Opening Bell: 08.02.13

Opening Bell: 08.02.13

Former Trader Is Found Liable In Fraud Case (DealBook)
“He was the one that didn’t get away,” one of the nine jurors, Beverly Rhetts, said after the verdict. “The decision-making was a slow and arduous process,” said Ms. Rhetts, a retired teacher who was juror No. 2. “We went over each item with a fine-tooth comb. We looked into the semantics and tried to understand them as best as we could.” “We never felt there was anything that was cut and dry,” she added. … Juror No. 9, Leonel Lopez, 27, who works in advertising, said, “I found Mr. Tourre’s testimony to be genuine and the defense’s case solid, but the evidence suggested that a number of S.E.C. violations had occurred.” As the verdict was read on Thursday, Mr. Tourre sat emotionless, briefly glancing at the jury before fixing his stare elsewhere. When the jury shuffled from the courtroom, few made eye contact with him. Minutes later, he departed the building, carrying a copy of “The History of the Decline and Fall of the Roman Empire” by Edward Gibbon.

Case Against SAC Is Aided by Hiring of Fired Trader (DealBook)
[Richard S.] Lee, who has pleaded guilty and is cooperating with investigators, proved crucial to the government’s case — not so much because of his illicit trading, but because of how he landed a job at SAC despite his earlier misstep. Mr. Lee’s interview process added to questions about SAC’s hiring practices and controls. His cooperation, as well as evidence suggesting that SAC recruited employees with sources inside publicly traded companies, provided ammunition for the government’s claim that SAC and its units permitted a “systemic” decade-long insider-trading scheme.

BofA faces potential mortgage-related civil charges (FT)
Bank of America is facing new legal troubles from US authorities, it disclosed on Thursday, including potential civil charges from the Department of Justice over securitisations of mortgages lent to wealthy borrowers. The bank has settled lawsuits over mortgages in the past year, helping to improve investor confidence that it is gradually escaping the legacy of the financial crisis when it wrote bad loans to borrowers who could not repay them. However, in a regulatory filing, BofA announced new threats and the development of existing cases. It said it had “been advised by the staff of the DoJ that it intends to file civil charges against Bank of America entities arising from one or two jumbo prime securitisations”.

Swaps Probe Finds Banks Manipulated Rate at Expense of Retirees (Bloomberg)
Recorded telephone calls and e-mails reviewed by the Commodity Futures Trading Commission show that traders at Wall Street banks instructed ICAP Plc brokers in Jersey City, New Jersey, to buy or sell as many interest-rate swaps as necessary to move the benchmark rate, known as ISDAfix, to a predetermined level, according to a person with knowledge of the matter. By rigging the measure, the banks stood to profit on separate derivatives trades they had with clients who were seeking to hedge against moves in interest rates.

Man Pays Settlement With 600,000 Quarters (WSJ)
On Wednesday, [Dr. Roger Herrin] delivered the money to the other parties, complying with a court-ordered settlement. But to their astonishment, he paid $ 150,000 of it in quarters. An armored Brink’s truck drove 150 bags of loose quarters from the Federal Reserve Bank of St. Louis to a Marion, Ill., bank. The bags were then piled on flatbed trucks that the doctor had borrowed from a friend. The trucks then rumbled through a busy downtown square, parked outside of two law firms, where the bags were dumped in the lobbies. “We blocked traffic,” Dr. Herrin told Law Blog. The 76-year-old doctor said his coin trick — reported by the Southern Illinoisan newspaper — was a “protest against the ruling.”

US bankruptcy court to shed light on Detroit case timeline (CNBC)
A court hearing on Friday may provide a roadmap for how Detroit’s historic bankruptcy filing will unfold as the judge overseeing the case could set a speedy schedule, appoint a mediator and rule on other matters. The hearing in U.S. Bankruptcy Court is a key step toward Detroit Emergency Manager Kevyn Orr’s effort to see the city emerge from the largest U.S. municipal bankruptcy filing in history by September 2014. But Detroit must first prove it qualifies to file for bankruptcy and then file a reorganization plan.

