss the wife’s claim. Yasmin Prest appealed an earlier ruling that denied her access to properties held and controlled by her ex-husband to cover part of the 2011 divorce settlement, which Michael Prest hasn’t paid, according to court documents at the U.K. top court. Her ex-husband isn’t a party to the litigation. ADP Says Companies in U.S. Added 198,000 Workers in February (Bloomberg) The 198,000 increase in employment followed a revised 215,000 gain the prior month that was more than initially estimated, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 41 economists surveyed by Bloomberg called for an advance of 170,000. Madoff Trustee ‘Unlikely’ to Win Merkin Suit, N.Y. Says (Bloomberg) The judge shouldn’t allow trustee Irving Picard to block the deal because “in the unlikely event” that Picard can win part of his suit, Merkin’s funds would be able to pay him, Schneiderman said in a filing with U.S. District Judge Jed Rakoff yesterday. The attorney general made his filing saying Picard’s “unusual” request for an injunction -- to give him time to proof his own $500 million case -- required an additional response. Zoo shuts in panic as male and female escape from cage because cleaner forgot to lock the door (DM) A zoo in China was forced to close after two lions escaped from their unlocked cages. Riot police, snipers and zoo workers armed with tranquiliser guns worked to capture the ferocious animals after theyescaped at the zoo in Chongqing, south west China. According to reports, the lion and lioness were given free run of the zoo when a keeper who was cleaning their enclosure forgot to lock the gate. The zoo was completely evacuated following the escape at 8am. While the lionness was caught within the hour, the male was at large for almost four hours before he was recaptured. A zoo spokesman said: 'We found the female first and subdued her with a tranquiliser gun but the male took longer to find and bring back. 'They both recovered quickly and are no worse off for their adventure.' Officials have issued an apology to visitors for the panic caused. One said: 'You can't blame the lions. It was human error and they naturally took advantage of it.'

Morgan Stanley Beats Estimates as Trading Gain Tops Peers (Bloomberg) The net loss of $94 million, or 6 cents a share, compared with profit of $968 million, or 50 cents, a year earlier, the New York-based company said today in a statement. Excluding accounting charges tied to the firm’s own credit spreads, profit was 71 cents a share, topping the 44-cent average estimate of 17 analysts surveyed by Bloomberg. Fixed-income trading revenue surged 34 percent, surpassing the 19 percent gain at Citigroup Inc. and Goldman Sachs Group Inc.’s drop of more than 15 percent, excluding accounting adjustments. Morgan Stanley Chief Executive Officer James Gorman, 53, has set a goal of 15 percent return on equity after lingering pressures from the financial crisis held that measure below 10 percent for five straight years. First-quarter return on equity was 9.2 percent. BofA Profit Falls But Beats Estimates (WSJ) The bank reported a profit of $653 million, compared with a year-earlier profit of $2.05 billion. Per-share earnings, which reflect the payment of preferred dividends, fell to three cents from 17 cents a year ago. The latest quarter included, among other items, a $4.8 billion pretax hit tied to changes in the value of the bank's debt. Excluding accounting changes related to the bank's debt, BofA reported profits of 31 cents per share, compared with the 12 cents estimated by analysts polled by Thomson Reuters. Blackstone First-Quarter Profit Falls on Performance Fees (Bloomberg) Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, dropped to $432.3 million, or 39 cents a share, from $571 million, or 51 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 40 cents a share, according to the average of nine estimates in a Bloomberg survey. Fitch Analyst Reportedly Warns on Dutch Rating (Reuters) "The Dutch are on the edge of a negative rating action," the Telegraph quoted Fitch analyst Chris Pryce, the rating agency's expert on the Netherlands, as saying. Ackman Plans 2013 listing for $4bn fund (FT) Pershing Square is planning a $4bn public flotation for a new fund in January 2013. Bill Ackman intends to float the vehicle, which has already been set up in Guernsey and is known as Pershing Square Holdings, on a "major exchange." PSH will be a shell company and invest all its assets in Pershing Square’s offshore hedge funds. As such, after flotation, it would offer Mr Ackman a source of permanent capital. Man accuses Blackhawks, Cubs of 'stealing his ideas' (Chicago Tribune) Emanuel Kuvakos, 56, was arrested Tuesday night and charged with three counts of misdemeanor harassment by electronic means, police said. Kuvakos sent “a number’’ of emails to Blackhawks CEO John McDonough and to Jim Hendry, the former general manager of the Chicago Cubs, that accused them of “stealing his ideas to win championships,’’ according to a police report. On Saturday, he sent them another email stating that he would keep the Blackhawks from winning the Stanley Cup, police said. While being interviewed by authorities, he claimed he also sent a message to Rocky