U.S. POISED TO SUE CORZINE OVER MF GLOBAL  | Federal regulators are preparing to sue Jon S. Corzine over the collapse of MF Global and the brokerage firm’s misuse of customer money, DealBook’s Ben Protess reports. The Commodity Futures Trading Commission, the agency that regulated MF Global, plans to approve the lawsuit as soon as this week against Mr. Corzine, the former New Jersey governor who ran the firm until its bankruptcy in 2011, according to law enforcement officials with knowledge of the case. In a rare move, the agency has informed Mr. Corzine’s lawyers that it intends to file the civil case without offering him the opportunity to settle, setting up a potentially lengthy legal battle, Mr. Protess reports.
“Without directly linking Mr. Corzine to the dsappearance of more than $1 billion in customer money, the trading commission will probably blame the chief executive for failing to prevent the breach at a lower rung of the firm, the law enforcement officials said,†Mr. Protess writes. “If found liable, he could face millions of dollars in fines and possibly a ban from trading commodities, jeopardizing his future on Wall Street.†A spokesman for Mr. Corzine in a statement denounced the trading commission for planning to file what he called an “unprecedented and meritless civil enforcement action.â€
Mr. Protess says: “A case would darken the cloud over the legacy of Mr. Corzine, 66, who as a onetime Democratic governor and senator from New Jersey and a former chief of Goldman Sachs has long been a confidant of leaders in Washington and on Wall Street. But it would also suggest that authorities have all but removed a greater threat: criminal charges.â€
DID BERNANKE ! SAY TOO MUCH?  | Ben S. Bernanke, the normally restrained Federal Reserve chairman, said far more during a news conference on Wednesday than he usually does, and he went further about the Fed’s policy plans than the central bank committee had said in its official statement. With markets now in a tailspin, some economists and others are asking whether Mr. Bernanke is being too chatty, Andrew Ross Sorkin writes in the DealBook column. Even a regional president of the Fed, James B. Bullard, publicly questioned the decision to let Mr. Bernanke expound on the committee’s thinking.
“It wasn’t that long ago that any Fed chairman hardly said a word,†Mr. Sorkin writes. “Ever since the financial crisis, with calls for more transparency, Mr. Bernanke has taken a different tack, holding news conferences and providing specific details and timelines for the Fedâ€s policies.â€
A STAMPEDE FROM BONDS  | Investors have been exiting their bond investments with unprecedented ferocity over the last two months and particularly over the last two weeks, Nathaniel Popper and Peter Eavis report in DealBook. “A bond sell-off has been anticipated for years, given the long run of popularity that corporate and government bonds have enjoyed. But most strategists expected that investors would slowly transfer out of bonds, allowing interest rates to slowly drift up.†Instead, ever since Mr. Bernanke’s remarks, waves of selling have convulsed the markets.
The pain has spilled over into stock markets, but the real pressure has been felt in the bigger and more closely watched bond market. Retail investors have sold a record $48 billion worth of shares in bond mutual f! unds so f! ar in June, according to the data company TrimTabs. Hedge funds and other big institutional investors have also been closing out positions or stepping back. “The feeling you are getting out there is that people are selling first and asking questions later,†said Hans Humes, chief executive of the hedge fund Greylock Capital.
ON THE AGENDA Â |Â Sprint shareholders vote on the $21.6 billion bid from SoftBank. Yahoo holds its annual meeting at 11 a.m. The S.&P./Case-Schiller Index of home prices is out at 9 a.m. Data on new home sales in May is out at 10 a.m. Walgreen reports earnings before the market opens. Apollo Group reports earnings this evening.
HIGH-END RETAIL DEALS IN THE WORKS  | High-end fashion still has appeal for Wall Street, Michael J. de la Merced and Peter Lattman write in DealBook. The private equity owners of Neiman Marcus, the owner of Bergdorf Goodman in Manhattan, on Monday filed for an initial public offering. And the owner of Lord & Taylor is exploring a potential bid for Saks Inc., the 90-year-old department store chain, according to someone briefed on the matter. “Interest in both companies highlights how the market for Chanel dresses and Louis Vuitton handbags has stayed strong, despite the financial crisis. Revenue at the two retailers hovers just below 2008 levels.â€
Investors Raise Buyout Offer for Club Med  | The largest shareholders of Club Med have increased their offer to buy the French resort operator in a bid! that val! ues the company at around $740 million, as they prepare for a big push into China.
DealBook »
Men’s Wearhouse Founder Ponders a Comeback  | George Zimmer, who was ousted from the company he founded and then quit the board on Monday, is speaking with legal advisers about possible options, Reuters reports. “Industry bankers and lawyers said these options could involve teaming up with private equity firms to launch a buyout bid or trying to wage a proxy battle with the help of shareholder activists or institutional investors.â€
REUTERS
Ichn and Southeastern Press Case for Scrapping Dell Buyout  | In a presentation for fellow investors, Carl C. Icahn and the money manager Southeastern Asset Management argued that Dell remained worth much more than the $13.65 a share that Michael S. Dell and his partner are offering.
