Hedge Fund Millennium to Try Three Office Days a Week This Fall [Bloomberg]
Employees at Izzy Englander’s hedge fund firm will be required to come into the office three days a week and can work the remainder from home, according to a person with knowledge of the matter. The approach will start on Sept. 7 and apply to most of the firm’s offices globally…. Millennium plans to monitor the viability of its plan and will settle on a longer-term solution at a later stage, the person said….
Home to one of the world’s busiest trading floors, Millennium’s move signals a cautious return to the office.

Credit Suisse Faces Banker Talent Drain After $5.5 Billion Archegos Hit [WSJ]
Barclays PLC poached several bankers including telecom-and-media specialist Ihsan Essaid, who is leaving to become the British lender’s co-head of Americas mergers and acquisitions, as well as Tim Devine and David MacGown, who focus on financial institutions, and Kamal Ahmed, who will become global head of semiconductor coverage banking. Two other bankers in the financial-institutions group, Chris Eby and Nick Daly, are leaving for Goldman Sachs Group Inc. and Bank of America Corp., respectively.
Perella Weinberg Partners hired industrial-company banker Christian Bradeen. News and information-services banker Simon Auerbach also departed, as did Jason Wortendyke, a transportation banker who is headed back to Citigroup Inc., where he will be global co-head of diversified industrials. Healthcare banker Leo Reif is joining Jefferies Financial Group Inc.

Nomura completes unwinding of positions related to U.S. client [Reuters]
In total, Nomura will incur $2.9 billion in Archegos-related losses, including some $2.3 billion already booked in the January-March quarter.

Treasury Secretary Janet Yellen Calls for Reform of Corporate Tax System [WSJ]
Ms. Yellen, speaking at the chamber’s online Global Forum on Economic Recovery, labeled corporate taxes as being at a “historical low” of 1% of gross domestic product as she argued the administration is seeking to return them to historic norms…. “We haven’t maintained our infrastructure let alone modernized it,” she said. “We haven’t sufficiently supported public research and development to ensure that America will maintain its technological edge. We haven’t embraced the investments in education and training that we need to keep up with technological change and to compete in the international marketplace as we once did.”

Activist Elliott calls for three-way split of U.S. utility Duke [Reuters]
In a letter to Duke's board, Elliott said the company's separation into three regionally-focused entities — the Carolinas, Florida and the Midwest — should create $12 billion to $15 billion of near-term value for shareholders…. In response, Duke in a statement said there was no strategic logic to breaking the company apart. The move would burden each entity with extra costs that would negatively impact services and threaten Duke's ability to pay its shareholder dividend, it added.

Trump Allies Promote Portfolios Targeting ‘Unwoke Investors’ [WSJ]
“It’s an investment option for unwoke investors,” said Andy Puzder, who is on the firm’s advisory board. “We believe that companies that focus on profit make more than companies that don’t.”
Mr. Puzder is the former chief executive of CKE Restaurants, the owner of Carl’s Jr. and Hardee’s fast-food chains. He withdrew in 2017 from consideration to be former President Donald Trump’s first labor secretary after questions arose about his past employment of an undocumented housekeeper.

