Opening Bell: 2.10.16 - Dealbreaker

Opening Bell: 2.10.16

Morgan Stanley trading exec says run for lives; Big firms raise debt funds; Yellen to talk rate hikes with congress; Man Accused Of Tossing Gator Into Wendy's Drive-Thru Window; and more.
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Morgan Stanley Trading Executive Provides Grim Picture for Wall Street (WSJ)
Morgan Stanley’s top trading executive warned that the first quarter was shaping up to be another tough one for Wall Street, as volatile markets take a toll on investors’ desire to buy and sell with banks. That view is particularly significant because the first quarter is often the strongest period for banks’ trading businesses. “The year started out OK, but it’s been a lot choppier since then,” said Edward Pick, Morgan Stanley’s head of trading, during a discussion at the Credit Suisse Financial Services conference Tuesday. Trading revenue, he added, so far this year has looked more like the weaker second half of the year “rather [than] the healthy first quarter we saw last year.”

Firms Dig Deeper Into Debt Markets (WSJ)
Related Fund Management, an arm of Stephen Ross’s Related Cos., will soon start raising a closed-end debt fund that could be as large as $2 billion, according to people familiar with the matter. New York-based Related started making debt investments focusing on junior debt two years ago mostly in partnership with Highbridge Principal Strategies, a unit of J.P. Morgan Asset Management. Meanwhile, Kayne Anderson Real Estate Advisors, of Boca Raton, Fla., is looking to raise more than $500 million for a new debt fund, according to people familiar with the firm. Like Related, Kayne Anderson has been focusing its debt investments on junior, or so-called mezzanine, debt that is more risky but pays a higher interest rate than senior debt.

The $20 Billion Manager Who Won After the Crisis Is Buying Again (Bloomberg)
In UBS Group AG, which has plummeted 26 percent this year, Samra sees his preferred combination of cheapness and a safety buffer. The Swiss bank, the third-largest holding in Samra’s biggest fund, has strong capital levels, a less complex balance sheet and a wealth-management business that’s worth more than the lender’s market value, says Samra, while declining to specify which stocks he’s been buying amid the selloff.

Britain’s Global Banking Hub Is Mostly Leery of an E.U. Exit (Dealbook)
In the extreme, banking executives worry about a painful economic and financial fallout from a British exit — known, in the political shorthand, as a Brexit. Even without a major shock, it could force global banks like HSBC, JPMorgan Chase, Goldman Sachs and Morgan Stanley to reassess their European operations, a logistical challenge that would affect the most basic transactions.

600-pound pig crashes New Hampshire primary (UPI)
A 600-pound pig stopped by a New Hampshire primary polling place on Tuesday after escaping from a local farm. The pig was spotted on its way to a Pelham high school by Merry Maid workers who shared a photo of the hefty animal to Facebook. Pelham police were called to retrieve the pig at 9 a.m. after it wandered into a parking lot full of voters participating in New Hampshire's first-in-the-nation primary. Police learned the pig was from a local farm and called its owner who came to the school to pick it up.

Economic Tumult to Color Janet Yellen’s House Testimony (WSJ)
Ms. Yellen, in remarks to the House Financial Services Committee, likely will seek to keep the Fed’s options open while officials await additional data on economy’s health and watch how events play out in financial markets. One deepening source of angst: New indications that expectations for future inflation among households and investors are sinking, a sign the Fed could have enduring trouble getting inflation up to its 2% target.

Deutsche considers multibillion bond buyback (FT)
Deutsche Bank is considering buying back several billion euros of its debt, as Germany's biggest bank steps up efforts to shore up the tumbling value of its securities against the backdrop of a broader rout of financial stocks.

German Finance Minister Schaeuble Has 'No Concerns' Over Deutsche Bank (Bloomberg)
German Finance Minister Wolfgang Schaeuble said he’s not worried about Deutsche Bank AG after the shares and bonds of Germany’s biggest lender took a battering over investor concern about capital and funding levels. “No, I have no concerns about Deutsche Bank,” Schaeuble told Bloomberg Television in Paris after a meeting of French and German finance chiefs on Tuesday. He didn’t elaborate further.