Wirtz, the Blackhawks owner, saying that if he ever saw Wirtz, he would beat him, according to the police report. Kuvakos, whose nickname is “Mike,” said during a telephone interview with the Chicago Tribune that he has been a freelance sportswriter for 30 years, and claimed he is a sports psychologist and “savant” who works for the Blackhawks, White Sox and the Cubs. Talks With Instagram Suggest a $104 Billion Valuation for Facebook (Dealbook) Facebook bought the photo-sharing service for $1 billion in early April, agreeing to pay roughly 30 percent in cash and 70 percent in stock, according to people briefed on the negotiations who did not want to be identified because the discussions were private. At that level, Facebook is pegging its own stock price at roughly $30 a share. Based on those numbers, the giant social network is valued at north of $75 billion. But Facebook could actually be worth more. During the negotiations with Instagram, the parties framed the deal around a logical assumption: Facebook could soon trade publicly at a much higher market value. As part of the talks, the companies discussed a potential value of about $104 billion for Facebook, these people said. One of Instagram’s founders, Kevin Systrom, first broached the number, one of the people said. At $104 billion, the value is roughly in line with where Facebook has at times traded on the secondary market: shares of the privately held company have been selling for as high as $40. More Americans Than Forecast Filed Weekly Jobless Claims (Bloomberg) Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. KKR's Real-Estate Arm Makes Its First Investment (WSJ) The Yorktown Center mall has 1.5 million square feet of retail space and more than 150 stores including a J.C. Penney and a Victoria's Secret. KKR's co-investor in the deal is YTC Pacific, which will manage the property, these people said. As is typical in a private-equity real-estate investment, KKR plans to improve the look of the mall and increase the occupancy rate with an eye toward reselling the property. Facebook Photo Sinks Man Who Stole Police Gas (TSG) A Kentucky man is facing a misdemeanor rap after he siphoned gasoline from a police car, a theft that came to the attention of cops after the perp posted a Facebook photo memorializing the crime. As Michael Baker, 20, was swiping the gas last month from a Jenkins Police Department squad car, he made sure to flip the bird as his girlfriend snapped a picture. While the siphoning photo has been removed from his Facebook page, Baker yesterday updated his 380 friends on his legal problems. “just got out of jail,” he wrote in one post, adding later that “yea lol i went too jail over facebook.” Responding to a friend who had not seen the image before it was yanked, Baker assured, “yea lol u would just have to seen it it was funny as hell tho.”

Barclays Cheaper Than Peers Fuels Breakup Talk (Bloomberg) The break-up discussion will be one of the first issues facing new chairman David Walker, who will succeed Marcus Agius as chairman of Barclays on Nov. 1. Walker said in an interview with the Telegraph newspaper that “my view is that this should continue to be a universal bank,” according to the Aug. 11 article. Agius has also defended the so-called universal banking model, which combines consumer lending with corporate and investment banking. Paul Ryan And What Wall Street Should Know (Dealbook) While Mr. Ryan may appear to be a friend of business, he doesn’t agree with the industry’s biggest talking point these days, the Simpson-Bowles deficit reduction plan. He was a member of the commission and voted it down, arguing that it did not go far enough in overhauling health care entitlements. He later criticized President Obama for not supporting it. That prompted Gene Sperling, director of the National Economic Council under President Obama, to retort on CNN: “Paul Ryan, talking about walking away from a balanced plan like Bowles-Simpson is, I don’t know, somewhere between laughable and a new definition for chutzpah.” Greece Completes Largest Debt Sale In Two Years (WSJ) Give it up for Greece, everyone: "The Greek Public Debt Management Agency said it sold €4.063 billion ($5.01 billion) of 13-week treasury bills at an auction, which included a 30% noncompetitive tranche. The uniform yield was 4.43%. Most of the funds will go to repay €3.1 billion in bonds held by the ECB that mature Aug. 20. That will ensure that the country avoids a default that would make it impossible for Greek banks to continue borrowing from the ECB, on which they currently depend for their survival." Wilbur Ross: Just Let Greece Go, It's Fine (CNBC) "I've been in favor of Greece going out, frankly both from the Greek point of view and the EU point of view," Ross said. "I think there are enough firewalls being built up, particularly now that (European Central Bank chief) Mario Draghi is acting like the lender of last resort, that I don't think it would be that traumatic anymore. Most of the indebtedness of Greece is official debt, no longer private debt, so you don't have the domino problem." Crocs co-founder George Boedecker blames 'girlfriend' Taylor Swift following arrest for drunk driving in Colorado (NYDN) A witness called Boulder