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Hedge-Fund Founder Arrested Over Neiman Marcus Bankruptcy [WSJ]
Dan Kamensky, the founder of Marble Ridge Capital LP, was arrested Thursday and charged by federal prosecutors in New York with securities fraud, wire fraud, extortion and obstruction of justice in connection with his efforts to acquire shares in Neiman’s MyTheresa e-commerce business…. If convicted of all charges, Mr. Kamensky faces up to 50 years in prison. The Securities and Exchange Commission also sued Mr. Kamensky and Marble Ridge on Thursday….

Payrolls increase by nearly 1.4 million as the unemployment rate tumbles [CNBC]
The unemployment rate was by far the lowest since the coronavirus shutdown in March, according to Labor Department figures released Friday. An alternative measure that includes discouraged workers and those holding part-time jobs for economic reasons also fell, down to 14.2% from 16.5% in July and 22.8% at the peak in April…. Markets rose sharply on the news, with Dow futures pointing to a gain at the open following an aggressive sell-off Thursday.

Malaysia Drops Goldman Sachs Criminal Charges Over 1MDB [WSJ]
In July, Goldman agreed to pay Malaysia $2.5 billion and guaranteed the recovery of $1.4 billion in assets allegedly stolen from the fund as part of efforts by the Wall Street bank to move on from one of the worst scandals in its history. Malaysia agreed to drop criminal proceedings against the bank related to the fund.
A Malaysian court Friday discharged and acquitted three subsidiaries of the bank over their alleged involvement in the scandal…. Goldman is still in discussions with the U.S. Department of Justice for a settlement.

Justice Dept. Plans to File Antitrust Charges Against Google in Coming Weeks [NYT]
Justice Department officials told lawyers involved in the antitrust inquiry into Alphabet, the parent company of Google and YouTube, to wrap up their work by the end of September, according to three of the people. Most of the 40-odd lawyers who had been working on the investigation opposed the deadline. Some said they would not sign the complaint, and several of them left the case this summer.
Some argued this summer in a memo that ran hundreds of pages that they could bring a strong case but needed more time, according to people who described the document…. While there were disagreements about tactics, career lawyers also expressed concerns that Mr. Barr wanted to announce the case in September to take credit for action against a powerful tech company under the Trump administration.

How Options-Market Amateurs Might Have Tripped Up Big Tech [WSJ]
Recently, there has been a jump in the trading volume of options linked to the shares of the top tech giants. While the cost of these derivatives contracts, gauged by their “implied volatility,” almost always moves in tandem with the “realized” volatility of the underlying shares, a rare disconnect has appeared over the past few weeks: Investors pushed up the implied volatility of Nasdaq options even as actual volatility declined…. It is a strategy tailored for uncertain times. However, it can also create feedback loops that affect the underlying assets. Because banks take the other side of these deals, they are left with a downside exposure to stocks, which they then hedge by buying those same shares. The result is a steadier rally, but one that can unravel quickly at the first sign of trouble.

Navarro pushes back on reported workplace behavior: 'If people get in the way ... there will be conflict' [The Hill]
“My mission in this administration is to serve as a soldier for the greatest commander in chief ever, and my job is to help this president do two things: save American lives and create American jobs. And if people get in the way of that, there will be conflict. And I make no bones about that. So this is a tough town,” Navarro said on CNN.
The Washington Post reported that Navarro berated other officials over their policy views, with the article saying young women appeared to suffer the most verbal abuse…. Navarro added that he had “absolutely not” been admonished over his conduct.

Palm Beach Dad Accused of Bribing Kid’s Way Into Georgetown [Bloomberg]
[Investment executive] Amin Khoury agreed in 2014 to pay about $200,000 to Gordon Ernst, then the head coach of men’s and women’s tennis at Georgetown, prosecutors said. Khoury was indicted on a fraud conspiracy count and a bribery count relating to programs that receive federal funds…. Khoury [is] the 40th parent accused in the sprawling case….
The alleged bribery scheme was set in motion after Khoury met with Ernst and an unnamed intermediary at a Brown University reunion event in May of 2014, according to prosecutors. Khoury himself had played tennis for Brown in his college days.

