SCRUTINY FOR AN INVASIVE FORECLOSURE TACTIC  | Faced with millions of foreclosures, the nation’s biggest banks turn to property management firms to help them navigate the wreckage. But the firms are coming under fire for using questionable and possibly illegal tactics, and the scrutiny threatens to ensnare JPMorgan Chase, Bank of America, Citibank and other lenders, Jessica Silver-Greenberg reports in DealBook.
Illinois on Monday became the first state to take on the property management firms legally, contending in a lawsuit that Safeguard Properties, the largest of the firms, wrongfully dispossessed hundreds of homeowners in the state. Lisa Madigan, the attorney general, claims that Safeguard broke into homes despite stark evidence that homeowners still lived in them, bullied tenants into leaving even though they had no legal obligation to do so and, in some cases, damaged the very homes they were sent to protect, according to the suit, Ms. Silver-Greenberg reports.
“This is a homeowner’s worst nightmare,†Ms. Madigan said in an interview, noting that her office had received more than 400 complaints about Safeguard. Diane R. Fusco, a spokeswoman for Safeguard, said that the company had not received the lawsuit, and she added that the company follows a rigorous system to determine whether a property is vacant before starting any work.
IF LEHMAN HAD BEEN SAVED  | With the five-year anniversary of the collapse of Lehman Brothers approaching this weekend, “the most intriguing hypothetical question about those fateful days is what would have happened had the government bailed out Lehman,†Andrew Ross Sorkin writes in the DealBook column. The decision not to rescue Lehman has been considered the domino that led to the tumbling of so many others, including the bailout of the American International Group.
But a rescue would not necessarily have helped the broader financial system or the economy. “In truth, in the fairy-tale version of bailing out Lehman, the next domino, A.I.G., would have fallen even harder,†Mr. Sorkin writes. “If the politics of bailing out Lehman were bad, the politics of bailing out A.I.G. would have been worse. And the systemic risk that a failure of A.I.G. posed was orders of magnitude greater than Lehman’s collapse.â€
“Had the Fed stepped in to save A.I.G. at that point anyway, despite the politics, it then becomes increasingly unlikely that the Treasury Department would have been able to muster enough Congressional support to pass†the bailout known as the Troubled Asset Relief Program.
KOCH BROTHERS OFFER $7 BILLION FOR MOLEX  | The conglomerate run by Charles and David Koch made a big move on Monday into a new line of business, offering to buy Molex, a relatively obscure maker of electronics plugs for the likes of Apple â€" for $7.2 billion, DealBook’s Michael J. de la Merced reports. The deal is the biggest by Koch Industries in eight years, trailing only the conglomerate’s roughly $22 billion takeover of Georgia-Pacific in 2005. “But it may signal that the conglomerate is on the prowl for more opportunities,†Mr. de la Merced writes.
ON THE AGENDA Â |Â Apple is introducing two new iPhones at an event at its Cupertino, Calif., headquarters. Sanford I. Weill, the former Citigroup chief, is on CNBC at 7 a.m. James P. Gorman, the chief executive of Morgan Stanley, is on CNBC at 2:30 p.m.
A $250 MILLION PLEDGE EVAPORATES  | “When tiny Centre College, in Danville, Ky., announced in July that it had received a $250 million donation, the largest outright gift ever made to a liberal arts college, it left out a small detail. The donor â€" the A. Eugene Brockman Charitable Trust â€" did not yet have the money,†DealBook’s Peter Lattman reports. “On Monday, the college said that the gift had been withdrawn.â€
The gift, it turned out, had been contingent on a scuttled $3.4 billion loan deal involving Reynolds & Reynolds, a large privately held company that provides software and services to car dealers. “In retrospect, we might have put a big asterisk on this thing, but no one had any inkling that this would come about,†John Roush, the president of Centre College, said in an interview.
Icahn Calls Off Fight Over Dell’s Sale  | After months of fighting and a seemingly inexhaustible stream of sharp-tongued letters, Carl C. Icahn is ending his battle against Dell’s proposed sale to its founder.
DealBook »
The Tweet Goes On for Icahn  | Carl Icahn conceded defeat on Dell, but he has had better luck with Apple, Richard Beales of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS
Neiman Marcus Is Sold for $6 Billion  | The owners of the luxury retail chain agreed on Monday to sell it to a group led by Ares Management and a Canadian pension plan.
DealBook »
Time Inc. Said to Be in Talks to Buy Magazines  | Time Inc. “is in late stage talks†to acquire five magazines including “Travel + Leisure†and “Food & Wine†from the publishing unit of American Express, The Wall Street Journal reports, citing two unidentified people familiar with the matter.
WALL STREET JOURNAL
Western Digital to Buy Virident Systems  | Western Digital, the maker of hard drives, said on Monday that it would buy Virident Systems, a maker of flash memory for servers, for $685 million in cash.
DealBook »
Finance Chief Steps Down at KPN  | Royal KPN, the Dutch telecommunications company, said on Monday that its chief financial officer had resigned but that the move was not related to a takeover attempt by América Móvil.
