GUILTY PLEA EXPECTED FOR UBS UNIT IN RATE-RIGGING CASE | “UBS is in final negotiations with American, British and Swiss authorities to settle accusations that its employees reported false rates, a deal in which the bank’s Japanese unit is expected to plead guilty to a criminal charge,” DealBook reports. In addition, “UBS could face about $ 1 billion in fines and regulatory sanctions,” according to people briefed on the matter who spoke of private discussions on the condition of anonymity.
The penalty would eclipse the $ 450 million that Barclays agreed to in June to settle accusations that it manipulated rates. The UBS settlement, which has not yet been approved by the bank’s board, could come as soon as Monday. An indictment of a big bank is highly unusual, as authorities tend to be fearful of potential job losses and other consequences that could come if a bank loses its charter to operate. “With UBS, federal prosecutors are trying to strike a balance. By levying a charge against the subsidiary, authorities send a powerful message, but stop far short of putting the company out of business.”
The crackdown may also involve the indictment of a former UBS trader. Thomas Hayes, a 33-year-old former trader at UBS and Citigroup, was one of the three men arrested by Britain’s Serious Fraud Office on Tuesday, according to DealBook. “Mr. Hayes is expected to be a central figure in the case against UBS. The UBS settlement is likely to include accusations that Mr. Hayes and other employees colluded with traders at other banks to influence the direction of interest rates, as part of a broader scheme to increase their profits.”
SOLARCITY LEAPS IN DEBUT | The delay in the I.P.O. didn’t dissuade investors on SolarCity’s first day of trading. The company’s stock rose as much as 59 percent on Thursday, closing the day at $ 11.79, or 47.4 percent above the offering price of $ 8. At the closing, the company had a market value of $ 861 million. “The strong market debut followed a few days of difficulty for SolarCity and its underwriters, none of whom fully prepared for issues in bringing a clean technology company to market,” DealBook’s Michael J. de la Merced writes. The company, which finances and installs rooftop solar systems, “prefers to think of itself as an energy company, rather than just a solar company.” Despite the decent debut, SolarCity may have miscalculated the market’s appetite. It ended up pricing its offering well below its expected range. “I feel the mistake that we made is that we underestimated the battle scars that the financial institutions had in the clean tech sector,” Lyndon Rive, SolarCity’s chief executive, told DealBook.
YAHOO SHAKES UP BOARD | Yahoo continues its effort to remake itself, adding Max Levchin, a co-founder of PayPal, to its board. Two other directors, Brad Smith, the chief executive of Intuit, and David W. Kenny, chief executive of the Weather Channel, are stepping down. Since becoming chief executive this summer, Marissa Mayer “has emphasized ways to modernize Yahoo staples like its e-mail and the Flickr photo service, to help the company square off against ever-newer competitors,” Mr. de la Merced writes. “Bringing in Mr. Levchin is intended to help with that push and show a commitment to developing enticing new offerings.” Mr. Levchin was PayPal’s chief technology officer before forming Slide, a Web applications company that Google bought for $ 180 million two years ago.
On his personal blog, Mr. Levchin explains his thinking in joining Yahoo. He says he has “long respected Marissa’s talent and tenacity” and that her decision to lead Yahoo was a bold one. There’s also a more personal aspect to his decision. Yahoo, Mr. Levchin says, “showed me that computer geeks can start companies that create that future. I’d love to do my part in helping the company that inspired me.”
ON THE AGENDA | About 156 million shares of Facebook will become available for sale, as another lock-up period expires. Elisse B. Walter takes over from Mary L. Schapiro as leader of the Securities and Exchange Commission. Brian Moynihan, chief executive of Bank of America, is on CNBC at 9:45 a.m. Alan Mulally, chief executive of Ford, is on Bloomberg TV at 8:30 a.m. The consumer price index for November is out at 8:30 a.m., and data on industrial production in November is released at 9:15 a.m.
IN SHORT | David Rubenstein is donating $ 10 million to the athletics department of Duke University, the latest gift by the Carlyle Group co-founder to his alma mater. Mario Draghi, president of the European Central Bank, was named “person of the year” by The Financial Times. In the Continent’s crisis, the newspaper writes, “Mr. Draghi has been the leading protagonist, insistently prodding governments and central banks to support the measures necessary to preserve the euro.”
AT HOME WITH A HEDGE FUND MANAGER | Richard Perry, the hedge fund manager whose firm took a majority stake in Barneys New York earlier this year, is “a man of meticulous habit, a super-athlete who prides himself on his sophisticated sense of style,” Cathy Horyn writes in the New York Times Magazine. His Sutton Place penthouse apartment, purchased for $ 10.9 million in 2000, is “a pure example of the Pop and neo-Pop aesthetics in that everything is magnified and lurid,” Ms. Horyn writes. “The apartment is like someone’s idea in 1963 of a home of the future, down to the panoramic curve of the living room, the bottomless whiteness and the oval leather sofa large enough to seat 30. On the walls hang paintings by Roy Lichtenstein and Jim Dine. It’s not a room for relaxing; even trays of hard candies, displayed with absurd precision, seem to treat enjoyment strictly as a still life.”
Mergers & Acquisitions »
PPG Industries to Buy Paint Unit for $ 1.05 Billion | The specialty chemical company has agreed to buy part of the North American operations of a Dutch rival, AkzoNobel, for $ 1.05 billion.
Sprint Offers $ 2.1 Billion for Clearwire and Its Spectrum | The telecommunications company would add critical spectrum to its wireless network if the deal went through, but analysts said Sprint might have to spend more than its proffered $ 2.90 a share.
