SAC Chief Gave Testimony

SAC CHIEF'S TESTIMONY  |  The hedge fund manager Steven A. Cohen has offered little public explanation of the stock trades that are the focus of an intensifying government investigation. But Mr. Cohen, the head of SAC Capital Advisors, gave testimony to the Securities and Exchange Commission on the matter, which involves allegations of insider trading by a former portfolio manager.

Mr. Cohen said that his hedge fund sold the stocks in question after a portfolio manager said he was “no longer comfortable” with the position, The Financial Times reports, citing unidentified people familiar with the testimony. Any details of the conversation between Mr. Cohen and the manager, Mathew Martoma, are likely to feature prominently in the coming court action. The criminal case against Mr. Martoma is the first time the government has linked M r. Cohen to questionable trades. The hedge fund was also warned by the S.E.C. that it might be the target of a civil fraud lawsuit.

The firm held a call with employees on Thursday after the market closed, reassuring them that Mr. Cohen had no plans to retire, CNBC's Kate Kelly reported. That followed a conference call with investors on Wednesday, in which executives tried to allay concerns. Six former employees of SAC have now been linked to insider trading by the government, and three have been convicted. Still, investors stuck with the firm, adding as much as $1.6 billion in new capital to the flagship funds between 2010 and 2011, according to Absolute Return.

KHOSLA KEEPS A BULLISH BET ON CLEAN TECH  |  A cyclical downdraft in the clean energy sector has not discouraged one prominent investor, Vinod Khosla, from committing more money to his bets, Randall Smith reports for Dea lBook. Mr. Khosla, the founder of Khosla Ventures, once controlled stakes worth as much as $1.3 billion in biofuel companies, but at least on paper, that value has dwindled to roughly $378 million, Mr. Smith reports. To one of his supporters, Andy Bechtolsheim, who co-founded Sun Microsystems with Mr. Khosla 30 years ago, Mr. Khosla is “a visionary who likes to make big bets on ideas that can really change the world.” Still, as Pavel Molchanov, an analyst at Raymond James & Associates, notes, “The whole clean tech sector has been out of favor.” Mr. Smith writes: “Despite the crosscurrents, Mr. Khosla seems unwavering in his commitment.”

ON THE AGENDA  |  Mario Draghi, president of the European Central Bank, and Christine Lagarde, managing director of the International Monetary Fund, join the finance ministers of Italy and France at a conference in Pari s. Michael Milken, chairman of the Milken Institute, is on Bloomberg TV at 1:30 p.m. Gene Sperling, director of President Obama's National Economic Council, is on Bloomberg TV at 9 p.m. Data on personal income and outlays for October is released at 8:30 a.m.

RIFTS IN THE BUSINESS LOBBY  |  The United States Chamber of Commerce, the powerful industry group, is trying to retain its “influence and swagger” after a string of political losses, and as another group, the Campaign to Fix the Debt, raises its profile, The New York Times reports. As President Obama and Congress negotiate over the “fiscal cliff,” the Chamber of Commerce is pushing for a deal without tax increases, while some prominent chief executives are acknowledging that taxes might have to be raised. “Many business leaders are looking to the chamber as a bulwark against the White House's push for higher taxes, but it is unclear if the century-old association has the clout it once did,” The Times writes.

For the business leaders who comprise Fix the Debt, the group offers more than access to political power. It's also an extended networking session, an “elite hobnobber's paradise,” New York magazine's Kevin Roose reports, quoting one unidentified member as saying, “We have these great dinners.”

WHEN DIRECTORS ELECT THEMSELVES  |  As Orient-Express Hotels considers an unsolicited takeover offer from the Indian Hotels Company, a subsidiary of the Tata Group, its board of directors is in a strong position, Steven M. Davidoff writes in the Deal Professor column. That's because the directors can elect themselves, “a unique characteristic among companies worldwide. Shareholders have no real say in the selection of Orient-Express's directors.” Mr. Davidoff explains: “Orient-Express's shares are divided into Class A and Class B shares, with the Class B shares controlling 64 percent of the votes. Who owns the Class B shares? It is actually Orient-Express itself.” This feature of Orient-Express, which is based in Bermuda, “wouldn't be allowed under Delaware law,” Mr. Davidoff says. “This wouldn't be so bad, except Orient-Express has a history of poor performance.”

Mergers & Acquisitions '

U.P.S. Offers Concessions to Secure TNT Express Takeover  |  United Parcel Service has submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed $6.8 billion takeover of the Dutch shipping company TNT Express.
DealBook '

Duke's Chief to Retir e as Part of Settlement Deal  |  Jim Rogers, the chief executive of Duke Energy, “is retiring, and the power company's board will be overhauled, in a sweeping settlement with North Carolina regulators over a controversial boardroom coup last summer,” The Wall Street Journal reports.
WALL STREET JOURNAL

R.B.S.'s Deal to Sell Indian Operations Falls Through  |  The Royal Bank of Scotland had agreed to sell its retail and commercial banking operations in India to HSBC, but the deal collapsed on Friday, and R.B.S. said it would now wind down the business, Reuters reports.
REUTERS

Wonga, British Lender, Said to Be in Talks to Acquire U.S. Firm  |  Wonga.com, a British company that pr ovides loans online, “is in discussions to acquire U.S. small business lender On Deck Capital Inc. as it looks to expand into North America, according to a person familiar with the situation,” Bloomberg News reports.
BLOOMBERG NEWS

2 Bidders Said to Vie for Dean Foods Unit  |  Michael Foods and Saputo of Canada are each looking to buy the Morningstar dairy division of Dean Foods, “in a deal that could fetch between $1 billion and $1.5 billion,” Reuters reports, citing unidentified people familiar with the matter.
REUTERS

