Opening Bell: 12.21.15

Tom Hayes catches a break; Martin Shkreli has a theory; Wall Street bucks back against Cuomo; Han Solo: Uber driver
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Court Reduces Ex-Trader’s Sentence in Libor Case (Dealbook)
A British appeals court on Monday declined to overturn the conviction of Tom Hayes, a former trader at Citigroup and UBS, for conspiring to manipulate a global benchmark interest rate known as Libor, but it did reduce Mr. Hayes’s sentence.
At a hearing on Monday, a three-judge panel of the Court of Appeal reduced Mr. Hayes’s sentence to 11 years in prison, down from 14 years, his original sentence following his conviction in August.
Mr. Hayes was the first person to go to trial in Britain on criminal charges related to manipulation of the London interbank offered rate, or Libor. His case was seen as a bellwether for British authorities, who have been criticized in the United States for not being as aggressive as the Justice Department when it comes to pursuing financial crime.

Martin Shkreli Says Drug-Price Hikes Led to Arrest (WSJ)
In his first interview since he was charged Thursday for allegedly misleading investors in his hedge funds and raiding a public company to cover the losses, Mr. Shkreli told The Wall Street Journal he had been targeted by authorities for his much-criticized drug-price hikes and over-the-top public persona.
His arrest Thursday dates back to his time as a small-time hedge-fund manager. But Mr. Shkreli believes it is related to the recent drug price increases.

Senator Lindsey Graham Drops Out of Presidential Race (Bloomberg)
Graham left the race on a day that President Barack Obama, in an interview on National Public Radio, praised him as the one Republican who delivered a "serious" alternative for combatting the Islamic State.
Graham, who retired this year from the Air Force Reserve, made the fight against Islamic terrorism the center of his campaign. He called repeatedly for deploying more combat troops to the Middle East and criticized Obama for not being more aggressive in the fight.

Lyft is planning to raise an Uber-sized, $1 billion funding round (Quartz)
The new fund-raising plans come as the competition against Uber—from Lyft and others—has ratcheted up. In September, Lyft allied with Didi Kuaidi, another ride-hailing giant and Uber’s stiffest competition in China. The deal promised to give Lyft a much-needed international presence and Didi Kuaidi a chance to mess with Uber on its home turf. Earlier this month, that partnership expanded to include two other Uber opponents: Ola, a big ride provider in India, and GrabTaxi, a company that operates in Malaysia, Singapore, Indonesia, Philippines, Vietnam, and Thailand.

With New York Bank Regulator in Flux, Wall Street Seeks Softer Touch (WSJ)
The moves by banks, insurers and top Wall Street lawyers to go around DFS come at a difficult time for the agency, which is now being run by its second temporary superintendent since its founding head, Benjamin Lawsky, left in June. They also come as Mr. Cuomo’s office itself has tangled with the DFS, seeking greater control over the agency, which Mr. Cuomo created in 2011 by merging two separate bureaucracies following the financial crisis. DFS operates its investigations independently, though the Cuomo administration selects its chief.

Han Solo is the ultimate Uber driver (The Verge)
Say you're a moisture farmer from Anchor Head, Mos Eisley, or some other wretched hive of scum and villainy, and you need to get to Alderaan lickety split. You pull out your comlink and see who's in the neighborhood. Ping. Your request is accepted by the nearest independent contractor: a smuggler by the name of Solo.
Imperial activity in the area means the fare will be twice the normal rate: 10,000 credits. But this Solo fellow has a stellar rating. He made the Kessel run in 12 parsecs. That's five-star material. But is he flexible? Would he accept 2,000 credits now, 15,000 when you get to Alderaan?
Of course he will. After all, Han Solo is the ultimate Uber driver.

