Barclays High-Pay Culture Brought Disrepute: Report (WSJ) Barclays PLC suffered from "a lack of self-awareness" in recent years as a culture of high pay and short-term incentives brought the bank into disrepute, according to an independent report by lawyer and investment banker Anthony Salz. The Salz Review, which was commissioned by Barclays' former chairman after the bank admitted to trying to rig interbank interest rates last summer, describes how in about 10 years the lender expanded to become a disparate set of businesses, each with its own culture. "The result of this growth was that Barclays became complex to manage," the report published Wednesday said. "Despite some attempts to establish group-wide values, the culture that emerged tended to favor transactions over relationships, the short term over sustainability, and financial over other business purposes." The 235-page report—which cost Barclays about £17 million ($25.7 million) to have produced—recommended a series of reforms aimed at trying to foster a common sense of purpose across the bank. To this end, Barclays' board must play a more active role in overseeing the business and Barclays' human resources department must be given more power to stand up on issues such as pay, the report said. Ex-Goldman Sachs Trader Taylor Said to Surrender to FBI (Bloomberg) Former Goldman Sachs Group Inc. traderMatthew Taylor planned to surrender today to the Federal Bureau of Investigation, a person familiar with the matter said. Taylor was accused Nov. 8 by the U.S. Commodity Futures Trading Commission of concealing an $8.3 billion position in 2007 that caused New York-based Goldman Sachs to lose $118 million. Morgan Stanley hired Taylor in March 2008, less than three months after Goldman Sachs disclosed in a public filing that he had been fired for building an “inappropriately large” proprietary trading position. Cyprus Bailout Details Emerge After IMF Deal (WSJ) The IMF statement set out the tough terms the tiny nation of 800,000 has to meet to get the bailout, calling the task ahead "challenging." Cyprus, an economy of roughly €17 billion in annual output, needs to push through cuts and savings worth 4.5% of gross domestic product by 2018 to hit a primary-surplus target of 4% of GDP outlined in the bailout deal, the IMF statement said. These cuts will come on top of savings worth 5% of GDP the government is already implementing through to 2015. An extra 2% of GDP in extra revenue will come from an increase in the country's corporate tax from 10% to 12.5% and an increase in the tax on interest income from 15% to 30%. The country's corporate-tax rate will remain among the lowest in Europe, on an equal footing with Ireland's, and will allow Cyprus to continue to use its tax regime to attract businesses, but the increase in withholding tax will make it substantially less attractive as a place for individuals to leave their savings. Cyprus Leader Invites Family Firm Probe (FT) Cyprus president Nicos Anastasiades has urged judges investigating the country's banking disaster to examine transactions handled by his family law firm as "a priority" in a bid to defuse public anger over last-minute transfers by well-connected Cypriots, Russians and Ukrainians who thereby avoided a "haircut" on their uninsured deposits. The move followed questions over whether a company managed by the president's son-in-law made use of inside information to transfer more than 20 million euros out of Laiki Bank days before its collapse. Marc Lasry In French Follies (NYP) Lasry, the CEO and co-founder of Avenue Capital, is on his way to getting a plum assignment as the US ambassador to France as a reward for his many years as a big Democratic fundraiser. But the Moroccan-born, French-speaking American could encounter some uncomfortable moments when he lands in Paris, given his views on the land of fine wine, crusty baguettes — and European socialism. “We don’t invest in France,” he said at a New York hedge-fund conference sponsored by French bank BNP in June 2010, even apologizing to his hosts as he made the comment. Lasry, who is a bankruptcy lawyer by training, loves to chide other countries for their creditor-unfriendly ways. His $11.7 billion distressed debt fund buys up beaten-down credits of companies headed towards bankruptcy, with the payout determined by their ranking in the process. That can be dicey in countries like France, he explained at the BNP conference, as “the legal system is very much tilted towards helping unions and workers.” As a result, he said, “you might find your claim disallowed.” 