KHUZAMI SWITCHES SIDES  | Six months after leaving his post as Wall Street’s top federal enforcer, Robert S. Khuzami has accepted a job that pays more than $5 million a year at Kirkland & Ellis, one of the nation’s biggest corporate law firms, DealBook’s Ben Protess and Peter Lattman report. “In doing so, he is following the quintessential Washington script: an influential government insider becoming a paid advocate for industries he once policed.â€
Mr. Khuzami, the former enforcement chief at the Securities and Exchange Commission, was wooed by financial giants like Visa and Bridgewater, and by white-shoe law firms like WilmerHale, before deciding to join Kirkland as a partner. Though Mr. Khuzami will represent some of the same corporations that the S.E.C. oversees, he argues that defense work is essential to the justice system.
“It’s both aggressive enforcement and vigorous defense that are critical to justice and fairness,†Mr. Khuzami, who will start in Kirkland’s Washington office around Labor Day, said in an interview.
TELEFONICA TO BUY E-PLUS OF GERMANY  | The Spanish telecommunications giant Telefónica agreed on Tuesday to buy Germany’s smallest mobile operator, E-Plus, from its Dutch rival KPN in a cash and stock deal worth an implied 8.1 billion euros ($10.7 billion), amid signs of accelerating consolidation in Europe’s phone sector. The deal, subject to approval from European antitrust officials and the boards of both companies, would reduce the number of network operators in Germany and create a rival to T-Mobile Germany and Vodafone Germany, which together dominate the market, Kevin J. O’Brien reports in DealBook. Telefónica plans to combine E-Plus with O2 Germany, which it already owns.
U.S. EXAMINES BANKS’ STORAGE OF COMMODITIES  | The Commodity Futures Trading Commission has begun an examination of warehouse operations controlled by Goldman Sachs, Glencore Xstrata, the Noble Group and others, as the commission scrutinizes a tactic that has inflated the price of aluminum, Gretchen Morgenson and David Kocieniewski report in The New York Times. The operations were the subject of a Times article over the weekend.
The trading commission has told the firms to retain internal documents and e-mails related to the business, people who reviewed the requests and spoke on the condition of anonymity told The Times. On Tuesday, a Senate Banking subcommittee holds a hearing on how Wall Street has extended its reach beyond banking and into global commodities markets. “The overarching question is whether banks should control the storage and shipment of commodities, and whether such activities could pose a risk to the nation’s financial system,†Ms. Morgenson and Mr. Kocieniewski write.
ON THE AGENDA Â |Â DuPont, in which the activist investor Nelson Peltz is said to be invested, reported a 13 percent decline in net income in the second quarter and said it was exploring a possible sale or spinoff of its performance chemicals unit. Apple and AT&T report earnings after the market closes. Julian Robertson of Tiger Management is on Bloomberg TV at 7 a.m. Wilbur Ross is on CNBC starting at 7 a.m.
AT SAC, A TOWERING FINE FOR NAUGHT  | When Steven A. Cohen’s firm, SAC Capital Advisors, agreed four months ago to pay $616 million to the Securities and Exchange Commission, it sounded like a payoff. But the settlement, to resolve civil accusations that the hedge fund was involved in insider trading without admitting or denying guilt, did not work, Andrew Ross Sorkin writes in the DealBook column. The S.E.C. returned with a new civil action against Mr. Cohen individually on Friday, seeking to bar him from the industry. That raises a baffling question within the legal community, Mr. Sorkin writes: Why did Mr. Cohen pay so much to settle a case that now appears far from settled?