Brazil backs IMF aid for Greece and recalls representative (FT)
Brazil reversed its hardline stance on Greece’s bailout on Thursday, saying it had not authorised its representative to the International Monetary Fund to withhold support for the latest aid to Athens. Guido Mantega, the country’s finance minister, said it was a “mistake” for Brazil’s representative, Paulo Nogueira Batista, to abstain on the €1.8bn tranche of aid. Mr Mantega said he fully supported the IMF’s efforts to supply financial aid to Greece. “[Mr Nogueira Batista] did not consult the government, nor was he authorised by us to vote in this manner and the finance minister has ordered him to return to Brazil immediately to explain himself,” Brazil’s finance ministry said. “The finance minister spoke to the managing director of the IMF, Christine Lagarde, just now over the phone, expressing his support for the [financial aid] programme,” it said.

Dell Deal Close but Not Final (WSJ)
Michael Dell and Silver Lake are nearing a new deal with Dell Inc.’s special board committee that would increase the price they would pay for the computer maker in exchange for a modification to the voting rules expected to ease passage of the deal, according to people familiar with the discussions. The per-share price would be $ 13.75, up from an earlier $ 13.65, and the deal would also include a special dividend for shareholders, one of the people said. The new deal isn’t done yet, the people cautioned. Any new pact would delay the process for a vote by Dell shareholders likely by about another month. After two earlier delays, the vote had been set for Friday morning.

LinkedIn membership and revenue soar, mobile outlook promising (Reuters)
LinkedIn Corp sailed passed Wall Street’s expectations with second-quarter revenue jumping 59 percent, as its efforts to become a highly trafficked website and popular mobile app paid off with robust membership growth. The company’s shares surged 7 percent to record levels after the bell. It also raised its full-year guidance, although it gave a lower-than-expected forecast for the third quarter. The money-making outlook for social media companies has brightened considerably with inroads made by sponsored ads, and the mobile-friendly format of LinkedIn’s update stream, which includes sponsored ads, has begun to show serious promise as a new revenue source for the company.

FBI busts 2 Montauk resort owners who allegedly fleeced investors for $ 96 million in Ponzi scheme (NYDN)
A pair of fraudsters desperate to make keep their oceanfront resort in Montauk afloat fleeced dozens of investors in a $ 96 million Ponzi scheme, authorities said. Brian Callahan, an investment fund manager, and his brother-in-law Adam Manson, a real estate developer, were arrested Thursday by the FBI. They are charged with conning their clients — including the Montauk Fire Department — into thinking their money was being invested in a hedge fund. Instead, Manson and Callahan allegedly diverted millions of dollars into their unprofitable Panoramic View resort as well as fancy cars for themselves and homes in Old Westbury.

‘Toffs’ in red trousers a turn-off for nearly half of Britons (Reuters)
Britain’s class-conscious public have voiced their dislike of men in red trousers, associating them with elitism and garish buffoonery, according to a survey this week. Just under half the respondents (46 percent) to a survey released by market research firm YouGov said they don’t like men in red trousers. … But socialite and fashion journalist Henry Conway launched a defense of them in the Guardian on Thursday, citing their illustrious history from stylish 15th century scarlet breeches in Britain to Napoleonic army uniforms. “I have to admit, I have a delicious pair in bold blood,” he wrote. “I know they make me look like a total rah, but they are soft and beautiful…”

BBC apologises after it broadcasts music video picture of Prince William with a penis, comedy glasses and a moustache drawn on his head (Daily Mail)
The BBC has apologised after broadcasting a picture of Prince William with a doodle of comedy glasses, a moustache and a penis drawn on his head. The unusual picture of the Duke of Cambridge was broadcast as part of a trailer used on BBC Breakfast for a feature on musical theatre group Barbershopera. The clip, shown shortly before 8.30am today, was taken from the group’s comedy song I Could Have Married Kate. It appears that BBC producers failed to spot the image, which also featured William missing several front teeth. … One Twitter user, Amanda Morrell, wrote: ‘Just watching BBC Breakfast and they showed a pic of prince William with a drawn on willy on his head’.

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