1,000 pot plants seized in Queens in warehouse raid (NYDN) A massive drug operation went up in smoke Tuesday when law enforcement officials raided an indoor marijuana farm in Queens. Authorities seized more than 1,000 pot plants - along with grow lights and other gear - from the 44th Rd. warehouse in Long Island City just after 3 p.m. , police sources said. Officials from the NYPD, state police and the federal Drug Enforcement Agency also rounded up five suspects in the sweep. New York-for-Buenos Aires Swap Theory Spreads: Argentina Credit (Bloomberg) Argentina’s refusal to improve its offer to holders of defaulted debt suing for full payment in the U.S. is deepening speculation that the nation will sever ties with the overseas bond market. The proposal submitted on March 29 mimics the terms of Argentina’s 2005 and 2010 debt exchanges, a move that could lead to a default on the restructured notes unless the country removes them from U.S. jurisdiction. BofA Chief Moynihan Said to Summon Managers for Revenue Push (Bloomberg) Bank of America Corp. Chief Executive Officer Brian T. Moynihan has summoned more than 100 of his regional leaders to a private meeting today where they’ll be pushed to boost the lender’s flagging revenue, said two people with direct knowledge of the project. Managers at the two-day event in Chicago will be judged on how much progress they’ve made in helping to sell more products to the 53 million customers of the second-biggest U.S. lender, said the people, who asked for anonymity because Moynihan’s plan hasn’t been made public. Revenue has dropped every year of Moynihan’s three-year tenure as he sold assets, repaired the firm’s balance sheet and settled more than $40 billion in claims tied to defective mortgages. Private Sector Adds 158,000 Jobs (WSJ) Economists surveyed by Dow Jones Newswires expected ADP to report a gain of 192,000 private jobs. However, the February job gain was revised up to 237,000 from 198,000 reported a month ago. SEC Embraces Social Media (WSJ) In a ruling that portends changes to how companies communicate with investors, the Securities and Exchange Commission said Tuesday that postings on sites such as Facebook and Twitter are just as good as news releases and company websites as long as the companies have told investors which outlets they intend to use. Gray seal pup saved from death on Montauk beach now recovering (NYDN) The three-month-old seal, underweight at 40 pounds, is now resting in one of the foundation's rehabilitation tanks at the Atlantic Marine World aquarium in Riverhead. "She feels very sassy in her tank and doesn't appreciate anything we are doing for her," laughed Kimberly Durham, director of the rescue program, "which is a good sign. A nasty seal is a good sign that she is getting better because they are wild animals.

Anger Over Christine Lagarde's Tax-Free Salary (Independent) Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills. The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without "justification" – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night. Unlike Mr Obama, however, she does not have to pay any tax on this substantial income because of her diplomatic status. EU Proposes 'Banking Union' (WSJ) The 17 countries that use the euro should consider setting up a "banking union" that allows them to share the burden of bank failures, the European Union's executive arm said Wednesday in a report on the currency union's crisis-fighting efforts. To further stop expensive bank bailouts from pulling down governments' own finances, allowing the euro zone's new rescue fund to directly boost the capital of banks "might be envisaged," the European Commission said. Greeks Flock To Germany Even As They Criticize It (CNBC) Germany, Europe's economic powerhouse and a country which has been criticized by many Greeks over its harsh demands for austerity cuts in return for bailout cash, has experienced an influx of young skilled immigrants. Der Spiegel magazine noted that while Greek newspapers "printed cartoons depicting the Germans as Nazis, concentration camp guards and euro zone imperialists who allow their debtors to bleed to death," the Greeks have kept arriving — bringing an "anything is better than Athens" attitude with them. Pissarides Says Euro Exit Would Aid Rich Greeks At Cost To Poor (Bloomberg) Nobel economics laureate Christopher Pissarides said wealthy Greeks would benefit at the expense of poorer citizens were the country to exit the euro. “A lot of Greeks” have withdrawn money and deposited it with banks elswhere in the 17-nation currency zone, Pissarides said in an interview in London today. If the country returned to the drachma, the new currency would be so devalued they could buy it cheaply on international markets with the cash they’d exported, enabling them to buy more assets in Greece. While poorer Greeks are equally able to appreciate the difficulties facing their country, they’re