Opening Bell: 5.19.16

Activist investors form lobbying group; Fed ready to go in June; Fresh from jail, Screech tells all to A.C. Slater; and more.
Author:
Publish date:

Fed Puts June Rate Increase on Table Provided Economy Says Go (Bloomberg)
Minutes of the April 26-27 Federal Open Market Committee meeting released Wednesday in Washington used the word “June” six times in a policy context. That signal follows several speeches by regional Fed bank presidents warning investors not to dismiss a mid-year hike after the odds of such a move edged close to zero.

Activist Investors Ally to Form Lobby Group (WSJ)
Billionaire investors Paul Singer, Carl Icahn, Barry Rosenstein, William Ackman and Daniel Loeb are setting aside their political differences to launch a Washington-based lobbying group to fight mounting attacks on shareholder activism. Dubbed the Council for Investor Rights and Corporate Accountability, or Circa, it is the first coordinated effort by activists to make their case to lawmakers and the American public that their investment strategy helps, rather than harms, companies and the U.S. economy.

Trump Invested in Outsourcing Companies He Denounced in Campaign (Bloomberg)
Trump has denounced units of United Technologies Corp., Ford Motor Co. and Mondelez International Inc. on the campaign trail -- and has received income of as much as $75,000 from bonds issued by all three since January 2015, according to his latest financial disclosure form released Tuesday. He also has invested in Apple Inc.’s stock and bonds even though in February he called for a boycott of the company for refusing to help the Federal Bureau of Investigation unlock an iPhone used by a terrorist in San Bernardino, California.

Ex-Goldman banker took cash from lawyer linked to Malaysian scandal: report (NYP)
Tim Leissner, the ex-Goldman Sachs banker in the middle of a $6 billion international embezzlement scandal, accepted hundreds of thousands of dollars from an official linked to a Malaysia wealth fund that is under investigation, according to a report on Wednesday. Leissner, who was seen strolling carefree around Manhattan last Sunday with his baby and model wife, Kimora Lee Simmons, got the cash from Jasmine Ai Swan Loo, a lawyer formerly with 1Malaysia Development Bhd. (1MDB), the fund from which the $6 billion went missing, according to the Wall Street Journal, which first reported on the matter. It’s not clear what the connection is between the two. The Justice Department, which is probing the missing cash, has subpoenaed the banker.

Fresh from jail, Screech tells all to A.C. Slater (NYP)
After spending three months in jail for allegedly stabbing a man in a 2014 Christmas bar fight, Dustin Diamond is ready to move on with his life. “I want to put the tomfoolery and malarkey behind me … for that clean slate,” he told his fellow “Saved by the Bell” alum, “Extra” host Mario Lopez, on Tuesday. “Time for a change.” Diamond, 39, was recently released from Ozaukee County Jail in Wisconsin. “It’s pretty daunting, it’s pretty scary going into the environment,” the former child star revealed. “I found that as long as you follow the rules and stay with the system, it works. You can get in and out unscathed.” He was originally sentenced to four months but was released a month early for working as a janitor. Diamond also gave his version of events, saying the pocket knife he drew in the scuffle only nicked the man on the arm.

Theranos Voids Two Years of Edison Blood-Test Results (WSJ)
Theranos Inc. has told federal health regulators that the company voided two years of results from its Edison blood-testing devices, according to a person familiar with the matter. The Edison machines were touted as revolutionary and were the main basis for the $9 billion valuation attained by the Palo Alto, Calif., company in a funding round in 2014. But Theranos has now told regulators that it threw out all Edison test results from 2014 and 2015.

Freakish Diamond Pulled From Sub-Arctic Ice Is About to Go on Sale (Bloomberg)
It was buried in a place where big gem-quality diamonds aren’t supposed to exist. A Rio Tinto Group ore processor was configured to discard it. And what saved the diamond’s 187.7 carats from being pulverized was a fluke: Its unusual, elongated shape allowed it to slip sideways through a filtering screen. “It really is a miracle that it was found,’’ said Alan Davies, chief executive officer of diamonds and minerals for Rio Tinto, the operator of Canada’s Diavik mine, Foxfire’s former home. “It’s a rare find, a really rare find.”

JPMorgan Investor Suit Tied to Madoff’s Fraud Is Dismissed (Bloomberg)
An investor suit claiming JPMorgan Chase & Co. ignored red flags about Bernard Madoff’s Ponzi scheme and profited from doing business with the con man was dismissed by a federal judge in New York. The investors waited too long to sue and failed to show that JPMorgan had any control over Madoff’s actions, U.S. District Judge John Koeltl ruled Wednesday.

Bartolo Colon trademarks ‘Big Sexy’ nickname for possible athletic apparel line (NYDN)
The New York Mets hurler applied last month for a trademark of the moniker, which he hopes to use on athletic apparel, records show. The Big Sexy brand got a big boost at Christmas last year, when Noah Syndergaard tweeted an image of his family wearing t-shirts with an image of Colon’s face. ESPN reporter Darren Rovell, who first reported on the trademark application, tweeted that Colon intended to use the name on “shirts, pants and hats.”

Related

Opening Bell: 10.02.12

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.

