Wall Street\'s New Foe

WALL STREET'S NEW FOE  |  A little-known agency, the Federal Energy Regulatory Commission, is becoming a thorn in the side of big banks. This week, the agency threatened to impose its largest-ever fine against Barclays, after previously turning up the heat on JPMorgan Chase and Deutsche Bank. “It's the most powerful agency that no one knows about,” said Tyson Slocum, the director of the energy program for the nonprofit advocacy group Public Citizen.

The watchdog, which oversees the oil, natural gas and electricity markets, started going after Wall Street in the aftermath of the Enron fraud, report DealBook's Ben Protess and Michael J. de la Merced. A law passed in 2005 gave the agency an enforcement unit, which received an expanded budget under the Obama administration. That unit also hired some seasoned criminal investigators an d this year created a specialized group to detect manipulation, DealBook writes. “The overhaul is starting to bear fruit.” The order filed against Barclays, for instance, “suggests that the fragmented markets for electricity are vulnerable to wily trading schemes,” DealBook's Peter Eavis writes.

POSSIBLE LIBOR FINE FOR R.B.S.  |  The Royal Bank of Scotland said on Friday that it expected to face penalties related to the broad industry investigation into potential rate manipulation. The bank, which is being investigated by various regulators over potential rigging of Libor, said it could make an announcement about the matter before before reporting earnings on Feb. 28. This summer, Barclays, R.B.S.'s rival in Britain, agreed to pay $450 million to settle charges that it attempted to influence rates.

R.B.S., which is still majority owned by the British government, is deali ng with a broader set of woes. The bank reported a net loss of £1.4 billion, or $2.3 billion, in the third quarter, after it took a charge on its own debt and set aside more money for customers who were inappropriately sold insurance.

THE ‘TOO BIG TO FAIL' LIST  |  Of all the big American banks, regulators are apparently most worried about JPMorgan Chase and Citigroup. The two banks are in the top “bucket” of institutions that are officially considered “systemically important,” meaning they will be required to hold the equivalent of 9.5 percent of their risk-adjusted assets in capital. Bank of America, Bank of New York Mellon, Goldman Sachs, Morgan Stanley, State Street and Wells Fargo are also on the list, albeit with lower capital requirements than JPMorgan and Citigroup. While the “too big to fail” designation imposes stricter rules o n these banks, it “may do little to answer the concerns of some analysts who feel the capital surcharges are too small,” writes DealBook's Peter Eavis.

ON THE AGENDA  |  The big data release of the day is the jobs report, which comes out at 8:30 a.m. With the presidential election on Tuesday, you can expect the numbers to be thoroughly scrutinized by political pundits. Economists predict that 125,000 jobs were added in October and that the unemployment rate ticked up to 7.9 percent. Restoration Hardware is set to start trading on the New York Stock Exchange under the ticker symbol RH, after pricing shares at the high end of its expected range. Chevron and the Washington Post Company report earnings before the opening bell. Mort Zuckerman of Boston Properties is on Bloomberg TV at 8 a.m. Jan Hatzius, Goldman Sachs's chief economist, is on CNBC at 10:30 a.m.

The best business book of the year, according to The Financial Times and Goldman Sachs, is “Private Empire: ExxonMobil and American Power,” by Steve Coll, a staff writer at the New Yorker.

The list of the world's 200 richest people, according to Bloomberg Markets magazine, includes “more than 30 hidden billionaires” that were “unmasked” by Bloomberg News. One of these little-known billionaires is Amancio Ortega, the founder of the Spanish clothing retailer Inditex, who overtook Warren E. Buffett to rank third on the Bloomberg Markets list.

BLOOMBERG MAKES HIS ENDORSEMENT  |  President Obama may not have many friends in finance these days, but he has the support of one Wall Street billionaire. Mayor Michael R. Bloomberg surprised New Yorkers on Thursday by endorsing the president's bid for a second term. Mr. Bloomberg argued that Mr. Oba ma would do a better job than Mitt Romney of tackling global climate change, which he said played a role in causing Hurricane Sandy. The destruction from the storm, the mayor said, “brought the stakes of next Tuesday's presidential election into sharp relief.”

It remains to be seen whether Mr. Bloomberg's endorsement will sway anyone on Wall Street. One Obama supporter, the hedge fund manager Whitney Tilson, said he “genuinely felt business risk” in backing the president, according to Bloomberg Businessweek.