not as able to shield their funds from an exit from the common currency, Pissarides said. They need to preserve quick access to their savings, which isn’t as easy to do if it’s held at a foreign bank, and such lenders may not always accept small deposits. Zuckerberg Drops Off Billionaires Index As Facebook Falls (Bloomberg) The 28-year-old’s fortune fell to $14.7 billion yesterday from $16.2 billion on May 25, as shares of the world’s largest social-networking company dropped 9.6 percent to $28.84. Woman's Boyfriend Took Car Without Permission Before She Slammed It Into House (NYP, earlier) Dan Sajewski, 23, arrived at his family’s Huntington estate last weekend with Anderson, 21, his on-again, off-again waitress girlfriend. While his parents vacationed on Long Island’s North Fork, the duo helped themselves to his mother’s 2003 Mercedes-Benz CLK 320, a birthday gift from Sajewski’s anesthesiologist father, a source said. They took a joyride to the Hamptons, where they had a little too much fun. A field Breathalyzer test revealed that Anderson drove home with a .30 Blood-Alcohol Content — nearly four times the legal limit and the equivalent of about 15 drinks, prosecutors said at her arraignment yesterday. They drove back to Huntington and she was speeding along Southdown Road when she failed to turn at a T-instersection — ramming through the front of Indiere’s house, obliterating her kitchen, and exiting through the back wall, prosecutors said. “We can’t believe he just let this girl drive a car he wasn’t even supposed to have in the first place,” a Sajewski family member said. “He’s done this before; he took his sister’s Jeep and just took off. “He was trying to get the car home before the family got home from their own Memorial Day weekend. He’s not exactly the model son.’’ The relative added that Sajewski didn’t call his father about the accident until two hours later. In the police report, Anderson told cops “her power steering got stuck, causing her to crash,” and that she only drank “three beers.” Housing Market Crawls Back (WSJ) Housing prices across the U.S. fell in March, but not as much as in earlier months, according to a report Tuesday that offered fresh evidence of a real-estate market on the mend. Compared with February, prices fell just 0.03% in March, and after adjusting for seasonal factors, they rose 0.09%, according to the S&P/Case-Shiller 20-city home-price index. "This is the first flat report we've had in quite some time," said David M. Blitzer, chairman of the Index Committee at S&P Indices. Still, "while there has been improvement in some regions, housing prices have not turned" everywhere, he said. Bankers Hired By Blackberry Maker (NYP) Research In Motion said yesterday it hired investment banks JPMorgan and RBC to review its “options,” which most investors took to mean a potential sale, and warned of another quarterly loss. Gold Investors Rush For The Exits (WSJ) Investors in SPDR Gold Shares and iShares Gold Trust, two high-profile exchange-traded funds that hold physical bullion, also have pulled back recently. Through Friday, the two funds had reduced the number of tons of gold they're holding this month. As of May 15, hedge funds, pension funds and other money managers also had slashed their bets that gold prices will rise in the futures market, to the lowest level since January 20, 2009, according to weekly data released by the U.S. Commodity Futures Trading Commission. The bullish bets rose slightly last week, but remain near the low for the year. Police Find Another Human Body Part In Package In Ottawa (OC) Police found a human hand at the Ottawa Postal Terminal Tuesday night, hours after a bloody foot was delivered to the Conservative party's Ottawa headquarters just blocks from Parliament Hill. Ottawa police were still trying to understand what they were dealing with even as detectives in Montreal combed through a crime scene where a torso was found in a suitcase in that city's Snowdon district. Police discovered the second package, sent from the same place as the package sent to Tory headquarters, Tuesday evening. Officers carried it from the huge Riverside Drive terminal in a brown paper bag, which they X-rayed before they opened it to find the hand. The gruesome events began shortly before noon when access to the Conservative party's headquarters was restricted after the fire department's Hazmat team was called in to investigate a suspicious package. A party staffer had started to open a blood-stained box sent to the office at 130 Albert St. before police were called to investigate. At first, it was thought there was a human heart inside, but after the box was X-rayed, police confirmed that it contained a foot.

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.