Related

Opening Bell: 12.04.12

Banks Rediscover Money Management Again As Trading Declines (Bloomberg) Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients. Deutsche Bank is now counting on the fund unit it failed to sell to help boost return on equity, a measure of profitability. UBS is paring investment banking as it focuses on overseeing assets for wealthy clients. Goldman Sachs, JPMorgan Chase and Wells Fargo, three of the five biggest U.S. banks, are considering expanding asset- management divisions as they seek to grab market share from fund companies such as Fidelity Investments. “Asset management is a terrific business,” said Ralph Schlosstein, chief executive officer of Evercore Partners Inc., a New York-based boutique investment bank that last month agreed to buy wealth manager Mt. Eden Investment Advisors LLC. “Asset managers earn fees consistently without risking capital. Compare that to other businesses in the financial services.” Hedge Funds Win as Europe Will Pay More for Greek Bonds (Bloomberg) Hedge funds drove up prices for Greek sovereign debt last week after determining that European finance ministers would back off a pledge to pay no more than about 28 percent of face value to retire the nation’s bonds. Money managers correctly wagered that not enough bondholders would participate at that level to get the deal done. That would put at risk bailout funds that Greece needs to stave off economic collapse. Transactions involving Greek bonds “increased by the day” after it became clear that the buyback was going to happen, with hedge funds accounting for most of the purchases, said Zoeb Sachee, the London-based head of European government bond trading at Citigroup Inc. “If all goes according to plan, everybody wins,” Sachee said. “Hedge funds must have bought lower than here. If it isn’t successful, Greece risks default and everybody loses.” GE's Swiss lending unit for sale, UBS to bid (Reuters) General Electric Co wants to sell its Swiss consumer lending business, two sources familiar with the matter said, with UBS one of the parties interested in a deal that could be worth up to 1.5 billion Swiss francs ($1.62 billion). The sources told Reuters that UBS was one of at least two parties who plan to submit bids in an auction process. "GE wants to finalize the sale of GE Money Bank by the end of the first quarter," said one of the sources. Brian Moynihan: 'Fiscal Cliff' Repercussions Could Stretch in 2014 (CNBC) "I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box." "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like." Icahn Fails In Oshkosh Tender Offer (WSJ) The activist investor was tendered only a meek 22% of shares in an offer he used essentially as a proxy for whether shareholders would support his board nominees. Icahn, who had pledged to drop the offer and his proxy fight if he didn’t receive at least 25% of shares tendered, says he is indeed dropping the tender offer. Ex-baseball star Lenny Dykstra sentenced in bankruptcy fraud case (Reuters) Lenny Dykstra, the 1980s World Series hero who pleaded guilty earlier this year to bankruptcy fraud, was sentenced on Monday to six months in federal prison and ordered to perform 500 hours of community service. The 49-year-old former ballplayer - who is already serving time in state prison for grand theft auto, lewd conduct and assault with a deadly weapon - was also ordered to pay $200,000 in restitution. In the federal case, Dykstra pleaded guilty in July to bankruptcy fraud and other charges. According to the written plea agreement, he admitted defrauding his creditors by declaring bankruptcy in 2009, then stealing or destroying furnishings, baseball memorabilia and other property from his $18.5 million mansion. Teacher disciplined for receiving foot massages from students (SLT) A Taylorsville Elementary School teacher has returned to his third-grade classroom after being disciplined for violating professional standards after students reported they scratched his back, rubbed his feet and had other inappropriate contact while at school. Granite School District officials found no criminal conduct by elementary teacher Bryan Watts, 53, who has worked at the school since 2004, but the district claims to have taken "appropriate disciplinary action" following complaints about Watts...Granite District police Detective Randall Porter started an investigation into Watts’ conduct Oct. 9 after a mother expressed concern to the district after her daughter reported odd classroom behavior by Watts. "She complained that her daughter [name redacted] told her that Watts asks students to rub his feet and back during ‘movie time,’ that Watts told the class that they should not tell their parents about activities that happen in the classroom, and that Watts scared a student by hitting a hammer on the student’s desk," Porter wrote in his 19-page report...officials also said there were student statements about odd activities, including playing dodgeball in Watts’ classroom. Knight Capital May Go It Alone (NYP) Knight Capital’s board emerged from another meeting yesterday to review dueling takeover offers without making a decision. Both Getco and Virtu Financial have made bids for the Jersey City, NJ-based Knight, which had to be bailed out several months ago after a $460 million trading glitch nearly tanked the firm. “[Knight] can still decide to remain independent. That’s a real possibility,” said one source familiar with the bidding process. Top US Firms Are Cash-Rich Abroad, Cash-Poor At Home (WSJ) With billions of dollars overseas that may never come back, the Securities and Exchange Commission is concerned that companies haven't been presenting investors with an honest appraisal of their liquidity. As a result, regulators are pressing companies to more clearly lay out how much of their cash is in the U.S. and how much is overseas and potentially encumbered by U.S. taxes. UBS Near Libor Deal (Reuters) UBS is nearing a deal to settle claims some of its staff manipulated interest rates, and could reach agreement with US and British authorities by the end of the year, a source said yesterday. Britain’s Barclays was fined $453 million in June for manipulating Libor benchmark interest rates, and remains the only bank to settle in the investigation, which led to the resignation of the bank’s chairman and CEO. Calpers Crusader Takes Aim At Fees (WSJ) Mr. Desrochers, a 65-year-old native of Canada who last year became head of private-equity investing for the California Public Employees' Retirement System, has told buyout funds to reduce fees if they want cash from the $241 billion pension goliath, one of the nation's largest private-equity investors. He has pushed for Calpers to pay management fees below the industry's standard of 1% or more and asked for performance fees below the usual 15% to 20% of gains, according to people who have dealt with him. Mike Tyson: Brad Pitt Had Sex With My Wife (NYP) Mike Tyson claims that he caught Pitt having sex with his ex-wife, Robin Givens, while they were in the middle of their divorce in the late eighties. Tyson, who was shortly married to Givens from 1988 to 1989, said he and the actress were still sleeping with each other during their separation. "I was getting a divorce, but... every day, before I would go to my lawyer's office to say 'she's a pig and stealing,' I would go to her house to have sex with her," Tyson said on the Yahoo! Sports show “In Depth with Graham Bensinger.” "This particular day, someone beat me to the punch. And I guess Brad got there earlier than I did." How did the heavyweight boxer react? "I was mad as hell...You should have saw his face when he saw me," Tyson said.