Man Accused Of Tossing Gator Into Wendy's Drive-Thru Window (HP)
A Florida man in Jupiter is facing assault charges after Fish and Wildlife officials said he tossed an 3.5-foot live alligator into the drive-thru window of a Wendy's. U.S. Marshals arrested 24-year-old Joshua James on Monday and charged him with assault with a deadly weapon and unlawful possession and transportation of an alligator, according to WPTV.com. The incident happened last October, but officials for the Florida Fish and Wildlife Department only tracked him down recently. According to the incident report, James pulled up to the window at a Wendy's in Loxahatchee last fall and placed an order for a drink. After he got the beverage, investigators said he tossed the alligator, which he had in the back of his truck, into the restaurant's kitchen, according to the Miami Herald...Linda James, the suspect's mother, told WPTV.com her son was just joking around. “It was just a stupid prank," she said. "He does stuff like this because he thinks it's funny.”

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Opening Bell

Opening Bell: 04.19.13

Blackstone Pulls Out of Dell Bid on Falling PC Sales (Bloomberg) In a letter to Dell’s board, Blackstone cited an “unprecedented” 14 percent market decline in PC volume in the first quarter, according to a statement today. The world’s biggest buyout firm made a non-binding offer to acquire Dell last month, rivaling a $24.4 billion joint bid by founder Michael Dell and Silver Lake Management LLC, the largest proposed leveraged buyout since the financial crisis. Fed Officials Back Higher Capital (WSJ) A pair of Federal Reserve officials suggested Wednesday that major financial institutions may need to hold even higher levels of capital, a sign of a growing concern over the efficacy of current regulatory efforts to address the risks posed by large, complex firms. AIG wins bid to transfer Bank of America mortgage lawsuit (Reuters) A federal appeals court ruled in favor of American International Group in concluding that the insurer's $10 billion lawsuit against Bank of America Corp over mortgage losses belongs in state court, not federal court. The 2nd U.S. Circuit Court of Appeals on Friday threw out a lower court order denying AIG's bid to move the case to a New York state court. AIG's lawsuit was filed in August 2011 but has been largely on hold because of the venue fight. German Banker Warns Crisis Far From Over (WSJ) Germany's top central banker warned that Europe's debt crisis would take as much as a decade to overcome, adding that a lasting solution would only come once politicians stopped relying on the European Central Bank and pushed through far-reaching structural overhauls. Frustrated by delay, Georgia cop allegedly pulled gun in McDonald’s drive-thru line (NYDN) Student Ryan Mash, 18, was waiting for his order at the drive-thru window of a Forsyth County McDonald's when he was taken by surprise — and it was not a Happy Meal toy. It was a gun allegedly brandished by Sgt. Scott Biumi, 48, a member of the DeKalb County Police Department for more than 20 years, authorities suspect. Biumi apparently grew frustrated that the fast food experience was not faster, so he stepped out of his car and yelled, "Stop holding up the drive-thru line," according to Mash. Mash claims Biumi thought his sincere apology was sarcastic. Then witnesses reported hearing Biumi scream, "You don't know who you are (messing) with!" "And that's when he pulled the gun on me," Mash said, "and kept on yelling at me for about 30 more seconds. And then walked off." European Fund Managers Seen Doubling Salaries on Bonus Caps (Bloomberg) About three-quarters of mutual fund managers’ total compensation is from bonuses and long-term incentives, meaning salary increases of 50 percent to 100 percent would be needed to negate the cap, said Jon Axcell, head of asset management at London-based Morgan McKinley. A European Parliament committee last month proposed to limit fund managers’ bonuses to no more than base salaries. Gorman Gains on Blankfein in Bet on Brokerage (Bloomberg) Morgan Stanley’s reputation as Wall Street’s weakest link is diminishing in debt markets as Chief Executive Officer James Gorman’s bet on a brokerage unit that has amassed $1.78 trillion in client assets starts to pay off. The cost of credit-default swaps protecting investors against losses on Morgan Stanley’s debt is about the lowest relative to the bank’s peers in almost two years, with the gap between it and its closest rival, Goldman Sachs, narrowing to 14 basis points from as wide as 111 last year, prices compiled by Bloomberg show. Private Equity Groups Renew Listing Plans (FT) More than a dozen offerings this year have rekindled private equity groups' hopes to list some of their largest assets bought during the bubble. The initial public offering of Intelsat on Thursday shows that it is feasible, but can also be painful. Drunk man tossed from hotel, accused of stealing shuttle (K11) Bloomington Police say a man tossed from a local hotel for being drunk early Wednesday morning made matters worse when he commandeered the hotel's shuttle van and crashed it into a stand of trees. Commander Kevin Herman says officers were called to the Quality Inn and Suites at 814 E. American Boulevard around 3 a.m. on reports of a drunk man causing a commotion. Staff members told officers they asked the man to leave about the time the hotel shuttle pulled up to the entrance. Witnesses say when the driver left the keys in the ignition and ran inside the drunk man ran out, jumped in the van and stole it.