Mergers & Acquisitions '

Berkshire Hathaway to Buy Oriental Trading  |  Warren E. Buffett's company said it would buy Oriental Trading, known for its catalogs of party supplies. The price, which was not disclosed, is said to be “about $500 million,” according to The Wall Street Journal. The deal would pro vide an exit for K.K.R.
REUTERS  |  WALL STREET JOURNAL

Rothschild Said to Plan Rival Bid for Bumi  |  Nathaniel Rothschild is forming a group to challenge the Bakrie family's plan to take over Bumi, the mining company, Reuters reports, citing unidentified people familiar with the matter.
REUTERS

What Next for Netflix?  |  Carl C. Icahn will probably push for a sale of Netflix, which the company may try to defend even if shareholders want a sale to happen, writes Steven M . Davidoff in the Deal Professor column.
DealBook '

Netflix Says It Is Open to Icahn's ‘Perspective'  |  In response to Carl C. Icahn's announcement that he had built up a roughly 10 percent stake in Netflix, the company said it is open to his perspective on how to build success.
DealBook '

George Lucas Plans to Use Lucasfilm Profit for Philanthropy  |  A spokesperson for Mr. Lucas told Vanity Fair that he would donate “the majority of the proceeds” from the sale of Lucasfilm to “philanthropic endeavors.”
VANITY FAIR

INVESTMENT BANKING '

Should the C.E.O. and Chairm an Roles Be Separate?  |  Bloomberg Businessweek says it conducted a study that found that separating the role “tends to reverse a company's performance: Low-performing firms benefit from a separation event, while high-performing firms suffer.”
BLOOMBERG BUSINESSWEEK

Deutsche Bank Names Chief of North American Unit  |  Jacques Brand has been appointed chief executive of Deutsche Bank's North American operations.
DealBook '

A.I.G. Profit Beats Expectations  |  But the insurer's shares fell in after-hours trading, amid questions about the government's plan to sell its stake, Reuters reports.
REUTERS

Editor Who Published Names of Greeks With Swiss Bank Accounts Is Acquitted  | 
NEW YORK TIMES

PRIVATE EQUITY '

Advance Auto Parts Said to Consider a Sale  |  Private equity firms may be looking to Advance Auto Parts for the next big leveraged buyout, at least by the standards of the post-financial-crisis era.
DealBook '

Inside Private Equity's Lobbying Effort  |  In its effort to improve its image, the buyout industry is looking to sway “about 70 members of Congress who represent districts in presidential battleground states or who hold key committee positions,” The Wall Street Journal reports.
WALL STREET JOURNAL

Alcatel-Lucent Considers Selling Assets  |  Alcatel-Lucent, the phone equipment company that offloaded a business to Permira last year, is considering options “such as reprofiling our debt or an infusion of liquidity, including asset sales,” the chief financial officer said.
REUTERS

HEDGE FUNDS '

Clearwire Investor Demands Sale of Spectrum  |  Sprint Nextel may have designs on the struggling cellphone network operator Clearwire, but a minority investor in Clearwire is calling on the company to remember its smaller shareholders.
DealBook '

Edoma Partners Hedge Fund to S hut Down  |  A hedge fund run by Pierre Henri-Flamand, a former head of proprietary trading at Goldman Sachs, is closing, Reuters reports. The fund's assets have shrunk to $855 million from a peak of $2 billion, according to Reuters.
REUTERS

Hedge Fund's Wager on Greek Bonds Pays Off  |  Adelante Asset Management, a London-based hedge fund, “has made a 70 percent gain on a sale of Greek bonds,” Reuters reports.
REUTERS

I.P.O./OFFERINGS '

Chinese Insurer Said to Prepare for I.P.O.  |  The People's Insurance Company of China “plans to start gauging investors' interest this month for an initial public offering in Hong Kon g that could raise up to $4 billion,” according to MarketWatch, which cites unidentified people familiar with the matter.
MARKETWATCH

LEGAL/REGULATORY '

Company That Sold Shares Under New Rules Is Charged With Fraud  |  A company called Caribbean Pacific Marketing “appears to have become the first ‘emerging growth company' as defined by the JOBS Act to have prompted charges of securities fraud by the Justice Department and an effort by the Securities and Exchange Commission to halt sales of the stock,” writes Floyd Norris in his column in The New York Times.
NEW YORK TIMES

The Bruce-Bharara Bromance  |  At a concert attended by the United States attorney for Manhattan, Bruce Springsteen shouted, “This is for Preet Bharara!” before ripping into “Death to My Hometown.”
DealBook '

At American Express, Warnings About the ‘Fiscal Cliff'  |  Companies are starting to warn investors about the harsh effects of federal spending cuts and tax increases, which would begin to take effect after Dec. 31.
DealBook '

A Mortgage Regulator's Digs  |  Edward DeMarco, a regulator who has resisted calls to forgive homeowners' debt, “lives in a 1961 split-level brick house with a bas ketball hoop in the driveway and a green Subaru in the carport,” according to Bloomberg Businessweek.
BLOOMBERG BUSINESSWEEK