For years, Wall Street research analysts have been barred from pitching initial public offering business. But with the market for I.P.O.’s making a comeback, some analysts say Wall Street is slipping back to its old ways, Peter Lattman and Susanne Craig report in DealBook.
A decade ago, the biggest banks agreed to bar their analysts from I.P.O. solicitations after regulators, led by Eliot Spitzer, then the New York attorney general, uncovered evidence that during the Internet boom some analysts issued overly optimistic reports about start-ups to help their colleagues on the investment banking side. “Today, companies routinely interview analysts when selecting bankers to underwrite their I.P.O.’s. During these meetings, the analysts say, they increasingly feel pressure to say the right things to curry favor with a company’s management and owners. They also see themselves as participating in their banks’ efforts to win business, a potential breach of government regulations,†DealBook reports.
“The enforcement department of the Financial Industry Regulatory Authority, or Finra, Wall Street’s self-regulatory body, has sent an inquiry asking several firms for information on the issue, said people briefed on the matter who spoke on the condition of anonymity.â€
Jay R. Ritter, a professor at the University of Florida who studies the I.P.O. market, said: “The walls between research and banking can still be porous.â€
PROSECUTORS AND F.B.I. EXAMINE JPMORGAN OVER LOSSES  | With federal authorities preparing to criminally charge two former JPMorgan Chase employees suspected of misrepresenting the multibillion-dollar trading loss known as the “London Whale,†prosecutors in Manhattan are separately exploring ways to penalize the bank, Ben Protess and Jessica Silver-Greenberg report in DealBook.
“The investigation, according to people briefed on the matter, could yield a fine and a reprimand of the bank for allowing the suspected wrongdoing to occur. Prosecutors at the United States attorney’s office in Manhattan could also require the bank to bolster internal controls that failed to thwart the trading loss. The action would come in addition to civil charges from the Securities and Exchange Commission, which could announce a settlement with the bank as soon as this fall.â€
HOW SUMMERS MADE HIS MILLIONS  | If the White House nominates Lawrence H. Summers as the next chairman of the Federal Reserve, his financial disclosure “will be one of the hottest documents in Washington,†Louise Story and Annie Lowrey report in The New York Times. “Among the top contenders for the position, Mr. Summers has by far the most Wall Street experience and the most personal wealth.â€
After leaving his job as President Obama’s top economic policy adviser at the end of 2010 to return to Harvard University, Mr. Summers jumped into a moneymaking spree, setting up a roster of part-time positions across the financial world. He has been employed by Citigroup and the hedge fund D.E. Shaw; he works for a firm that advises small banks as well as the exchange company Nasdaq OMX; and he is on the boards of two finance-oriented Silicon Valley start-ups that may pursue initial public offerings in the next year, The Times reports.
“His clock was ticking partly because he knew that the Fed chairmanship, to which he has long aspired, was likely to open up in early 2014, when Ben S. Bernanke’s second term will come to an end.â€
ON THE AGENDA Â |Â
Lawyers for Carl C. Icahn are set to urge a Delaware judge to speed up his lawsuit seeking to stop the proposed buyout of Dell by its founder. James Woolery, deputy chairman of Cadwalader Wickersham & Taft, is on CNBC starting at 7 a.m.
