Monday, March 18, 2013

New York Times DealBook: SAC Looks on the Bright Side | Dimon's Clout Is Questioned | Stocks Fall on Cyprus Bailout | A Blankfein Wedding

New York Times DealBook: SAC Looks on the Bright Side | Dimon's Clout Is Questioned | Stocks Fall on Cyprus Bailout | A Blankfein Wedding

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The New York Times

MONDAY, MARCH 18, 2013
TODAY'S TOP HEADLINES

M & A Diller Takes on Cable TV

INVESTMENT BANKING HSBC Said to Plan Thousands of Job Cuts

PRIVATE EQUITY AXA Private Equity Raises $2.3 Billion Fund

HEDGE FUNDS Pershing Square Investors Want Details on J.C. Penney

OFFERINGS Moleskine to Woo Investors Before I.P.O.

VENTURE CAPITAL Square's Dorsey Has Political Ambitions

LEGAL/REGULATORY Central Banks Urge Overhaul of Libor

For the latest updates, go to dealbook.nytimes.com »
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BY WILLIAM ALDEN
SAC LOOKS ON THE BRIGHT SIDE The $616 million fine against SAC Capital Advisors that was announced on Friday by the Securities and Exchange Commission would be enough to cripple some hedge funds. But SAC saw the positive in the penalty, which settles two insider-trading lawsuits brought by the government, DealBook's Peter Lattman writes. The $15 billion hedge fund said in a statement that the settlements were "a substantial step toward resolving all outstanding regulatory matters."

Some investors also cheered the development, as it removed the fund's exposure to litigation against two former employees. The Blackstone Group, whose $550 million investment makes it SAC's largest outside client, views the settlements favorably, Mr. Lattman reports. But it's still too early to say what Blackstone will decide to do come the mid-May deadline to ask for its money back, a person familiar with Blackstone's thinking said.

Rival hedge fund managers and securities lawyers criticized the settlements of $602 million and $14 million as too weak, even though the S.E.C. called the larger penalty the biggest settlement ever of an insider trading case. "While $616 million would normally be a massive penalty, for Cohen this is basically a drop in the bucket," said Bradley D. Simon, a criminal defense lawyer and former federal prosecutor in New York. "There is also no debarment or admission of wrongdoing."
DIMON'S CLOUT IS QUESTIONED The Senate hearing on Friday over JPMorgan Chase's huge trading loss shines an uncomfortable spotlight on Jamie Dimon, the bank's influential chief executive. Though Mr. Dimon wasn't present while his top lieutenants were being grilled, the hearing and the Senate panel's report could create fresh challenges for an executive long considered an expert manager of risk, Ben Protess and Jessica Silver-Greenberg report in DealBook.

Some investors and even members of the bank's board are becoming frustrated with Mr. Dimon's "off-putting arrogance," as one shareholder put it. Mr. Dimon isn't likely to face a serious threat to his power. Still, two board members are concerned about the repercussions of Mr. Dimon's comments last April that dismissed the disastrous trades as a "tempest in a teapot," people briefed on the board's thinking said. "The concern is that those statements - made months after Mr. Dimon learned the trades had breached the firm's internal alarm system hundreds of times, according to the Senate report - could put the bank in a precarious situation with regulators investigating the trades," DealBook writes.

"And government officials who would speak only anonymously say that Mr. Dimon, faulted in the Senate report for strong-arming regulators, is also losing sway with some authorities in Washington."
STOCKS FALL ON CYPRUS BAILOUT Shares of big banks fell on Monday after the announcement this weekend that bank depositors in Cyprus would be forced to share the cost of a European bailout. HSBC fell more than 2 percent in Hong Kong trading, and Standard Chartered was down about 2 percent in trading in London.

The scene in Cyprus was chaotic. "The euro fell sharply against major currencies ahead of the action, as investors around the world absorbed the implications of Europe's move," The New York Time's Liz Alderman and Landon Thomas Jr. reported.

European Union leaders are proposing a 6.75 percent tax on deposits of up to 100,000 euros to help pay for the bailout. Nicos Anastasiades, the Cypriot president, who said he was trying to persuade the leaders to modify those demands, described in apocalyptic detail what might happen if Cyprus did not approve the rescue: a "complete collapse of the banking sector," major losses for businesses and depositors and a possible exit for Cyprus from the euro zone.
ON THE AGENDA Chancellor Angela Merkel of Germany holds a press briefing in Berlin with with President Francois Hollande of France at 1:45 p.m. Peter Orszag, the former White House budget director and current Citigroup executive, is on Bloomberg TV at 8:10 a.m. Bart Chiltonof the Commodity Futures Trading Commission is on CNBC at 8:30 a.m. The analyst Meredith Whitney is on CNBC at 4:10 p.m.
A BLANKFEIN WEDDING Lloyd C. Blankfein, the chief executive of Goldman Sachs, has gained a daughter-in-law. Mr. Blankfein's son, Alexander, 27, was married on Saturday at the Vizcaya Museum and Gardens in Miami, in an outdoor ceremony beneath a chuppah and a canopy of trees. The bride, Cristina Mercedes Ros, 26, is a founder of Circle of Women, a group in Cambridge, Mass., that promotes women's education. The couple met at Harvard, where they are both pursuing M.B.A. degrees, according to an item in The New York Times. Rabbi Judy Kempler officiated the ceremony. The groom is to become a consultant at Bain & Company in September, according to The Times.

