UBS Approaches Deal on Rate Rigging

The Swiss bank UBS “is close to reaching settlements with American and British authorities over the manipulation of interest rates,” DealBook's Ben Protess and Mark Scott report. “UBS is expected to pay more than $450 million to settle claims that some employees reported false rates to increase the bank's profit, according to officials briefed on the matter who spoke on the condition of anonymity because the talks were private.”

The collective penalties being discussed would top the $450 million settlement that authorities struck with Barclays in June, DealBook writes. “The authorities claim that UBS traders colluded with rival banks to influence rates in an effort to bolster their profits, according to officials briefed on the matter.” The UBS settlement is expected to heighten calls for overhauling the Libor system.

“American authorities are hoping to complete a deal with UBS by the middle of the m onth, according to officials briefed on the matter. The officials noted that the discussions could spill into next year. The talks could also break down, in which case the authorities would file a lawsuit against the bank.” More than a dozen banks are being investigated by the Justice Department, the Commodity Futures Trading Commission and Britain's Financial Services Authority. Two American banks, Citigroup and JPMorgan Chase, have been identified as targets.

 

MORGAN STANLEY TRADER UNDER INVESTIGATION  |  The head of Morgan Stanley's global interest rate desk, Glenn Hadden, is the focus of a regulatory investigation into his trading of Treasury futures while at his previous employer, Goldman Sachs, DealBook's Susanne Craig reports. “Regulators at the CME Group, which runs commodity and futures exchanges, are investigating whether Mr. Hadden's purchases or sales of Treasu ry futures late in the trading day manipulated closing prices in the market and, in turn, made other of his trades more profitable, according to people briefed on the matter who were not authorized to speak publicly.”

Mr. Hadden, a highly paid trader known for his aggressive risk taking, has been given formal notice by the CME that an inquiry is under way, Ms. Craig reports. “It is unusual for someone of Mr. Hadden's stature to be the target of a civil complaint like this, and if he is found to have violated exchange rules, he could, in the extreme, face millions in fines and be barred from trading on the CME Group.”

Mr. Hadden has previously drawn the ire of regulators. He was put on paid leave from Goldman in 2009 after the firm received complaints from the Federal Reserve Bank of New York - a controversy of which Morgan Stanley was also aware, Ms. Craig reports. “Traders at the Fed, according to people briefed on the matter, suspected that Goldman was trying to improperly profit from one of the federal government's bond-buying programs, which are aimed at stimulating economic growth.”

 

DELTA IN TALKS OVER STAKE IN VIRGIN ATLANTIC  |  Delta Air Lines is in talks to buy a 49 percent stake in Virgin Atlantic Airways from Singapore Airlines, the latest sign of consolidation in the airline industry, Jad Mouawad and Michael J. de la Merced report in DealBook. “Talks are continuing but a deal will not be announced soon,” DealBook reports, citing a person briefed on the matter.

A transaction would “be Delta's most significant strategic move since its 2008 merger with Northwest Airlines, which made it the biggest American carrier until the union of United Airlines and Continental Airlines last year.” It would also help strengthen Delta's international operations and give it more access to London's Heathrow Airport. F or Virgin, a deal could give it a competitive edge and also allow for an eventual change of control of the airline.

 

ON THE AGENDA  |  The three-day UBS Global Media and Communications conference begins in Manhattan, where the chief executive of Viacom, Philippe Dauman, is to speak at 12:30 p.m. The Financial Stability Oversight Council holds a closed-door meeting in Washington. Alan R. Mulally, chief executive of the Ford Motor Company, is on CNBC at 8 a.m. and on Bloomberg TV at 12:30 p.m. Stephen A. Schwarzman of the Blackstone Group is on CNBC at 3:10 p.m. Anthony Scaramucci of SkyBridge Capital is on CNBC at 5 p.m. The Institute for Supply Management releases results of its manufacturing survey for November at 10 a.m.

 

GREECE ANNOUNCES BUYBACK OFFER  |  Greece has presented the terms of its offer to buy back bonds from investors. The troubled nation is offering to pay 10 billion euros ($13 billion) for the debt, at an average maximum price of 34.1 cents on the euro, Bloomberg News reports. That price is “higher than previously published or announced,” Spyros Politis, head of an Athens-based asset manager, told Bloomberg. “At the moment it looks as if it will be successful, or if they miss the target, they will miss it by a small margin.”

