TOURRE FOUND LIABLE IN FRAUD CASE  | The former Goldman Sachs trader Fabrice Tourre lost a closely watched legal battle on Thursday, when a jury found him liable on six counts of civil securities fraud after a three-week trial in Lower Manhattan, DealBook’s Susanne Craig and Ben Protess report. It was the first significant courtroom victory for the Securities and Exchange Commission in a case stemming from the financial crisis.
For the S.E.C., dogged by its failure to thwart the crisis and haunted by one courtroom disappointment after another, the case offered a shot at redemption. For Mr. Tourre, 34, who was accused of deceiving investors in a toxic mortgage deal, the threat of being barred from Wall Street came second to the black mark on his name. He has abandoned his trading career to pursue a doctorate in economics and become a teacher.
Though Mr. Torre was a midlevel employee stationed in the bowels of Goldman’s mortgage machine, the S.E.C. threw innumerable resources at the case, making the trader the face of the financial crisis. Yet even with the triumph on Thursday, the S.E.C. could still face scrutiny; five years after the crisis, it has not leveled fraud charges against one top executive at a big bank.
“He was the one that didn’t get away,†one of the nine jurors said after the verdict. “The decision-making was a slow and arduous process,†the juror, a retired teacher, said. “We went over each item with a fine-tooth comb. We looked into the semantics and tried to understand them as best as we could.â€
In the aftermath of the case, a broader question arises, Floyd Norris writes in DealBook: “Why did Fabrice Tourre’s security exist?†The mortgage security at the heart of the case “in no way helped to create capital for anything. It was a pure gamble. One side bet that the mortgage market would collapse. The other bet it would not.â€
DELL AND BUYERS SAID TO BE NEAR COMPROMISE ON TAKEOVER BID  | A special committee of Dell’s board is near a compromise with the company’s founder, Michael S. Dell, over his takeover bid for the computer maker, which would have him pay more in exchange for altering the voting rules for the bid, a person briefed on the matter told DealBook’s Michael J. de la Merced on Friday.
Mr. Dell and his partner, the investment firm Silver Lake, would pay $13.75 a share under the likely terms of the new agreement, Mr. de la Merced reports. They would also pay a special dividend of 13 cents a share. In return, the special committee would agree to change the rules for victory by no longer counting Dell shares not cast in the election as “no†votes. The agreement could push back a shareholder vote on the deal to September.
An announcement is expected before the market opens, though the agreement could still fall apart, this person said. On Thursday, the billionaire Carl C. Icahn said he had sued Dell in an effort to prevent the company and its board from altering terms of the vote, which had been scheduled for Friday.
ON THE AGENDA Â |Â The jobs report for July is out at 8:30 a.m. Chevron and Och-Ziff Capital Management report earnings before the market opens. Jeff Weiner, the chief executive of LinkedIn, is on CNBC at 11:40 a.m.
FIRED TRADER AIDES CASE AGAINST SAC  | Hours after starting a new job at Citadel in 2008, Richard S. Lee signed into the hedge fund’s accounting system and misstated the value of his holdings, an effort that would have inflated his returns by about $4.5 million, Ben Protess and Peter Lattman report in DealBook. Citadel, based in Chicago, fired him the next morning.
But Mr. Lee found a home at SAC Capital Advisors, the hedge fund run by Steven A. Cohen that federal prosecutors have called a “magnet of market cheaters.†Despite warnings from a Citadel employee and SAC’s legal department, Mr. Lee was hired anyway. He has now become an important part of the government’s criminal insider-trading case against SAC, which was announced last week.
Mr. Lee proved crucial for the government because of how he landed a job at SAC despite his earlier misstep, adding to questions about SAC’s hiring practices and controls. DealBook writes: “People briefed on the investigation say that Mr. Lee also possesses a rich vein of information about other illicit activity at SAC, including potential insider trading in the shares of Gymboree, the children’s clothing store.â€
At Penney, a Number of Challenges Remain  | “We see no evidence of a turnaround in the works,†the analyst Deborah Weinswig of Citigroup, who had been a J. C. Penney cheerleader, wrote in a note to clients as she issued a sell recommendation on Penney shares. “Product on the floor is not resonating with core customers.â€
NEW YORK TIMES
Terra Firma Said to Approach Sale of Phoenix Energy  | The private equity firm Terra Firma Capital Partners “is near an agreement to sell its Northern Irish gas distribution company Phoenix Energy Holdings Group to Hastings Funds Management Ltd., said two people familiar with the talks,†Bloomberg News reports.