Opening Bell: 03.21.13

ECB Threatens To Cut Off Cypriot Banks (WSJ) The European Central Bank ramped up pressure on Cyprus to seal a bailout agreement with the European Union and the International Monetary Fund by Monday, making further funding for the island's ailing banks contingent on a deal. The ECB said it would extend emergency funding that has kept the island's banks in operation while the bailout plan was being negotiated in recent months only until Monday. "Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an European Union/International Monetary Fund program is in place that would ensure the solvency of the concerned banks," the ECB said in a statement. Italy's Five-Star Party Reiterates Demand for Euro Referendum (WSJ) Representatives of Italy's Five-Star Movement reiterated their anti-establishment party's demands for a referendum on the country's membership of the euro, and insisted that they should form the country's next government. Italian President Giorgio Napolitano is consulting political leaders on forming a government after last month's inconclusive election result. Deustche Bank Legal Bill Mounts (WSJ) Deustche Bank revised fourth-quarter earnings downward, setting aside about €600 million ($773 million) in legal provisions for U.S. mortgage litigation in another sign that mounting legal liabilities are cutting into investment -bank profits. The bank updated its fourth-quarter net loss to 2.54 billion euros, wider than the originally reported loss of €2.17 billion. This compared with a profit of €147 million a year earlier. The bank also reiterated that it would make first-quarter targets for a key measure of the bank's health known as the capital ratio, indicating a strong first quarter, analysts said. Deutsche Bank has now set aside €2.4 billion for litigation, with additional identified non-provisioned legal risks of €1.5 billion. The bank's legal provisions were nearly 10 times net profit of €237 million for 2012, compared with a profit of €4.1 billion in 2011. Total legal risk is likely much higher than what the bank has publicly identified, analysts said. Lululemon Sees Sheerness Issue Hitting Profits (WSJ) Lululemon Athletica said Thursday its fourth-quarter profit climbed 48%, but said it expects the transparency issue related to some of its yoga pants to reduce first-quarter earnings by 11 to 12 cents a share. Bernanke Saying He’s Dispensable Suggests Tenure Ending (Bloomberg) Federal Reserve Chairman Ben S. Bernanke said he’s “spoken to the president a bit” about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy. “I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Barack Obama. His term expires at the end of January. Personal assistant pleads guilty to embezzling 821G from hedge funder Todd Meister (NYP) After a year of denials, glamorous Ukranian embezzler Renata Shamrakova admitted in Manhattan Supreme Court yesterday that she stole nearly $1 million while working as the personal assistant to hedge funder Todd Meister. Under the plea deal, she will serve no jail time but must repay what she took within two years. “Yes, your honor,” Shamrakova told the judge, when asked if she had committed grand larceny in the second degree by stealing from Meister, 42, a Harvard-educated money man who famously married Nicky Hilton for just six weeks in 2004. Shamrakova, 28, wore a gray cashmere sweater over a short, floral-print skirt and spoke in a quiet, girlish voice as she sat at the defense table and admitted her crimes. In addition to ripping off Meister, she tried to dodge a search warrant by hiding financial records. Dell Walks Fine Line in Pitch for Buyout (WSJ) Mr. Dell needs to persuade Dell Inc. investors that the prospects for the company he founded in his dorm room in 1984 and has been running for the past six years are anything but rosy if he is to succeed with his plan to take the computer maker private. Friday marks the end of a 45-day window to flush out alternative offers to the $24.4 billion buyout deal that Mr. Dell and private-equity firm Silver Lake Partners reached last month. The $13.65-a-share offer has sparked derision from some shareholders who believe the price undervalues the Round Rock, Texas, company. No alternative bid has been offered, but late Wednesday Blackstone Group LP was working on a few scenarios for a potential bid that would see the private-equity giant team with a partner to buy all or part of the computer maker, according to people familiar with the matter. JPMorgan To Return Money To MF Global Customers (AP) JPMorgan Chase has agreed to a deal that will return $546 million to former customers of trading firm MF Global Holdings Ltd., which collapsed in 2011 with $1.6 billion missing from its accounts. Initial Jobless Claims in U.S. Rise Less Than Forecast (Bloomberg) Applications for jobless benefits increased by 2,000 to 336,000 in the week ended March 16, Labor Department figures showed today. Economists projected 340,000 claims, according to the median estimate in a Bloomberg survey. The monthly average, which smoothes the week-to-week volatility, dropped to the lowest level since February 2008. Regulator finds flaws in Deutsche Bank's Libor supervision (Reuters) German markets watchdog Bafin is set to tell Deutsche Bank of "organizational flaws" in how it supervised its contribution to the setting of inter-bank lending rates at the heart of the international rate-rigging scandal, sources familiar with the watchdog's investigation said. Wis. limits use of nude beach to reduce sex, drugs (AP) Wisconsin authorities announced Tuesday they will shut down one of nation's most popular nude beaches on weekdays after struggling for years to curtail sex and drugs on the sandbar and surrounding woods. Nudists from around the country have been traveling to the public beach on the Wisconsin River near Mazomanie, about 25 miles northwest of Madison, for decades as word spread that prosecutors in ultra-liberal Dane County wouldn't go after anyone for showing skin. But visitors haven't stopped at just stripping down. They've been slipping off into the woods for trysts and drugs. Authorities say that's crossing the line, but they haven't been able to stop the shenanigans. Their frustration reached a tipping point Tuesday, when the state Department of Natural Resources announced it will close the beach, the islands immediately off it and the surrounding woods to the public on weekdays, when wardens say troublemakers tend to operate unseen. The closures begin immediately. The area will remain open on weekends, though. Bob Morton, executive director of the Austin, Tex.-based Naturist Action Committee, which lobbies on behalf of nudists, has visited the beach several times. He criticized the DNR for not consulting with beachgoers before closing the area. "Honestly, we're on their side when it comes to enforcing things that are lewd and lascivious," Morton said. "There's something to be said about consulting the users of the place. There's got to be more to this somewhere."