Photo: Getty Images
Opening Bell

Opening Bell: 9.22.16

Yellen signals 2016 hike coming; Bill Gross is 'verklempt' after Fed decision; Australian hot dog and hamburger combination 'hamdog' coming to U.S.; and more.

Opening Bell

Opening Bell: 01.04.13

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.

Opening Bell

Opening Bell: 11.27.12

Greece's Creditors Reach Aid Deal (WSJ) struck a deal in Brussels to cut Greece's debt to a level below 124% of gross domestic product by 2020, officials said. To satisfy IMF concerns that Greece's debt must fall even more to be considered "sustainable," euro-zone ministers agreed to bring the government's debt to under 110% of GDP in 2022. The deal will allow Greece to receive loan payments of about €44 billion ($57 billion) to be paid in three installments early 2013, tied to Greece's implementation of the continuing measures, said Eurogroup president Jean-Claude Juncker. The deal will lower Greece's debt through a mix of interest-rate cuts on loans to Athens, a buyback of Greek debt at sharply discounted prices and the European Central Bank returning profits linked to its holdings of Greek bonds to the Greek government. London Bankers Bracing for Leaner Bonuses Than New York (Bloomberg) nvestment bankers and traders at European banks should expect at least a 15 percent cut in pay this year, while U.S. lenders may leave compensation unchanged, three consultants surveyed by Bloomberg said. That’s because bonus pools at European banks may be reduced by as much as half, while those at U.S. firms, which can cushion the impact of falling fees in the region with earnings from home, may fall 20 percent, they said. “The real split is coming, and we will see the quantum divide this year,” said Tom Gosling, a partner at PricewaterhouseCoopers LLP in London, referring to the difference in pay between the two financial centers. “U.S. regulators don’t have the same obsession with pay structures that European regulators have.” Dimon Would Be Best to Lead Treasury in Crisis, Buffett Says (Bloomberg) “If we did run into problems in markets, I think he would actually be the best person you could have in the job,” Buffett said in response to a question about Dimon from Charlie Rose, according to the transcript of an interview that was scheduled to air yesterday on PBS. “World leaders would have confidence in him.” [...] Dimon, once dubbed Obama’s “favorite banker” by the New York Times, said in a 2011 CNBC interview that he could never work as Treasury secretary and was “not suited to politics.” Carney Abondons A Haven, Leaping Into British Storm (WSJ) Philipp Hildebrand, the former head of the Swiss National Bank, described Mr. Carney as one who "speaks bluntly and politely." The son of a professor and a teacher, Mr. Carney grew up in Edmonton, the capital of Canada's western province, Alberta. He played hockey as an undergraduate at Harvard. Mr. Carney has close links to Britain, having studied in Oxford University in the early 1990s. He worked for a time in Goldman Sachs' London office...Known as a diplomat, Mr. Carney, who supports the Edmonton Oilers NHL team, in his Ottawa office displays a mock street sign alluding to one of Canada's other pro teams, the Ottawa Senators. He cultivates an everyman image, recently discussing his musical tastes—from AC/DC to the hip-hop group Down with Webster—in local media interviews. Fiscal Cliff Compromise Elusive as Congress Returns (Bloomberg) “There’s still a great deal of ground that has to be covered before they get anywhere near a budget deal, and time is running” short, said Phil English, a former Republican congressman from Pennsylvania and now a lobbyist at Arent Fox LLP in Washington. The Secret Powers Of The Son-In-Law (WSJ) In couples where the husband initially reported being close to his wife's parents, the risk of divorce over the next 16 years was 20% lower than for the group overall. Yet when the wife reported being close to her in-laws, that seemed to have the opposite effect: The risk of divorce with these couples was 20% higher. Dr. Orbuch has a possible explanation: The wife who feels close with her husband's parents may find it difficult to set boundaries and over time may come to see their close relationship with her as meddling. "Because relationships are so important to women, their identity as a wife and mother is central to their being," says Dr. Orbuch, author of the 2012 book "Finding Love Again: 6 Simple Steps to a New and Happy Relationship." "They interpret what their in-laws say and do as interference into their identity as a spouse and parent." Men, for the most part, don't have this problem. Their identity as a father and a husband is often secondary to their identity as a provider, Dr. Orbuch says. As a result, they don't tend to take what their in-laws do so personally. Chicago, Illinois charges woman $105,761 for parking infractions she did not commit (TN) Jennifer Fitzgerald is fighting back against the city, her ex-boyfriend and United Airlines with a lawsuit filed