The International Monetary Fund has insisted Greece must complete the buyback, which is intended to reduce the government's debt load by as much as 30 to 40 billion euros, before it signs off on the latest package of aid. DealBook reported on Friday: “Hedge funds are holding firm on their stance that they will not sell for any price below 35 cents on the euro - a significant premium to today's average price of around 30 cents.” The market for Greek debt had become robust in anticipation of th e offer.

Greece plans to conduct the transaction as a modified Dutch auction, with bondholders submitting the prices they are willing to accept. Finance ministers of the euro zone are set to meet in Brussels on Monday to discuss the troubles of Greece and Cyprus. The economist Tyler Cowen writes in The New York Times that the negotiations in Europe are like a game of chicken. “Unfortunately, the economic study of strategic behavior - also known as game theory - suggests that if you play chicken too many times, you will eventually crash the proverbial car.”

 

 

 

Mergers & Acquisitions '

Cable and Wireless to Sell Units for Up to $1 Billion  |  Cable and Wireless Communications of Britain agreed on Monday to sell a number of businesses to the phone operator Bate lco Group of Bahrain for up to $1 billion. DealBook '

 

News Corp. Shuffles Top Management  |  Tom Mockridge, who was chief executive of News Corporation's British newspapers after a phone hacking scandal, is stepping down at the end of the year, he announced on Sunday. The news followed reports that Robert Thomson, the top editor at The Wall Street Journal, would be named chief executive of News Corporation's planned spinoff publishing company. NEW YORK TIMES MEDIA DECODER

 

Martin Marietta Said to Be Weighing Friendly Offer for Vulcan  |  After an earlier unsolicited offer for Vulcan Materials was rejected, Martin Marietta Materials is now “likely to explore a friendly offer” for Vulcan, The Wall Street Journal reports, citing unidentified people familiar with the decision. WALL STREET JOURNAL

 

Airbus Parent Expected to Alter Investor Base  |  The New York Times reports: “The board of European Aeronautic Defense and Space, the parent company of Airbus, was expected Monday to announce a significant restructuring of its core shareholder base that would give the German government a direct stake in the group equal to that of France.” NEW YORK TIMES

 

H.P.'s Blunder for the Record Books  |  Until now, it seemed likely that a deal like AOL's acquisition of Time Warner would never be repeated, rivaled or surpassed, reports James B. Stewart, the Common Sense columnist for The New York Times. DealBook '

 

Berkshire Moves Into Spain With CaixaBank Reinsurance Deal  |  Warren E. Buffett and his sizable insurance team are betting that at least one Spanish firm is in good financial shape, even as its home country remains on shakier economic ground. DealBook '

 

INVESTMENT BANKING '

Bank of America Holds Off on New Fees  |  The bank “has shelved plans for new fees that could have hit at least 10 million customers by the end of this year, skirting a potential replay of a 2011 uproar over consumer-banking charges,” The Wall Street Journal reports. WALL STREET JOURNAL

 

Goldman Pitches Subprime Mortgages to Clients  |  Goldman Sachs “said in a Nov. 28 report on its top 10 market themes for 2013 that clients should buy some” derivatives linked to subprime mortgages, Bloomberg News reports. BLOOMBERG NEWS

 

Pressure Mounts on Credit Suisse C.E.O  |  Brady W. Dougan, the head of Credit Suisse, “has outmaneuvered an internal rival with his recent revamp of the Swiss bank and management shake-up but is still on borrowed time, senior banking sources say,” Reuters reports. REUTERS

 

Buffett's Broad Appeal  |  Warren E. Buffett's investing style sets him apart from the times, and his calls for higher taxes set him apart from the superrich. “Rather than fret about Buffett's being a traitor to his class, Wall Street and the superrich should see that his message helps keep the pitchforks at bay,” The New Yorker's James Surowiecki writes. “If Buffett didn't exist, the rich would have had to invent him.” NEW YORKER

 

HSBC Names New Head of Retail Banking  | 
REUTERS

 

PRIVATE EQUITY '

K.K.R. Struggles to Get a Foothold in Japan  |  K.K.R.'s experience “underscores the hurdles private-equity firms face in Japan, and how the government and big corporations still wield influence over strategic industries,” The Wall Street Journal writes. WALL STREET JOURNAL

 

K.K.R. Ends Talks on Lending to IDB Holding of Israel  | 
REUTERS

 

HEDGE FUNDS '

Some SAC Investors Move Toward the Exit  |  The French bank Société Générale, which has money in SAC Capital Advisors through an asset management arm, is among investors that have put in requests to withdraw money, as the hedge fund is the focus of an intensifying government investigation, The Wall Street Journal reports. WALL STREET JOURNAL