Opening Bell: 07.10.12

Diamond To Forgo Deferred Bonuses (WSJ) Former Barclays Chief Executive Robert Diamond has given up bonuses of up to £20 million ($31 million) in an apparent effort to shield the lender as the bank looks to defuse anger following the rate-fixing scandal...According to Mr. Diamond's contract, he will receive up to 12 months' salary, pension allowance and other benefits. Barclays Chairman Marcus Agius said that this amounts to around £2 million. Paulson Funds Fell In June As Rally Undercut Euro Wager (Bloomberg) The $22 billion firm had losses in all its funds last month as stock markets rose. The losses were led by a 7.9 percent drop in his Advantage Plus Fund, according to an update to investors obtained by Bloomberg News. That leaves the fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, down 16 percent this year. Einhorn says Fed stimulus counterproductive (Reuters) "I think it's actually counterproductive," Einhorn said of the stimulus program, adding that it lowers the standard of living and drives up food and oil prices. He said he would suggest a rise in interest rates on U.S. Treasury bonds to "a reasonable level" of 2 to 3 percent. Einhorn said Apple, which he praised at this year's Ira Sohn investing conference, was "the best big-growth company we have." "We're two, three years into the Apple investment, and the way it seems headed it's likely we'll be there for a good while longer," he said. "I think the stock is very very substantially undervalued." He said Amazon.com Inc was "tough on its competitors" because it does not "feel the need to make a profit." "It's very hard to compete against somebody who doesn't feel the need to make a profit," he said, adding that he is not "short" Amazon. Investment Bankers Face Termination As Europe Fees Fall (Bloomberg) Credit Suisse and UBS face the most pressure to boost efficiency as that country runs ahead of others in introducing tougher capital and liquidity rules to curtail risk-taking, making some businesses unviable...While the situation may be most acute at the Swiss banks, similar dynamics are at work at other firms as the debt crisis drags on, capital requirements ratchet higher and economic growth grinds to a halt. “Bankers are really gloomy and a lot of people are worried about their jobs,” said Edward Cumming-Bruce, a partner at London-based advisory firm Gleacher Shacklock LLP who has more than 20 years’ experience. “Banks are under remorseless pressure to cut costs and balance sheets as we witness a significant change in the way the financial industry works.” Sitting for More Than Three Hours a Day Cuts Life Expectancy (WSJ) Sitting down for more than three hours a day can shave a person's life expectancy by two years, even if he or she is physically active and refrains from dangerous habits like smoking, according to a study to be published on Tuesday in the online journal BMJ Open. Watching TV for more than two hours a day can exacerbate that problem, decreasing life expectancy by another 1.4 years, said the report, which analyzed five underlying studies of nearly 167,000 people over a range of four to 14 years. Futures Broker Freezes Accounts (WSJ) Peregrine, based in Cedar Falls, Iowa, couldn't be reached for comment on the NFA action, but in an earlier statement to clients said "some accounting irregularities are being investigated regarding company accounts." "What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds," said PFGBest in its statement. Also in the statement, the firm said Russell R. Wasendorf Sr., its founder, chairman and chief executive, had experienced a "recent emergency" and described it as a "suicide attempt." A spokeswoman for PFGBest said Mr. Wasendorf was in critical condition in a hospital. Four Companies Break Through IPO Drought (WSJ) What do two fast-growing technology companies, an iconic guitar maker and a skin-infection specialist have in common? All four aim to break the latest dry spell in the IPO market. Fender Musical Instruments Corp., which has supplied guitars to rock artists from Buddy Holly to Kurt Cobain and John Mayer, network-security firm Palo Alto Networks Inc., travel website Kayak Software Corp. and pharmaceutical firm Durata Therapeutics Inc. said Monday that they plan to push ahead with initial public offerings in coming weeks. JPMorgan Silence On Risk Model Spurs Calls For Disclosure (Bloomberg) The U.S. Securities and Exchange Commission is probing JPMorgan’s belated May 10 disclosure that a change to its mathematical model for gauging trading risk helped fuel the loss in its chief investment office. While the SEC would have to prove that the biggest U.S. bank improperly kept important information from investors, regulators probably will press Wall Street firms to tell more about the risks they’re taking, three former SEC lawyers said. Would You Stress Over A Millionaire Wife? (CNBC) The study, conducted by SEI and Phoenix Marketing, found that a third of the women who are the financial leads in millionaire households say their partner feels “stressed” by their financial roles. By contrast, only 14 percent of males in male-led millionaire households said they feel tension from their partner. Actor who kicked in doors to Ed Sullivan theater escapes jail time (NYDN) The struggling actor who kicked in the glass doors to the Ed Sullivan Theatre and urinated on the lobby floor last year got lucky with a no-jail sentence Monday. But he had to pay $7,377.28 in restitution. James Whittemore, 23, who now deejays in Massachusetts under the name DJ Nutron, never formally apologized to David Letterman face to face, but he said he'd like to..."Someone stole my iPhone, I quit my job, my girlfriend broke up with me, I was having a rough day," he said.