DealBook »
Cost Savings Make Vodafone Deal Palatable  | Still, Vodafone has work to do to overcome a reputation for being lumbering and for overpaying in mega-deals, Quentin Webb of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS
Warner Bros. Puts TV and Mo! vie Units! Under One Executive  |Â
NEW YORK TIMES
Inside the Bailout of Anglo Irish Bank  | The Irish Independent describes a recorded phone conversation in 2008 between two executives of Anglo Irish Bank discussing the lender’s upcoming government bailout. The senior manager, John Bowe, is heard “laughing and joking†and using a vulgarity to explain how he determined the amount of money needed in the bailout, the newspaper says.
INEPENDENT
When Brevity Is the Soul of Wall Street Research  | The gloom over Wall Street in recent days has prompted lots of commentary from analysts trying to make sense of the markets. But for one analyst, a single word did the trick.
DealBook »
Credit Warnings Offer a Glimpse Into China’s Banks  | “China’s hidden banking system is coming out of the shadows as the government seeks to rein in the excessive lending that it fears could spin out of control,†The New York Times writes.
NEW YORK ! TIMES
Amid Weakening Demand, Banks Prepare to Sell Bonds  | Bloomberg News reports: “Wall Street firms spent the past six months increasing commercial mortgage origination as investors bought the most debt in six years. That’s now backfiring as banks prepare to market $7.5 billion of loans earmarked to be sold as bonds before credit markets took a dive this month.â€
BLOOMBERG NEWS
Seibu Pushes Aside Cerberus’s Call for New Directors  | The American private equity firm Cerberus, a major shareholder in Seibu, had soughtto shake up the Japanese company’s leadership in an effort to increase value.
DealBook »
K.K.R. to Buy PRA, a Clinical Testing Company, for $1.3 Billion  | Kohlberg Kravis Roberts has agreed to buy PRA International, a provider of clinical laboratory testing services for drug makers, from another private equity firm, Genstar Capital. Terms weren’t disclosed, but a person briefed on the matter said that the purchase price was about $1.3 billion.
DealBook »
Stormy Markets Soak a Bridgewater Fund  | The $70 billion “all weather†fund of Bridgewater Associates “is down roughly 6 percent through this month and down 8 percent for the year, said two people familiar with the fund’s performance,†Reuters reports.
REUTERS
Glenview Offers Investors a Higher Fee  | Glenview Capital Management announced a new option for investors in which it would lower its management fee in exchange for a higher incentive fee, Absolute Return reports.
ABSOLUTE RETURN
REUTERS
EP Energy Said to Consider an I.P.O.  | EP Energy, an oil and gas company that was bought last year by private equity investors including Apollo Global Management, “is working with investment banks to prepare for an initial public offering as soon as this year, three people f! amiliar w! ith the matter said on Monday,†Reuters reports.
REUTERS
The Challenges Ahead for Gogo  | Shares of Gogo, a provider of in-flight Internet service, have fallen since the company’s I.P.O. last week. “The immediate problem for Gogo is that most travelers don’t pay for Wi-Fi access when they fly,†Bloomberg Businessweek reports.
BLOOMBERG BUSINESSWEEK
Demand Media Buys E-Commerce Site  | Demand Media said it acquired Society6, an online marketplace with about 300,000 members, for $94 million in cash, in a foray into e-commerce.
REUTERS
Recent Ex-Senators Find Soft Landings on Corporate Boards  | Departing senators are finding that the life of an ex-lawmaker can be lucrative. In recent months, several have found spots in corporate boardroom, even if they have no direct business experience in the industries wooing them.
DealBook »
Rajaratnam Conviction Upheld by Appeals Court  | The appeals court rejected arguments that federal prosecutors had used deceptive methods to obtain permission from a judge to tap a former hedge fund manager’s cellphone.
DealBook »
More Use of Wiretaps Is Likely to Come in Trading Cases  | An appeals court decision in the Raj Rajaratnam insider trading case means that prosecutors will have a strong impetus to employ wiretaps in other white-collar crime investigations, Peter J. Henning writes in the White ollar Watch column.
DealBook »
A Task Force for Looking Into Libor  | Bloomberg News reports: “Mark Carney, the next Bank of England governor, said global regulators will set up a task force with banks in a bid to repair or replace tarnished benchmarks in the wake of Libor and other rate-rigging scandals.â€
BLOOMBERG NEWS
Mass Layoffs at a Top-Flight Law Firm  | ! The surprising move by Weil, Gotshal & Manges, one of the country’s most prestigious and profitable law firms, underscores the financial difficulties facing the legal profession.
DealBook »
Making Misconduct a Crime  | A proposal in Britain to allow the prosecution of bank executives when they engage in reckless misconduct raises the question of whether the United States should consider a similar measure, Peter J. Henning writes in the White Collar Watch column.
DealBook »
The Bankers That Aren’t Too Big to Jail  | Attorney General Eric H. Holder Jr. et off a heated debate earlier this year when he suggested that some financial institutions may be too big to prosecute. But it’s a different story when the banks are small. To illustrate the point, American Banker has a slideshow of bankers from small firms that have been brought to justice.
AMERICAN BANKER
