Tag Archive | "insider"

Opening Bell: 06.01.11

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S.E.C. Case Stands Out Because It Stands Alone (NYT)
But [Fabrice] Tourre’s world would soon be turned upside down. In fall 2009, the S.E.C. issued him a Wells notice, a formal warning that he was likely to be named in a civil fraud suit for his role in the mortgage deals. Mr. Egol also received such a notice in 2010. In their Oct. 10 response to the S.E.C., Mr. Tourre’s lawyers, including Pamela Chepiga of Allen & Overy, made an argument that they have not emphasized publicly. They contended that “singling Mr. Tourre out for criticism regarding the content of this clearly collaborative effort is unreasonable.” These legal replies, which are not public, were provided to The New York Times by Nancy Cohen, an artist and filmmaker in New York also known as Nancy Koan, who says she found the materials in a laptop she had been given by a friend in 2006.  The friend told her he had happened upon the laptop discarded in a garbage area in a downtown apartment building. E-mail messages for Mr. Tourre continued streaming into the device, but Ms. Cohen said she had ignored them until she heard Mr. Tourre’s name in news reports about the S.E.C. case.  She then provided the material to The Times. Mr. Tourre’s lawyer did not respond to an inquiry for comment.

Did the NYT hack Fabrice Tourre’s email? (Reuters)
Felix Salmon: “Louise Story and Gretchen Morgenson have a long and rambling story about the court case against Goldman’s Fabrice Tourre, which is mainly interesting for how it was sourced…I’m sure this was extremely carefully formulated, but it does raise a lot of questions without answering them. Tourre’s name was splashed over the newspapers in April 2010, so it stands to reason that the NYT has had some kind of access to Tourre’s private, password-protected email account — not to mention archives going back at least to 2006 — for a good year at this point. I’d also guess that the NYT is going public with its source now because Tourre finally got around to changing his password, and the stream of emails then dried up.”

SAC Faces Probe of Biotech Trading (WSJ)
MedImmune shares jumped 18% on April 23, 2007, the day its takeover was announced. Trading was heavy before the announcement, driving shares up more than 50% over six weeks, suggesting that rumors of a deal may have reached traders ahead of the announcement. SAC significantly increased its holdings of MedImmune during the quarter prior to the one in which the deal was announced, according to public filings. SAC increased its holdings from 151,000 shares in the fourth quarter of 2006 to 796,000 shares in first quarter of 2007. It cut its holdings to 30,000 shares at the end of 2007′s second quarter, then reported that it sold the position completely, according to filings.

Greece nears IMF/EU deal, dismisses drachma talk (Reuters)
Greece should complete talks by the end of the week with inspectors from the EU and IMF on a medium-term budget plan plus a vital next slice of international aid, sources close to the negotiations said on Wednesday.

EU warns US to speed up bank reform (FT)
In a letter sent last week to US Treasury secretary Tim Geithner, Michel Barnier, the European commissioner in charge of financial markets, argued that Brussels was ahead of the US in several areas – including capital requirements for banks and limits on bonuses for financial executives. Mr Barnier urged the US to match European efforts. “The level playing field must be a reality, not an empty slogan,” he wrote in the May 27 letter, which was obtained by the Financial Times.

Irish lenders outline loss plans for bondholders (FT)
Three of Ireland’s lenders revealed plans to impose losses of up to 90 per cent on bondholders in attempts to make them shoulder some of the cost of recapitalising the country’s banks. Bank of Ireland said it would shortly announce a cash offer for €2.6bn ($3.7bn) of its subordinated debt, with discounts of either 80 per cent or 90 per cent depending on the type of bond. Two smaller lenders, Irish Life & Permanent and EBS, planned to impose similar losses on holders of about €1bn of debt.

UBS May Move Stamford Investment Bank to World Trade Center (Businessweek)
UBS AG, Switzerland’s biggest lender, may move the staff of its U.S. investment bank from Stamford, Connecticut, to the World Trade Center in Manhattan by 2015, a person with direct knowledge of the plan said.