Opening Bell: 07.12.12

Fed Weighs More Stimulus (WSJ) A few Fed officials were ready to move aggressively when the Fed met in June and several others said they might want to take new measures if the recovery loses momentum or their growth and employment forecasts are cut once again. That is according to minutes of the central bank's June 19-20 meeting, which were released Wednesday with their usual three-week lag. Gold to Hit $2,000 by Year-End on More Fed Easing: Merrill (CNBC) "We think that $2,000 an ounce is sort of the right number,” Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at the investment bank, said Thursday. Regulators’ Shake-Up Seen as Missed Bid to Police JPMorgan (NYT) After the financial crisis, regulators vowed to overhaul supervision of the nation’s largest banks. As part of that effort, the Federal Reserve Bank of New York in mid-2011 replaced virtually all of its roughly 40 examiners at JPMorgan Chase to bolster the team’s expertise and prevent regulators from forming cozy ties with executives, according to several current and former government officials who spoke on the condition of anonymity. But those changes left the New York Fed’s front-line examiners without deep knowledge of JPMorgan’s operations for a brief yet critical time, said those people, who spoke on the condition of anonymity because there is a federal investigation of the bank. Forced to play catch-up, the examiners struggled to understand the inner workings of a powerful investment unit, those officials said. At first, the examiners sought basic information about the group, including the name of the unit’s core trading portfolio. Neb. Man Jailed for Bomb Threat on Job Application (AP) the Legacy 272 Lounge employee who reviewed 38-year-old Jason Dornhoff's application last Thursday called police when he read the threat that closed with: "If you be quiet and help me, you won't die." Police arrested Dornhoff, of Heartwell, Neb., at gunpoint and searched his truck, but didn't find any bomb. Court documents say Dornhoff told police he uses methamphetamines and went to the restaurant hoping to find a way to fulfill his sexual fantasies. Clock Is Ticking On Crisis Charges (WSJ) Federal laws under which the Securities and Exchange Commission usually goes after alleged fraud and other misdeeds have a five-year statute of limitations. The five-year limit is causing SEC officials to race to file lawsuits in some cases and ask lawyers representing the targets of certain investigations to give the agency more time, according to people close to the investigation. The SEC intends to file charges against firms and people involved in the creation of a $1.6 billion mortgage-bond deal called Delphinus CDO 2007-1, people close to the investigation said. Credit Suisse Clients Targets Of Tax Probe (WSJ) German tax inspectors in recent weeks have been raiding the homes of Credit Suisse Group AG clients suspected of evading taxes, according to bank and German government officials. The investigation is centering on about 5,000 clients who between 2005 and 2009 allegedly bought insurance policies at a Bermuda-based subsidiary of the Swiss bank. In These Knife Fights, Only Pride Gets Wounded (WSJ) Donavon Phillips windmilled his arms. He hopped a few times to get the blood flowing in his legs. A light sweat formed under his black-and-red jersey—just the right dew. "You can't go into this cold, because it's an all-out sport," said Mr. Phillips, pulling his right arm across his chest. He was warming up for a cutthroat event: the 10th annual World Championship Cutting Competition. It takes razor-sharp focus to be a cutting champ, along with a blade that resembles a bulkier, sharper version of a kitchen meat cleaver. Mr. Phillips is one of a few who have helped make a sport out of demonstrating they can swiftly, flawlessly slice through a dozen water bottles or chop a rolling tennis ball in half. Having won the national title in May, he is a favorite on the cutting circuit. SEC Votes To Require Consolidated Audit Trail For Markets (Bloomberg) “A consolidated audit trail that accurately tracks orders throughout their lifecycle and identifies the broker-dealers handling them will provide us with an unprecedented ability to effectively oversee the markets we regulate,” said SEC Chairman Mary Schapiro. The rule is a “great leap forward,” she said. BofA Execs Dodge A Bullet (NYP) Bank of America won a federal court ruling dismissing claims against former Chief Executive Officer Ken Lewis and others in a securities-fraud lawsuit over the bank’s use of an electronic mortgage registry. Buffett: US Economic Growth Slowing, US Slipping "Pretty Fast" (CNBC) Despite the slowdown, Buffett says the U.S. economy is still doing better than "virtually any other big economy" around the world. New York Fed to Release Libor Documents Friday, Official Says (Reuters) The Federal Reserve Bank of New York will release on Friday documents showing it took "prompt action" four years ago to highlight problems with the benchmark interest rate known as Libor and to press for reform, an official at the regional U.S. central bank said on Wednesday. 'Con artists' scammed Hamptons homeowners by turning rentals into teen party pads: officials (NYP) Two real-estate con artists made hundreds of thousands of dollars by renting homes in the Hamptons and using them as post-prom and graduation-party crash pads for raucous teens, authorities said. Officials and outraged homeowners said the front man, 25-year-old Lee Hnetinka, of Jericho, would rent the mansions saying he intended to use them for his own family reunions. “He said it was his aunt having a party at his house,” said Lucy Sachs, 64, who rented her family’s East Hampton home to Hnetinka for $30,000 a month. When a neighbor called on June 8 to tell her that a “party bus with a disco ball had arrived” at Sachs’ place in the middle of the night, she rushed over, confused. What Sachs found was a houseful of nearly 100 teens smoking and drinking in the century-old building. Hnetinka allegedly teamed up with Leslie Jennemann (both inset), a Hamptons real-estate agent who in 2002 was convicted of running over and killing a migrant potato picker on her way home from a party, Southampton officials said...The suspects charged students $355 each for three days at the house, homeowners said. Scarlato estimated that the pair brought in $60,000 to $80,000 a weekend and had as many as 10 rentals. Another East Hampton homeowner, Eli Braha, rented to Hnetinka and became suspicious after a landscaper called to ask about all the trash and as many as 30 inflatable beds in the home.