For Clearwire, There Is No Better Alternative | In offering $ 2.1 billion for the 48 percent of Clearwire that it doesn’t already own, Sprint is taking on some starry-eyed activists, Robert Cyran writes in Reuters Breakingviews.
Rosneft May Tap Bond Market to Finance TNK-BP Deal |
INVESTMENT BANKING »
China to Introduce Deposit Insurance in Bank Overhaul | The New York Times reports: “China’s new leadership is preparing to introduce bank deposit insurance as the first step in financial reforms to be started soon at a top-level meeting in Beijing, a government official and banking policy advisers said.”
NEW YORK TIMES
In Europe, Bonuses May Be Capped at Twice Salary | Bloomberg News reports: “European Union officials reached a tentative deal with lawmakers to ban banker bonuses that are more than double annual salaries.”
Countrywide Co-Founder Says He Has No Regrets | Angelo Mozilo, co-founder of Countrywide, the mortgage firm that has been the source of ongoing legal headaches for Bank of America, said in deposition last year, according to Bloomberg News, “We were a world-class company in every respect.”
Wall Street Stars Raise Their Lighters at Sandy Benefit Concert | The stars present at 12-12-12: The Concert for Sandy Relief weren’t only on stage or manning the donation phone banks: Wall Street boldfaced names like Jamie Dimon, David Einhorn and Steven A. Cohen were also in the crowd.
Deutsche Bank Says Earnings Will Be Weak | A day after prosecutors raided its headquarters in a tax-evasion investigation, Deutsche Bank disclosed that earnings would be weak, but called it “guidance” rather than a “profit warning.”
Spanish Lenders Invest in ‘Bad Bank’ | Banco Santander, CaixaBank and Banco Sabadell were among the investors in the so-called bad bank that was created to take assets off banks’ balance sheets, Bloomberg News reports.
Outside New York, a Boom in Financial Services Jobs |
WALL STREET JOURNAL
Bank of America Merrill Lynch Names Head of Moscow Office |
PRIVATE EQUITY »
Best Buy Stock Rises Amid Bid Speculation | Richard Schulze, founder of Best Buy, “plans to submit a bid to buy the struggling consumer electronics retailer by week’s end,” according to the Minneapolis Star Tribune.
K.K.R. Enters Auction for Unit of Leighton Holdings |
HEDGE FUNDS »
Elliott Management Builds a Stake in Emulex | Elliott Management, an activist firm, has increased its stake in Emulex to more than 11 percent, Bloomberg News reports.
Man Group Said to Face Write-Off Tied to GLG Partners | The Financial Times reports: “Man Group is weighing up significant accounting write-offs next year relating to its 2010 acquisition of GLG Partners, a move that will raise eyebrows after the announcement on Monday that former GLG boss Emmanuel Roman is to be the new chief executive of the company.”
Pfizer Said to Weigh $ 4 Billion I.P.O. of Animal Health Unit | Pfizer may take its animal-health unit Zoetis public in January or February, according to The Wall Street Journal.
WALL STREET JOURNAL
Macquarie Plans a $ 1 Billion I.P.O. of Mexican Real Estate Trust | Bloomberg News reports: “The biggest real-estate investment trust to go public in Mexico is staking its success on the city most ravaged by the nation’s drug war.”
VENTURE CAPITAL »
Summers Joins Board of Lending Club | Larry Summers, the former Treasury secretary, joined John Mack and Mary Meeker on the board of Lending Club, a peer-to-peer lending company.
Khosla Ventures Teams Up With Condoleezza Rice | The venture capital firm Khosla Ventures announced it had retained RiceHadleyGates, the consulting firm whose principals include Condoleezza Rice, a former secretary of state.
Japanese Regulators Order S.&P. to Improve Its Ratings System | Japan’s Financial Services Agency took aim at the Japanese unit of Standard & Poor’s, saying there were “significant problems” with the rating agency’s “business operations from the perspective of the public interest and investor protection.”
S.E.C. Said to Seek New Trial for Mutual Fund Managers | The Wall Street Journal reports: “The Securities and Exchange Commission plans to ask a federal judge for a new trial against mutual-fund managers Bruce Bent Sr. and his son, Bruce Bent II, according to a court filing.” The two men managed the Reserve Primary money market fund.
WALL STREET JOURNAL
Davis Polk Starts Litigation Practice in Hong Kong | Davis Polk & Wardwell is forming a litigation practice in Hong Kong, highlighting the continued push by New York’s blue-chip corporate law firms into foreign financial centers.
Possible Ripples From the Argentine Bond Litigation | Recent court decisions in the Argentine debt litigation seem to go a long way toward transforming the pari passu clause from a rule of rank into a prohibition on preferences, Stephen J. Lubben writes in his column, In Debt.
Clarity Becomes a Priority for Federal Reserve | The New York Times writes: “Over the last two years, Mr. Bernanke and his colleagues have announced a series of changes intended to increase the transparency of the Fed’s decision-making. Some of those moves have also transformed the way those decisions are made and, the Fed hopes, increased the power of its efforts to revive the economy.”
NEW YORK TIMES
In Fight With MBIA, Bank of America Issues Notice of Default |
Will Martoma Turn on His Former Boss? | It is “baffling to authorities” that Mathew Martoma, the latest former employee of SAC Capital Advisors to be accused of insider trading, has not been cooperating with the government, Bloomberg Businessweek writes.