Opening Bell: 05.14.12

JPMorgan Loss Claims Official Who Oversaw Trading Unit (NYTimes) The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said. Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon...Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe. “This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Jamie Dimon: Trading Losses Are Not Life-Threatening (CNBC) “This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.” Yahoo’s Thompson Out Amid Inquiry; Levinsohn Is Interim CEO (Bloomberg, earlier) Thompson, 54, was brought on to orchestrate a turnaround after Google Inc. and Facebook Inc. lured users and advertising dollars. Thompson’s undoing stems from erroneous biographical references to him as holding a bachelor’s degree in computer science from Stonehill College. A former EBay Inc. (EBAY) executive, he earned a degree in accounting from the Easton, Massachusetts- based school, and the information is correctly listed in EBay regulatory filings and some Yahoo press releases. The incorrect degree showed up in Yahoo’s April 27 10-K filing, as well as on the company’s website. As part of the board changes, Daniel Loeb, chief executive officer of Third Point, joins as a director along with Harry Wilson and Michael Wolf. A fourth nominee, Jeffrey Zucker, said in today’s statement that he withdrew his nomination to allow a quick transition. Euro Officials Begin to Weigh Greek Exit (Bloomberg) Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay. LightSquared Moves Toward Bankruptcy Filing (WSJ) Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Facebook cofounder living large in Singapore as he stiffs US for a possible $600M in taxes (NYP) Saverin is renouncing his US citizenship in favor of Singapore, the Southeast Asian city-state that has no capital-gains tax, where he has lived like royalty since 2009. The move already has saved him about $288 million in taxes, and will save him much more if he chooses to sell his $4 billion personal stake in Facebook, which goes public next week. “This pisses me off,” fellow tech-industry billionaire Mark Cuban spat on Twitter Friday upon hearing news of Saverin’s decision. Saverin’s spokesman has defended the move, claiming he has investments in the Far East, and Europe and the permanent move makes perfect sense. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s spokesman told Bloomberg. JPMorgan Unit's London Staff May Go as Loss Prompts Exits (Bloomberg) The entire London staff of JPMorgan Chase’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. In Wake Of JPMorgan Loss, Rivals Fret About New Rules, Downgrades (WSJ) Over the weekend, rival banks scurried to explain why they believe a similar trading loss couldn't happen at their firm. Some companies pointed to moves already taken to reduce risk and sell off volatile and opaque assets such as derivatives on credit indexes. In a statement, Citigroup "has a small amount of straight-forward economic hedges managed at the corporate center to mitigate our credit exposure, principally relating to consumer loans." About half of that total is in cash, with most of the rest in U.S. Treasury bonds and other conservative investments. At Morgan Stanley, the portfolio most similar to J.P. Morgan's investment office is a $32 billion "available for sale" portfolio. The portfolio primarily consists of easily traded U.S. Treasury and government agency securities. It doesn't hold any derivatives instruments, a person familiar with Morgan Stanley's operations said. Goldman Sachs has no similar unit to the one at J.P. Morgan that suffered the loss. Apple Founder Wozniak to Buy Facebook Regardless of Price (Bloomberg) “I would invest in Facebook,” he said in an interview yesterday on Bloomberg Television. “I don’t care what the opening price is.” Missing: Stats on Crisis Convictions (WSJ) It is a question that has been asked time and again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer. That is because the department doesn't keep count of the numbers of board-level prosecutions. In a response earlier this month to a March request from Sen. Charles Grassley (R.,Iowa), the Justice Department said it doesn't hold information on defendants' business titles. "Consequently, we are unable to generate the [requested] comprehensive list" of Wall Street convictions stemming from the 2008 meltdown, the letter from the Department of Justice to Mr. Grassley said. Man Charged in Death Offers Victim's Foot for Deal (AP) A homeless man charged with killing and dismembering his friend says he can't remember much about the crime. But in a jailhouse interview, Leslie Sandoval told the Anderson Independent-Mail he remembers where he put the victim's missing left foot and is willing to tell a prosecutor if she will make him a deal. Sandoval says he went on a January drinking binge with Seth Foster. Foster's torso was found under an Anderson home, and his head, hands and right foot were found different places. Sandoval says he is confused about exactly what happened. But he disagrees with a coroner's finding he beat Foster and denies a claim from investigators that he confessed and gave them the knife used to dismember Foster.