authorities early Saturday evening after seeing Crocs co-founder George Boedecker passed out at the wheel of a Porsche with the engine running, according to the Denver Post. Boedecker was busted on suspicion of driving under the influence and is free on $500 bond. When confronted by cops, the 51-year-old Boedecker said that it was actually the 22-year-old Swift who was driving the car, according to a police report obtained by The Smoking Gun and the Denver Post. According to the report, Boedecker said that his "girlfriend" left the vehicle after they got into a fight. When asked who his girlfriend was, Boedecker told the officer she was a "really (expletive) famous" singer, then asked the officer if he knew who Taylor Swift was. When the officer asked Boedecker where Swift was, Boedecker gestured toward a nearby yard, and “said she was in Nashville,” according to the police report. He also described his girlfriend as “bats--- crazy.” Authorities could not find anyone in the area, and Swift is currently dating Robert F. Kennedy Jr.'s 18-year-old son, Conor. Boedecker reeked of booze and was uncooperative with cops, saying “I’m not doing your f------ maneuvers" when asked to take a sobriety test. When asked for his address, Boedecker replied, "I have 17 (expletive) homes," and also told the cops he would have their badges, according to the police report. Knight $440 Million Loss Sealed By New Rules On Canceling Trades (Bloomberg) Knight, whose market-making unit executes 10 percent of U.S. equity volume, lost $440 million on Aug. 1 and its stock has plunged 73 percent after a computer malfunction bombarded the market with unintended orders that exchanges declined to cancel. A decade ago, the firm suffered almost no consequences in a similar breakdown when officials agreed to void trades after Knight mistakenly sold 1 million of its own shares. Peregrine CEO Is Indicted (WSJ) The chief executive of Peregrine Financial Group Inc. was indicted Monday on 31 charges of lying to government regulators regarding the failed brokerage's operations. Russell Wasendorf Sr. faces a maximum sentence of 155 years' imprisonment on the charges and fines of about $7.75 million, according to a statement from the U.S. Attorney's Office for the Northern District of Iowa. Hedge Funds Have $74 Billion As Europe Fire Sale Delayed (Bloomberg) Apollo Global Management, Oaktree Capital Group, Avenue Capital Group, and Davidson Kempner Capital Management are among U.S. firms that have flocked to Europe, setting up offices and raising funds to benefit from the most severe period of distress in the region. The money raised for distressed-debt funds gives the firms about 100 billion euros to spend on deals including leverage, according to PricewaterhouseCoopers LLP. Facebook Shares Unlocking (WSJ) An avalanche of privately held Facebook shares could begin hitting the market this week—potentially putting further pressure on the company's stock—as rules expire that have kept some early investors from cashing out. Record 17-foot python caught in Everglades (Herald Tribune) Scientists say they've caught the biggest Burmese python ever recorded in Florida. The python weighed in at 164½ pounds and measured 17 feet, 7 inches long. It was pregnant with 87 eggs. The snakes are native to Southeast Asia but have established a population of tens of thousands in the Everglades, where the latest find was recorded Friday. It was euthanized and is being studied at the Florida Museum of Natural History.

Chinese Premier Blasts Banks (WSJ) In an evening broadcast on state-run China National Radio, Mr. Wen told an audience of business leaders that China's tightly controlled banking system needs to change. "Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly," said Mr. Wen, according to the transcript of the program on the broadcaster's website. "To break the monopoly, we must allow private capital to flow into the finance sector." Regulators Expected to Penalize JPMorgan Over Lehman Collapse (NYT) The Commodity Futures Trading Commission is expected this week to file a civil case against JPMorgan. The bank is expected to settle the Lehman matter and pay a fine of approximately $20 million...The Lehman action stems from the questionable treatment of customer money — an issue that has been at the forefront of the recent outcry over MF Global. JPMorgan was also intimately involved in the final days of that brokerage firm. The trading commission is expected to accuse JPMorgan of overextending credit to Lehman for two years leading up to its bankruptcy in 2008, the people briefed on the matter said. Fitch Ditched in Bond Dispute (WSJ) Fitch Group's new chief executive said Credit Suisse Group AG CSGN.VX -1.61% dropped the firm's rating from a mortgage-backed security because Fitch took a harsher view than two rivals that assigned triple-A ratings to the deal. "It was an 11th-hour thing when they decided which agency it would be to publicly rate it," said Paul Taylor, who took over this week as chief executive of Fitch Group, in an interview. "We had a materially different take." Mr. Taylor said Fitch Group, which includes credit-rating firm Fitch Ratings, had been compensated for its rating on the mortgage-backed deal. Fitch shared its