 

Tax Increases on Investments Would Not Be So Bad, Some Say  |  The hedge fund manager Douglas Kass, founder of Seabreeze Partners Management, says fears of the negative effects of tax inc reases on dividends and capital gains may be overblown, The New York Times reports. NEW YORK TIMES

 

Explaining Argentina's Debt Mess Through Legos  |  Felix Salmon of Reuters dramatizes the struggle between Argentina and its bondholders, including Elliott Management, with a cast of Lego actors. REUTERS

 

Hedge Funds Start-Ups Take a Quantitative Approach  |  The Financial Times reports: “Trend-following quantitative ‘black-box' hedge funds are accounting for their highest-ever proportion of hedge fund start-ups, despite weak returns since the financial crisis.” FINANCIAL TIMES

 

I.P.O./OFFERINGS '

Spanish Phone Company Plans to Float Part of Latin American Unit  |  The Spanish mobile company Telefónica may list up to 15 percent of its Latin American operations, a deal that could raise more than $4.6 billion, Reuters reports. REUTERS  |  FINANCIAL TIMES

 

Facebook's Unlikely Insider Takes a Different Path  |  Chris Hughes, who was at Facebook from the beginning, now runs The New Republic. New York magazine writes of the company's chief executive, Mark Zuckerberg: “If Zuckerberg used to refer to himself, presumably jokingly, as the ‘enemy of the state,' Hughes, whose demeanor is less piratical, has his eye on state dinners.” NEW YORK

 

VENTURE CAPITAL '

Uber Runs Afoul of Regulators  |  Transportation regulators in Washington recently discussed ways to clarify the legality of apps, including Uber, that allow users to request rides in taxis or cars. The New York Times reports that the regulators “proposed guidelines that would effectively force Uber, a San Francisco start-up, to cease operations in the United States.” NEW YORK TIMES

 

Hosts of Airbnb Travelers May Be Breaking the Law  |  The New York Times columnist Ron Lieber writes about the start-up Airbnb, which lets people host travelers in their homes: “Local laws may prohibit most or all short-term rentals under many circumstances, though enforcement can be sporadic and you have no way of knowing how tough your local authorities will be.” NEW YORK TIMES

 

Partnership Aims to Support Media Entrepreneurs  |  The New York Times reports: “Matter Ventures, a start-up accelerator that will provide four months of financial and logistical support for budding media entrepreneurs, will be unveiled Monday by its partners: KQED, a public television and radio station operator; the John S. and James L. Knight Foundation; and the Public Radio Exchange, known as PRX.” NEW YORK TIMES

 

LEGAL/REGULATORY '

Widows Fall Victim to Foreclosure  |  The New York Times reports: “Just as the housing market is recovering, a growing group of homeowners - widows over the age of 50 whose husbands a lone were holders of the mortgage - are losing their homes to foreclosure because of a paperwork flaw that keeps them from obtaining loan modifications.” NEW YORK TIMES

 

F.H.A. Heads Toward a Crisis  |  If the Federal Housing Administration “were to stop insuring new home loans today, it wouldn't have the money it needs to cover its expected losses in the coming years,” Gretchen Morgenson writes in The New York Times. NEW YORK TIMES

 

Silicon Valley Legend on the Lam in Belize  |  John McAfee, who made his fortune from computer antivirus software, is a “person of interest” in the investigation of a murder in Belize, and “has turned lamming it into a kind of high-tech performance art,” The New York Tim es reports. NEW YORK TIMES

 

S.E.C. Chief Said to Have Been Influenced by Concerns Over Legacy  |  The Wall Street Journal reports: “In one of her last acts as chairman of the Securities and Exchange Commission, Mary Schapiro delayed a rule potentially affecting hundreds of billions of dollars of private offerings by companies, in part because of concerns about her personal legacy, according to previously unpublished documents.” WALL STREET JOURNAL

 

Aide to Obama in the Spotlight in Fiscal Talks  |  Jacob J. Lew, the president's budget director, has much at stake in the current negotiations in Washington over tax increases and spending cuts. If the talks fails, The New York Times reports, “Mr. Lew could wind up with a blot on his nearly impeccable record.” NEW YORK TIMES

 

Hospital in Brooklyn Plans to Declare Bankruptcy  |  Interfaith Medical Center “is planning to declare bankruptcy this week, hospital officials said on Sunday, raising concerns that New York State may force it to close or merge with another institution,” The New York Times reports. NEW YORK TIMES