Opening Bell: 02.15.13

SEC Looks At Trades A Day Before Heinz Deal (NYT) Regulators are scrutinizing unusual trading surrounding the planned $23 billion takeover of the food company H. J. Heinz, raising questions about potential illegal activity in one of the biggest deals in recent memory, a person briefed on the matter said. The Securities and Exchange Commission opened an insider trading inquiry on Thursday as Berkshire Hathaway and the investment firm 3G Capital agreed to pay $72.50 a share for Heinz, this person said. Regulators first noticed a suspicious spike in trading on Wednesday. Deferred Pay Draws Fed's Scrutiny (WSJ) U.S. banks and securities firms would have to step up their compensation disclosures under rules being considered by the Federal Reserve, said a person familiar with the central bank's regulatory efforts. The rules are in the formative stages and wouldn't take effect for some time. But an early draft has circulated internally at the Fed, this person said, marking a step on the path toward a public proposal. The Fed's push ultimately could give investors sheaves of new data on how and when companies pay their employees—including scarce numbers on how much compensation has been promised but not yet paid out. Shifting Blame Muddles S&P Suit (WSJ) The Delphinus deal, which means "dolphin" in Latin and is the name of a small constellation in the Northern Hemisphere, was one of more than 30 CDOs included in the federal government's lawsuit against Standard & Poor's Ratings Services last week. Federal prosecutors say that S&P, a unit of McGraw-Hill Cos., disregarded its own standards when rating Delphinus and the other CDOs, misled investors and should cover losses suffered by federally insured banks and credit unions that bought the securities, which included bundles of subprime mortgages. The discrepancy could give S&P a way to counterattack the Justice Department as the two sides gird for a battle that legal experts say will be grueling. U.S. Attorney General Eric Holder is seeking more than $5 billion in damages from S&P, which claims the allegations are "meritless." The U.S. government's conflicting opinions about the Delphinus deal might be a problem if the civil-fraud suit goes to trial. The ratings firm probably will argue that "these banks aren't victims," says Samuel Buell, a former federal prosecutor who now is a law professor at Duke University. Ackman: Herbalife Short Unaffected By Icahn Stake (CNBC) In his first public comments following the disclosure of activist investor Carl Icahn's stake in Herbalife, hedge fund manager Bill Ackman, who made $1 billion short bet against the stock, told CNBC he remains convinced that "Herbalife is a pyramid scheme." Ackman's statement read, "We invest based on a careful analysis of the facts. After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme. Our conclusions are unaffected by who is on the other side of the investment. Our goal was to shine a spotlight on Herbalife. To the extent Mr. Icahn is helping achieve this objective, we welcome his involvement." G-20 Seeks Common Ground on Currencies After Yen Split (Bloomberg) Group of 20 finance ministers and central bankers begin talks in Moscow today with investors seeking clarity on how comfortable they are with a sliding yen. Questions are being asked after the Group of Seven united around a pledge not to target exchange rates only to divide over its meaning for Japan. “We have to get to the bottom of this, of course, listen to our Japanese colleagues and how they explain this and what decisions they will take and what exchange-rate policy they will follow,” Russian Finance Minister Anton Siluanov said in an interview yesterday before hosting the meeting. He said the G-20 should adopt more “specific” language opposing exchange-rate interference in a statement to be released tomorrow. Corvette's stick shift thwarts Orlando man (OS) Orlando police said the 20-year-old tried to carjack a man inside a Corvette near Orlando Regional Medical Center late last month, but couldn't steal the car because he didn't know how to use the clutch or stick-shift. He and his accomplice ran away from the car, but not before stealing the victim's wallet and cell phone, police said. Soon after the failed carjacking, the victim's credit card was used at a McDonald's on Kirkman Road. Surveillance video inside the restaurant showed Sayles at the register, placing an order at about 12:15 a.m. Jan. 28. Not long after, the stolen cellphone's internal GPS registered with the phone company. Authorities tracked the phone to a home on Grandiflora Drive in a neighborhood off Kirkman Road. On