Morning Agenda: S.E.C.’s New Tack in JPMorgan Inquiry

S.E.C. SAID TO PRESS JPMORGAN FOR ADMISSION OF WRONGDOING  | 
The Securities and Exchange Commission is seeking to level civil charges against JPMorgan Chase and extract a rare admission of wrongdoing, as an investigation into last year’s multibillion-dollar trading loss enters its final stage, Ben Protess and Jessica Silver-Greenberg report in DealBook. If JPMorgan concedes to some wrongdoing, such an admission would set an important precedent for the S.E.C., which for decades allowed defendants to “neither admit nor deny wrongdoing.” An agreement could come as soon as this fall, people briefed on the case said, adding that the agency had not threatened to charge JPMorgan executives.

The S.E.C. has scrutinized the bank over whether traders at JPMorgan’s chief investment office in London falsified records to hide losses from executives in New York. The S.E.C., the people said, could cite the bank for lax controls. “The inquiries have heated up in recent months, the people said, as government authorities secured the cooperation of a former JPMorgan trader, Bruno Iksil, who came to personify the botched trade.” At the same time, a parallel criminal investigation is also ramping up.

SAC TO KEEP MANAGING MONEY UNDER INDICTMENT  |  SAC Capital Advisors and federal prosecutors agreed on Thursday to a protective order that requires the firm to keep most of its money in its fund while operating under a criminal indictment, a person briefed on the case tells DealBook’s Peter Lattman. “The order serves a dual purpose, preserving the government’s interest in any money that it might seize from SAC in a forfeiture action, while also allowing the firm to continue running its money management business.”

“Under the terms of the agreement, SAC must maintain at least 85 percent of its assets owned by the firm and its various entities. The firm had about $14 billion under management as of July 1. If assets fall below the 85 percent threshold, SAC has to replenish them in order to maintain that level, this person said.” The protective order must be approved by a judge.

AMERICA MOVIL BIDS FOR KPN  |  América Móvil, the Latin American phone giant owned by Carlos Slim Helú, offered on Friday to buy the remaining 70 percent stake in the Dutch cellphone operator KPN that it did not already own for 7.2 billion euros, or $9.6 billion, DealBook’s Mark Scott reports. América Móvil said it was offering 2.40 euros a share, a 20 percent premium on KPN’s closing share price on Thursday. Shares in the Dutch operator rose 16.2 percent, to 2.32 euros, in morning trading in Amsterdam on Friday.

The move to acquire KPN may challenge the plans of the Spanish telecommunications company Telefónica, which reached an agreement in July to buy E-Plus, a German mobile phone operator, from KPN in a cash-and-stock deal worth 8.1 billion euros. “By pursuing a full takeover of KPN, which would value the Dutch company at around 10.3 billion euros, analysts said América Móvil could move to block the E-Plus deal,” Mr. Scott writes.

ON THE AGENDA  |  Brookfield Asset Management reports earnings before the market opens. Allen Questrom, a former chief of J.C. Penney, is on CNBC at 7 a.m.

ACKMAN PRODS J.C. PENNEY OVER C.E.O. SEARCH  |  Shares of J.C. Penney rose more than 6 percent on Thursday after William A. Ackman wrote to his fellow board members urging them to speed up a search for a permanent chief executive. The hedge fund manager suggested the directors could find a new leader within 30 to 45 days, according to the letter, which was posted by CNBC.

“The correspondence highlights yet the latest headache bedeviling Penney, which brought back yet another blast from the past â€" a former chief executive, Myron Ullman â€" after firing Ron Johnson as chief executive in April,” DealBook’s Michael J. de la Merced writes. Mr. Ackman said in the letter that Allen Questrom, a retail veteran who turned around Penney once before, had indicated a willingness to return if the board chooses an acceptable chief executive.

But the emergence of the letter did not sit well with Penney’s current chairman, Thomas Engibous, who said in a statement released on Thursday that the board stood by Mr. Ullman. “The board of directors strongly disagrees with Mr. Ackman and is extremely disappointed that his letter was released to the media at the same time that it was sent to the board,” Mr. Engibous said.