Attorney General orders more episodes of the “The Wire”, or a movie (Reuters)
“I want to speak directly to Mr. Burns and Mr. Simon: Do another season of ‘The Wire’,” Holder said, drawing laughter and applause from the audience. “That’s actually at a minimum. … If you don’t do a season, do a movie.  We’ve done HBO movies, this is a series that deserves a movie. I want another season or I want a movie. I have a lot of power Mr. Burns and Mr. Simon.”

‘Expert Networker’ Jiau Faces Trial in U.S. Insider-Trading Investigation (Bloomberg)
Winifred Jiau, a former consultant with so-called expert networking firm Primary Global Research LLC, faces jury selection as her insider trading trial begins today, the third tied to a nationwide probe of illegal stock- tipping.

Citigroup Close to China Securities Partnership Deal (WSJ)
Citigroup Inc. is close to an agreement with a partner in China to set up a joint-venture securities business that would give the New York bank a long-sought foothold in China’s domestic capital markets, according to people familiar with the situation. Citigroup is expected to sign a memorandum of understanding with Shanghai-based Orient Securities Company Ltd. as soon as Thursday morning China time.

EIB halts Glencore lending on governance concerns (Reuters)
The EIB, the European Union’s lending institution, provided in 2005 a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, to help pay for the modernisation of a copper smelter. But Mopani has since been accused by some non-governmental organisations — most recently by campaign groups in an open letter signed by a group of European parliamentarians — of tax evasion and of causing widespread pollution.

Morgan Stanley Invests in Short-Sale Target Yongye International of China (Bloomberg)
Morgan Stanley agreed to invest $50 million in Yongye International Inc. (YONG), the U.S.-traded producer of plant nutrients in China that is the target of a short seller who says the company has misrepresented its business.

South Korea Probes Foreign Banks (WSJ)
Financial Supervisory Service Deputy Gov. Kim Yung-dae said at a briefing Tuesday that some foreign-bank branches in South Korea were handing over day-to-day trading operations involving money held in local accounts to a larger foreign branch or regional headquarters in places like Hong Kong and Singapore. Such outsourcing is illegal in South Korea…Mr. Kim said HSBC Holdings PLC and Crédit Agricole SA have already been sanctioned for improper outsourcing of operations involving derivatives…A person familiar with the situation said Royal Bank of Scotland Group PLC may also be sanctioned for engaging in similar activity, with the FSS likely to decide on the matter in June or July.

Sovereign ratings still relevant – but mostly when they go negative (FT Alphaville)
Bond markets still react to sovereign ratings announcements, though they tend to react more when the rating agencies say something negative. That’s the conclusion of a new working paper from the European Central Bank, which looked at changes in yields and CDS spreads after rating actions from Standard & Poor’s, Moody’s and Fitch on two dozen European Union countries from 1995 on.

Lehman Veteran Is Back in Game (WSJ)
Mark Walsh is best known for the gigantic real-estate deals that backfired on Lehman Brothers Holdings Inc. before it collapsed in 2008. As the financial crisis recedes, the 52-year-old Mr. Walsh is mounting a low-key comeback at a new real-estate firm by leaning on connections made before the real-estate bubble burst. “Unfortunately, Mark has to live with the talk of having done a couple of bad deals, rather than people focusing on the overwhelming amount of good ones,” says New York real-estate developer Steven Witkoff.

Accuser was maid to wait (NYP)
A female manager at the ritzy Pierre hotel was suspended yesterday for shrugging off a room attendant who reported that an Egyptian business big shot had just sexually assaulted her in his room, the hotel revealed yesterday. The manager, whose name was not released, merely noted the maid’s shocking claims in a logbook — and never reported them to Pierre security, her own bosses or police, officials said.