Goldman Profit Soars (WSJ) "While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders," Chief Executive Lloyd C. Blankfein said. Overall, the investment-banking arm recorded revenue of $1.41 billion for the quarter, up from $857 million a year ago and $1.16 billion in the third quarter. Financial advisory revenue rose 8.1% from year ago. Debt underwriting revenue surged to $593 million from $196 million in the year ago and the $466 million reported in the third quarter. Equity underwriting revenue popped 59% from the year ago and 61% from the prior quarter to $304 million. Revenue from fixed income, currency and commodity trading totaled $2.04 billion, versus $1.36 billion a year earlier and $2.22 billion in the third quarter. Revenue from equities execution rose 45% from a year ago to $764 million but fell 10% from the third quarter. Overall profit for the fourth quarter totaled $2.89 billion, compared with a year-earlier profit of $1.01 billion. Earnings per share, reflecting the payment of preferred dividends, jumped to $5.60 from $1.84. Net revenue, including net interest income, surged 53% to $9.24 billion. JPMorgan Profit Tops Estimates (WSJ) JPMorgan's fourth-quarter earnings surged 53% on strong revenue and better credit, as the bank further detailed the fallout from more than $6 billion in trading losses last year. The outsized, complex trades on credit default swaps tied to corporate bonds became known as the "London Whale." On Wednesday, the bank made public an internal report outlining mistakes and oversights by executives who played a role in the matter, including Chief Investment Officer Ina Drew, who has since left the bank, and Douglas Braunstein, who was chief financial officer during the episode and has since become a vice chairman. It also said its Treasury and Chief Investment Office, where the "Whale" trades were made, recorded a loss of $157 million on the fourth quarter, compared to net income of $417 million in the year ago. J.P. Morgan also said it halved the 2012 compensation of Chief Executive James Dimon to $11.5 million. Additionally, he will have to wait up to another 18 months before he can start exercising two million options that were awarded to him five years ago. Overall, J.P. Morgan reported a profit of $5.69 billion, or $1.39 a share, for the fourth quarter, up from $3.73 billion, or 90 cents a share, a year ago. Bankers Get IOUs Instead Of Bonus Cash (WSJ) Several thousand Morgan Stanley traders, investment bankers and other employees will get IOUs instead of cash when bonus day arrives Thursday, a fundamental change in Wall Street pay triggered by the financial crisis. The New York company will pay its bonuses in four equal installments, according to people briefed on the plan, with the first chunk coming in May and the last in January 2016. Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company. "I don't think there will be a lot of cheers on the trading floors of Morgan Stanley," said Mark Williams, a former Federal Reserve bank examiner who now teaches at Boston University. "Bonuses were used to buy houses and cars. They were savings vehicles." AIG Seeks Approval To File More Bank Suits (NYT) Since the summer of 2011, the insurance giant American International Group has been battling Bank of America over claims that the bank packaged and sold it defective mortgages that dealt A.I.G. billions of dollars in losses. Now A.I.G. wants to be able to sue other banks that sold it mortgage-backed securities that plunged in value during the financial crisis. It has not said which banks, but possibilities include Deutsche Bank, Goldman Sachs and JPMorgan Chase. But to sue, A.I.G. first must win a court fight with an entity controlled by the Federal Reserve Bank of New York, which the insurer says is blocking its efforts to pursue the banks that caused it financial harm. Hungary Attacks Roubini Over Currency 'Advice' (CNBC) Hungary's Ministry for National Economy said in a statement that the forint began to depreciate after economist Nouriel Roubini – dubbed Dr Doom for his pessimistic forecasts – said in a newsletter that failure to secure a deal with the International Monetary Fund was bad news for the currency. The forint has been in decline since last week hitting seven-month lows earlier this week but has since gained some ground. Hungarian officials rounded on Roubini saying; "On Thursday speculators seem to have taken Roubini's advice and attacked the forint." BofA Takes A Mortgage Mulligan (WSJ) Less than two years after embarking on a painful retreat from home lending, Bank of America Corp. is girding for a new run at the U.S. mortgage business. Whether that gamble pays off will depend in large measure on how long the mortgage market's run of record profits continues. The Charlotte, N.C., company aims to sell more mortgages through its 5,000-plus branches, executives said. The fourth-biggest U.S. mortgage lender, after Wells Fargo & Co., J.P. Morgan Chase & Co. and U.S. Bancorp, is intent on "growing that business," Chief Executive Brian Moynihan said at a December investor conference. Eurozone Plan May Be Watered Down (WSJ) One of the euro zone's most significant commitments last year aimed at containing its financial crisis—a plan to allow the bloc's bailout fund to directly boost the capital of banks in countries facing debt troubles—could be undermined by technical complications and second thoughts by some governments. Germany Repatriates Gold Reserves (WSJ) Germany's central bank said it would remove nearly a fifth of its total gold reserves from deposits at the New York Federal Reserve Bank and the Bank of France and bring them back to Germany, amid a debate in the country over the transparency of its global gold holdings. Inside Trader Sent To Kinnu-can (NYP) John Kinnucan, the former head of Portland, Ore.