Feb. 8, police went to the home, and Sayles answered the door. Officers noted in their arrest report that they immediately recognized him from the surveillance video inside the McDonald's. When asked why the victim's stolen cellphone would detect at his house, the report said, Sayles said a lot of people come to his residence and they could have brought it. One-Man Bank Keeps German Village Business Running (Reuters) The Raiffeisen Gammesfeld eG cooperative bank in southern Germany is one of the country's 10 smallest banks by deposits and is the only one to be run by just one member of staff. Small banks like this dominate the German banking landscape. Rooted in communities, they offer a limited range of accounts and loans to personal and local business customers. While numbers have shrunk from around 7,000 in the 1970s to around 1,100 now, cooperative banks like Raiffeisen Gammesfeld provide competition for Germany's two largest banks - Deutsche Bank and Commerzbank. A typical day's work for Breiter involves providing villagers with cash for their day-to-day needs and arranging small loans for local businesses. Not to mention cleaning the one-story building that houses the bank, which is 200 meters from his own front door. Moving from a bigger bank, where it was all "sell, sell, sell", Gammesfeld-born Breiter says taking up this job in 2008 was the best decision he ever made. The advertisement required someone to work by hand, without computers. The typewriter and the adding machine bear the signs of constant use, although Breiter, in his standard work outfit of jeans and jumper, does now have a computer. "It's so much fun," Breiter, a keen mathematician, says as he deals with a steady stream of lunchtime customers. He knows his customers by name and regularly offers advice on jobs, relationship and money woes. Ex-Analyst At SAC Felt Pressured For Tips (WSJ) The Federal Bureau of Investigation and the Manhattan U.S. Attorney's office now are using the statements from the analyst to try to build a case against the SAC portfolio manager, Michael Steinberg, and others that could result in charges in the coming months, these people said. Authorities currently are preparing to present evidence to a grand jury against Mr. Steinberg, according to a person familiar with the investigation. The development ramps up the legal pressure on the big hedge fund, highlighting that the previously reported insider-trading investigation of SAC and its founder, Steven A. Cohen, is proceeding on multiple fronts. Blackstone Keeps Most Of Its Money With SAC (NYT) The Blackstone Group, the largest outside investor in the hedge fund SAC Capital Advisors, said it would keep most of its $550 million with the hedge fund for three more months while it monitors developments in the government's insider trading investigation. Performance Tops Pedigree in Money Managers’ Fortunes (Bloomberg) Virtus Investment Partners Inc. and Artio Global Investors Inc. set out on their own in 2009 within nine months of one another. The paths of the two money managers couldn’t have been more different. Virtus, which started as a virtually unknown money manager, has surged 18-fold since its public debut as assets have soared, with its shares hitting a record on Feb. 14. Artio, which listed in September 2009 after spinning out from Switzerland’s 122- year-old wealth manager Julius Baer Group Ltd., saw its life as an independent firm come to an abrupt end with its Feb. 14 acquisition by Aberdeen Asset Management Plc after assets slumped and shares plunged about 90 percent. Banks Warned Not To Leave Libor (WSJ) The Financial Services Authority recently sent letters to a handful of major banks—including France's BNP Paribas SA and the Netherlands' Rabobank Group—warning them not to pull out of the panel that sets the London interbank offered rate, or Libor, these people said. The letters came after executives at those banks privately informed the British Bankers' Association, the trade organization that oversees Libor, that they planned to exit the rate-setting panel. Australian couple get married in IKEA (DM) Lynne said: 'We wanted to get married in IKEA for a very simple reason - we adore IKEA. 'It felt right to be able to show our commitment to one another by getting married somewhere we both love and to show the world that romance can be alive anywhere, even in the aisles of IKEA. Our visits to IKEA over the years have actually brought the two of us closer!' Every element of the special day featured IKEA products handpicked by the happy couple, including crockery, lighting, dining furniture, decorations, glassware and meatballs.