Sarah Palin, Donald Trump split a pepperoni pizza at Famous Famiglia in Times Square (NYDN)
“She didn’t ask me (to run with her) but I’ll tell you, she’s a terrific woman,” Trump said as he ushered Palin into a branch of Famous Famiglia pizza on Broadway at 50th St.

ACLU wants porn to be allowed for South Carolina inmates (ABC)
The American Civil Liberties Union is pushing for porn at a detention center in Moncks Corner, South Carolina. The move came after reports surfaced that the facility only allowed inmates to read the Bible. But prison officials said that isn’t true and inmates have a wide variety of reading material at their disposal.



Article courtesy of Dealbreaker

GigaOm doubles down on research, raises another $6M

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Om MalikGigaOm already stands out as one of the most heavily-funded sites in the tech news world — and today it nearly doubled that funding, announcing that it has raised another $6 million.

Back when the San Francisco-based company had “only” raised around $8 million, I already found the funding “kind of remarkable”. The new total, $14 million, isn’t a huge amount for a tech startup, but it certainly dwarfs the amount raised by most competing sites. (VentureBeat, for example, has raised less than $1 million, while Business Insider has raised more than $6 million.)

When I asked GigaOm chief executive Paul Walborsky about the decision to raise more money, he responded, “We are big believers in building out a big company.”

GigaOm is certainly one of the most-respected names in the field, but thus far, tech blogs haven’t been acquired for enough money to justify a higher level of funding — the biggest deal has probably been AOL buying TechCrunch for $40 million. Walborsky said that he and founder Om Malik (pictured above) are confident that they’ve figured out a model that works and can continue grow. Rather than limiting its monetization efforts on GigaOm sites (which include GigaOm itself, as well as sites like video-focused NewTeeVee and cleantech-focused Earth2Tech), it sounds like the company sees the blogs as a way to build its brand. The sites also draw in potential new customers for its conferences and the research and reports sold through GigaOm Pro. The new money will mostly go towards building out the technology infrastructure behind Pro, Walborsky added.

“We believe that the growth of GigaOm is going to be driven by our research platform and GigaOm Pro,” he said. “That does not minimize the importance of our online audience. What we write about on the blog is what brings people to read GigaOm on a daily basis.”

GigaOm now claims more than 4 million unique monthly visitors across its sites, a number that’s growing 30 percent annually. According to Walborsky, the company doubled its revenue in 2010, thanks largely to GigaOm Pro. It’s on-track to double that revenue yet again this year, and to become cash-flow positive by the end of 2011.

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Article courtesy of VentureBeat » deals

How To Destroy Evidence Of Insider Trading: Lesson 3

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If you’ve been closely following the government’s Insider Trading Fest(ivus) 2010/2011 you know that one thing that’s emerged is a detailed guide to how one should go about destroyed evidence of securities violations that a jury would not look upon kindly. Garrett Bauer spoke to us at length about the benefits of washing versus burning dirty money while Donald Longueuil, the foremost expert on the matter, provided a step-by-step guide to getting rid of incriminating USB drives (you’ll need: two pairs of pliers, four plastic baggies, one North Face fleece). Yesterday, an (alleged) accomplice of (accused) insider trader/former Galleon employee Zvi Goffer added a chapter on getting rid of a cell phone that could cause trouble.

Santarlas, testifying under a cooperation agreement with the government, said he and another former Ropes & Gray attorney, Arthur Cutillo, told Brooklyn, New York, lawyer Jason Goldfarb in 2007 about acquisitions involving 3Com Corp. and Axcan Pharma Inc. He said Goldfarb gave him $25,000 for the 3Com information and $7,500 for Axcan.

“When I received the cash, Jason had told me to dispose of the phone — break it in half, submerge it in water and put it in a garbage can,” Santarlas testified.