-based firm Broadband Research, was sentenced to four years and three months in prison after admitting to feeding illegal stock tips to his well-heeled hedge fund clients. Reporter fired for secret stripping job gets new journalism gig with same (NYDN) Tressler, 30, is now a reporter for the San Antonio Express-News, covering “cops, crime and general mayhem,” according to her Twitter account. In April, the gorgeous Tressler was fired from her job as a society reporter for the Houston Chronicle for failing to tell the newspaper about her after-hours gig as a stripper, which she chronicled in her blog, “Diary of an Angry Stripper.” Tressler then sued her former employer's parent company, the Hearst Corp., which also owns the Express-News, alleging that the firing was unfair. She hired celebrity lawyer Gloria Allred and filed a complaint with the U.S. Equal Employment Opportunity Commission, saying the paper’s reason for firing her -- failing to write on her application that she had been working part-time as a stripper -- was ridiculous. "I've worked at KB Toys. I've worked at a surf shop. I've worked at multiple coffee shops. I've worked at Taco Bell. I've worked as a line cook at a restaurant," Tressler told the Las Vegas Review-Journal in June. “Do you really want me to put every single one of those on my job application?" Over the summer, Tressler embarked on a national stripping tour and pushed a book, which shared the same title as her blog. She also picked up some freelance assignments for “Good Morning America.” After the suit and the tour, it seemed unlikely Tressler would re-enter Texas journalism, let alone for a newspaper owned by the same parent company that fired her. Some have suspected that her new job was part of a settlement she reached with the company.

Dozens Likely Implicated In UBS Libor Deal (FT) bout three dozen bankers and senior managers will be implicated in the alleged rigging of Libor interest rates when UBS settles with global regulators later this week, according to people familiar with the matter. UBS is close to finalizing a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5 billion and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan...Not all of the three dozen individuals will face criminal or civil charges and the level of alleged misconduct varies among them. While it also is not clear how many bankers will be criminally charged, people familiar with the investigation said the settlement documents will document an intercontinental scheme to manipulate the Yen-Libor interest rate over several years involving desks from Tokyo to London. Cerberus Seeks Sale of Gun Maker Freedom Group (WSJ) Private-equity firm Cerberus Capital Management LP said it is seeking to sell the company that manufactures a gun used in last week's shooting at Sandy Hook Elementary School in Newtown, Conn. "We have determined to immediately engage in a formal process to sell our investment in Freedom Group…We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so," Cerberus said in a statement Tuesday. Cliff Talks Narrow (WSJ) President Barack Obama backed away from his long-standing call for raising tax rates on households making more than $250,000 a year, a development that inches the White House and congressional Republicans closer to a budget deal. Mr. Obama's move, a counter to Republicans' recent proposal to raise tax rates on income over $1 million, further narrows the differences between the two sides. During a meeting with House Speaker John Boehner (R., Ohio) Monday the president proposed allowing Bush-era tax rates to expire for households making more than $400,000 in annual income, people familiar with the meeting said. Poland Finds It's Not Immune To Euro Crisis (NYT) During much of the region’s debt crisis so far, Poland has counted itself fortunate that the troubles began before the country had joined the euro currency union. By being part of the E.U.’s common market, but not bound by euro strictures, Poland has been one of the Continent’s rare economic good-news stories. But the deceleration in Polish growth, which has prompted the central bank to begin a series of interest rate cuts to stimulate the economy, has underscored the country’s exposure to slumping euro zone consumer markets. Hedge Fund Managers Convicted of Insider-Trading Scheme (Bloomberg) Level Global Investors LP co-founder Anthony Chiasson and former Diamondback Capital Management LLC portfolio manager Todd Newman were convicted of securities fraud and conspiracy for an insider-trading scheme that reaped more than $72 million. After deliberating a little more than two days, a federal jury in New York found both men guilty of conspiracy to commit securities fraud for a scheme to trade on Dell Inc. (DELL) and Nvidia Corp. (NVDA) using illicit tips. The panel found Chiasson, 39, guilty of five counts of securities fraud, earning Level Global $68.5 million on inside tips trading on the two technology company stocks. Newman, 48, was convicted of four counts of securities fraud related to trades on inside information that earned his fund about $3.8 million. “We had all the evidence we needed,” said Felicia Rivera, a juror from Westchester County near New York City, said after court. Credit unions sue JPM for $3.6B (NYP) The nation’s credit-union watchdog sued JPMorgan for a second time yesterday over $3.6 billion of Bear Stearns mortgage bonds that imploded in the wake of the financial crisis. The suit brought by the National Credit Union Administration accuses Bear Stearns, the failed bank acquired by JPMorgan in 2008, of peddling toxic securities to four credit unions that later collapsed. The same government agency sued JPMorgan last year over $1.4 billion in mortgage-backed securities that led to losses for credit unions. That suit is still pending. In the latest complaint, the credit union regulator said Bear Stearns conspired with at least 16 outfits that cranked out toxic mortgages and securities sold to unsuspecting buyers. Those included notorious subprime mortgage outfits such as Countrywide Financial, New Century and People’s Choice Home Loans. Man wears 70 items of clothing at airport to avoid baggage charge (DS) A man took to putting on 70 items of clothing to avoid an extra baggage charge at an airport. The unidentified passenger turned up at Guangzhou Baiyun International Airport in China, described as looking like a 'sumo wrestler'. According to Guangzhou Daily, the man's luggage exceeded the weight limit. He did not want to pay the extra baggage costs, and thus took out and wore more than 60 shirts and nine pairs of jeans. Wanting to board a flight to Nairobi, Kenya, he was stopped by the metal detector and had to undergo a full body search. AIG Raises $6.45 Billion as AIA Priced in Top Half of Range (Bloomberg) AIG sold 1.65 billion shares at HK$30.30 each, AIA said in a statement today. The shares were offered at HK$29.65 to HK$30.65 each. AIA fell 3.3 percent to close at HK$30.60 in Hong Kong, the most since July 23. It was the biggest decliner and most actively traded stock by both volume and value in the city’s benchmark Hang Seng Index (HSI) with HK$56.6 billion ($7.3 billion) worth of shares changing hands today. Probe Sparks Split On Trades (WSJ) A regulatory investigation into whether stock exchanges have given unfair advantages to high-speed traders has sparked complaints against the exchanges, fueling a broader debate about how the market operates and is regulated. The Investment Company Institute, trade group for mutual funds, complained in a recent letter to the Securities and Exchange Commission that U.S. stock exchanges "facilitate strategies" for rapid-fire trading firms "that can lead to disorderly markets or that can benefit market participants at the expense of long-term investors." Buybacks Rule The Day (WSJ) American companies bought back $274 billion more shares than they issued in the year through September, according to Ed Yardeni, president of investment advisory firm Yardeni Research. And the spending spree looks set to continue, a sign that companies have the cash to put to work but don't yet see an economic case for using it to expand their businesses or create jobs. Dog swallows a foot of Christmas lights (Mirror) Charlie, a seven-year-old crossbreed dog from Southampton, was saved by surgeons from veterinary charity PDSA after wolfing down his family's Christmas lights recently. And the dog has a track record for getting his paws, and teeth, on household objects, having once eaten his owner Sharon Fay's scarf. Ms Fay, who aptly refers to her dog as the "light of her life", became concerned when she noticed bits of wire sticking out of Charlie's faeces in the garden. The 45-year-old said: "I hadn't even noticed that the lights had been chewed at this stage but it quickly became clear what had happened. "Back in March he ate one of my scarves and needed an operation to remove it, but I thought it was just a one-off incident as he hadn't shown any signs that he was going to be a repeat offender. I've had dogs all my life and have never known a dog act like this before." An X-ray immediately cast a light on Charlie's problem - the tangled remains of the decorations clearly showed up in his stomach and would have proved fatal if they were not removed. Vets rushed Charlie to the operating table and removed the Christmas decorations, also finding a shoelace.

