Top Story: Arrest Over Software Illuminates Wall St. Secret
DealBook: Edited by Andrew Ross Sorkin
The New York Times
Monday, August 24, 2009
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DealBook: Edited by Andrew Ross Sorkin
The New York Times
Monday, August 24, 2009
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1. Top Story: Arrest Over Software Illuminates Wall St. Secret
2. M & A: Warner Chilcott to Buy Procter & Gamble Unit
3. Banking: UBS Chairman Says Clients "Not Harmless Victims"
4. Private Equity: Reader's Digest Files for Chapter 11
5. Hedge Funds: Hedge Funds Have Three-Month Hot Streak
6. Offerings: Beijing Capital Land Seeks Shanghai Listing
7. Venture Capital: A Sports Site Tries to Please Every Fan
8. Legal: Plain Talk From Judge Weighing Merrill Case
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1. Top Story: Arrest Over Software Illuminates Wall St. Secret
------------------------------
Flying home to New Jersey from Chicago after the first two days at his
new job, Sergey Aleynikov was prepared for the usual inconveniences of
air travel. He was not expecting to be arrested by an F.B.I. agent upon
landing and accused with stealing software code from Goldman Sachs, his
old employee.
At a bail hearing last month, a federal prosecutor asked that Mr.
Aleynikov be held without bond because the code could be used to
"unfairly manipulate" stock prices.
This case is still in its earliest stages, and some lawyers question
whether Mr. Aleynikov should be prosecuted criminally, or whether a
civil suit may be more appropriate. But the charges, along with civil
cases in Chicago and New York involving other Wall Street firms, offer
a glimpse into the turbulent world of ultrafast computerized stock
trading, The New York Times writes.
Little understood outside the securities industry, the business has
suddenly become one of the most competitive and controversial on Wall
Street. At its heart are computer programs that take years to develop
and are treated as closely guarded secrets.
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2. M & A: Warner Chilcott to Buy Procter & Gamble Unit
------------------------------
Procter & Gamble said Monday that Warner Chilcott has agreed to buy its
prescription drug business for an upfront cash payment of $3.1 billion.
Go to P&G Press Release:
http://www.pginvestor.com/
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German Chancellor Angela Merkel said she would press ahead with plans
to save Opel, the troubled unit of General Motors, after lamenting that
G.M.'s board failed to resolve the fate of its European operations when
it met Friday.
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Tribune, the bankrupt newspaper publisher, has finally agreed to sell
the Chicago Cubs baseball team and Wrigley Field to the Ricketts family
for $845 million, concluding a two-year sales process.
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Guaranty Bank, a deeply troubled Texas lender, was sold Friday to Banco
Bilbao Vizcaya Argentaria of Spain in one of the largest
government-assisted deals offered to a foreign bank.
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http://www.nytimes.com/2009/
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Yahoo and Microsoft hope that by teaming up, they can tilt the balance
of power away from Google. First, however, Yahoo and Microsoft have to
convince regulators that their plan won't hurt advertisers and
consumers.
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The News Corporation is in talks to sell its Dow Jones stock-market
index business, potentially separating the famous Dow Jones Industrial
Average from the newspaper that has long controlled it, The Wall Street
Journal, people briefed on the matter told DealBook.
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Intel has acquired software company RapidMind in an effort to push
development of programs that can exploit the power of Intel's multicore
processors.
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http://www.nytimes.com/
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Close Brothers, the London-based investment bank, has emerged as a
bidder to buy Kleinwort Benson from Commerzbank, The Financial Times
reported.
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3. Investment Banking: UBS Chairman Says Clients "Not Harmless Victims"
------------------------------
UBS clients facing disclosure of their accounts to U.S. tax authorities
were not harmless victims and legal cases against former UBS bankers
did not affect the bank, its chairman told Swiss Sunday newspapers.
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Goldman Sachs holds a weekly meeting of its research analysts where
they offer trading ideas that are given to top clients, The Wall Street
Journal reported Sunday.
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-----
Four hundred protesters hurt by Lehman Brothers-linked financial
products took to the streets of Hong Kong to voice their anger over the
government's handling of allegations that local banks misled clients
about the complex investments.
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The Hamptons has long been the unofficial playground for the finance
crowd, but in recent years, there's been a bit more anxiety amid the
manicured hedges and expensive boutiques.
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4. Private Equity: Reader's Digest Files for Chapter 11
------------------------------
Reader's Digest Association on Monday made its previously announced
Chapter 11 bankruptcy filing, in what is a high-profile setback for
Ripplewood Holdings and its founder, the longtime deal-maker Timothy C.
Collins.
Go to Article from The Associated Press via The New York Times:
http://www.nytimes.com/
Go to Reader's Digest Press Release via PRNewswire:
http://news.prnewswire.com/
Go to Article from Bloomberg News:
http://www.bloomberg.com/apps/
Investment Dealer's Digest uses the bankruptcy to examine the many fees
that buyout targets pay their private equity owners.
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http://www.iddmagazine.com/
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-----
Private equity wipeouts are coming thick and fast, Breakingviews
writes. Reader's Digest's bankruptcy will erase millions put in by
Ripplewood Holdings. And Metro-Goldwyn-Mayer could be the next big
buyout in line for Chapter 11.
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http://www.nytimes.com/2009/
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-----
Harvard University's multibillion dollar endowment is adopting a
strategy of selling off holdings in hedge funds, private-equity firms
and other money managers to bring more money under the control of
internal investing staff, The Wall Street Journal said.