[Bloomberg]

Earlier: If You’ve Ever Wondered What Donald Longueuil Might’ve Sounded Like On The Cold December Night He Told A Colleague How To Destroy Evidence Of Insider Trading, Wonder No Longer (MP3)



Article courtesy of Dealbreaker

CNBC’s Jim Cramer: “Overpriced” LinkedIn IPO will “destroy everybody” (video)

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jim cramerFinancial pundit Jim Cramer, host of the CNBC TV show Mad Money, went ballistic today when discussing LinkedIn’s initial public offering, saying that it marked the beginning of a new dot-com bubble that will end as badly as the one 10 years ago.

“This is the most outrageously overvalued, ridiculous thing that I’ve seen since CBS Marketwatch or TheGlobe,” he said.

Cramer also compared the IPO to TheStreet.com, the site that he cofounded. Like LinkedIn, Cramer said, TheStreet was a “sliver” IPO, where only a small number of shares became available on the public market, driving investors into a frenzy. But, the interviewer asked, if LinkedIn’s stock price eventually comes back down to Earth, won’t that lead to more reasonable pricing of other Web companies expected to go public, like Facebook, Twitter, and Groupon? Cramer responded that LinkedIn will probably remain overvalued as long as there’s only a limited amount of stock available.

“We’re going to do another one of these things where we destroy everybody,” Cramer said. He later added, “This is exactly the playbook from 1999.”

So is Cramer right to be worried? Well, I was still in high school during the first dot-com era, but VentureBeat’s Matt Marshall tells me that this doesn’t begin to compare to the hype last time around. Matt also sounds more optimistic about LinkedIn’s long-term potential, as you can see in his post about the IPO.

[via Business Insider]

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Article courtesy of VentureBeat » deals

Raj Rajaratnam Jury Still Listening To Wiretaps

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We’re into Week 3 of deliberations on the insider trading case, with jurors asking to play conversations between Raj and his former friends/sources of what may or may not have been material non-public information, in addition to a phone call between Raj and his little brother, who could not match big bro’s skills in (ALLEGED) insider trading and lady slaying, though he tried his hardest. [Reuters, WSJ]



Article courtesy of Dealbreaker

Raj Rajaratnam Suspiciously Contracts Dire Case Of Athlete’s Foot Monday After Royal Wedding Hangover

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Was he unable to make it to court today because he had to have emergency surgery to treat a bacterial infection or because he was too tired from staying up all night combing through pictures of Kate Middleton in that he dress he told friends was “to die for” and couldn’t get enough of?

Raj Rajaratnam, the Galleon Group LLC co-founder awaiting a jury’s verdict in his insider-trading trial, had emergency surgery yesterday to treat a bacterial infection of his foot, according to defense lawyer John Dowd. “It is hoped that he will be recovered sufficiently to return to the courthouse this week,” Dowd said in a statement. He said his client waived his right to be in court during jury deliberations, which began April 25. “The court has approved this absence,” Dowd said in the statement.

[Bloomberg]



Article courtesy of Dealbreaker

Bain & Company Chairwoman Takes A Moment To Point Out Which Consulting Firm Hasn’t Been Employing Alleged Insider Traders

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In addition to Galleon Group, one firm whose name has popped up a whole bunch as it relates to the Feds’ Insider Trading Fest(ivus) is McKinsey. Until they resigned, the consulting firm employed two partners, Rajat Gupta and Anil Kumar, who have both been accused to sharing material non-public information about various companies with their buddy Raj Rajaratnam (Kumar pleaded guilty last year and has been cooperating with the government, while Gupta, who was called out by the SEC in February, has vowed to fight thing thing to the death). Know who doesn’t have any senior executives on staff who may or may not have traded hot tips for money? Bain Chairwoman Orit Gadiesh can think of one.

Gadiesh, chairman of Bain, said her company had not received a single question from the firm’s clients following the scandal, nor did she see the need to do anything differently. She said Bain has had a strong culture of risk management for the past thirty years, including compulsory training, spot checks, weekly reminders and restrictions about the types of investments its employees can make.

“When I became chairman, just for myself, I said I would never trade in stock directly anywhere in the world because I don’t know where in the world we might be working,” she told the Financial Times.

