CASE PUTS SPOTLIGHT ON COHEN OF SAC  | Defenders of the billionaire hedge fund manager Steven A. Cohen have argued that the unusual structure of his firm, SAC Capital Advisors, shielded him from any illegal trading by his employees. But in a legal filing on Friday, federal regulators argued that Mr. Cohen was not only aware of suspicious trading activity at SAC but participated in it, DealBook’s Peter Lattman writes. “Faced with red flags of potentially unlawful conduct by employees under his supervision, Cohen allowed his traders to execute the recommended trades and stood by,†the Securities and Exchange Commission said.
The information in the S.E.C. filing could provide ammunition for federal prosecutors and the F.B.I., Mr. Lattman writes. “Among the actions being contemplated by the Justice Department is bringing a broad conspiracy charge against the fund itself, accusing it of multiple acts of insider trading over a period of years.†The case also “adds detail on Mr. Cohen’s role in his firm’s buildup of large stakes in two drug makers, the subject of a separate criminal case, including the first mention of input from a former SAC employee who is now a hedge fund manager.â€
An SAC spokesman said Mr. Cohen at all times acted appropriately and would fight the charges.
The filing on Friday represents the first government action brought directly against Mr. Cohen after an inquiry that has persisted for nearly a decade. It includes new and detailed evidence, quoting e-mails and instant message conversations between Mr. Cohen and employees at his firm.
A LUCRATIVE SHUFFLE OF ALUMINUM Â |Â A maneuver by Goldman Sachs and other financial players adds a fraction of a penny more to the price of a can of soda, beer or juice, ultimately costing consumers billions of dollars when multiplied by the 90 billion aluminum cans consumed in the United States each year, David Kocieniewski writes in The New York Times. The story begins in 27 industrial warehouses in the Detroit area, where a Goldman subsidiary has choreographed an industrial dance to exploit pricing regulations set up by an overseas commodities exchange, Mr. Kocieniewski reports. A fleet of trucks shifts 1,500-pound bars of aluminum among the warehouses, lengthening the storage time and adding many millions a year to the coffers of Goldman, which owns the warehouses and charges rent t store the metal.
“The inflated aluminum pricing is just one way that Wall Street is flexing its financial muscle and capitalizing on loosened federal regulations to sway a variety of commodities markets, according to financial records, regulatory documents and interviews with people involved in the activities,†Mr. Kocieniewski writes. “The maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone.â€
IN JAPAN, ELECTION VICTORY SIGNALS CHANGE  | The governing Liberal Democrats in Japan secured a landslide victory in parliamentary elections on Sunday, offering Prime Minister Shinzo Abe, a nationalist who promises to revitalize Japan’s deflationary economy, “the chance to be the most transformative leader in a decade,†Martin Fackler writes in The New York Times. “The win comes at a time when many Japanese seem more open than ever to change, after years of failed efforts to end their nation’s economic slump.â€
ON THE AGENDA Â |Â
Hasbro and McDonald’s report earnings Monday morning. Netflix reports earnings after the market closes. Data on sales of existing homes in June comes out at 10 a.m. Barney Frank, the former congressman from Massachusetts, is on CNBC at 4 p.m.
DETROIT GAP REVEALS DISPUTE ON PENSION MATH  | The bad news came seemingly out of nowhere. In mid-June, a firm hired by Detroit’s emergency manager found a $3.5 billion hole in the city’s pension system. “But Detroit’s pension revelation is nothing new to many people who run pension plans for a living, the math-and-statistics whizzes known as actuaries,†Mary Williams Walsh writes in DealBook. “For several years, little noticed in the rest of the world, their staid profession has been fighting over how to calculate the value, in today’s dollars, of pensions that will be paid in the future.â€
TWILIGHT OF BIG LAW  | White-shoe law firms are facing a crisis that would have been unthinkable a generation ago, Noam Scheiber writes in The New Republic. “Part of the reason the law-firm ecosystem has changed so dramatically in a single generation is greed: The most profitable partners steadily discarded their underachieving colleagues, because they didn’t want to share the spoils. And part of the reason is the brutal recession that began in 2007, prompting corporations to slash every conceivable expense, law firms included. But the biggest problem is that there are simply many, many more high-priced lawyers today than there is high-priced legal work.â€
Ways to Muscle Out Competing Deal Offers  | AT&T’s $1.19 billion acquisition agreement with Leap Wireless includes provisions intended to protect against competing bids, Steven M. Davidoff writes in the Deal Professor column. But are such protections likely to become commonplace? DealBook »
Hutchison Whampoa May Sell Grocery Chain  | Hutchison Whampoa, which is controlled by the billionaire Li Ka-shing, confirmed that it was considering selling its ParknShop supermarket chain in Hong Kong, The Wall Street Journal reports. WALL STREET JOURNAL