November 2 in Cook County Circuit Court. According to the complaint, the somewhat confusing story starts when her former boyfriend Brandon Preveau, bought a 1999 Chevy Monte Carlo from Fitzgerald's uncle for $600 in 2008. Despite paying all the fees associated with owning a vehicle (registration, title and insurance) he put the vehicle's registration in Fitzgerald's name -- something the West Side Chicago resident claims was done without her knowledge...the couple broke up at the start of 2009 and Preveau took the car with him after their split. He used the Monte Carlo to drive to work at O'Hare Airport where he was employed by United Airlines. Preveau would leave the vehicle in O'Hare parking lot E, a secured outdoor lot surrounded by high chain link fencing, that is open to the flying public but also utilized by airport employees. The parking lot is owned by the city of Chicago and operated by Standard Parking Corporation, but according to the complaint, United Airlines leases spaces in the lot for use by airline employees. Unbeknownst to Fitzgerald, Preveau abandoned the vehicle. According to the complaints, "On or before November 17, 2009, Brandon drove the automobile into the parking lot and never drove it out again." While the car Preveau drove began receiving parking tickets at the O'Hare lot as early as May 23, 2009, the key date for this story is November 17, 2009. On that day the vehicle was issued seven different parking tickets including being in a hazardous and dilapidated condition, no city sticker, broken headlights, missing or cracked windows, expired plates, being an abandoned vehicle and most importantly a violation for parking a vehicle for more than 30 days in a city-owned lot. Intrade, Facing Charges, Won't Take U.S. Bets (WSJ) The online-predictions exchange Intrade—known for offbeat markets on presidential politics and the Academy Awards—said it would no longer accept bets from U.S. residents. The move came just hours after U.S. regulators filed a civil complaint against the firm over its commodities-focused markets. "We are sorry to announce that due to legal and regulatory pressures, Intrade can no longer allow U.S. residents to participate in our real-money prediction markets," the Dublin-based company said in a statement on its website. Intrade said that existing customers must exit their trades and close their accounts. In China, Hidden Risk of 'Shadow Finance' (WSJ) Shadow finance in China totals about 20 trillion yuan, according to Sanford C. Bernstein & Co., or about a third the current size of the country's bank-lending market. In 2008, such informal lending represented only 5% of total bank lending. The sector is lightly regulated and opaque, raising concerns about massive loan defaults amid a softening economy, with ancillary effects on the country's banks. Harvard Doctor Turns Felon After Lure of Insider Trading (Bloomberg) Today, Joseph F. "Chip" Skowron III, 43, is serving a five-year term for insider trading at the federal prison at Minersville, Pennsylvania. At FrontPoint, Skowron lied to his bosses and law enforcement authorities, cost more than 35 people their jobs and stooped to slipping envelopes of cash to an accomplice. FrontPoint is gone. Morgan Stanley, which once owned FrontPoint, is seeking more than $65 million from Skowron, whose net worth a year ago was $22 million. Until he’s a free man, his wife of 16 years will have to care for their four children and Rocky, their golden retriever, on her own...Health care has become America’s sweet spot for insider traders like Skowron. Among researchers, physicians, government officials and corporate executives, the lure of easy money in health-care insider trading has become epidemic. Since 2008, about 400 people were sued by regulators or charged with insider trading; of those, at least 94 passed or received tips involving pharmaceutical, biotechnology or other health-care stocks. Man Arrested For Saying He Had Dynamite in His Luggage at Miami International Airport (NBC) A man was arrested for telling a TACA ticket agent that he had dynamite in his luggage, which prompted the partial evacuation of Concourse J at Miami International Airport on Monday, Miami-Dade Police said. Alejandro Leon Hurtado, 63, a doctor from Guatemala, faces a charge of false report bomb/explosives at airport, the arrest affidavit said. It wasn't immediately known if Hurtado had an attorney. The ticket agent had just accepted Hurtado luggage, when he asked him about whether it contained hazardous materials. Hurtado answered that he had dynamite in the baggage, and the ticket agent asked him again if he had dynamite in his bag, and he replied that he did and started laughing, the affidavit said. "Once the Defendant was told that police were going to be called the Defendant stated that he was joking," the affidavit said. Hurtado admitted he did say he had dynamite in his bag, but that it was a joke. Hurtado was in custody on an immigration hold Monday night, according to online Miami-Dade Corrections records.