Alex Rodriguez fuming over ‘fixed’ sale of Mets to Steve Cohen, sources say [Thornton/N.Y. Post]
Sources close to the former Yankees slugger say they lost the Queens team on Friday, Aug. 28, after the Mets’ banker — Steve Greenberg of Allen & Co. — reached out to ask for a sneak peek at what was being offered. The request came days ahead of the official Aug. 31 bidding deadline…. The former Yankees third baseman is now convinced that the Mets spoon-fed his bid information to Cohen so the billionaire financier and art collector could have the highest offer and win the team….
The Mets never went back to see if A-Rod wanted to match or better Cohen’s offer, sources said. Rodriguez has been trying to reach Mets owner Fred Wilpon since Friday but can’t get him on the phone, they added.

Billionaire Bill Ackman says market turbulence stems from election and virus uncertainty, stretched tech valuations but isn't 'the beginning of the end' [BI]
"It's certainly not the beginning of the end but I would say we're coming upon one of the more uncertain periods in American history," the founder and CEO of Pershing Square Capital said. "Markets don't like uncertainty…." Ackman said that the divisive presidential election and what it means for the country, corporate America, and taxation, paired with the ongoing coronavirus pandemic, are creating uncertainty within markets. He added that "valuations particularly in the technology landscape have gotten to some pretty extraordinary levels."

Hedge Funds’ Beloved NYC School Ditches In-Class Learning in ’20 [Bloomberg]
Success Academy, the largest charter-school network in New York City, has abandoned its plan to bring students back into the classroom and opted to go fully remote through at least December, the network told families and staff Thursday…. A decision about 2021 will come closer to December…. Many of Success Academy’s schools are co-located inside New York City’s public school buildings, where access has been restricted. The complexity of low-density, in-person learning also proved formidable, making close interactions “very difficult, if not impossible.” New protocols like staggered arrivals also “reduce learning time.”

How To Hide A Billion Dollars: Three Techniques The Ultra-Rich Use To Dodge Ex-Spouses, The Taxman And Disgruntled Business Partners [Forbes]
Quantlab co-founders Bruce Eames (with a 24% stake) and Andrey Omeltchenko (with 4%) are now suing the 81-year-old [co-founder Wilbur “Ed”] Bosarge for fraud. (He denies their claims.) Bosarge is also facing a fraud suit from the founder of a Bahamian stem cell clinic that he funded, took control of and received multiple treatments at—for, he said in a deposition, “bad ankles, bad knees from skiing, muscles that pulled out….” But Bosarge’s most notable current legal battle— for what it shows about the way U.S. state trust laws increasingly protect the rich—is with his wife, Marie, a 66-year-old onetime Marilyn Monroe impersonator Ed married in 1989….
Marie contends she’s owed a billion or more, although she tells Forbes she’d settle for less than $100 million…. Forbes estimates Ed Bosarge is worth at least $1 billion. But as he and his lawyers tell it, the couple’s community property assets total just $25 million since an array of trusts own not only his Quantlab stock, but also their homes in Houston, Aspen, London and Maine and the 72-acre island in the Bahamas where they docked their three (trust-owned) yachts, including the eponymous 180-foot Marie, replete with a baby grand piano. After the divorce papers were served, one of the trusts even repossessed a $1.9 million (purchase price) diamond necklace which Marie says Ed gave her as a Christmas present in 2009. “That wasn’t a gift; that was specifically bought by the trust. It was a specific investment,’’ Ed insisted in a deposition last year.



Opening Bell: 12.8.20

Goldman certainly thinks Trump lost; Peter Navarro is a lawless political hack; papal capitalism; and more!

(Getty Images)

Holiday Bell: 12.23.16

Deutsche and Credit Suisse settle; Italy rolls out the bailout; Tiger Woods is "Mac Daddy Santa"; and more.

wilbur ross slipper king

Opening Bell: 9.18.20

WeChat, too; new stress tests to stress about; an extra-special SPAC; Xi Jinping confirms all of Peter Navarro’s suspicions; and more!

hollow core fiber

Opening Bell: 12.15.20

Well who could have seen that coming?; Buffett and Barr; Fannie and Freddie; A-Rod Inn & Suites; and more!


Opening Bell 6.26.18

Navarro says no; Trump attacks Harley; Finance managers steal to buy kittens and more!

tv dinner

Holiday Bell: 11.25.20

Trump starts taking credit for Biden rally; Steve Cohen gets some Black, uh, start; bonjour a Paris, Monsiers et Madames Goldman; and more!

Norman Rockwell [Public domain], via Wikimedia Commons

Holiday Bell: 11.23.22

The ranks of the unthankful: Credit Suisse, Goldman Sachs, systematically important non-banks, FTX investors, Zoom shareholders, and more!