IN THE HOUSE, SEATS OF PLENTY  | Representative Andy Barr, a Republican from Kentucky with little experience in the intricacies of Wall Street, has become a telling example of why the powerful House Financial Services Committee is sometimes called “the cash committee,†Eric Lipton reports in The New York Times. It is a place, critics say, where there are big incentives for House freshmen to do special favors for the financial industry. “Mr. Barr, 40, a first-time elected official, has raised nearly as much money this year from political action committees run by major banks, credit unions and insurance companies as longtime lawmakers like Speaker John A. Boehner and other party leaders.â€
Rockwell Collins to Buy Arinc for $1.39 Billion  | Rockwell Collins agreed on Sunday to buy Arinc, a maker of commercial flight systems, from the Carlyle Group. DealBook »
NBC Buying Stringwire to Stream Phone Video  | NBC News, a unit of Comcast’s NBCUniversal, will announce on Monday its acquisition of Stringwire, an early stage Web service to stream live video from the cellphones of witnesses at a news event, The New York Times reports. NEW YORK TIMES
Brighter Spotlight on The Times  | The New York Times is optimistic about staying competitive in an increasingly digital world. James B. Stewart, in his Common Sense column in The Times, asks whether it should be. NEW YORK TIMES
A Buffett Play for the Washington Post Company?  | Now that the Washington Post Company has sold its flagship newspaper, Andrew Bary of Barron’s speculates that one possibility down the road for the remaining television and education company could be a sale to Warren E. Buffett’s Berkshire Hathaway. BARRON’S
The Housing Market Lacks a Backbone  | “With the government backing or financing nine out of 10 residential mortgages today, it is crucial to lure back private capital, with no government guarantees, to the home loan market,†Gretchen Morgenson writes in her column in The New York Times. NEW YORK TIMES
A News Service for Traders Attracts Scrutiny  | Need To Know News, a service owned by Deutsche Börse that sends “data directly from the government through high-speed lines to financial firms that are able to trade on it instantly,†is treated as a media outlet when representatives of the organization are invited to a sealed room for an early look at government data, The Wall Street Journal reports. WALL STREET JOURNAL
This ‘Ironman Market’ Receives Little Respect  | “In some ways, it’s the most detested bull market of all time,†Michael Hartnett, chief global equity strategist at Bank of America Merrill Lynch, tells Jeff Sommer, a columnist for The New York Times. NEW YORK TIMES
Cantor Fitzgerald and Former Employee Trade Lawsuits  | The brokerage firm Cantor Fitzgerald accused a former derivatives trader in Singapore of making a blackmail threat, and the former employee sued for wrongful dismissal, Bloomberg News reports. BLOOMBERG NEWS
For BlackBerry, a Buyout Would Not Be a Cure-All  | Reuters writes: “A deal to take BlackBerry Ltd. private could make sense from a financial standpoint, say private equity executives, though any such move won’t by itself make the smartphone company more competitive.†REUTERS
Charges Fly in Feud Over Strategy at J.C. Penney  | William A. Ackman stepped up his fight against fellow directors of J.C. Penney, calling for the replacement of the chairman and reiterating a demand for a new chief executive. DealBook »
Falcone Adds Defendants in Effort to Keep LightSquared  | Just days after suing the satellite television mogul Charles W. Ergen and another hedge fund in a last-ditch attempt to maintain control of LightSquared, Philip A. Falcone has turned his focus on the GPS industry in another lawsuit. DealBook »
Renewable Energy Company Files for I.P.O. Â |Â The Pattern Energy Group, which owns and operates wind power projects, filed on Friday to raise up to $345 million in an initial public offering, though that amount could change, Reuters reports. REUTERS
Technology Extends a Hand to Print Media  | “Call it a sense of obligation. Or responsibility. Or maybe there is even a twinge of guilt. Helping print journalism adapt to a changed era is becoming a cause de jour among the technology elite,†The New York Times writes. NEW YORK TIMES
Human Resources Software Company Raises $16 Million  | SilkRoad, a talent management technology start-up, raised $16 million in financing, bringing its total money raised to $145 million, the company announced on Monday. Investors included Foundation Capital and Intel Capital. SILKROAD
Fearing Loss of Capital, SAC Talks of Layoffs  | The beleaguered hedge fund SAC Capital Advisors is bracing for investors to pull virtually all of their remaining money, a humbling blow to a once-powerful firm hobbled by criminal insider trading charges. DealBook »
Sallie Mae to Be Accused of Overcharging Military Members on Loans  | The New York Times reports: “Federal regulators plan to accuse Sallie Mae, the giant student lending corporation, of charging military personnel excessive interest on student loans, and the government is looking into similar allegations against other lenders.†NEW YORK TIMES
Commodities Regulator Is Said to Seek Documents From Metals Warehousing Firm  | The Commodity Futures Trading Commission has delivered a subpoena to a metals warehousing firm, seeking records related to the London Metal Exchange, Reuters reports. REUTERS