Icahn Urges Oshkosh Shareholders to Accept Offer  | 
REUTERS

INVESTMENT BANKING '

Financial Sector Leads a Rise in Corporate Profits  |  United States corporate profits reached a record high in the third quarter, and “all of the growth in domestic corporate profits was accounted for by the financial sector,” the Economix blog writes.
NEW YORK TIMES ECONOMIX

Berkshire in Reinsurance Deal With CaixaBank  |  Berkshire Hathaway agreed to pay the Spanish lender CaixaBank $778.7 million for future cash flow from a life insurance portfolio, “a rare dip into a fiscally stressed euro-zone country” for Warren E. Buffett's company, The Wall Street Journal reports.
WALL STREET JOURNAL

Morgan Stanley's Chief Laments Wall Street Scandals  |  James P. Gorman said at a conference on Thursday that Wall Street's reputation was “in the doghouse,” in part because of trading scandals like the one at UBS, Bloomberg News reports.
BLOOMBERG NEWS

At Citigroup, Lower Bonuses and More Job Cuts  |  Bloomberg News reports that Citigroup's “trading and investment-banking division plans to eliminate 150 more jobs while shrinking bonuses by as much as 10 percent, extending the toll of Wall Street's revenue slump, two people with direct knowledge of the decisions said.”
BLOOMBERG NEWS

Citigroup Hires Head of Financial Institutions Group for Singapore  | 
WALL STREET JOURNAL

British Banks May Be Undercapitalized, Bank of England Governor Warns  |  Britain's banks need more capital to protect against the fallout from the euro zone crisis, the rate-manipulation investigations and other potential costs, according to a report from the Bank of England. The health of Britain's major financial institutions is probably overstated because possible future losses and costs related to bad loans may be larger than expected, Julia Werdigier reports in The New York Times.
DealBook '

PRIVATE EQUITY '

S.E.C. Accuses Private Equity Manager of Misleading Investors  |  Bloomberg News reports that the “Securities and Exchange Commission sued Resources Planning Group, a Chicago-based investment adviser, and one of its owners, over cl aims they raised money for a failing private equity fund to pay off existing clients.”
BLOOMBERG NEWS

Cerberus's Talks With Supervalu Said to Hit a Snag  |  Bloomberg News reports that Cerberus Capital Management's talks to acquire Supervalu have “stalled because the private equity firm has had trouble obtaining the funds for a leveraged buyout, said people familiar with the matter,” Bloomberg News reports.
BLOOMBERG NEWS

HEDGE FUNDS '

Muddy Waters Offers to Pay for Olam Debt Rating  |  The short-seller introduced an unusual twist in its battle against the Singapore commodity company: an offer to pay for the company to get its debt rated by Standard & Poor 's.
DealBook '

In Battle With Hedge Funds, a Small Victory for Argentina  |  A stay of a federal judge's order on debt payment may provide an opportunity for Argentina's lawyers to raise questions that an appeals court may not have fully considered before, Steven M. Davidoff writes in the Deal Professor column.
DealBook '

I.P.O./OFFERINGS '

China Insurer Raises $3.1 Billion in I.P.O.  |  The deal ranks as Hong Kong's biggest of the year, but more than half of the shares sold by the People's Insurance Company (Group) of China went to 18 so-called cornerstone investors, many of them state-owned companies.
DealBook '

Status Quo at Groupon as Board Stands by Chief  |  A Groupon spokesman, Paul Taaffe, said that the board and the management team are “aligned.” For now, it appears Mr. Mason isn't going anywhere.
DealBook '

VENTURE CAPITAL '

Thiel Invests in Accounting Software Company  |  Peter Thiel, the PayPal co-founder, joined other investors in committing $49 million to Xero, which makes online accounting software for small businesses, TechCrunch reports.
TECHCRUNCH

LEGAL/REGULATORY '

Judge Gives Final Approval to Hostess Wind-Down Plan  |  A bankruptcy judge signs off on a liquidation plan that includes paying out up to $1.8 million in bonuses to executives. In addition, advisers to company say they are in active talks with about 110 suitors.
DealBook '

Barclays to Contest Energy Market Manipulation Case  |  Barclays said Thursday that it would fight charges filed by the Federal Energy Regulatory Commission over claims that it manipulated rates in California's energy markets.
DealBook '

Journalist Implicated in Insider Trading Case  |  Michael Baron, sen ior editor for TheStreet.com, is described in a criminal complaint as being connected to an insider trading ring, The Wall Street Journal reports.
WALL STREET JOURNAL

How Auditors Clashed in H.P.'s Autonomy Deal  |  The New York Times columnist Floyd Norris writes that in H.P.'s disastrous Autonomy deal, there is an answer to the question “Where were the auditors?” He writes: “They were everywhere.”
NEW YORK TIMES

George C. Kern Jr., Innovative M.&A. Lawyer, Dies at 86  |  The founder of the mergers and acquisitions practice at Sullivan & Cromwell in the late 1970s, Mr. Kern “played a major role in the corporate takeover battles of the 1980s,” The New York Times writes.
NEW YORK TIMES

A Warning to Life Insurers on Reserve Risk  |  The New York Times reports: “After more than a year studying a surge of intricate financial deals in the life insurance industry, regulators said Thursday that they had found transactions that could ‘give the industry a black eye,' but could not agree on what to do about them.”
NEW YORK TIMES

Strauss-Kahn Said to Reach Settlement Deal With Hotel Housekeeper  |  The New York Times reports: “Dominique Strauss-Kahn and the hotel housekeeper who accused him of sexually assaulting her last year have quietly reached an agreement to settle a lawsuit she brought against him stemming from the case, which made international headlines, people with knowledge of the matter said Thursday.”
NEW YORK TIMES