differing view with investors after the deal closed Friday, publishing a report critical of Standard & Poor's Ratings Services and DBRS Ltd. for issuing triple-A ratings on the residential-mortgage-backed security issued by Credit Suisse. Fed Signals No Need for More Easing Unless Growth Falters (Bloomberg) “A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below” 2 percent, according to minutes of their March 13 meeting released today in Washington. That contrasts with the assessment at the FOMC’s January meeting in which some Fed officials saw current conditions warranting additional action “before long.” Spanish Bond Sale Fizzles (WSJ) Spain sold a total of €2.589 billion ($3.43 billion) of the 4.4% January 2015, 4.25% October 2016 and 4.85% October 2020 bonds, against its €2.5 billion to €3.5 billion target. Wednesday's sale, brought forward by one day due to a national holiday on Thursday, brought Spain's 2012 bond issuance completion to almost 46% of the €86 billion gross bond issuance target. ‘Apple Fever’ Prompts Predictions of $1 Trillion Value (Bloomberg) “Apple fever is spreading like a wildfire around the world,” Brian White, the Topeka analyst, said in a report that initiated coverage of the company with a buy recommendation. White’s new 12-month target of $1,001 is the highest among the 45 analysts tracked by Bloomberg and represents a 59 percent increase over today’s closing price. He said Apple’s market value will eventually top $1 trillion. £200,000 bar bill trader, arrested in FSA probe (CityAM) Alex Hope, the 23 year-old trader who hit the headlines after spending £125,000 on a single bottle of champagne, has been arrested on suspicion of being involved in an unauthorised foreign exchange trading scheme. Hope, who claims to be a self made foreign exchange trader, became infamous when he ran up a £125,000 bar bill in one evening at a Liverpool nightclub. Most of this was spent on a single 99lb bottle of champagne...Hope's publicist last night confirmed that he had been arrested but said that he denies all allegations. His personal website describes him as “a name to watch out for in the city” and “an expert in the UK economy” who regularly "trades millions." It calls him a “talented, charismatic and thoroughly likeable man." SEC Puts Exchanges on Notice Over Computer-Driven Trades (Bloomberg) “The consequences of a big failure are so severe that the SEC should be paying close attention to these issues,” James Angel, a finance professor at Georgetown University’s business school in Washington, said in an e-mail. “No human system is perfect and eventually something will happen, so they also want policies and procedures in place for catching problems quickly and cleaning up the mess afterwards.” Ready for a rumble: Falcone vs. Icahn (NYP) Falcone, who has funneled a whopping $2.9 billion into LightSquared, is desperate to salvage his shaky investment amid a battle with federal regulators over building out the wireless network. Falcone has said both publicly and privately that bankruptcy is not an option. However, some LightSquared creditors, including Icahn, would rather put the company into bankruptcy as part of a plan that would give them equity stakes in the company and greater control over its future, sources said. The deadline for creditors to decide is fast approaching. Icahn and other owners of LightSquared’s $1.6 billion loan due 2014 have given the company until the end of April before they decide whether to put LightSquared into default for breaching some loan covenants tied to its customer contracts. ADP: 209,000 Jobs Added (WSJ) Private businesses hired at a modest rate in March close to what economists expected, according to a report released Wednesday. Private-sector jobs in the U.S. increased 209,000 last month, according to a national employment report published by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The gain was just above economists' median expectation of 200,000 contained in a survey done by Dow Jones Newswires. Occupy London Hinders Burrito Sales More Than Banker Bonuses (Bloomberg) The protesters were evicted from St. Paul’s on Feb. 28 and at least one restaurant found its bookings jump back to pre- occupied levels. Sales were down 40 percent to 50 percent while the camp was at St. Paul’s, resulting in two or three staff members losing their jobs, said Pollie Hall, events manager at the Paternoster Chop House. “This isn’t the corporate fat cats they were affecting, it was average working Joes,” said Hall, who said her customers were verbally abused by protesters and she was called a “devil- worshipping mason.” A wedding scheduled at the restaurant on the first day of the protest had to be moved. Mega ‘winner’: $105M tix stashed in this McDonald's (NYP) The Baltimore woman who claims to have one of three winning Mega Millions tickets now says it’s hidden somewhere in the McDonald’s restaurant where she works. Marlinde Wilson, 37, coyly wouldn’t reveal whether she had stashed the slip of paper behind the McFlurry machine or under the all-beef patties. “I’m waiting for things to calm down so I can go back to McDonald’s and get it. The people [at McDonald’s] are too excited. I want their heads to cool down before I go back,” she said.