Opening Bell: 4.25.16

Ex-Buffett heir now trying hand at activist investing; Glass Lewis tells Credit Suisse investors to reject pay packages; ‘Female Ted Cruz’ is making a p0rno; and more

Opening Bell: 06.04.12

Kerviel’s Refusal To Be SocGen Scapegoat May Harm Appeal Chances (Bloomberg) Jerome Kerviel began his fight today against a 2010 conviction for Societe Generale’s 4.9 billion- euro ($6.2 billion) trading loss, telling a Paris appeals court that the bank knew about his actions. His lawyers said they’ll show judges at the four-week appeal starting today that the bank knew before the 2008 trading loss that he was exceeding his mandate with risky bets and can’t claim to be an innocent victim. “I think that I’m not responsible for this loss,” Kerviel told judge Mireille Filippini at the start of the hearing today in response to a question about why he was appealing. “I always acted with the knowledge” of the bank. Germany Signals Crisis Shift (WSJ) Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe. China Making Contingency Plans for a Greek Exit (Reuters) The Chinese government has called on key agencies, including the central bank, to come up with plans to deal with the potential economic risks of a Greek withdrawal from the euro zone, three sources with knowledge of the matter told Reuters on Monday. The sources said the plans may include implementing measures to keep the yuan currency stable, increasing checks on cross-border capital flows, and stepping up policies to stabilize the domestic economy. Oversight Of JPMorgan Probed (WSJ) A federal agency that oversees J.P. Morgan Chase is taking heat over how much it knew about risk-taking in the part of the bank that suffered more than $2 billion in trading losses. Sen. Sherrod Brown (D., Ohio) asked Comptroller of the Currency Thomas Curry in a letter Friday for details about the regulator's supervision of trading operations at the largest U.S. bank by assets. Mr. Brown also wants more information about the Office of the Comptroller of the Currency's "process for reviewing trading operations" at J.P. Morgan and other big banks. The Senate Banking Committee, which includes Mr. Brown, is scheduled to hold a hearing Wednesday that will focus on the trading loss. JPMorgan Was Warned About Lax Risk Controls (NYT) A small group of shareholder advocates delivered an urgent message to top executives at JPMorgan Chase more than a year ago: the bank’s risk controls needed to be improved. JPMorgan officials dismissed the warning from the CtW Investment Group, the advocates, who also cautioned bank officials that the company had fallen behind the risk-management practices of its peers. Merrill Losses Were Withheld Before Bank of America Deal (NYT) What Bank of America’s top executives, including its chief executive then, Kenneth D. Lewis, knew about Merrill’s vast mortgage losses and when they knew it emerged in court documents filed Sunday evening in a shareholder lawsuit being heard in Federal District Court in Manhattan: Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed. Mets crasher out of jail, says he 'got caught up in the moment' (NYP) Mets fanatic Rafael Diaz said he got such an adrenaline rush from Johan Santana’s no-hitter at Citi Field that “he couldn’t help” himself from running on the field to celebrate. “I was overcome with emotion, just being a die-hard Mets fan,” Diaz said after his release from jail yesterday. “That’s all it was.” Diaz, 32, was charged with trespassing for taking part in the on-field celebration. He spent two nights behind bars before a Queens judge released him and pal John Ries, 25, on their own recognizance. Diaz returned to his Massapequa, LI, home, wearing the same Gary Carter No. 8 jersey he had on Friday night. He hit the showers and donned a fresh Santana jersey before explaining his stunt. After Santana retired the final St. Louis batter on Friday night, Diaz jumped over the railing on from his field-level perch on the first-base side of Citi Field. Moments later, Diaz was rubbing elbows with Santana, R.A. Dickey and Ike Davis in a joyous Mets mob. “I couldn’t help myself,” Diaz said. “I just wanted to be on the mound celebrating the no-hitter.” Diaz paid a stiff penalty, both at home and Citi Field. He missed his 1-year-old son’s birthday party Saturday, and the Mets have banned him for life from their home park. “That’s the bad part,” Diaz said of missing his son’s bash. Feds Eye MFGlobal's False Promise (Bloomberg) Three days before MF Global filed for bankruptcy-court protection, CME Group was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money. But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S. IPO doubts plague Nasdaq’s Grief-eld (DJ) Companies in the early stages of going public are raising questions about whether they want to list with Nasdaq...The questions, coming two weeks after Bob Greifeld’s exchange botched the largest, most anticipated initial public offering in a generation – Facebook’s $16 billion coming-out party – are the first indication that Nasdaq’s headaches over the snafu are likely to linger. “There’s no question, this Facebook situation has put on the table the question of Nasdaq’s market structure and its market quality,” one exchange expert said. Madoff kin having trouble finding an apartment (NYP) Andrew Madoff and girlfriend Catherine Hooper have tried to cover up their connection to the Ponzi schemer by making appointments under Hooper’s name. She then shows up alone to view the $20,000-per-month pads, brokers said. Hooper speaks generally, saying the space is for her, her fiancé and their children, the sources said. But once the brokers explain who Hooper is to the landlord, the couple is immediately rejected, the sources added. “My owners would never, ever rent to him,” said a broker. “They will go through a lot of rejections.” China Muzzles Online Talk of Tiananmen Anniversary (WSJ) China's Internet monitors have unleashed a broad clampdown on online discussion of the 23rd anniversary of the Tiananmen Square crackdown, restricting even discussion of the nation's main stock market when it fell by a number that hinted at the sensitive date. Officials minding China's popular Twitter-like microblogging service Sina Weibo beginning this weekend began blocking a number of terms that could refer to the 1989 Tiananmen Square crackdown, an incident often referred to as June 4 or 64 in the Chinese-speaking world. Under the crackdown the government ordered troops to fire on unarmed demonstrators, likely killings hundreds. Dennis Gartman: 100% Chance Of Further Fed Easing (CNBC) Gartman believes a third round of quantitative easing could come as early as the Fed’s next meeting on June 19-20, or at the following meeting on July 31-Aug. 1. The central bank will want to ease as “far ahead” of the U.S. presidential election in November as possible, so it doesn't come off as being "politically amenable" to the current administration, he noted. Dutch artist turns dead cat into remote-controlled helicopter, dubbed ‘Orvillecopter’ (NYDN) A Dutch artist, upset over losing his beloved pet, Orville, had the animal stuffed and transformed its body into a remote-controlled helicopter. The “half cat, half machine” piece of art was dubbed the “Orvillecopter.” The cat, who was killed when it was hit by a car, was named after famed American aviator Orville Wright. “After a period of mourning, he received his propellers posthumously,” Jansen said. A video posted to YouTube shows the flying feline slowly hover several feet in the air in a park, it's body permanantely spread eagle with propellors on its front paws. Artist Bart Jansen teamed up with radio control helicopter expert Arjen Beltman after having a taxidermist preserve the pussy cat.