Opening Bell: 01.08.13

Obama Said Close to Choosing Lew for Treasury Secretary (Bloomberg) President Barack Obama may choose White House Chief of Staff Jack Lew to replace Treasury Secretary Timothy F. Geithner as soon as this week, according to two people familiar with the matter. The selection of Lew would trigger a White House shuffle for Obama’s second term as he replaces his chief of staff and moves senior aides into new roles, said the people, who requested anonymity to discuss personnel matters. While Obama hasn’t made a final decision to pick Lew, the president’s staff has been instructed to prepare for his nomination, said one of the people. Rescued by a Bailout, AIG May Sue Its Savior (NYT) The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Greenberg: 'Cadre' Hurt AIG (NYP) Maurice “Hank” Greenberg, former chief executive officer of American International Group, says in a soon-to-be-published book that the company was almost destroyed by overzealous overseers. The insurer was “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to an excerpt of “The AIG Story” on Amazon.com’s website. JPMorgan’s Staley Quits to Join BlueMountain Hedge Fund (Bloomberg) ames E. Staley, the JPMorgan Chase executive who was once seen as a possible candidate to become chief executive officer, quit to join BlueMountain Capital Management LLC, a $12 billion hedge fund with close ties to the New York bank. Staley, who was at JPMorgan for more than 34 years, most recently as chairman of the corporate and investment bank, will become a managing partner and purchase a stake in BlueMountain, the New York-based firm said today in a statement. Proceeds from the stake sale will be invested in new infrastructure, technology and people, the firm said. “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” Staley, 56, said in the statement. HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (Bloomberg) A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology Inc., conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted yesterday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts. “Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document. Bill Ackman Says Just Getting Started Exposing Herbalife (Bloomberg) “We’re prepared to spend whatever it costs and do whatever is required to make sure that the world understands the facts about this company,” he said in a telephone interview. “We can’t imagine how the SEC or the Federal Trade Commission or any other relevant regulator will ignore what we have said.” Ackman said he would make all his information available to U.S. regulators. Chinese Tech Titans Eye Brazil (WSJ) The Chinese like emerging markets because, for a change, they don't have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group and Internet-search company Baidu hope to gain an edge over companies like Hewlett-Packard and Google In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil's long history of protectionism and red tape and its high cost of labor, particularly compared with Asia. Oregon brewer Daniel Keeton creates nutritional, non-alcoholic brew for his dog (NYDN) Oregon man Daniel Keeton enjoys serving beer to customers at the brewery he works for, so why shouldn't he serve up some healthy brew for the dog he cares about? The dog brew is non-alcoholic of course, but it is a big hit with Keeton's canine Lola Jane. And now Keeton's special brew is available to anyone who wants it. After years of planning, Keeton launched his company Dawg Grog over the summer. Keeton, who works at Boneyard Brewery in Bend, says Dawg Grog is good for the dogs, and they can't seem to get enough of it. "Bend is a dog-loving community and a beer-loving community," Keeton told the Daily News on Monday. "I wanted to marry those two together in some way." Keeton spent years refining the ingredients to his special brew, which includes low-sodium vegetable broth, water and spent grain from Boneyard Brewery. "After a couple of years of trying recipes I came up with one that I am really happy with, and one that my dog is really happy with," he said. Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Bloomberg) MSI wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said...The team of about a dozen people, based at the firm’s Manhattan headquarters, is headed by Daniel Oneglia and Geoff Adamson. Oneglia was treasurer of the Princeton eating club Tiger Inn, where his nicknames included “the Don” and “the Weasel,” according to the university’s website. Adamson was coxswain for men’s heavyweight varsity crew. A Boston Globe photo shows teammates flinging him into a Massachusetts lake after a victory. Carlyle Bags $4 Billion Profit From China Insurance Exit (Reuters) Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment. After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show. By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle. London Quantitative Hedge Funds Report Second Year of Losses (Bloomberg) The performance of the funds belies their popularity with investors, who’ve poured $108.2 billion into the pools since the end of 2008, according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money during the financial crisis when other hedge funds didn’t, they’ve since stumbled as market sentiment swung from optimism to pessimism following political announcements in Washington and Brussels, breaking up the trends they try to follow. That may force investors to withdraw money. Japan Executives Warn Yen May Get Too Weak (WSJ) The executives, who gathered at an annual New Year's reception held by Japan's three biggest corporate lobbies, praised Prime Minister Shinzo Abe's new government for its proposals to boost the economy and tame the strong yen, which erodes exporters' profits and makes it harder to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the government doesn't take steps to get its bloated finances under control, investors could lose confidence in Japan and flee, sending the yen into free fall. KFC diner stumbles upon strange brain-like organ in his meal (TS) Disgusted Ibrahim Langoo was tucking into a Gladiator box meal when he spotted what he thought was a “wrinkled brain” inside a piece of chicken. KFC have apologised and, after having the photographs analysed, reckon the unsightly organ may in fact be a kidney. The 19-year-old took a photograph of the three-inch stomach-churning discovery on his mobile phone and complained to staff. Apologetic bosses at the fast-food chain – known for its Finger Lickin’ Good slogan – have now offered him vouchers for even more KFC meals.