Opening Bell

Opening Bell: 02.19.13

SAC’s Cohen May Face SEC Suit as Deposition Hurts Case (Bloomberg) U.S. investigators have subpoenaed a 2011 deposition of SAC Capital Advisors LP founder Steven Cohen, whose sworn statements on insider-trading compliance may hurt him as he tries to persuade regulators not to file a lawsuit with the potential to shut his $14 billion firm. The SEC told the hedge fund Nov. 20 that it planned to sue SAC for securities fraud and so-called control-person liability for failing to supervise employees. The same day, the agency accused an ex-SAC portfolio manager and his hedge-fund unit of insider trading for persuading Cohen, 56, to make $700 million in illegal trades. Prosecutors also indicted the manager. Cohen’s testimony, reviewed by Bloomberg News, establishes his personal control over the unit, CR Intrinsic, and records his unfamiliarity with his firm’s compliance and ethics policies on insider trading. “I’ve read the compliance manual, but I don’t remember exactly what it says,” Cohen said. Morgan Stanley Strives to Coordinate 2 Departments Often at Odds (Dealbook) Traditionally, traders and investment bankers think of themselves as the elite of Wall Street and look down on the retail business, seeing it as pedestrian...Yet since Morgan Stanley moved to acquire control of the Smith Barney brokerage business from Citigroup in 2009, the balance of power has shifted to wealth management, which now accounts for almost 52 percent of the company’s earnings, up from roughly 16 percent in 2006. Paulson Leads Funds to Bermuda Tax Dodge Aiding Billionaires (Bloomberg) A decade after the U.S. Internal Revenue Service threatened to crack down on what it said were abuses by hedge-fund backed reinsurers, more high-profile money managers are setting up shop in tax havens. Paulson, SAC Capital Advisors LP’s Steven A. Cohen and Third Point LLC’s Daniel Loeb have started Bermuda reinsurance companies since 2011, following a similar Cayman Islands venture by Greenlight Capital Inc.’s David Einhorn. Options Activity Questioned Again (WSJ) Over the past year, unusually large positions were established shortly in advance of news that moved shares of Nexen Inc., Youku Inc., Human Genome Sciences Inc., Constellation Brands Inc. and, most recently, CBS Corp. All turned profitable after the news. A spokeswoman for the SEC, which regulates stock and options trading, said the agency would neither confirm nor deny the existence of inquiries into trading tied to those companies. No charges have been filed in the Heinz case, which was linked to a Swiss trading account, but the move to freeze the assets is one of the fastest enforcement actions ever filed by the agency, according to officials. The SEC said Friday that the timing and size of the trades were highly suspicious given the account had no history of trading in Heinz securities in the last six months. Prosecutors, Shifting Strategy, Build New Wall Street Cases (Dealbook) Criticized for letting Wall Street off the hook after the financial crisis, the Justice Department is building a new model for prosecuting big banks. In a recent round of actions that shook the financial industry, the government pushed for guilty pleas, rather than just the usual fines and reforms. Prosecutors now aim to apply the approach broadly to financial fraud cases, according to officials involved in the investigations...The new strategy first materialized in recent settlements with UBS and the Royal Bank of Scotland, which were accused of manipulating interest rates to bolster profit. As part of a broader deal, the banks’ Japanese subsidiaries pleaded guilty to felony wire fraud. Russians Wade Into the Snow to Seek Treasure From the Sky (NYT) Ever since the meteor exploded somewhere over this impoverished Siberian town, Larisa V. Briyukova wondered what to do with the fist-size stone she found under a hole in the roof tiles of her woodshed. On