Just thought you’d like to know.

[FT]



Article courtesy of Dealbreaker

Write-Offs: 4.27.11

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$$$ Buffett to ‘Welcome‘ Sokol Questions at Annual Meeting [CNBC]

$$$ Former SAC Capital Manager Donald Longueuil to Plead Guilty in Insider Probe [Bloomberg]

$$$ Bernanke Says Ending Bond-Buying Unlikely to Have Major Impact [Bloomberg]

$$$ Driver Says He Survived Crash Into Grand Canyon [AP]

$$$ Inside the New York Mets’ financial ledger [Fortune]

$$$ Millennium Partners Will No Longer Use Expert Networks [FBN]

$$$ Madoff Daughter-in-Law Shops Book Deal [Daily Intel]

$$$ Former Treasury Secretary Paul O’Neill: “Those who don’t support a debt ceiling hike are ‘our version of al qaeda terrorists‘” [Bloomberg via Heidi Moore]



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Raj Rajaratnam Defense: Prosecution’s Witness Are Liars

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Earlier this morning, Raj Rajaratnam’s 7-man legal team led by attorney John Down gave its final remarks in the insider trading case. While the Galleon founder is, of course, innocent until prove guilty, much of the evidence brought by the prosecution has made him look prettay prettay prettay bad, including but not limited to recordings of Raj complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” as well as testimony from a former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI and the previously undisclosed fact that the defense’s big witness, Richard Schutte, was gifted with a $15 million investment in his hedge fund by the Rajaratnam family two weeks prior to speaking glowingly of Raj. How did Dowd explain all that in his wrap-up? It’s pretty simple, really. Everyone who said something that suggested his client was guilty is a liar.

Dowd said former McKinsey & Co. consultant Anil Kumar “was a tax cheat and he admitted he was a tax cheat.” “You know you can’t trust Anil Kumar…This case is just make-believe,” Mr. Dowd said.

Mr. Dowd, after discussing Mr. Kumar, turned to Adam Smith, a former Galleon Group portfolio manager who has also pleaded guilty in connection with tips he allegedly provided Mr. Rajaratnam. Mr. Smith testified at the trial that he gave his boss nonpublic information he received from a Morgan Stanley investment banker, and also told jurors that Mr. Rajaratnam made efforts to hide insider trading. The defense later called witnesses who testified that Mr. Smith had denied insider trading to Mr. Rajaratnam’s lawyers last year and said the government had pressured him to plead guilty to providing confidential information he hadn’t given. “Smith has changed his story so many times he doesn’t know if he’s coming or going,” Mr. Dowd said. “You can’t trust Smith any more than you can trust Kumar. You know that Smith and Kumar are lying because the evidence proves they’re lying.”

Dowd did not say whether or not the wiretaps lied, but it would follow.

[WSJ]



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Former Galleon Employee Zvi “Octopussy” Goffer Takes Page From Old Boss’s Playabook

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Perhaps inspired by how well Raj Rajaratnam’s decision to plead not guilty and take his insider trading charges to trial, Zvi Goffer AKA Mr. Octopussy AKA Dances with Tracksuits has done the same, a week after having six extra accusations of securities fraud added to his file.

Galleon Group LLC trader Zvi Goffer, accused of leading one of three insider-trading rings that are the subject of a U.S. probe, pleaded not guilty to new federal charges in an amended indictment. Goffer and his brother Emanuel Goffer, along with Craig Drimal and Michael Kimelman, today entered not guilty pleas to the new indictment filed by the U.S. on April 7.

U.S. District Judge Richard Sullivan in New York granted defense lawyers’ request for a one-week delay in the trial, which was originally set to begin May 9. The attorneys said they needed time to review evidence because of the new charges.

Earlier: Alleged Insider Trader Emanuel Goffer “Needs A Hug”
The Morning After: Incremental Capital Holiday Party



Article courtesy of Dealbreaker