Mergers & Acquisitions »

Buffett Settles for Smaller Prey  |  Though Warren E. Buffett is known for blockbuster deals, he has increasingly favored smaller, “bolt-on” acquisitions, The Wall Street Journal writes. But he hasn’t called off the hunt for “elephants.” He told the newspaper: “A big deal still is what causes my heart to beat faster.”
WALL STREET JOURNAL

After Going All In During Mining Boom, BHP Cuts Its Ambitions  |  BHP Billiton, the world’s largest company in a sector that is deeply out of favor with investors, is aggressively curtailing its spending in hopes of winning them over.
DealBook »

What Yahoo Got for Its Big Tumblr Deal  |  Tumblr had just $16.6 million in cash, $74 million in tangible assets and $182.4 million in “customer contracts and related relationships” when it sold itself to Yahoo, according to a regulatory filing.
DealBook »

Icahn Heads to Court With a Point About Dell  |  Carl Icahn is challenging the Dell board’s postponement of the annual meeting to elect directors to Oct. 17, contending that it is an undue delay under Delaware law, Steven M. Davidoff writes in the Deal Professor column.
DealBook »

INVESTMENT BANKING »

Wall Street’s Go-To Public Relations Team  |  The public relations firm Sard Verbinnen has honed an “ability to influence a major news event without leaving fingerprints,” Bloomberg Businessweek writes.
BLOOMBERG BUSINESSWEEK

Pimco Urges Investors to Stay  |  “We are confident that we know how to win this evolving bond war,” Bill Gross, co-chief investment officer of Pimco, wrote in a note posted online that came after client redemptions in recent months.
BLOOMBERG NEWS

Citigroup Names Operating Chief in Asia  |  Michael Borch, currently Citigroup’s chief of industrials investment banking for Asia, is set to take over as chief operating officer for corporate and investment banking in the Asia-Pacific region, The Wall Street Journal reports.
WALL STREET JOURNAL

PRIVATE EQUITY »

BlackBerry Said to Warm to Idea of Going Private  |  The chief executive of BlackBerry and the company’s board are “increasingly coming around to the idea that taking BlackBerry private would give them breathing room to fix its problems out of the public eye, the sources said,” Reuters reports.
REUTERS

Apollo Shows Strong Gains as Investments Rise in Value  |  The buyout firm said on Thursday that its earnings for the second quarter jumped nearly tenfold, to $197.8 million, from the period a year earlier, as its core private equity portfolio performed well and it cashed out of a number of investments.
DealBook »

HEDGE FUNDS »

Soros Fund Said to Be Withdrawing Money From Pershing Square  |  Soros Fund Management has asked to withdraw the money, which is less than $250 million, that is has invested with Pershing Square Capital Management, Reuters reports, citing an unidentified person close to the matter.
REUTERS

I.P.O./OFFERINGS »

A Twitter Hire Adds to Speculation About I.P.O.  |  Twitter has hired a stock administration analyst who formerly handled stock grants to meet the “I.P.O. deadline” at Zynga, according to her LinkedIn profile, USA Today reports.
USA TODAY

VENTURE CAPITAL »

Echoes of Steve Jobs in Elon Musk  |  Tesla Motors has exceeded Wall Street analysts’ estimates for two consecutive quarters â€" that’s an auspicious start even if the most recent quarterly profit relied on a number of one-offs, Antony Currie of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

LEGAL/REGULATORY »

A Professed Whistle-Blower of the Banking Industry  |  Hervé Falciani “is in high demand these days, having cast himself as a crusader against the murky world of Swiss banking and money laundering. Once dismissed by many European authorities, he and other whistle-blowers are now being courted as the region’s governments struggle to fill their coffers and to stem a populist uprising against tax evasion and corruption,” The New York Times writes.
NEW YORK TIMES

New Embarrassment for British Regulator  |  The Serious Fraud Office admitted on Thursday that it had lost thousands of documents linked to an investigation into the British aerospace giant BAE Systems.
DealBook »

When Agencies Are Independent in Name Only  |  “There is some evidence that the president generally gets to choose the chairmen of independent commissions, but the other majority members are picked on Capitol Hill,” Floyd Norris, a columnist for The New York Times, writes. “The result has been that chairmen of commissions can find it difficult to accomplish anything.”
NEW YORK TIMES