Monday, a stranger knocked on her door, offering about $60, Ms. Briyukova said. After some haggling, they settled on a price of $230. A few hours later, another man pulled up, looked at the hole in the roof and offered $1,300. “Now I regret selling it,” said Ms. Briyukova, a 43-year-old homemaker. “But then, who knows? The police might have come and taken it away anyway.” On Friday, terror rained from the skies, blowing out windows and scaring people over an enormous swath of Siberia. But by Monday, for many people what fell from the sky had turned to pure gold, and it touched off a rush to retrieve the fragments, many buried in deep February snows. Many of those out prospecting looked a lot like Sasha Zarezina, 8, who happily plunged into a snowbank here in this village of a thousand, laughing, kicking and throwing up plumes of powdery snow. Then she stopped, bent over and started to dig. “I found one!” she yelled. A warm breath and a rub on her pants later, a small black pebble, oval like a river rock, charred and smooth, was freed of ice. While trade in material from meteorites is largely illegal, there is a flourishing global market, with fragments widely available for sale on the Internet, usually at modest prices. At least one from the recent meteor was available on eBay on Monday for $32, and there is a Web site called Star-bits.com devoted to the trade — much to the displeasure of scientists and the countries where the objects were found. UK's Lloyds fined $6.7 million for mis-sold insurance (Reuters) Britain's financial regulator on Tuesday fined Lloyds Banking Group 4.3 million pounds ($6.7 million) for failing to handle complaints relating to insurance sold on loans and mortgages properly. The Financial Services Authority (FSA) said failings in the bank's systems and controls resulted in up to 140,000 customers experiencing delays in receiving compensation for being mis-sold payment protection insurance (PPI). Horsemeat Scandal Draws in Nestlé (FT) Switzerland-based Nestle on Monday removed pasta meals from shelves in Italy and Spain and suspended deliveries of all processed products containing meat from German supplier, H.J. Schypke, after tests revealed traces of horse DNA above 1 per cent. Nestle said it had informed the authorities. Is Berlusconi Getting a Poll Bounce From Tax Evaders? (CNBC) The media mogul, who has been convicted of tax fraud, has promised to introduce a tax amnesty for evaders if elected and to abolish the real estate tax. Swelling U.S. Labor Force Keeps Fed at Ease (Bloomberg) In the short run, the larger labor force will have an unfortunate side effect: It will slow the fall in unemployment. Mellman sees the jobless rate dropping to 7.5 percent by year- end from 7.9 percent now. It fell 0.7 percentage point in 2012. In the longer run, a bigger supply of labor is good news because it swells the pool of Americans available and willing to work, enhancing the economy’s potential to grow, according to Julie Hotchkiss, a policy adviser at the Federal Reserve Bank of Atlanta. It also has a silver lining for investors. The gradual fall in unemployment will allow policy makers to keep monetary policy looser for longer without having to worry about igniting a wage- driven rise in inflation. Couple Getting Affectionate Drive Through Home (WO) "She told the investigating trooper that her and the boyfriend were getting a little amorous and the trooper suspects that's probably why she lost control of the vehicle," said Florida Highway Patrol spokeswoman Kim Montes. Walker lost control of the vehicle and slammed into an unoccupied home. The vehicle went all the way through the house. The impact was so dramatic, the pressure blew a window in another part of the house out. Florida Highway Patrol troopers said Walker was injured when debris fell inside the vehicle. She was taken to Halifax Medical Center to be checked out. Her boyfriend, Charles Phillips, was not hurt.