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Three Questioned In Libor Probe (WSJ) While the SFO didn't identify the men, one of them is Thomas Hayes, a former trader at UBS and Citigroup, according to people familiar with the matter. Authorities in multiple countries have been looking into Mr. Hayes as an alleged coordinator of a group of employees at multiple banks who sought to manipulate the London interbank offered rate, or Libor, according to people familiar with the case. One of the others arrested was Terry Farr, an employee of British brokerage firm R.P. Martin Holdings Ltd. in London who is currently on leave from the firm, according to a person familiar with the case. Mr. Farr has been under investigation for possibly helping bank employees coordinate their efforts to influence Libor, according to people familiar with the case. HSBC Mexican Branches Said to Be Traffickers’ Favorites (Bloomberg) From 2006 to 2010, the Sinaloa cartel in Mexico and the Norte del Valle Cartel in Columbia moved more than $881 million in proceeds through HSBC’s U.S. unit, said Lanny Breuer, assistant attorney general for the U.S. Justice Department’s criminal division. Breuer, along with U.S. Attorney Lorretta Lynch in Brooklyn, New York, announced yesterday the bank had agreed to pay at least $1.9 billion to settle money laundering probes. “These traffickers didn’t have to try very hard,” Breuer said at a press conference in Brooklyn. “They would sometimes deposit hundreds of thousands of dollars in cash in a single day into a single account using boxes designed to fit the precise dimension of the tellers’ windows in HSBC’s Mexico branches.” It Could Get Hairy Before 'Cliff' Deal: Greenspan (CNBC) "The best possible outcome is to take something like Simpson-Bowles as it came out originally and work off that," he said, of a deal to avoid the automatic tax hikes and spending cuts that go into effect at the end of the year. But he said that reaching a final agreement won't be an easy process, since the president believes he has a mandate following the election while House Republicans believe they, too, have a mandate. "I'm not at altogether clear how much control (Speaker) Boehner has over the overall caucus," Greenspan said. "At the end of the day it will all work out but it's going to be a bit hairy before we get there." Buffett Joins Soros in Effort to Raise Taxes on Estates (Bloomberg) Billionaireinvestors Warren Buffett and George Soros are calling on Congress to increase the estate tax as lawmakers near a decision on tax policies that expire Dec. 31. In a joint statement Tuesday, Buffett, Soros and more than 20 other wealthy individuals asked Congress to lower the estate tax’s per-person exemption to $2 million from $5.12 million and raise the top rate to more than 45 percent from 35 percent. An estate tax structured this way will “raise significant revenue to reduce the deficit and fund vital services, will only be paid by the top one percent of estates, will raise more from the wealthiest estates” and will simplify compliance, said the statement. It also was signed by John Bogle, founder of mutual fund company Vanguard Group Inc., and former President Jimmy Carter. U.S. Probe of SAC Trading Said to Be Linked to 2010 Case (Bloomberg) A U.S. investigation of possible insider trading at SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, is linked to a 2010 regulatory lawsuit over allegedly illegal trades in InterMune Inc, according to a person with knowledge of the matter. The Federal Bureau of Investigation and the Securities and Exchange Commission’s probe of trades that SAC Capital made in the Brisbane, California-based biopharmaceutical company is tied to a December 2010 SEC lawsuit against an investor, said the person, who asked not to be named because the matter isn’t public. The investor bought InterMune options before a European Union regulatory panel urged approval of the company’s drug Esbriet to treat a fatal lung disease, the person said, declining to elaborate. Man says law standing between him and sex acts with donkey is unconstitutional (NYDN) Lawyers representing the frisky farmhand thrown in jail for allegedly masturbating with a donkey are now fighting to have Florida’s statute banning sex with animals declared unconstitutional. “By making sexual conduct with an animal a crime, the statute demeans individuals like Defendant by making his private sexual conduct a crime,” attorneys for 32-year-old Carlos R. Romero wrote in a motion filed last week, the Ocala-Star Banner reported. Romero was cuffed at an Ocala farm back in September after farm proprietor Gerald James told police he saw Romero with his pants down as he was seemingly having sex with a donkey named Doodle in an equipment room on Aug. 15, according to police report obtained by thesmokinggun.com. Romero later pleaded not guilty to a first-degree misdemeanor charge of sexual activities involving animals. He announced last week that he wanted his case to go to trial. His attorneys argue that Florida’s statute violates the farmhand’s rights by stripping him of his “personal liberty and autonomy when it comes to private intimate activities.”They say the statute is unconstitutional because it doesn’t require the state to provide any proof of the animal’s suffering “or any proof of the sexual activity being non-consensual.” Inside The Risky Bets Of Central Banks (WSJ) While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days. If the central bankers are correct, they will help the world economy avoid prolonged stagnation and a repeat of central banking mistakes in the 1930s. If they are wrong, they could kindle inflation or sow the seeds of another financial crisis. Failure also could lead to new restrictions on the power and independence of central banks, tools deemed crucial in such emergencies as the 2008-2009 financial crisis. Freeport's $20 Billion Deal Stirs Backlash (WSJ) Freeport agreed last week to acquire energy explorers McMoRan Exploration Co. MMR +0.85% and Plains Exploration & Production Co. PXP -0.42% in transactions that will cost the Arizona mining giant about $20 billion including assumed debt. The deal will result in six directors with overlapping roles at Freeport and McMoRan Exploration receiving payouts for their shares totaling more than $130 million, according to securities filings. Some Freeport investors and analysts also have questioned the wisdom of a metals miner diving into the oil and gas business. They have taken issue with what they call conflicts of interests among the shared executives and directors at Freeport and McMoRan and the fact that the deal as structured doesn't require a Freeport shareholder vote. Fed Discourages Bank Dealmaking (WSJ) The Federal Reserve is pushing large U.S. banks to forget about all but the smallest acquisitions for a while amid a raging debate over the risk big lenders pose to the financial system. Man Drive 100 MPH To Wedding, Gets Arrested (Again) (NWI) Timothy N. Thompson, 23, of Valparaiso, was supposed to be married in a 7 p.m. ceremony. Instead, Thompson was arrested for resisting law enforcement, criminal recklessness and reckless driving. He was also cited for speeding and improper passing. According to police, an officer spotted Thompson about 6:30 p.m. Saturday speeding north in the center lane of Willowcreek Road. The officer estimated Thompson was driving 100 mph. Thompson allegedly continued to drive erratically, switching lanes abruptly and, according to the report, nearly wrecking. Police reported they followed Thompson as he turned into the parking lot of Nativity of Our Savior Church on Willowcreek Road, where he again nearly tipped over the Jeep Grand Cherokee. Once he entered the church's parking lot, three people -- later identified as relatives -- began flailing their arms and yelling at him. Thompson drove through the parking lot, accelerating and doing a "doughnut," creating a thick blanket of tire smoke, according to the report. When he stopped, Thompson told police he was late for his wedding and estimated he was doing "about 90" mph. He also told police he had his emergency flashers on and was sounding his horn to alert drivers. When an officer walked away from Thompson's vehicle, Thompson reentered his vehicle and drove toward the entrance of the church, where he was stopped by police again. "Oh, I thought you were done and I'm late for a party in Chicago," police reported Thompson saying. "It now means I have to drive really fast to get there." Thompson, who also told police he had just been released from jail that day, didn't make his wedding. He was transported to Porter County Jail and held without bond.

Opening Bell: 1.19.16

Deutsche faces high-speed trading suit; Shkreli calls fraud case against him ‘fictitious’; "Woman faces jail for tagging former in-law on Facebook"; and more.