Opening Bell: 11.30.12

Germany Approves Greek Aid (WSJ) German parliamentarians approved with an overwhelming majority a package of new aid measures for Greece Friday, clinching support for a plan to close a €14 billion ($18.17 billion) gap in the heavily indebted nation's finances and to ready a near €44 billion tranche of promised aid. The vote shows that German Chancellor Angela Merkel has been able to consolidate the support of her center-right coalition of Christian Democrats and Free Democrats, many of whom have expressed skepticism that Greece can be saved without significant costs to German taxpayers. Her coalition voted 90% in favor of the measures. Leave "fairy world" behind, Draghi tells euro zone (Reuters) "We have not yet emerged from the crisis," Draghi told Europe 1 radio. "The recovery for most of the euro zone will certainly begin in the second half of 2013." "The crisis has shown that we were living in a fairy world," the ECB chief later added at a conference with top financial officials, pointing to the unsustainable debts, weak banks and poor policy coordination that gave birth to the crisis three years ago. Obama Takes ‘Fiscal Cliff’ on the Road; Republicans Stew (CNBC) President Barack Obama, reapplying his re-election campaign theme of protecting the middle class, heads to Pennsylvania on Friday suggesting that Republicans could spoil Christmas by driving the country over the "fiscal cliff." The president's road trip, visiting a factory that makes Hasbro's [HAS 38.60 --- UNCH] Tinkertoys, is infuriating Republicans. House Speaker John Boehner called it a "victory lap" as he rejected Obama's proposals to avoid the cliff, the combination of tax increases and spending cuts set to start taking effect in January. Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal (WSJ) Berkshire Hathaway will pay CaixaBank SA million €600 million ($778.7 million) for the future cash flow from a portfolio of life insurance policies, the Barcelona-based bank said Friday, a rare dip into a fiscally stressed euro-zone country for the investment firm run by Warren Buffett. If You Like Late Nights, Try Being an Analyst in Hungary (WSJ) As the clock ticked toward midnight on a recent night, stock analyst Gergely Gabler sat sleepily in his pajamas at the small desk in his bedroom, waiting. Then, just after 12, he sprang into action, evaluating the newly released earnings report of Hungary's largest bank. For the next two hours, Mr. Gabler worked on a report about OTP Bank's performance for clients of his firm, Hungarian brokerage Equilor Investments, before catching some shut eye, only to awake about 3½ hours later so he could be in his office to field questions by 7 a.m. Burning the midnight oil is a painful quarterly tradition for analysts and financial journalists in Hungary, where the country's biggest blue-chip companies publish their results in the wee hours, after markets in New York have closed and long before they open anywhere in Europe. "I'm a night owl, so I don't mind staying up," Mr. Gabler said. The hard part, the 28-year-old said, is getting out of bed the next day. That morning, he grabbed a red-and-black can of Hell, a caffeine-laden Hungarian energy drink, to fuel his workday. Moody's Puts Aston Martin on Watch for Downgrade (NYT) “The review was prompted by a significant deterioration in Aston Martin’s liquidity profile as per end September 2012, caused by a much weaker cash generation and operating performance in the third quarter than anticipated by the company and compared to Moody’s expectations,” Falk Frey, a Moody’s analyst, said in a statement. Harvard Approves BDSM Group (Crimson) It started last October with a meal in Currier dining hall with a handful of friends who shared something in common: an affinity for kinky sex. More than a year after the group first began informally meeting over meals to discuss issues and topics relating to kinky sex, Harvard College Munch has grown from seven to about 30 members and is one of 15 student organization that will be approved by the Committee on Student Life this Friday. Michael, who was granted anonymity by The Crimson to protect his privacy, is the founder of Munch, an informal lunch or dinner meeting for people