Opening Bell

Opening Bell: 4.7.16

Yale scored 93% a year on venture capital in past two decades; Blackstone to close fund; Yellen says rate hikes on track; Macaulay Culkin says he’s ‘essentially retired’ from the acting world; and more.

Opening Bell

Opening Bell: 06.27.12

Germany's Credit Rating Slashed By Egan-Jones (Reuters) The credit ratings agency on Tuesday downgraded its credit rating for Germany to "A+" with a negative outlook from "AA-," noting the need to watch for fallout should Greece exit the euro zone. Whether or not Greece or other euro-zone members exit the monetary union, Germany will be left with "massive" additional, uncollectible receivables, Egan-Jones said in a statement. Spain Considers Sweeping Tax Hikes to Please EU (Reuters) Spain's current VAT rate is 18 percent, one of the lowest in Europe, but many products are charged at a reduced 8 percent or a "super-reduced" 4 percent. "The ministry is studying reclassifying certain products and services that have reduced or super-reduced VAT," a spokesman for the ministry said. Madrid is also considering eliminating tax breaks on housing after reintroducing the measure as one of the first decrees the center-right government announced after being sworn in December. It is also considering introducing a so-called "green tax" on gasoline, following recommendations by the European Union, Treasury Secretary Marta Fernandez Curras said. New Plan Sees Closer Euro-Zone Ties (WSJ) Several of the proposals—such as joint bond issuance and the effective veto powers on national budgets—raise red flags for many governments. If all 27 EU leaders, or at least those from the euro zone, accept the report's basic principles at their summit scheduled for Thursday and Friday, the decision will set the currency union off on what is likely to be a long period of wrangling. Accused Manhattan 'madam' posts bail (NYP) Pattis and Gristina faced the microphones briefly before the family sped off to her 200-acre pig rescue farm in upstate Monroe. Singapore Pastor Charged For Funds For Wife’s Pop Career (Bloomberg) The founder and senior pastor of Singapore’s City Harvest Church was charged with three counts of dishonestly using the charity’s funds to finance his wife’s singing career. Kong Hee, whose wife Ho Yeow Sun has performed with artists like Wyclef Jean, conspired with others to conceal the diversion of the funds, prosecutor Christopher Ong told a Singapore Subordinate Court today. Financial irregularities of at least S$23 million ($18 million) from the charity’s funds were discovered, Singapore’s Commissioner of Charities said in a statement on its website yesterday. Wedding Party Soaked After Dock Breaks (WTV) A bride, groom and their entire wedding party fell into Gun Lake after the dock on which they were having photos taken gave way. It happened Saturday at Bay Pointe Inn at the wedding reception of Eric Walber and Maegan McKee (now Walber) of Bryon Center..."We were out there for probably 30 seconds, standing on the dock, and it started to lean and tilt," groom Eric told 24 Hour News 8. "We went right under." Eric said he knew just a split second before the dock collapsed what was about to happen. "I saw the thing starting to tilt, and I'm like, 'Oh, yup, this is going to happen,'" he said. Wall Street Analysts Give Facebook A Cautious Nod (Reuters) Barclays Capital, Stifel Nicolaus and Citi Investment Research & Analysis set a "hold" or equivalent rating on the stock, while Morgan Stanley and RBC Capital Markets began coverage of Facebook with their top ratings. Barclays in Libor settlement (Reuters) The bank is poised to secure a $200 million deal with U.S. regulators to settle a probe into allegations staff manipulated a key interbank lending rate known as Libor, one source familiar with the matter said. SEC And Falcone Set For Showdown (WSJ) Mr. Falcone's pledge sets the stage for a legal battle that may decide the fate of an investor who seemed poised to become a Wall Street star as recently as four years ago, when a series of winning bets propelled his fund to $26 billion in assets. The New York-based fund managed $3 billion in March, after several years of client withdrawals and steep losses, including those tied to a troubled venture to set up a nationwide wireless network. Mayor Cools SUV (NYP) Mayor Bloomberg wants to maintain his politically correct credentials on global warming — but hates to get into a hot car when he leaves an air conditioned building. The solution his aides came up with? In full view of bemused tourists and other passers-by yesterday, workers hoisted a standard room air conditioner to a side window of one of the mayor’s SUVs parked in the City Hall lot to see if it would fit. “This is an experiment to be used on extremely hot days like the types we saw last week,” said mayoral spokesman Stu Loeser.