Hedge Funds Belt Few Home Runs (WSJ) They are the few. The proud. The hedge-fund managers making a killing this year. David Tepper's firm was up about 25% through Friday, partly from a bet Europe will avoid a meltdown. Steve Mandel's firm gained nearly as much from soaring consumer and technology stocks. Pine River Capital Management rose 30% thanks in part to subprime mortgages, as did Josh Birnbaum's Tilden Park. And the Barnegat Fund has climbed over 39% with a debt strategy that the manager concedes isn't for the faint of heart. The big gains, as reported by fund investors and people familiar with the firms, come as most hedge funds struggle for the fourth year a row, the longest period of underperformance since 1995 to 1998. Hedge funds on average gained 4.7% through September, according to industry tracker HFR, while stock-trading funds were up on average 5.5%. By comparison, the Standard & Poor's 500 index scored gains of 14%, including dividends, through Friday. Bond Investors Put Faith In A More Stable Africa (WSJ) Last month, Zambia raised $750 million with a 10-year global bond in an auction that drew offers worth more than 15 times that amount. Nigeria in September sold 30 million naira ($192,000) in five-year bonds, to demand twice as high. Spurred by the heavy interest, Rwanda wants to issue a global bond by June and Kenya is planning one as early as next year. Investors' willingness to step up to buy African bonds is another sign of their thirst for yield. Efforts by the Federal Reserve and other major central banks to push down interest rates and buy developed-market bonds have driven investors further and further afield. Africa, a continent of more than 50 countries, is considered one of the last investing frontiers—many of its nations have been isolated from international markets, in part due to a history of default by some countries. Sir Mervyn King: no recovery until banks recapitalise (Telegraph) Raising the prospect of rights issues or even another taxpayer bail-out for the state-backed lenders Royal Bank of Scotland and Lloyds Banking Group, Sir Mervyn King said UK banks have “insufficient capital” to protect against undeclared losses on their books. FDIC Gets Windfall In Bank-Failure Settlement (WSJ) International Paper Co has agreed to pay the FDIC to settle a year-old lawsuit stemming from the 2009 collapse of Guaranty Financial Group, an Austin, Texas, company that ranks as the fifth-biggest U.S. bank failure. As part of the agreement, the failed bank's creditors will get an added $38 million, bringing the total settlement to $80 million. Although International Paper, Memphis, Tenn., didn't have any direct connection until this year to the banking industry or to the failed Texas bank, its involvement in the case demonstrates the long tentacles of the financial crisis. International Paper was pulled into the case in February when it bought packaging firm Temple-Inland Inc., which had owned Guaranty for nearly two decades before spinning it off into an independent company in 2007. Guaranty failed less than two years later, weighed down by toxic securities that were backed by adjustable-rate mortgages. It had 162 branches and $13.5 billion in assets. The bank's deteriorating securities portfolio was the subject of a page-one article in The Wall Street Journal just before it failed. The failure cost the FDIC's deposit-insurance fund $1.29 billion, according to an estimate published on the agency's website. RBS Settles Over Loans In Nevada (NYT) The Royal Bank of Scotland agreed to pay $42.5 million late Tuesday in a settlement with the Nevada attorney general that ends an 18-month investigation into the deep ties between the bank and two mortgage lenders during the housing boom. Most of the money paid by R.B.S. — $36 million — will be used to help distressed borrowers throughout Nevada. In addition, R.B.S. agreed to finance or purchase subprime loans in the future only if they comply with state laws and are not deceptive. The settlement between the bank and Catherine Cortez Masto, Nevada’s attorney general, relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom. Aurora Bird Hoarder: ‘I Was Obsessed’ (CBS) Outside of his west suburban Aurora townhome Monday, Dave Skeberdis admitted right away: “I am a hoarder.” “I did let the birds