Credit Suisse Returns To Profit (WSJ) In the fourth quarter, Credit Suisse's net profit was 397 million francs, compared with a net loss of 637 million francs a year earlier when restructuring charges weighed on earnings. Revenue, which includes interest income, fees and trading proceeds, rose 29% to 5.8 billion francs. Analysts had expected a profit of 563 million francs and revenue of 6.14 billion francs. State Lawsuits Could Add To S&P Exposure (WSJ) On Tuesday, the Justice Department sued S&P for allegedly causing some banks and credit unions to lose $5 billion after relying on the company's ratings of mortgage-linked securities. However, the $5 billion claim, which S&P has dismissed as "meritless," is only part of the legal battle being fought by the world's largest credit-ratings firm by number of deals rated. Thirteen states and the District of Columbia have followed in the Justice Department's footsteps, filing separate lawsuits against S&P on Tuesday. The California attorney general alone is suing S&P for about $4 billion to recover funds for two of the country's largest public pension funds, according to its lawsuit. Other states, such as Colorado and Arkansas, are demanding S&P give back the revenue it earned on precrisis ratings of hundreds of securities. State prosecutors allege S&P presented its ratings as based on objective and independent analysis but actually were inflated to cater to the banks that helped arrange and sell the securities. S&P Hires Top Defense Attorney for $5 Billion Lawsuit (Reuters) Standard and Poor's has hired John Keker, one of the country's top white-collar defense attorneys, to help fight the $5 billion lawsuit brought by the U.S. government this week. Keker, who is based in San Francisco and has represented everyone from cyclist Lance Armstrong to Enron's Andrew Fastow, was hired at the recommendation of Floyd Abrams, a prominent New York attorney who also represents the ratings firm. RBS Settles Rate Charges (WSJ) CFTC enforcement chief David Meister said Wednesday that the trading floor was "laden with conflicts of interest," where RBS traders "seized the opportunity to ask colleagues sitting in the next chair for false rate submissions." From mid-2006 to the end of 2010, traders at RBS tried hundreds of times to rig the London interbank offered rate, or Libor, sometimes succeeding, said U.S. and U.K. regulators as they announced a $612 million settlement with the British bank. ‘Historic Winter Storm’ Moving Toward U.S. Northeast (Bloomberg) A “potential historic winter storm” and blizzard may dump 2 feet of snow on Boston and eastern Massachusetts, potentially causing power outages and leaving 10 inches in New York City. Eighteen to 24 inches (46 to 61 centimeters) of snow may fall in Boston, and the city has an 85 percent chance of receiving at least 12 inches from the storm that is expected to arrive in two days, according to the latest forecast from National Weather Service in Taunton, Massachusetts, published at at 4:25 a.m. Eastern Standard Time. “Heavy snow and gusty winds will bring the potential for blizzard conditions. The worst of the storm will be Friday night into the morning,” the weather service said. The storm arrives on almost the 35th anniversary of the Blizzard of 1978, which killed 99 people, destroyed 2,000 homes, drove 10,000 residents into shelters and paralyzed eastern Massachusetts and northern Rhode Island for a week, according to the weather service. Ireland Moves Toward Debt Deal (WSJ) Under Ireland's new proposal, the government will provide a long-term bond to the Irish central bank that replaces the note, the Irish finance ministry said. IBRC will be liquidated and its remaining commercial property assets will be dispatched to Ireland's so-called bad bank, the National Asset Management Agency. Mr. Noonan told lawmakers early Thursday that there was still "no deal," but he needed to announce new powers to liquidate IBRC—the first step toward potentially striking such a debt agreement—to protect the country from unspecified legal challenges. Man Claims IRS Agent Coerced Him Into Sex (CBS) An Oregon man is suing the U.S. Government and a female IRS agent he alleges pressured him into sex, by threatening a tax penalty. Vincent Burroughs, of Fall Creek, Ore., says the harassing relationship began in August of 2011 when Dora Abrahamson, an agent with the Internal Revenue Service, called him and said he would be audited, CBS affiliate KVAL reports. Burroughs says he didn't know Abrahamson, and that he hadn't met her before those calls - nor had he heard that he was being audited by the IRS. "She was sending me texts that she wanted to come out, give me massages because she needed to help me relax," Burroughs said in a phone interview with KVAL News. Over the next two months, Burroughs alleges that Abrahamson sent him several flirtatious text messages - offering to give massages, asking to meet him, and sending racy photos of herself to his cell phone. "She said she knew more than my mother knew about me," said Burroughs. In the lawsuit, Burroughs says in September 2011 Abrahamson came to his home wearing provocative attire. "Next thing I know, she's at my gate, honking...so I opened my gate, she came into my property dressed exactly like [when] she texted me," Burroughs said. The lawsuit states: "She said that she could impose no penalty, or a 40% penalty, and that if he would give her what she wanted, she would give him what she needed." E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad (NYT) When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix. Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews,according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors. The trove of internal e-mails and employee interviews, filed as part of a lawsuit by one of the investors in the securities, offers a fresh glimpse into Wall Street's mortgage machine, which churned out billions of dollars of securities that later imploded. The documents reveal that JPMorgan, as well as two firms the bank acquired during the credit crisis, Washington Mutual and Bear Stearns, flouted quality controls and ignored problems, sometimes hiding them entirely, in a quest for profit. Harvard’s Gopinath Helps France Beat Euro Straitjacket (Bloomberg) When French President Francois Hollande unveiled a plan in November for a business tax credit and higher sales taxes as a way to revive the economy, he was implementing an idea championed by economist Gita Gopinath. Gopinath, 41, a professor at Harvard University in Cambridge, Massachusetts, has pushed for tax intervention as a way forward for euro-area countries that cannot devalue their exchange rates. “Fiscal devaluation” is helping France turn the corner during a period of extreme budget constraints, former Airbus SAS chief Louis Gallois said in a business- competitiveness report Hollande commissioned. Gopinath’s support for the theory took shape through her years teaching at Harvard and the University of Chicago and particularly as a Ph.D. student at Princeton University under the guidance of Kenneth Rogoff, Pierre-Olivier Gourinchas and Ben Bernanke, now chairman of the Federal Reserve. While her earlier work on current accounts and balance of payments garnered praise, it is her recent focus on the 17 euro nations that has national leaders paying action. John Thomas Financial Said To Draw Regulatory Probe (NYP) Wall Street brokerage firm John Thomas Financial, owned by flamboyant founder and CEO Tommy Belesis — who gained more than 15 minutes of fame from his role in Oliver Stone’s “Wall Street: Money Never Sleeps” — is being probed by the brokerage industry, the Securities and Exchange Commission and the FBI, The Post has learned. Agents from the FBI’s New York office have been knocking on doors of people associated with the firm, asking questions about JTF’s business practices, including cold calling by brokers and Belesis’ overseas accounts, sources told The Post. Fewer Workers Filed Claims for U.S. Jobless Benefits Last Week (Bloomberg) Applications for jobless benefits dropped 5,000 to 366,000 in the week ended Feb. 2, Labor Department figures showed today. Economists forecast 360,000 claims, according to the median of 53 estimates in a Bloomberg survey. Big Mac Prices Show Which Euro Zone States Best at Belt-Tightening (Reuter) Economist Guntram Wolff took the data and found that the price rise in Greece, Portugal and Spain has been less than the euro zone average, while in Ireland the price actually fell. These are the main countries undergoing deep economic reform due to the debt crisis. This contrasts with price rises above the euro zone burger average in Germany. Wolff concludes from this that economic adjustment is working. For example, In Ireland, which has made spending cuts after receiving international aid, the burger price has fallen from 3.80 euros to less than 3.50 euros. There is one notable exception, however. Heavily-indebted Italy is the most expensive country in the euro area to buy a Big Mac - 3.85 euros - while it costs just 3.64 euros in Germany. PETA: Naked chicken corpses aren't sexy (CM) The American founder of People for the Ethical Treatment of Animals, president Ingrid Newkirk, criticised a newspaper for running a picture of a raw chicken. "We don't want to see any chickens on display, but instead want them to live natural, happy lives with their families. Sexily displaying the corpse of a chicken who has been bred to grow so big, so quickly, that many collapse under their own weight, is just additionally offensive."

BofA Figures In Drug Probe (WSJ) A Mexican cocaine-trafficking cartel used accounts at Bank of America to hide money and invest illegal drug-trade proceeds in U.S. racehorses, the Federal Bureau of Investigation said. The alleged ties between the violent drug gang known as Los Zetas and the second-largest U.S. bank by assets were described in a 35-page affidavit filed in federal court in Texas last month. According to an FBI agent, a horse-buying and training business created to launder drug money had accounts at the Charlotte, N.C., bank. Libor Probe Moves To Political Arena (WSJ) The scandal over banks' manipulation of key interest rates cost the jobs of three senior financial figures last week. On Monday, the deputy governor of the Bank of England will try to ensure it doesn't derail his own career. Paul Tucker, a leading candidate to become the next governor of the Bank of England, will testify Monday afternoon before a Parliamentary committee that is examining how Barclays and other global banks improperly tried to influence interest rates like the London interbank offered rate...Barclays, after reaching a £290 million settlement with U.S. and British regulators over its attempts to manipulate Libor, sought to defend itself by releasing notes from an October 2008 phone call between Mr. Tucker and Robert Diamond. According to Mr. Diamond's notes from the call, Mr. Tucker relayed concerns from "senior" British government officials about Barclays's above-average Libor submissions. "Mr. Tucker stated…that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently," Mr. Diamond wrote to two of his colleagues the day after the call. Diamond Antithesis Seen As Key Step To Repairing Barclays (Bloomberg) The British lender faces a criminal probe and political pressure to curb or separate the investment banking unit that Diamond built up during his 16-year career at Barclays from the consumer bank. The unit generated 61 percent of the bank’s first-quarter pretax profit. At a Parliamentary hearing last week, lawmakers asked if the culture at the investment bank was “rotten” and if he lived in a “parallel universe.” Former Barclays CEO: I Too Fell for the Diamond Myth (FT) "It was a close call," Taylor says of his decision to retain Diamond as head of Barclays Capital. "I suspect the subsequent history of the business would have been very different had I asked him to go. I deserve blame for being among the first to succumb to the myth of Diamond’s indispensability, to which some in Barclays were still in thrall only a matter of days ago." SEC set to hand out up to $452M to whistleblowers (NYP) “The SEC is receiving two to three tips every day that are worth pursuing, and they’re farming them out to staffers for investigation,” said Lawrence A. West, a lawyer with Latham & Watkins. “SEC officials are eager to pay out and publicize the first whistleblower award,” said West, whose firm has gathered a number of tipsters under the new law. “Once the first award is publicized, tips to the SEC from disgruntled employees are almost certain to increase substantially.” Romney Mines Hamptons For Political Cash (NYT) EAST HAMPTON, N.Y. — A woman in a blue chiffon dress poked her head out of a black Range Rover here on Sunday afternoon and yelled to an aide to Mitt Romney. “Is there a V.I.P. entrance? We are V.I.P.” (No such entrance existed.)