Opening Bell: 11.08.12

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.

Opening Bell: 01.30.13

MF Global's Bankruptcy Nears Happy Conclusion (NYT) On Thursday, a bankruptcy court will review a proposal that would return 93 percent of the missing money to customers like Mr. Desai, who lost his $580,000 nest egg in the brokerage firm's chaotic final days. And the trustee who has submitted the proposal, James W. Giddens, has quietly identified a way that, if sent to the judge and approved, could plug the remaining shortfall for customers in the United States, according to people involved in the case. The broad push to make MF Global customers nearly whole, a goal now surprisingly within reach, is a remarkable turnaround from the firm's 2011 bankruptcy filing when such a recovery seemed impossible. "I'm surprised that, magically, the money has shown up," said Mr. Desai, a software account executive who, like most customers in the United States, has only 80 percent of his money. "I feel very relieved." Deutsche Bank Seen Missing Goldman-Led Gains on Cost Rise (Bloomberg) Europe’s biggest bank by assets may post a loss of 210 million euros ($282 million) compared with a profit of 147 million euros in the fourth quarter of 2011, when it reports earnings tomorrow, according to the average estimate of nine analysts surveyed by Bloomberg. Goldman Sachs and three other leading U.S. investment banks saw their combined net income jump 92 percent annually to $9.73 billion in the period. Co-Chief Executive Officers Juergen Fitschen and Anshu Jain are eliminating staff and bolstering capital levels, the lowest among Europe’s biggest investment banks, in their first year in charge to help meet stricter capital rules. The costs countered a surge in trading revenue, spurred by the European Central Bank’s measures to stem Europe’s sovereign debt crisis. “Deutsche Bank is trying to look forward and hoping no one can really blame fourth-quarter losses on the new management as they only took over mid-year,” Andreas Plaesier, an M.M. Warburg analyst who recommends investors buy the shares, said by telephone from Hamburg. “It would rather see its earnings wrecked in one quarter and show it’s making progress on building capital.” Chesapeake CEO To Exit (WSJ) Chesapeake Energy Corp. Chief Executive Aubrey K. McClendon is leaving the company he built into the country's second-biggest natural-gas producer, citing "philosophical differences" with a board of directors largely installed by shareholders to curb his risk-taking and free-spending ways. Paul Singer Is a Backer of 'Les Miserables' (CNBC) Singer writes in his investor note: "December marked the end of the 'Beverly Boulevard II' film slate submission period. We accepted the final two additional film submissions during the quarter, bringing our remaining funding commitment to seven films set for release in 2013 and 2014. One film in the slate, 'Les Miserables,' was released during the quarter. It will be several more weeks before we begin to have any reliable idea of the ultimate economic performance and value of the big-screen version of this huge stage hit, but early indications are promising and the film just garnered three major awards at this year's Golden Globe Awards." "Beverly Boulevard II" is run by Relativity Media and Elliott Management appears to be a large investor in the company, at least according to this 2010 article from Institutional Investor. JPMorgan Bet Against Itself In 'Whale' Trade (Reuters) It was widely known that a group of about eight credit-focused hedge funds, such as BlueMountain Capital Management and Saba Capital Management, were on the other side of the trades that JPMorgan's London-based Whale team made on an index tied to corporate default rates. But the role JPMorgan's own investment bank may have played in the messy unwinding of the derivatives trade has not come out until now. One of the three people familiar with the matter claimed that JPMorgan managers discussed merging the two sets of trades in an attempt to offset some of the CIO's losses. Those talks ended about a month before Bloomberg News first reported the CIO trades on April 5 last year, the source said. JPMorgan's Kristin Lemkau said that this "never came up in our exhaustive internal investigation." Police Say Man Steals Ambulance, Then Tries to Steal Horses (WHNT) Police say it all began when Todd was arrested for DUI