multiply. I admit, I was obsessed,” he said. “But I’m a regular person.” Skeberdis, 57, estimated that there are 200 birds of varying species inside his townhome in the 200 block of Shadybrook Lane. He returned to the home Monday to feed the birds. “It’s condemned, but they can’t stop me from going into the house,” he said. “I don’t really want to lose them, but this is too many birds.” On Monday, Skeberdis, who is employed in the information technology field, said he can now understand that his bird collecting is out of control. He said he is from a family of hoarders. “I think it’s time for a change in my life,” Skeberdis said...Skeberdis, who is not married, acquired his first bird seven years ago, he said, on April 15, 2005. While working in computer support at United Airlines, he “rescued” a parakeet, and later named the bird “Doc.” “I saved his life, and he saved mine,” Skeberdis said. Over time, he bought and adopted more birds. Those birds include a Chinese Quail named “Demon,” blind bird “Longstreet” and scalped bird “Liz Cojack,” and a white baby parakeet he hand-fed and once carried to work with him in a briefcase. Appeal In Insider Trading Case Centers On Wiretaps (Dealbook) In March 2008, the Justice Department made an extraordinary request: It asked a judge for permission to record secretly the phone conversations of Raj Rajaratnam, a billionaire hedge fund manager. The request, which was granted, was the first time the government had asked for a wiretap to investigate insider trading. Federal agents eavesdropped on Mr. Rajaratnam for nine months, leading to his indictment — along with charges against 22 others — and the biggest insider trading case in a generation. On Thursday, lawyers for Mr. Rajaratnam, who is serving an 11-year prison term after being found guilty at trial, will ask a federal appeals court to reverse his conviction. They contend that the government improperly obtained a wiretap in violation of Mr. Rajaratnam’s constitutional privacy rights and federal laws governing electronic surveillance...Such a ruling is considered a long shot, but a reversal would have broad implications. Not only would it upend Mr. Rajaratnam’s conviction but also affect the prosecution of Rajat K. Gupta, the former Goldman Sachs director who was convicted of leaking boardroom secrets to Mr. Rajaratnam...A decision curbing the use of wiretaps would also affect the government’s ability to police Wall Street trading floors, as insider trading cases and other securities fraud crimes are notoriously difficult to build without direct evidence like incriminating telephone conversations. Ex-Goldman Director Gupta Awaits Sentence In Insider Trading Case (Reuters) Gupta's lawyers have requested that he be spared prison, citing his work with groups such as the Bill & Melinda Gates Foundation on fighting disease in developing countries. Bill Gates, Microsoft Corp's co-founder, and former United Nations Secretary-General Kofi Annan are among the luminaries who have urged Rakoff to be lenient. As one alternative to prison, the defense proposed "a less orthodox" plan in which Gupta would live and work with Rwandan government officials to help fight HIV/AIDS and malaria in rural districts, court papers said. Federal prosecutors, however, argue that Gupta should serve eight to 10 years in prison. Companies Are Sitting On More Cash Than Ever Before (CNBC) Amid a lackluster earning season that has featured many companies missing sales expectations, cash balances have swelled 14 percent and are on track toward $1.5 trillion for the Standard & Poor's 500, according to JPMorgan. Both levels would be historic highs. Denny's heads to Middle-earth with 'Hobbit'-inspired menu (LA Times) It’s Bilbo Baggins time down at Denny’s, which is rolling out a menu and marketing campaign based on the upcoming film “The Hobbit: An Unexpected Journey.” The 11 new menu items are enough to satisfy the diminutive creatures’ six-meal-a-day habit, with options such as Shire Sausage, Bilbo’s Berry Smoothies, Build Your Own Hobbit Slam and Radagast’s Red Velvet Pancake Puppies. The film, based on the novel by “Lord of the Rings” author J.R.R. Tolkien, opens Dec. 14. The limited Denny’s offer will run from Nov. 6 through January, according to the chain.

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.