DealBook »
At Goldman, a Paycheck No Longer Equals an Account  | For years, employees at Goldman Sachs automatically received a brokerage account. But in recent months, the firm has notified several employees, most of whom have assets valued at less than $1 million, that their accounts are being transferred to Fidelity.
DealBook »
Inside Morgan Stanley’s Effort to Shed Risk  | “It actually makes life a lot simpler,†James P. Gorman, Morgan Stanley’s chief executive, told The Wall Street Journal of the new limits placed on the bank’s business. Traders, he said, “know exactly the size of the sandbox they’re playing in.â€
WALL STREET JOURNAL
JPMorgan and Insurer Settle Suit  | JPMorgan Chase and Assurant agreed to pay $300 million in the settlement, which calls for the bank to stop accepting commissions for so-called force-placed insurance policies.
DealBook »
JPMorgan Chase Picks 2 for Board Seats  | JPMorgan Chase said its board intended to elect two new directors: Linda B. Bammann, who was deputy head of risk management at JPMorgan until her retirement in 2005, and Michael A. Neal, former chairman and chief executive of GE Capital.
DealBook »
Bank of America Said to Cut Jobs in Mortgages  | Bank of America plans to “eliminate about 2,100 jobs and shutter 16 mortgage offices as rising interest rates weaken loan demand,†Bloomberg News reports, citing two unidentified people with knowledge of the plans.
BLOOMBERG NEWS
A Young Analyst’s Skeptical Report Draws Criticism  | After a report by a 26-year-old analyst led to a 6 percent fall in the stock of Kinder Morgan last week, other analysts took aim at the report.
REUTERS
A Pension Plan With a Flair for Deal-Making  | Jim Fasano, head of private equity funds for the Canadian Pension Plan Investment Board, which was part of a group that agreed this week to buy Neiman Marcus, talks to Privcap about how the fund invests its large pool of capital.
PRIVCAP
Seeking Answers From Green Mountain Coffee  | The sales figures at Green Mountain, the roaster behind the popular Keurig coffee makers, don’t seem to add up, Jesse Eisinger of ProPublica writes in his column, The Trade.
DealBook »
Tiger Global Said to Be Starting New Fund  | Tiger Global Management, the stock-focused hedge fund and private equity firm run by Chase Coleman, is starting a new “long-only†fund, CNBC reports, citing two unidentified people familiar with the situation.
CNBC
Chinese Developer Said to Seek $1 Billion in I.P.O. Â |Â The SZITIC Commercial Property Company, a Chinese shopping mall developer, is planning an initial public offering in Hong Kong that could raise as much as $1 billion, The Wall Street Journal reports, citing unidentified people familiar with the matter.
WALL STREET JOURNAL
SunEdison Seeks to Spin Off Chip Unit  | SunEdison, the solar power company, filed to spin off its semiconductor unit, SunEdison Semiconductor, through an initial public offering of up to $250 million.
SEC
Consumer Analytics Firm Clarabridge Raises $80 Million  | Clarabridge, which offers software that lets big companies analyze the behavior of their customers, is announcing on Tuesday that it has raised an $80 million financing round led by Summit Partners, General Catalyst Partners and Yuchun Lee.
CLARABRIDGE
With MoPub Acquisition, Twitter Plans to Sell Ads for Other Companies  | “Twitter has been focused on building up a business selling advertisements that blend into the flow of 140-character messages that make up its social network,†Vindu Goel reports on the Bits blog. “Now it plans to sell similar ads on other companies’ mobile apps, too.â€
NEW YORK TIMES BITS
S.&P.’s Counterattack on the Government  | In its defense against a Justice Department lawsuit, Standard & Poor’s argues that it was improperly targeted because it lowered the credit rating on federal debt two years ago. How far it will get with that argument is an open question, Peter J. Henning writes in the White Collar Watch column.
DealBook »
Swiss Parliament Approves Deal on Tax Evasion  | Swiss lawmakers in the lower house of parliament approved a law on Monday that requires the country’s banks to report the holdings of their American clients to tax authorities, Agence France-Presse reports. The upper house of parliament had already approved the law.
Agence France-Presse
Furniture Brands Files for Bankruptcy  | The furniture maker Furniture Brands International filed for bankruptcy on Monday with a deal to sell its assets to Oaktree Capital Management for $166 million, The Wall Street Journal reports.
WALL STREET JOURNAL
Ex-Administration Lawyer Rejoins Skadden, Arps  | Boris Bershteyn, a former senior lawyer in the Obama administration, is rejoining Skadden, Arps, Slate, Meagher & Flom, the law firm based in New York.
DealBook »
Market Rebound in China Shows Beijing’s Resolve  | Those predicting a sharp slowdown in China a couple of months ago appear to have underestimated the central government’s determination to keep things on track, Bill Bishop writes in the China Insider column.
DealBook »
Google Makes New Offer in European Antitrust Case  | “Google made a second try last week to settle a three-year-old antitrust case with the European Union, officials said. Neither side released details of the offer, however, and rivals continued to call for the American technology company to cede more control of its Internet search and advertising business,†The New York Times writes.
NEW YORK TIMES