Holiday Bell: 11.23.12

FBI Tried To Flip Trader Against Cohen (WSJ) A year before the government charged Mathew Martoma with insider trading, it tried to get him to turn against his former boss, Steven A. Cohen. Federal agents, including Federal Bureau of Investigation case agent Matthew T. Callahan, turned up at the Boca Raton, Fla., home of Mr. Martoma, a former portfolio manager at an affiliate of SAC Capital Advisors L.P. Agents tried and failed to persuade him to be a cooperating witness in the government's effort to build a criminal case against Mr. Cohen, the founder of SAC and one of the biggest names in the hedge-fund world, said people close to the case...The government's attempt to engage Mr. Martoma as a cooperating witness shows the high level of focus placed on Mr. Cohen, whose $14 billion fund has posted some of the best returns on Wall Street. It also demonstrates how the government has been unable so far to implicate Mr. Cohen in Mr. Martoma's alleged wrongdoing...Each of the two securities fraud charges against Mr. Martoma carry a maximum of 20 years in prison; federal sentencing guidelines, based on the amount of the alleged illegal profits, recommend a sentence of 15 to 19 years. By contrast, most people who have pleaded guilty to insider trading and cooperated with the government have been sentenced to little or no jail time. Mr. Martoma is married with children. "Twenty years is a very long time in prison," said Thomas Gorman, a partner at Dorsey & Whitney LLP in Washington, referring to the sentence Mr. Martoma could serve if convicted. "There will be an enormous amount of pressure to earn a cooperation credit to try to mitigate that." Cohen’s ’Elan Guy’ Martoma Dropped Ethics for Hedge Fund (Bloomberg) Martoma got his undergraduate degree at Duke University in Durham, North Carolina, according to the university registrar. During his first year, he was inducted into Phi Eta Sigma, an honors society for freshmen who attain at least a 3.5 grade point average, according to the university registrar. He graduated in December 1995. Less than two years later, he went off to Harvard Law School in Cambridge, Massachusetts. He wrote two medical-ethics papers, one of which identifies him as a member of Harvard Law’s class of 2000 and as the former deputy director of the National Human Genome Research Institute’s Office of Genome Ethics. He left Harvard in December 1998 without attaining a degree, according to the school’s registrar, and attended Stanford Business School, where he joined three alumni groups including MBA Class of 2003, according to university records. In 2001, he changed his name from Ajai Mathew Mariamdani Thomas...Former colleagues, who asked not to be named because the fund is private, said the Martoma, who stood almost six feet tall, had a quiet demeanor and left little impression except for an outsized trade that earned him the name “the Elan guy.” Trading Case Casts a Deeper Shadow on a Hedge Fund Mogul (NYT) Thus far, any potential evidence against Mr. Cohen is entirely circumstantial. The government's complaint includes e-mails about secretly selling the Elan and Wyeth shares through esoteric methods like algorithms and dark pools. But that is common practice among large, sophisticated funds that do not want to alert competitors or move the stock too much. Moreover, while SAC dumped its large positions in the two stocks quickly - raising the question of what prompted it to do so - Mr. Cohen is known for a rapid-fire trading style. He frequently moves aggressively in and out of stocks while processing gobs of information fed to him by his underlings. It would be difficult for a jury to infer anything incriminating just from the way these trades were executed. The government in this case also lacks the powerful wiretap evidence that it has used to convict dozens others, including Raj Rajaratnam, the head of the Galleon Group. Greek Bond Buyback In Doubt (WSJ) The rally in outstanding Greek bonds has made any buyback plan more expensive, eroding the impact it would have on Greece's debt. It raises the challenge for euro-zone finance ministers to seal a deal at their next meeting on Monday that would both plug holes in Greece's €246 billion ($316.95 billion) bailouts and bring the country's debt load to a more manageable level. S&P Confirms France's AA-Plus Rating (WSJ) The decision removes the immediate threat of another downgrade of France, though S&P kept a negative outlook on the country's debt. That indicates a one-in-three chance of a cut in France's credit rating during 2013. Diamond, Dimon’s Early Risks Made Them Better: Adoboli (Bloomberg) Adoboli, who was jailed Nov. 20 for causing the largest unauthorized trading loss in British history, said in an e-mail exchange with Bloomberg News that Jamie Dimon, Bob Diamond and Yassine Bouhara, the former co-head of global equities at UBS, all lost large amounts of money at some point in their careers. The more senior you are the easier it is to avoid getting slammed to the wall,” Adoboli wrote in a Nov. 14 e-mail. “Funny thing