Among the guests at the wedding was Joshua Kushner, founder of the venture capital firm Thrive Capital. Mr. Kushner, son of the real estate developer Charles Kushner and brother of Jared Kushner, owner of The New York Observer, was Mr. Blankfein's roommate when they were undergraduates at Harvard.
Contact: @williamalden | E-mail
MERGERS & ACQUISITIONS »
Diller Takes on Cable TV Barry Diller, the chairman of IAC/InterActiveCorp, is backing Aereo, a start-up that challenges the television business by streaming broadcast signals over the Internet. "In this environment, your friends really are your enemies. Anything you're going to do more than likely disrupts somebody's business," Mr. Diller told The New York Times's David Carr.
Dropbox Buys an E-Mail App Dropbox is buying the maker of the e-mail app Mailbox, in a move to expand beyond file-sharing and storage. The terms were not disclosed.
AT&T Hints That It May Sell Assets
In Sweden, Cinema Chains Agree to Merge The combination of Finnkino and SF Bio would have an enterprise value of about $468.85 million, according to Reuters.
INVESTMENT BANKING »
HSBC Said to Plan Thousands of Job Cuts The Financial Times reports: "HSBC is gearing up for thousands more job cuts, with Europe's biggest bank by market value set to outline the next stage in its strategic overhaul at an investor day in two months' time."
JPMorgan Fund Raises $5 Billion for Corporate Debt Highbridge Capital Management, a hedge fund operator owned by JPMorgan Chase, raised a $5 billion fund to invest in certain types of corporate credit, Reuters reports.
Erin Callan: 'I Leaned In Far' In an interview on "Rock Center With Brian Williams," Erin Callan, former chief financial officer of Lehman Brothers, discusses issues facing women in the workplace.
China Commits $2 Billion to Latin American Investment Fund
For the latest updates, go to dealbook.nytimes.com »
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PRIVATE EQUITY »
AXA Private Equity Raises $2.3 Billion Fund The private equity arm of AXA, the French insurer, raised a fund to invest in European infrastructure, Reuters reports.
Ex-Goldman Partner Opens Private Equity Firm in Europe
HEDGE FUNDS »
Pershing Square Investors Want Details on J.C. Penney Officials at two state pension funds that are invested in William A. Ackman's hedge fund told Reuters that they plan to ask Mr. Ackman for more information about the long-term plan to turn around the ailing retailer J.C. Penney.
A Cautionary Tale at J.C. Penney James Surowiecki of The New Yorker writes that Ron Johnson, the chief executive of J.C. Penney, is demonstrating the wisdom of an observation by Warren E. Buffett: "When a manager with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact."
Paulson Not Planning a Move to Puerto Rico After reports that he had looked at real estate in Puerto Rico for its tax advantages, John A. Paulson issued a statement saying he had no plans to relocate to the island.
I.P.O./OFFERINGS »
Moleskine to Woo Investors Before I.P.O. The notebook maker Moleskine is about to embark on its roadshow before an offering in Milan that could value it at up to $732.5 million, Dow Jones reports.
Empire State Building Moves Closer to I.P.O. According to a letter sent to investors on Friday, "the owner of New York's Empire State Building has secured nearly three-quarters of the votes it needs to proceed" with a controversial I.P.O., The Financial Times reports.
VENTURE CAPITAL »
Square's Dorsey Has Political Ambitions Jack Dorsey, the entrepreneur behind Twitter and Square, has dreams of becoming New York City mayor, he told "60 Minutes."
Tech Investors Back Start-Ups to Curb Gun Violence These investors are betting that "smart guns" and other technologies to prevent gun violence will be big business in the future, Reuters reports.
LEGAL/REGULATORY »
Central Banks Urge Overhaul of Libor The Libor rate should be replaced by a set of rates based on actual transactions, a group of central bankers said on Monday, Reuters reports.
To Reassure Investors, Fed Expected to Continue Stimulus"When the Fed's policy-making committee meets on Tuesday and Wednesday, its members are likely to spend a lot of time talking about the potential costs of the current stimulus campaign. Then the Fed's chairman, Ben S. Bernanke, will probably seek to reassure investors that the Fed plans to press on," The New York Times's Binyamin Appelbaum writes.
Attorneys General Press White House to Fire Housing RegulatorA group of state attorneys general is arguing that the policies overseen by Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, are impeding the economic recovery, The New York Times reports.
S.E.C. Files Fewer Fraud Cases as Crisis Fades
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