across the kink community. For him, the recognition will provide a sense of ease for current and future members, knowing they are receiving institutional support. “It’s a little hyperbolic for me to get teary-eyed and paternal about sophomores, but it’s really a joy to see the experience they will have now,” Michael said. Michael said there are many benefits to being officially recognized on campus such as being able to poster for events and promote Munch’s presence...But for Michael, the biggest advantage to being recognized comes with “the fact of legitimacy,” he said. “[Our recognition] shows we are being taken seriously.” Mae, a member of the organization who asked to be identified by her middle name, said since its formation the group has provided her with a comfortable space to discuss her interests. “I didn’t think that anyone was even remotely interested [in kink] on campus,” Mae said. “It’s a community where you can feel safe, and you can feel comfortable talking about [kink].” Cohen's Damage Control (NYP) Beleaguered hedge fund honcho Steve Cohen held a conference call yesterday for his roughly 1,000 employees to explain potential civil charges against his firm, SAC Capital Advisors. The call with SAC’s employees went over similar talking points as the call with investors the previous day, according to a person familiar with the call. In the latest call, officials notified employees that last week, the $14 billion Stamford, Conn., hedge fund received a Wells Notice from the Securities and Exchange Commission tied to trading by a former portfolio manager who was arrested Nov. 20 on insider trading charges. McDonald’s Starved for Ideas as Burger King Lures Diners (Bloomberg) Burger King has been excelling at a game McDonald’s worked to perfect years ago, introducing a steady stream of new menu items, such as snack wraps and gingerbread sundaes for the holidays. McDonald’s has “not had anything to talk about of substance,” Michael Kelter, a New York-based analyst at Goldman Sachs Group Inc., said in an interview. “People are going elsewhere.” Hong Kong IPOs Generate Little Excitement (WSJ) Hong Kong appears unlikely to regain its position as the world's top venue for initial public offerings anytime soon. In recent days, the city's biggest IPO in two years drew only lukewarm support, while another deal ran up against insufficient demand and a third was postponed. Recession Left Baby Bust as U.S. Births Lowest Since 1920 (Bloomberg) The country’s birth rate fell 8 percent from 2007 to 2010, according to a Pew Research Center report. The rate dropped 6 percent for U.S.-born women and plummeted 14 percent for foreign-born females since 2007, the onset of the worst economic downturn since the Great Depression. The decline continued last year to the lowest point since records began in 1920. Rogue caviar fugitive Mario Garbarino admits his guilt in fishy egg smuggling scheme (NYDN) Isidoro (Mario) Garbarino, 69, who went on the lam 23 years ago pleaded guilty Thursday to smuggling $10 million worth of Russian and Iranian savruga and beluga to New York more than two decades ago. Garbarino’s plea deal requires him to pay $3 million in restitution. He also faces up to four years in prison when he is sentenced in January. Garbarino, a supplier to fancy gourmet shops including Zabar's, was indicted in 1987 for cheating the government on import duties. Feds say his Bronx company, Aquamar Gourmet Imports, engaged in an elaborate scheme to smuggle more than 100,000 pounds of the expensive delicacy from 1984 to 1987. As part of the plot, Garbarino switched the high-quality caviar with much cheaper American caviar which he then sold to Pan Am, other airlines and cruise ships operators as the real thing. In 1989, Garbarino fled. He was nabbed two months ago in Panama and extradited to New York. "Isidoro Garbarino ran his high-end importation business in a low-end way — cheating the government out of millions of dollars in tax revenues and defrauding his international clients who paid top dollar for exotic caviar they did not receive," said Manhattan U.S. Attorney Preet Bharara...Garbarino admitted he “occasionally misrepresented the nature of the caviar” to avoid paying the required taxes.