Mr. Sorkin writes: “Within Mr. Cohen’s legal camp, which includes Paul, Weiss and Willkie Farr, the new civil action came as a surprise, according to people involved in the case. His legal team had thought that by settling with the S.E.C. in March for such a large sum it would be unlikely that the agency would come back for more, despite assertions by the S.E.C. that it reserved the right to pursue additional charges against Mr. Cohen.â€
PacWest Bancorp to Buy CapitalSource  | The bank holding company PacWest Bancorp is paying about $2.29 billion in cash and stock for CapitalSource, a commercial bank, to expand in Southern California, Reuters reports. REUTERS
Vivendi Says It Is in Talks to Sell Stake in Maroc  | Vivendi said it was discussing a sale of its majority stake in Maroc Telecom to Etisalat for 4.2 billion euros ($5.54 billion) in cash, Reuters reports. REUTERS
Dell’s Buyout Fate Still Hinges Mostly on Icahn  | Just two days from Dell’s new deadline for counting votes on its founder’s proposed buyout, the company’s fate appears to rest firmly in the hands of the activist investor Carl C. Icahn and his ally, Southeastern Asset Management, as well as the mutual-fund manager T. Rowe Price. DealBook »
Chevron to Spend $770 Million on Development Projects  |Â
NEW YORK TIMES
Japanese Companies Go Shopping in Southeast Asia  | So far this year, Japanese companies have announced $8.2 billion of acquisitions in Southeast Asia, according to Dealogic, The Wall Street Journal reports. WALL STREET JOURNAL
Deutsche Bank Hints It Will Take Steps to Reduce Risks  | If Deutsche Bank does announce a plan to reduce its assets, it would probably do so on July 30, when it discloses second-quarter earnings. DealBook »
Deutsche Bank Hires Former UBS Banker in Thailand  | Phumchai Kambhato, previously the head of investment banking for Thailand at UBS, is joining Deutsche Bank as head of corporate banking and securities and head of corporate finance for Thailand, The Wall Street Journal reports. WALL STREET JOURNAL
UBS Reaches Settlement on Mortgage Securities  | The big Swiss bank UBS said it had reached an agreement in principle with the Federal Finance Housing Agency to settle claims related to mortgage-backed securities issued between 2004 and 2007. DealBook »
Singapore Gains Clout in Wealth Management  | The Financial Times reports: “Singapore’s position as one of the world’s fastest-growing wealth management hubs was highlighted on Tuesday when it said assets under management rose more than a fifth over the past year.†FINANCIAL TIMES
R.B.S. Sued by Former Employee Over Bonus  | A former head of emerging market rates for the Royal Bank of Scotland claims his bonus was wrongfully forfeited, Bloomberg News reports. BLOOMBERG NEWS
K.K.R. Invests in Indonesia Consumer Market  | The private equity firm K.K.R. agreed on Monday to buy a 9.5 percent stake in Tiga Pilar Sejahtera, a snack food company listed in Jakarta, The Financial Times reports. FINANCIAL TIMES
Activist Investor to Step Down From Yahoo Board  | Daniel S. Loeb, whose campaign to change Yahoo culminated in the appointment last year of Marissa Mayer as the company’s chief executive, is resigning from the board. DealBook »
Loeb Wins and Shareholders Lose Out at Yahoo  | Yahoo’s repurchase of a large chunk of Daniel S. Loeb’s stake sucks up most of the cash the company reserved for buybacks, Robert Cyran of Reuters Breakingviews writes. It also heralds the departure of three Third Point-approved directors, robbing Yahoo of some much-needed advisers. REUTERS BREAKINGVIEWS
Hedge Funds Act as Lenders When Banks Won’t  |Â
WALL STREET JOURNAL
Oil Trader Prepares to Start New Commodities Firm  |Â
ABSOLUTE RETURN
Thai Billionaire Plans $2.3 Billion Infrastructure Fund I.P.O.  | The True Corporation, a 3G and broadband network operator in Thailand controlled by the billionaire Dhanin Chearavanont, said it planned to use proceeds from the proposed spinoff of telecommunications assets to reduce debt. DealBook »
Extended Stay America Aims to Go Public  | Extended Stay, a hotel chain owned by three investment firms, filed on Monday for an initial public offering. The I.P.O. would be the latest deal to test investors’ willingness to bet on a recovery in real estate. DealBook »
Netflix Reports Strong Quarter, but Investors Hit Pause  | The New York Times reports: “Netflix’s subscriber gains â€" an improvement over last year’s performance during what is traditionally its weakest quarter of the year â€" and overall profits were well within projections, but some investors, hoping for more, sent the stock down about 8 percent in after-hours trading before rebounding somewhat. That result alludes to one of the challenges Netflix faces: maintaining the enthusiasm of both investors and subscribers to its video-streaming services.†NEW YORK TIMES
Start-Up Raises $15.4 Million for Autism Test  | A Massachusetts company called SynapDx raised a round of financing led by Google Ventures to develop a blood test for autism, TechCrunch reports. TECHCRUNCH
That Dell E-Mail? Cohen Didn’t Read It, Lawyers Say  | In a report that responds point-by-point to the Securities and Exchange Commission’s civil action, lawyers for Steven A. Cohen claim he “did not even read†an e-mail about Dell at the center of the case, The Wall Street Journal reports. WALL STREET JOURNAL
Tourre Lawyers Focus on Reliability of Federal Witness  | Lawyers for the former Goldman Sachs trader Fabrice Tourre tried to cast doubt on the witness, Gail Kreitman, over differences between statements made in 2009 and while on the stand. DealBook »
New Powers Invoked to Curb a High-Speed Trading Feint  | Three regulatory agencies set penalties on Panther Energy Trading for a practice known as “spoofing,†in which bogus orders are used to draw in other traders and manipulate markets. DealBook »
Detroit Blazes a Path It Never Wanted  | Unlike other municipal debtors that have overextended themselves or made poor financial choices, Detroit is in much deeper trouble, Stephen J. Lubben writes in the In Debt column. Its trip through bankruptcy will be in uncharted territory. DealBook »
Signs That a Financial Overhaul May Be in the Works in China  | Beijing is taking incremental, but symbolic, steps toward financial reform, Bill Bishop writes in the China Insider column. DealBook »