...what was billed as a day of elegant campaign events at the homes of the ultrarich turned out to be an afternoon of curious and clashing tableaus: protesters with their bandannas and Occupy Wall Street-inspired chants (“We got sold out, banks got bailed out!”) standing amid multimillion-dollar mansions, where live bands played “Margaritaville” and donors dined on prosciutto-wrapped melon balls...After that, Mr. Romney attended events at the Southampton homes of Clifford Sobel, the former United States ambassador to Brazil, and David Koch, the billionaire industrialist and longtime benefactor of conservative political causes. The event at Mr. Koch’s home drew about 200 protesters, who...went so far as to hire a local pilot to fly a giant red and black banner over Mr. Koch’s house, which read: “Romney has a Koch problem,” a play on the drug. (Mr. Koch’s name is pronounced the same as the word coke.) A truck, festooned with the logos of big banks like Citigroup and Wells Fargo, circled the neighborhood with a plastic dog on the roof, a jab at Mr. Romney’s much-mocked family vacation in which he traveled with his Irish setter inside a pet carrier on the roof of a car. Barclays mulls split after Libor scandal: report (MarketWatch) Board directors at U.K. bank Barclays PLC BCS -1.72% are considering splitting the company into two units, as regulatory scrutiny mounts in the wake of its role in the Libor interest-rate fixing scandal, The Sunday Times reports without citing sources. The newspaper says Barclays is examining plans to spin off its investment banking arm, which could be floated in New York, with the U.K.-headquartered retail and commercial bank retaining its London listing. (A person familiar with the matter said the story was inaccurate.) Roubini: My 'Perfect Storm' Scenario Is Unfolding Now (CNBC) In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together in to create a storm for the global economy in 2013. “(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday. Tighter Control For Euro Banks (WSJ) The establishment of a single authority, with a single set of rules for the region's banks, is seen by Germany and other strong economies as an essential condition before they will consider sharing resources with other euro-zone countries. House-crasher sentenced after enjoying Diddy's food, cigars and toothbrush (NYP) A East New York man, busted for sneaking into rapper Sean “Diddy” Combs’ palatial East Hampton spread in April, guzzled the star’s top-shelf liquor, washed with his soap, and even used his toothbrush, officials revealed yesterday. “I brought a cheesesteak, a cheesecake, a bucket of fried chicken — which I ate at the house — and drank a ‘dollar’ bottle of Hennessy and four cans of Pepsi,” Quamine Taylor told prosecutors at his sentencing yesterday. He even slathered Diddy’s Frank’s Red Hot sauce on his grub, and drank a bottle of Hpnotiq, a vodka liqueur, he said, adding, “After I ate, I went upstairs and went to sleep.” He also smoked three of Diddy’s Dutch Masters cigars and drank a can of orange soda. Then he freshened up using Diddy’s soap and splashing on his aftershave.

SEC Drops Case Against Ex-Berkshire Exec Sokol (Reuters) The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway, Sokol's lawyer told Reuters. In 2011, Buffett said Sokol violated the company's insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company. The U.S. Securities and Exchange Commission began investigating Sokol's investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway. Sokol's lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol. "SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol," said Levine, a lawyer at legal firm Dickstein Shapiro. Sokol has been "completely cleared" as there was no evidence against his client, Levine said. Cohen’s SAC Tops Most Profitable List Amid Insider Probes (Bloomberg) SAC Capital International, Cohen’s flagship fund, was the world’s most-profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds...SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors. Geithner's Planned Departure Puts Obama In A Tough Spot (Reuters) The Treasury Department said Geithner would stick to his previously announced schedule to stay until sometime around the Jan. 21 inauguration. Obama chose Geithner to lead the just-ended negotiations with Congress to avert the Dec. 31 fiscal cliff of spending cuts and tax hikes that threatened to push the economy back into recession. But the deal, which preserved most of the Bush-era tax breaks for Americans, sets up a series of crucial fiscal deadlines by delaying automatic spending cuts until March 1 and not increasing the government's borrowing limit. That puts Obama in the tough spot of nominating another Treasury secretary and asking the Senate to approve his choice when lawmakers are in the middle of another budget battle. Egan Jones Says Further US Downgrades Unlikely (CNBC) "This latest round (of negotiations) indicates a sign of health. You have a major ideological clash going on in Congress and many people uncomfortable with it, but it is part of democracy. The more positive light is that we actually have a deal and can move forward," Sean Egan, managing director of Egan-Jones told CNBC on Friday. "We've gotten a lot more comfortable about the U.S. and we probably won't take additional negative actions for the foreseeable future," he added. Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg) From John Paulson’s call for a collapse in Europe to Morgan Stanley’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. The ill-timed advice shows that even the largest banks and most-successful investors failed to anticipate how government actions would influence markets. Unprecedented central bank stimulus in the U.S. and Europe sparked a 16 percent gain in the S&P 500 including dividends, led to a 23 percent drop in the Chicago Board Options Exchange Volatility Index, paid investors in Greek debt 78 percent and gave Treasuries a 2.2 percent return even after Warren Buffett called bonds “dangerous.” Fed Divided Over Bond Buys (WSJ) A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth. Minutes released Thursday of the Fed's Dec. 11-12 policy meeting showed that officials were divided. Some wanted to continue the programs through the end of 2013, others wanted to end them well before then and a minority wanted to halt the programs right away. Swiss Bank Pleads Guilty In Probe (WSJ) In the latest blow to Switzerland's centuries-old banking practices, the country's oldest bank pleaded guilty to a criminal conspiracy charge in the U.S. on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad. Wegelin & Co., founded in 1741, is the latest Swiss bank to reach a deal with U.S. prosecutors as they crack down on Americans who kept their money in secret accounts overseas and the entities which helped them. Three Wegelin bankers also were charged criminally in the U.S. last year. Subway worker tells customer to 'fight me like a man,' during confrontation over ketchup (WFTV) Luis Martinez said he stopped by a Subway shop in a Walmart on South Semoran Boulevard late Tuesday night to get something to eat. He said he ordered a Philly cheese steak the way he always does. "American cheese, onions and ketchup," said Martinez. Lawrence Ordone was working behind the counter. "He wants ketchup on the Philly cheese steak and I have never put -- we don't even have ketchup at Subway -- I've never put ketchup on anybody's sandwich," said Ordone. Martinez said he didn't want the sandwich without the ketchup and that a man next to him in line offered to buy the sandwich. Ordone said that Martinez mouthed off at the man. Martinez denied saying anything, but neither he or Ordone disputed what they said happened next. "That's when I flew off the handle," said Ordone. "He shoved a chair to the side, like knocked it down to come at me, and I said, 'This is going to be serious,'" said Martinez. "I said, 'Let's go, fight me like a man,'" said Ordone. "I was scared. Next thing, I'm thinking a gun's going to come out," said Martinez. Ordone said he blocked the customer so he couldn't get out. "He threatened to kill me in front of my wife," said Martinez. Martinez called 911, but by the time police got there the Subway worker had already left. Ordone said he was fired from his job Wednesday, and that he is baffled the confrontation started over something as simple as ketchup. "There's ketchup three aisles down. You can go buy your own ketchup, and I promise to God, you can put as much as you want on it and nobody's going to say nothing," said Ordone. Economy Adds 155,000 Jobs (WSJ) Rebuilding following superstorm Sandy, which struck the Northeast in late October, likely added to job growth last month. Nationally, employment in the construction sector advanced by 30,000 jobs. Meanwhile, manufacturing payrolls increased by 25,000 and health-care jobs grew by 45,000. JPMorgan Faces Sanction for Refusing to Provide Madoff Documents (Bloomberg) The Treasury Department’s inspector general has threatened to punish JPMorgan Chase for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme. Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege. Rich Catch a Break With Budget Deal Providing Deductions (Bloomberg) “The increases in taxes and limits to deductions are more favorable than expected,” said Christopher Zander, partner and head of wealth planning at Evercore Partners Inc. (EVR)’s wealth management unit. “They could have been worse for high net-worth taxpayers.” Regulators to ease up on banks to get credit flowing (Reuters) Banks will get more time to build up cash buffers to protect against market shocks under a rule change that could help free up credit for struggling economies, a European regulatory source said. The Basel Committee, made up of banking supervisors from nearly 30 countries, is expected to announce the revision on Sunday to its "liquidity coverage" ratio or LCR, part of efforts to make banks less likely to need taxpayer help again in a crisis. The change comes after heavy pressure from banks and some regulators, who feared Basel's original version would suck up too much liquidity at a time when ailing economies are badly in need of a ready supply of credit to finance growth. 'Stripper' arrested after performance art leads to ruckus in Hallandale (SS) According to police and witnesses, Mena, 25, was first spotted standing and yelling in the middle of A1A outside her condo building along the 1800 block of South Ocean Drive about 10:45 a.m. on Wednesday. Noel von Kauffman, 40, said he was walking along the street when he noticed Mena trying to direct traffic while wearing a tank-top, cut-off jean shorts and tall boots...At some point, Mena picked up a traffic cone and threw it at a car driven by Dieter Heinrich, 49, of Dania Beach, according to an arrest report. The cone broke the car's side mirror, causing about $300 in damages, the report indicated. When Heinrich got out of his car, Mena allegedly spat in his face. Von Kauffman said he jumped in to help Heinrich, who had children in the back seat of his car. Mena scratched von Kauffman's wrist as the two men tried to restrain her and move her away from the busy roadway, according to the police report. After pinning her to the ground, von Kauffman said the woman first tried to say the incident was part of a television show and that everything was being caught on camera. Then she claimed she was a federal agent. Then she said she was friends with Hallandale Beach Mayor Joy Cooper and everyone involved would be in trouble, von Kauffman said.