Opening Bell: 06.11.12

Nasdaq CEO Lost Touch Amid Facebook Chaos (WSJ) At the end of Facebook's disastrous first day of trading May 18, the phone in Robert Greifeld's New York office rang. It was Mary Schapiro, head of the Securities and Exchange Commission, wanting an explanation from the chief executive of Nasdaq OMX Group for the epidemic of glitches and delays in one of the most anticipated initial public offerings ever. Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast. So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him. Three weeks later, Mr. Greifeld still isn't sure why technology systems failed during the crucial IPO. Nasdaq's failure to see the problem coming is something its engineers are still dissecting. "You wake up, you turn around, and there's a black or dull spot," Mr. Greifeld said in an interview, sucking on Life Savers candy at a conference table in his office. "You can't get away from it." Spain’s Bailout Gives Rajoy Best Chance To Fix Banks (Bloomberg) Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds may provide the country with enough money to shore up its banking system after three failed attempts in as many years. “Now that they have this money, it will hopefully finally be possible to recognize all the hidden losses and clean up the system,” Luis Garicano, a professor at the London School of Economics, said in a phone interview. The amount sought is about 2.7 times the funds deemed necessary for Spanish banks by the International Monetary Fund in a report released June 8 and five times the total requested by the Bankia group, the country’s third-biggest lender, to cleanse its balance sheet. Spain's economic misery will get worse this year despite bailout request, prime minister says (NYP) A day after the country conceded it needed outside help following months of denying it would seek assistance, Rajoy said more Spaniards will lose their jobs in a country where one out of every four are already unemployed. "This year is going to be a bad one," Rajoy said Sunday in his first comments about the rescue since it was announced the previous evening by his economy minister. IPOs Dry Up Post Facebook (WSJ) In the aftermath of Facebook's botched trading debut, the IPO market has gone three weeks without an offering, the longest drought in five months. It is the slowest stretch in initial public offerings since a four-week span at the end of 2011 and the beginning of this year, according to data from Ipreo. Greece Threatens Wall Street Jobs In Third Trading Plunge (Bloomberg) For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months. Nickelback Review Goes Viral (Poynter) Music critic Josh Gross has written hundreds of stories about bands, but none has brought him as much attention as the brief he wrote this week about Nickelback’s upcoming appearance in Idaho, where Gross writes for the Boise Weekly. He summarizes the response: "In the past day, I have been told that I am a genius, a king amongst men and a hack that could be easily outdone by a one-armed cat. I should alternately win the Pulitzer and forcibly insert 45 pickles into my bum. There has been little middle ground. Why? Because I had the audacity to point out that seeing Canadian “rock” band Nickelback at the Idaho Center may not be the best use of one’s $45." Gross wrote of the Nickelback: "You can spend $5 to go see Nickelback this week. Or you could buy 45 hammers from the dollar store, hang them from the ceiling at eye level and spend an evening banging the demons out of your dome...$45 is also enough to see Men In Black III five times, buy a dozen Big Macs, do 10 loads of laundry or so many other experiences as banal and meaningless as seeing Nickelback but come without actually having to hear Nickelback. But if you must, the band is playing The Idaho Center on Wednesday, June 13, at 6PM tickets start at $45." Dimon Faces Washington Grilling Over Trading Debacle (Reuters) The Senate Banking Committee has asked Dimon to come prepared Wednesday to provide "a thorough accounting of the trading losses," a committee aide said. Senators will also ask what he knew about the risks involved in the trading strategy. Fed Colleague Backs Dimon (WSJ) "I do not think he should step down," Lee Bollinger said in an interview with The Wall Street Journal. He said Mr. Dimon appears to have done nothing wrong, that critics attacking the Fed have a "false understanding" of how it works, and that it is "foolish" to say Mr. Dimon's presence on the New York Fed board creates an appearance of a conflict when the law requires bankers to serve on such boards. Private lunch with investor Warren Buffett sells for $3.5 million (WaPo) The previous four winning bids have all exceeded $2 million with records set every year. Last year’s winner, hedge fund manager Ted Weschler, paid $2,626,411. India Could Be First BRIC to Lose Investment Grade: S&P (Reuters) Standard & Poor's said on Monday that India could become the first of the so-called BRIC economies to lose its investment grade status, sending the rupee and stocks lower, less than two months after cutting its rating outlook for the country. "Slowing GDP growth and political roadblocks to economic policymaking are just some of the factors pushing up the risk that India could lose its investment-grade rating," the ratings agency said in a statement issued Monday on a report dated June 8. Town Considers Fines For Cursing (WSJ) Mimi Duphily was hanging baskets of pink geraniums on antique street lamps downtown for the Middleborough Beautification and Activities Group when she noticed something else that needed cleaning up—citizens' mouths. "The cursing has gotten very, very bad. I find it appalling and I won't tolerate it," said Ms. Duphily, a civic leader in the otherwise quiet New England community, which calls itself the Cranberry Capital of the World. "No person should be allowed to talk in that manner." Soon, Middleborough residents who do could risk a $20 fine. Ms. Duphily, 63 years old, tried scolding the cursers—whom she describes as young people shouting the "F word" back and forth—with a stern, "Hey kids, that's enough!" Then she conferred with the Beautification and Activities Group, which informed the Middleborough Business Coalition, which then called a summit with Middleborough Police Chief Bruce Gates, who now, in his sworn role, is trying to stomp out swears.