is though, losing money seems to make you better at making money. Perhaps that’s why traders who lose money always get rehired, as long as they still have their risk appetite.” Canada Police Arrest Man Who Told Kids Santa Isn't Real (Star) As Christmas-themed floats slowly rolled down Princess St. during Kingston’s annual Santa Claus parade, an intoxicated man shouted blasphemous lies to shocked children: Santa doesn’t exist. The man, whose gelled hair “looked like a set of devil horns protruding from his head,” was reported to Kingston police, Const. Steve Koopman said. Police arrested a 24-year-old man around 6 p.m. “It was pretty despicable that someone, during this time of the year, would tell kids Santa isn’t real — which of course we would argue,” Koopman said. Higher Gas-Tax Idea Joins Fiscal-Cliff Talks (WSJ) Other industries also are moving to have initiatives attached to a budget deal—as part of either a short-term agreement this year or a longer-term plan reached next year to overhaul spending and taxes. Casinos are pushing a measure to legalize Internet poker games nationally. Small banks are pressing to extend a program that gives unlimited federal guarantees to certain bank deposits. Governors want additional aid to cover destruction wrought by Hurricane Sandy. The financial industry is pushing to loosen regulations on complex financial derivatives. "Basically, you've got a bunch of people waiting in the wings to stick the collection plate out and grab whatever they can grab," said Dan Kish, senior vice president for policy at the Institute for Energy Research, which advocates for free-market energy policies. Jain Gets Silent Treatment as Bankers Eat Humble Pie (Bloomberg) Deutsche Bank co-Chief Executive Anshu Jain says telling people he works in banking is a conversation-killer at parties, as the industry fails to convince the general public that it’s changing. “If you go to a party these days, you’re asked what you do and you say you’re a banker, people go all quiet,” Jain said before a conference on Europe’s finance industry began in Frankfurt. “We’re still the subject of anger.” Judge Rules For Singer (Reuters) A federal judge has ordered Argentina to pay holders of defaulted bonds, including Paul Singer’s Elliott Management, immediately, a blow to the country’s efforts to overcome a 2002 debt crisis that has raised fears of another default. In a ruling Wednesday, Judge Thomas Griesa lifted a previous order stalling payments to so-called holdout investors who refused to take part in two swaps of defaulted debt. Argentina’s president, Cristina Fernandez, has said her government will not pay “one dollar,” and Griesa’s ruling cited threats by Argentina’s leaders to defy his rulings in the decade-old dispute. Germany Halts Swiss Tax Deal (WSJ) The bilateral treaty was vetoed by the left-leaning Social Democrat and Green opposition parties in the Bundesrat, which represents Germany's 16 states. The treaty's opponents argue that it is too lenient on tax evaders. We want a treaty that is "more painful to Swiss banks and German tax evaders," Norbert Walter-Borjans, the Social Democrat finance minister of the German state North Rhine-Westphalia said in a debate in the upper house preceding the vote Friday. A ‘Whale’ of a Chase is on (NYP) JPMorgan Chase turned its chief investment office into a proprietary-trading unit that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their suit against the bank. JPMorgan contended the unit’s primary role was managing risk when in fact it was engaging in trades to generate profit for the bank, the funds said in an amended complaint filed in Manhattan federal court. CEO Jamie Dimon “secretly transformed the CIO from a risk management unit into a proprietary-trading desk,” the plaintiffs said. The pension funds allege they incurred losses in their holdings because of trades by the chief investment office and Bruno Iksil, known as “the London Whale.” Porn star vows night of passion if Barcelona wins (NYDN) Colombian-born Janeira Ventura said she would give "any Barca fan who dares" the "night of their lives" if Lionel Messi, Andres Iniesta and co. fire them to the top of La Liga by the end of the season. The adult actress told Mundo Deportivo, "If we win the league this year, I pledge publicly to spend a night of passion with any Barcelona member or supporter who dares. "How can they prove they support the team? It's easy, by showing me the membership card or photos and tickets to a game. They just have to contact me on my website." The 27-year-old was born in Barranquilla, moved to Spain when she was a baby and now lives in Toronto. She added, "I've been a Barcelona fan since I was little, I love the team, the way they play, and above all I love the players. The most sexy ones? Messi, Xavi and Puyol." Her obsession extends to having two cats, who are called Leo and Messi, and plans to tattoo the Argentine striker's name "in a secret place" when she returns to Spain in 2013. She also wants to convince Barcelona bosses to let her be their "official club porn star."