Opening Bell

Opening Bell: 03.19.12

Goldman Sachs Board Must Act on Smith Op-Ed, Ex-Partner Writes (Bloomberg) Goldman Sachs directors must investigate a former employee’s allegations about a change in the firm’s culture, Jacki Zehner, who was a partner when she left the firm in 2002, wrote on her blog. “These are very serious accusations from a credible person in my view and I hope it does indeed provide a ‘wake-up’ call to the board of directors,” wrote Zehner, who was the first female trader promoted to partner and is married to a former partner. She is now CEO and president of Women Moving Millions, a non- profit supporting the advancement of women and girls worldwide. “It is the board that is accountable to shareholders and before they take another paycheck I hope they ask a heck of a lot of questions and get honest answers,” Zehner, 47, wrote in her March 16 commentary...Janet Tiebout Hanson, who left Goldman Sachs after almost 14 years in 1993 and in 1997 founded the women’s networking firm 85 Broads, wrote her own blog response to Smith’s op-ed piece, calling it a “cowardly act.” “By tossing a verbal hand grenade on his way out the door, he sullied the reputations of the vast majority of the people at the firm who work and live by the highest possible professional standards every single day,” wrote Hanson, who was the first woman at Goldman Sachs to be promoted into sales management. “He is just a quitter who never gave management an opportunity to respond before he verbally strafed the entire firm in print.” Is it Magic Johnson vs. Steve Cohen for Dodgers? (CBS) Cohen's appeal? Cash, mostly. Although Johnson is believed to have the highest total offer on the table (a rumored $1.6 billion), Cohen's bid has more cold, hard, redeemable U.S. currency involved ($900 million, to be precise). That may appeal to McCourt, who's facing a pricey divorce settlement with little more than exposed pocket linings and the Dodger Stadium parking lots to his sullied name. Additionally, as CBSSports.com Insider Jon Heyman has reported, Cohen may have additional credibility in the eyes of MLB because of his willingness to bring on board seasoned baseball men like Tony La Russa and former deputy commissioner Steve Greenberg. Lagarde Says World Can’t Be Lulled Into Sense of Security (Bloomberg) nternational Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant as oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” Lagarde said today at a speech in Beijing at the China Development Forum. “We cannot go back to business as usual.” Gupta’s Lawyer Says ‘Wrong Man’ on Trial in Insider Case (Bloomberg) Gupta’s lawyer, Gary Naftalis, said that Rajaratnam had a different Goldman Sachs tipper, who gave him confidential information about Intel Corp. and Apple, the lawyer said. That Goldman source was also caught on government wiretaps passing the inside information, Naftalis said. Where Was The Bracket Born? (WSJ) Steven Murray, a Colorado Mesa University professor who has studied the history of sports, said the concept that inspired the bracket—a single-elimination sporting competition with many rounds—isn't a modern invention. He said the ancient Greeks held wrestling and boxing competitions starting around 700 B.C. where the combatants would draw lots to set pairings. If the tournament pairings were posted in a bracket form, Murray said, they probably would have been painted with pigment on scrolls, placards or walls and wouldn't have survived...By some accounts, the oldest existing sports bracket lies in the archives of the Wimbledon Lawn Tennis Museum, which houses memorabilia from the famous tennis tournament. According to the curator, Honor Godfrey, the Lawn Tennis Championship printed a bracket in the program to display the pairings in its inaugural year, 1877. Godfrey said she couldn't find a copy of that program, but she did unearth a Xeroxed copy of the program from the following year, 1878. That program, issued by the "All England Croquet and Lawn-Tennis Club" announced the "Lawn Tennis Championship Meeting," which would be contested for a prize of 19 Guineas. Inside, on a full page, is a one-sided bracket with 34 names. To make the pairings add up correctly, a certain E.R. Seymour and a certain H.F. Lawford were awarded byes. To this day, Wimbledon's program includes a bracket of the tournament field. Apple To Say Monday How It Will Use Cash Hoard (NYT) Apple has finally decided what to do with its cash hoard of nearly $100 billion. The company issued an unusual media alert on Sunday evening saying it planned to announce on Monday morning the long-awaited outcome to a discussion by its board about what to do with its cash balance. It will announce its plans in a conference call at 9 a.m. Eastern time. Goldman's God Problem Goes Away, For Now (Reuters) For the past two years, a group of religious institutions that hold Goldman shares has asked the investment bank to review executive compensation packages and has been successful in getting its proposal taken up at regular shareholders' meetings. This year, the group, including the Sisters of St. Francis of Philadelphia, again sought to have its proposal voted on by shareholders. But for the first time, the U.S. Securities and Exchange Commission sided with Goldman, which argued it had already complied with the request Scores Arrested as the Police Clear Zuccotti Park (City Room) The operation occurred after hundreds of people had gathered in the financial district to observe the founding of Occupy Wall Street six months ago. Earlier, protesters had embarked upon a winding march, after which police officers made initial arrests of about a dozen people near the park...Kobi Skolnick, 30, said that officers pushed him in several directions and that as he tried to walk away, he was struck from behind in the neck. “One of the police ran and hit me with a baton,” he said. Cambodia Embracing Capitalism With First IPO Since Khmer Rouge (Bloomberg) Enthusiasm about the start of trading at the exchange, which opened last July without a single listed company, extends beyond the borders of the Southeast Asian country. Investors including Templeton Emerging Markets Group Chairman Mark Mobius said they plan to participate in Cambodia’s stock market after state-owned Phnom Penh Water Supply Authority has its initial public offering next month. “The potential for investors in Cambodia is excellent,” Mobius, who oversees about $50 billion, wrote in an e-mail. “The listing of publicly traded stocks will drive up interest and demand. If a country can list its state-owned enterprises and list enough stocks so that foreign investors can get involved, then it can be very, very good.” E! Network Brings Clint Eastwood Clan (WSJ) Actor and director Clint Eastwood is about to add a credit to his nearly 60-year career: reality-television star. Mr. Eastwood; his wife, Dina; and two of his children, 18-year-old Francesca and 15-year-old Morgan, will appear in "Mrs. Eastwood & Co.," a reality series that tracks the family in Los Angeles, at their Carmel, Calif., home and beyond. The 10-episode series also will follow Overtone, a South African singing group that Mrs. Eastwood manages. The band appeared on the soundtrack of Mr. Eastwood's 2009 film "Invictus," which recounts Nelson Mandela's attempt to use rugby to help unify post-apartheid South Africa.