after a car crash. He was taken to Marshall Medical Center South for treatment. Police say while at the hospital, he walked out, got into a running ambulance and drove away. They say he later got the ambulance stuck on Barnard Street, but that was just the beginning. “He walked across a pasture and got into a barn where he tried to saddle up two horses,” says Boaz Assistant Chief Todd Adams. “One was two wild for him and the other he appeared to be too intoxicated to properly saddle the horse.” Police say Anderson then stole a car, which he crashed. They say he then stole another car and got away. However, on Saturday police say Anderson started bleeding from his original injuries. He sought treatment back at the hospital, was recognized and then arrested. Fed Risks Losses From Bonds (WSJ) The Federal Reserve could be charting a course that leaves the highly profitable central bank with no extra income to hand over to the U.S. Treasury for several years. That is the conclusion of five Fed staff economists who examined how the central bank's bond-buying programs will affect its profitability over the long run. Right now the Fed is earning large returns on its bond portfolio and sending most of its profits to the Treasury. Several years from now, when the economy is stronger, the Fed is expected to sell bonds and raise short-term interest rates to tighten credit and restrain inflation. The group found the Fed might have to sell bonds at a loss and incur higher expenses on interest it pays to banks on the reserves they hold at the Fed. Italy Scours Deals Abroad for Elusive Tax Revenue (WSJ) Italy, which has one of the biggest tax-cheating problems in the developed world, is cracking down on suspect offshore investments as part of an unprecedented drive to find new sources of tax revenue and ease concerns about its €2 trillion ($2.69 trillion) in debt. The country just added a new property tax and is boosting its sales taxes to narrow its fiscal gap. In an effort to claw back an estimated €120 billion a year in unpaid taxes, it has limited cash payments to €1,000 so that untaxed money can't slosh around the economy without leaving a paper trail and is hunting down people who buy luxury yachts yet report little income. One of the brightest spotlights is on companies suspected of earning money or shifting it abroad to avoid paying Italian taxes. Italy netted €600 million in additional taxes last year after prosecutors pursued two cases involving money stored illicitly to Switzerland. NBA Union Chief Hunter Fires Family After Nepotism Report (Bloomberg) Billy Hunter purged family members from roles in the National Basketball Association players union that he runs after a report that criticized nepotism at the organization. The moves dismissing personnel including his daughter and daughter-in-law were disclosed in a letter from Hunter to members of a special committee of players established prior to the investigation by the law firm Paul, Weiss, Rifkind, Wharton & Garrison. A copy of the letter, dated Jan. 23, was obtained by Bloomberg News. No Twinkies 'Til September? (NYP) While bankrupt Hostess Brands is expected to select a preferred bidder for its snacks business today, regulatory approval, time needed to close the deal and then the firing up of the Twinkies manufacturing process means it’ll be early September before the spongecake treats are available at retailers, experts said. Leon Black’s Apollo Global Management and co-bidder C. Dean Metropoulos, a veteran food exec, are expected to be named the preferred bidder for Twinkies, Ding Dongs, Donettes and other Hostess snacks. Zimbabwe has $217 in the bank: finance minister (AFP) After paying public workers’ salaries last week, the balance in cash-strapped Zimbabwe’s government public account stood at just $217, Finance Minister Tendai Biti said Tuesday. “Last week when we paid civil servants there was $217 (left) in government coffers,” Biti told journalists in the capital Harare, claiming some of them had healthier bank balances than the state. “The government finances are in paralysis state at the present moment. We are failing to meet our targets.” Biti said that left no choice but to ask the donors for cash. “We will be approaching the international community,” he said.

Opening Bell: 10.04.12

France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.

Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.