BLOOMBERG NEWS
Lloyds Banking Group Said to Seek Sale of Leasing Unit in Australia  | The unit has a book value of $3.6 billion and a $625 million institutional loan portfolio, Reuters reports, citing three unidentified people familiar with the situation.
REUTERS
Board of Kabel Deutschland Recommends Vodafone Offer  |Â
REUTERS
Royal Bank of Scotland Appoints New Chief Executive  | The British bank named the head of its retail operation, Ross McEwan, to become its new chief executive, as it reported a $332 million net profit in the second quarter of the year.
DealBook »
Barclays in a Bind Over Capital  | Barclays said three months ago that it believed it was “well capitalized.†But it turns out a British regulator disagrees, Floyd Norris, a columnist for The New York Times, writes.
NEW YORK TIMES
A.I.G. Announces a Dividend  | The American International Group announced its first dividend since it was rescued by the government in the financial crisis. The insurer also authorized a buyback of $1 billion of stock.
BLOOMBERG NEWS
Singapore Wealth Fund Considers Investments in U.S. Â |Â
FINANCIAL TIMES
Lloyds Poses Front-Running Risk for Barclays  | Depending on timing, there could be competition for investor demand between two British banks as both weigh share sales, George Hay of Reuters Breakingviews writes.
A Fallen Wall Street Programmer Tells His Side  | Sergey Aleynikov, a former Goldman Sachs computer programmer accused of stealing computer code from the bank, is the subject of a profile in Vanity Fair.
DealBook »
Sun Capital Court Ruling Threatens Structure of Private Equity  | An appeals court ruling last week will make it harder for private equity funds to walk away from the unfunded pension liabilities of a portfolio company that goes bankrupt. But the case may have implications for tax law, Victor Fleischer writes in the Standard Deduction column.
Standard Deduction »
Client Outflows Continue at Man Group  | The Man Group, the world’s largest publicly traded hedge fund, beat analysts’ estimates on its first-half earnings on Friday, despite continued client outflows.
DealBook »
A Peak at Steven Cohen’s East Hampton Gathering  | Lauren London, president of London Misher Public Relations, attended a dinner on Saturday hosted by Steven A. Cohen of SAC Capital Advisors and his wife, Alexandra, according to Bloomberg News. “It was not a party, no tuna, nothing lavish,†Ms. London said.
BLOOMBERG NEWS
Yelp Shares Soar on Report of Stronger Revenue  | Shares of Yelp, the customer-reviews site, rose more than 23 percent on Thursday after the company reported second-quarter results that beat analysts’ expectations.
ALLTHINGSD
LinkedIn Profit Rose 32% in 2nd Quarter  | LinkedIn has reported a number of strong quarters since going public in 2011.
WALL STREET JOURNAL
HootSuite Raises $165 Million in New Round of Financing  | HootSuite, which provides services to manage multiple social media accounts like Facebook and Twitter, said on Thursday that it has raised $165 million in new financing from a trio of investment firms.
DealBook »
RebelMouse Raises $10.25 Million in Financing  | RebelMouse, a social publishing start-up, raised a Series A financing round led by Oak Investment Partners, SoftBank, Sterling Investment Partners and Michael Lazerow, the company announced on Friday.
REBELMOUSE
U.S. May Move Against Bank Over Jumbo Loan Securities  | Regulators are investigating Bank of America and Merrill Lynch as both companies try to move past the problems of the financial crisis.
DealBook »
New York State Investigates Disqualification of Customers by Banks  | The state’s attorney general, Eric T. Schneiderman, sent letters to six banks seeking information about the use of databases that disqualify people seeking to open checking or savings accounts.
DealBook »
Banks Manipulated Key Rate for Derivatives, Regulator Finds  | Bloomberg News reports: “U.S. investigators have uncovered evidence that banks reaped millions of dollars in trading profits at the expense of companies and pension funds by manipulating a benchmark for interest-rate derivatives.â€
BLOOMBERG NEWS
Obama Considers 3 Candidates for Fed Chairman  | In addition to Lawrence H. Summers and Janet L. Yellen, President Obama is interviewing a dark horse for the Federal Reserve chairman post, Donald L. Kohn, a former Fed vice chairman, The New York Times reports.
NEW YORK TIMES
European Central Bank Keeps Interest Rates Low  | Still, Mario Draghi, the president of the European Central Bank, offered a slightly more upbeat assessment of the euro zone’s prospects for growth.
NEW YORK TIMES
Citigroup to Pay $10.75 Million in Arbitration Case  | A Financial Industry Regulatory Authority arbitration panel ordered Citigroup to pay an award to a former customer over losses from investments in the Royal Bank of Scotland, Reuters reports.
REUTERS