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-----
Abax Global Capital is the latest firm to announce plans for a private
equity fund in mainland China. The Hong Kong hedge fund manager is
backed by Morgan Stanley and plans to invest in environmentally
friendly products.
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-----
Village Roadshow has shelved a proposal to privatize the group, sending
the stock price plummeting, The Age reported. The Australia-based media
and entertainment firm lost as much as 18 percent on Monday.
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5. Hedge Funds: Hedge Funds Have Three-Month Hot Streak
------------------------------
For the first time since 2007, investors have put more money into hedge
funds than they have withdrawn, CNN Money reported, citing data from
HedgeFund.net.
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http://money.cnn.com/2009/08/
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-----
Cohmad Securities executive Robert Jaffe moved Friday in separate court
filings to dismiss some civil claims brought against him by the S.E.C.
and the trustee for Bernard L. Madoff's firm, The Wall Street Journal
reported.
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-----
The days of record volatility in the oil market may be over now that
the Commodity Futures Trading Commission moves to curb speculation in
the futures market, analysts at Commerzbank say.
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-----
Last year saw the $10 billion listed alternative funds sector suffer,
and the area has continued to underperform, putting increased pressure
on listed private equity and hedge fund vehicles, The Financial Times
said.
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-----
Todd Stottlemyre is moving from the pitching mound to the hedge-fund
world. The New York Post reported that the major league player has
created Desert Shores Capital, which could be a hedge fund built around
fast-paced momentum trading in stocks.
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-----
Authorities say that Marcus Schrenker, the troubled Indiana money
manager who tried to fake his own death in a plane crash, had built his
investment businesses on the backs of people he knew -- acquaintances,
an old friend and his own aunt.
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6. I.P.O.s/Offerings: Beijing Capital Land Seeks Shanghai Listing
------------------------------
Beijing Capital Land said Monday that it had applied for a Shanghai
listing via the issue of up to 1.4 billion new A-shares to help finance
a total of $1.40 billion worth of projects, Reuters reported.
Go to Beijing Capital Land Press Release via Google Translate:
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-----
Betfair, the gaming exchange, is meeting with advisers to discuss a
possible flotation, The Daily Telegraph reported. The flotation is
expected to value the group at about $2.5 billion.
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Mingfa Group plans to raise as much as $774 million in a stock offer in
the fourth quarter of this year, The South China Morning Post reported,
citing unidentified sources.
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Required):
http://www.scmp.com/portal/
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China plans to tighten capital requirements for banks, threatening to
curb the record lending that's fueled a 60 percent rally in the
nation's stock market, people familiar with the matter told Bloomberg
News.
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Swedbank's chairman said last week that stress tests being conducted on
European banks led the Swedish lender to hold its second stock offering
in eight months.
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Go to Article from Svenska Dagbladet (in Swedish):
http://www.svd.se/naringsliv/
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Sumitomo Mitsui Financial Group, one of Japan's largest banks, said it
plans to form an investment banking unit in the nation by hiring
bankers including Masuo Fukuda and Taro Hayashi from Citigroup.
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The Bombay Stock Exchange on Monday started an initial public offering
index to track the value of stocks for two years after listing.
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http://www.reuters.com/
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7. Venture Capital: A Sports Site Tries to Please Every Fan
------------------------------
Fanbase, a new Web site backed with $5 million from venture
capitalists, is creating an almanac of every professional and college
athlete and team, no matter how obscure.
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Mint.com, the personal finance site that has racked up 1.4 million
users in the United States, might expand up north and across the pond
early next year, its founder and C.E.O. Aaron Patzer said.
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North Bridge Venture Partners has added Jim Moran as its newest general
partner, The Wall Street Journal reported. Mr. Moran was responsible
for the recent turnaround of North Bridge portfolio company Covergence.
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8. Legal: Plain Talk From Judge Weighing Merrill Case
------------------------------
The New York Times profiles Jed S. Rakoff, the federal judge who is
tussling with the S.E.C. and Bank of America, both of which will file
reports to him today detailing who knew what about bonuses paid out
last year by Merrill Lynch.
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-----
Bradley Birkenfeld, a key informant in the United States' tax evasion
case against UBS, was sentenced to three years and four months in
prison on Friday by a federal court judge in Florida.
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Democratic senator Ted Kaufman is expected to ask the Securities and
Exchange Commission to review the stock market's structures, The Wall
Street Journal reported, reviving a debate over the market impact of
computer-based trading.
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James E. Press, the last holdover among top executives from Chrysler's
prebankruptcy days, is expected to leave within three months, The New
York Times reported, citing a person with knowledge of his plans.
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Creditors of Babcock & Brown Ltd., the bankrupt Australian investment
firm, voted Monday to liquidate its assets, paving the way for a
possible inquiry into a deal struck between Babcock's management and a
syndicate of 25 banks.
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A British court ruling could force European clients of Lehman Brothers
to wait years to get their assets back, according to the administrators
overseeing the wind-down of Lehman's European arm.
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Richard S. Fuld Jr., the former Lehman Brothers chief executive, has
sold his Park Avenue co-op to a co-founder of Michael S. Dell's
investment firm for $25.87 million, according to New York City property
records.
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Van Zeck, commissioner of the public debt, quietly runs one of the
government's truly indispensable operations. He is not a policy maker.
He does not decide how much to borrow. He just makes sure the money is
borrowed at the lowest possible cost to the U.S. government.
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The Federal Reserve lifted an estimate of the value of Bear Stearns and
American International Group assets used to secure their rescue last
year, potentially reducing losses to U.S. taxpayers.
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http://nytimes.com/reuters/
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Go to Report from the Federal Reserve (PDF):
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