Allbritton TV Stations Expected to Sell for Up to $1 Billion  | Bids for the eight television stations are due on Monday, The Wall Street Journal reports. WALL STREET JOURNAL
Buyout Firm Said to Explore Sale of Six3 Systems  | The buyout firm GTCR “hopes to fetch as much as $1 billion†for Six3 Systems, which provides intelligence services to government agencies, Reuters reports, citing four unidentified people familiar with the matter. REUTERS
UBS Quarterly Profit Rises  | UBS reported net income of about 690 million Swiss francs ($734 million) in the second quarter, compared with 524 million francs a year earlier. The bank also said it was close to a settlement over sales of mortgage-backed bonds. BLOOMBERG NEWS
How to Make Banks Safer  | “On both sides of the Atlantic, much more needs to be done on a fundamental issue - the structure of banking entities,†Michael Barr, a former assistant secretary of the Treasury for financial institutions, and John Vickers, the former chairman of Britain’s Independent Commission on Banking, write in an essay in The Financial Times. FINANCIAL TIMES
2 JPMorgan Directors Resign  | Two directors at JPMorgan Chase who had received lackluster support from shareholders resigned on Friday, the latest change in the aftermath of a multibillion-dollar trading loss last year. DEALBOOK
An Important Reminder on How Bonds Work  | A recent bulletin from the Securities and Exchange Commission, titled “Interest Rate Risk,†was a cry for understanding, Jeff Sommer writes in The New York Times. NEW YORK TIMES
How Interval Training Can Make You Incredibly Efficient at Work  | Just as runners find that short, intense workouts are a good way to train, bursts of single-minded tasks can help us be far more efficient with work, Tony Schwartz writes in the Life@Work column. DealBook »
CVC Raises Fund for European Buyouts  | CVC Capital Partners has raised 10.5 billion euros ($13.8 billion) for “the largest fund for European buyouts since the start of the financial crisis,†according to The Financial Times. FINANCIAL TIMES
S.E.C. Rejects Its Own Deal With Hedge Fund Manager  | The decision to overrule its own enforcement division’s proposed settlement with the high-flying money manager Philip A. Falcone signals a broader crackdown by the agency. DealBook »
NetApp Adds Directors Amid Push for Changes  | The addition of two directors to the board of NetApp at the urging of the activist hedge fund Elliott Management hints at a possible push for a sale. DealBook »
Facebook’s Bid to Expand in Developing World  | For more than two years, Facebook has quietly been working on a project to get the social network onto the billions of cheap “feature phones†that are still the norm in developing countries, The New York Times reports. NEW YORK TIMES
Aereo as Bargaining Chip in a Television Battle  | “Analysts have theorized that distributors could exploit Aereo, or a service like it, to avoid paying increasingly steep retransmission fees,†Brian Stelter writes in The New York Times. Aereo, a start-up backed by Barry Diller and other venture capitalists, picks up television signals and streams them to Internet-connected devices. NEW YORK TIMES
Upstarts Challenging the Taxi Industry  | “Companies like Uber are continually confronting the obstacle of entrenched government bureaucracy, resistant unions of taxi drivers and dispatchers, and overlapping and sometimes conflicting systems of state and city regulation,†Nick Bilton writes on the Bits blog of The New York Times. NEW YORK TIMES
Files Suggest Chinese Graft Case May Expand  | Apart from the British pharmaceutical giant GlaxoSmithKline, “at least six other global pharmaceutical companies, including Merck, Novartis, Roche and Sanofi, used the same travel agency to make arrangements for events and conferences,†David Barboza reports in The New York Times. NEW YORK TIMES
Glaxo Says Executives in China May Have Acted Unlawfully  | “Certain senior executives of GSK China, who know our systems well, appear to have acted outside of our processes and controls which breaches Chinese law,†the head of emerging markets for GlaxoSmithKline, Abbas Hussain, said in a statement, according to Reuters. REUTERS
Under New Chief, a Feistier S.E.C. Emerges  | A flurry of moves appeared to signal that the Securities and Exchange Commission was striking a harder line with Wall Street under its new chairwoman, Mary Jo White. DealBook »
S.E.C. Accuses Miami of Misleading Bond Investors  | The Securities and Exchange Commission filed charges on Friday afternoon, accusing Miami of giving misleading information about its finances to investors in 2009 to make its municipal bonds more attractive. DealBook »
An Effort to Pierce a Wall Street Fog  | Thanks to investigators in Europe, we may learn more about what went on behind the scenes in the trillion-dollar market for credit-default swaps, Gretchen Morgenson writes in The New York Times. NEW YORK TIMES
Former Brokers Appear in Court in Libor Case  | Two former brokers at RP Martin Holdings made their first court appearance in London on Friday in connection to charges tied to the manipulation of global benchmark interest rates. DealBook »
