JPMORGAN CHASE IS SAID TO ADMIT FAULT IN SETTLEMENT Â |Â JPMorgan Chase has agreed to pay about $800 million to government agencies in Washington and London, and to make a groundbreaking admission of wrongdoing, to resolve allegations stemming from its London Whale trading loss last year, Ben Protess and Jessica Silver-Greenberg report in DealBook. The settlements, expected this week, will help the bank move beyond the $6 billion loss and mend frayed relationships with regulators. In a victory for the bank, senior JPMorgan executives avoided charges in the case.
An admission of wrongdoing would be a rare stain on JPMorgan’s reputation and could expose the bank to private litigation. The bank will acknowledge that it should have caught the problem faster, people briefed on the matter tell DealBook. The deal, reflecting a somewhat tougher line taken by the Securities and Exchange Commission, will also require the bank to admit that its lax controls allowed traders in a unit in London to build the risky position and cover up their losses, DealBook writes.
But at least one regulator is not on board. The Commodity Futures Trading Commission, which oversees the market in which the losses occurred, has balked at joining the settlement and plans to fine the bank later this year, the people briefed on the matter said. Splitting from fellow regulators, the agency has examined whether JPMorgan amassed a position so large that it “manipulated†the market for derivatives.
PERELMAN’S DAUGHTER IN LEGAL BRAWL  | Samantha Perelman, a 23-year-old student at Columbia University who will be at the center of a nasty family battle in a New Jersey courtroom this week, is a legal novice. But her father, Ronald O. Perelman, the 70-year-old financier and chairman of the cosmetics company Revlon, has never shied away from a court fight, having sued companies, ex-wives and a former business partner, DealBook’s Susanne Craig reports.
In this case, Mr. Perelman is picking up the tab for his daughter’s legal fight with her uncle, James Cohen, the head of Hudson Media. Mr. Cohen is a longtime legal opponent of Mr. Perelman, who has previously contended that Mr. Cohen siphoned hundreds of millions of dollars out of Samantha’s inheritance from her mother. Now, Ms. Perelman’s legal brawl with her uncle has conservatively cost at least $60 million in legal bills so far, according to lawyers on both sides.
“What he did was greedy and not nice,†said Ms. Perelman in a videoconference interview from her father’s yacht off the shore of Greece. She added that despite her father’s wealth her mother always wanted her to be provided for separately and she would be “incredibly heartbroken and angry to know her brother deceived her.â€
GUESSING CONTINUES IN FED RACE  | An intriguing question was swirling around Washington on Monday only hours after Lawrence H. Summers withdrew his name from consideration to succeed Ben S. Bernanke as chairman of the Federal Reserve when he steps down at the end of January, Andrew Ross Sorkin writes in the DealBook column. “What if Janet L. Yellen doesn’t get the job?â€
“While the conventional wisdom is that the vice chairwoman, Ms. Yellen, is now almost assured the job, some White House and Fed watchers are not-so-privately speculating that President Obama may still choose another candidate,†Mr. Sorkin writes. “His name is Donald L. Kohn, a former Fed vice chairman. He has a big fan whispering in the ear of President Obama: Timothy F. Geithner, the former Treasury secretary, who has been informally consulted by the White House on the selection.â€
Still, Mr. Kohn, who has long worried about the Fed’s independence and has sometimes pushed back against Mr. Bernanke’s efforts to be more public, ultimately may not get the job. “Just can’t see Obama going for anyone other than Yellen â€" the pushback within his own party would be intense and it would revive all sorts of gender issues,†said Greg Valliere, chief political strategist at the Potomac Research Group, where, coincidentally, Mr. Kohn serves as a senior economic strategist.
ON THE AGENDA Â |Â Occupy Wall Street is holding a rally to celebrate its second anniversary. Jacob J. Lew, the Treasury secretary, speaks at the Economic Club of Washington at 7:45 a.m. James Chanos, the president of Kynikos Associates, is on Bloomberg TV at 11 a.m. Jack Dorsey, the Twitter co-founder, is on Bloomberg TV at 6 p.m.
COMPLYING WITH TAX EVASION LAW IS VEXING FOREIGN BANKS Â |Â
“A sweeping new federal law has a seemingly simple goal â€" curbing offshore tax evasion by Americans through foreign banks, trusts and shell companies. But behind the scenes, foreign banks and financial firms are increasingly finding that complying with the law is a major headache,†Lynnley Browning reports in DealBook.
“Treasury Department officials say they are moving apace in getting the world’s banks on board with the law, the Foreign Account Tax Compliance Act,†Ms. Browning writes. “But some financial institutions, trade groups, scholars and members of Congress have raised an array of concerns, starting with the cost of creating the complex computer systems needed to track Americans’ accounts.â€
Huntsman to Buy Rockwood Units for $1.1 Billion  | The chemical company Huntsman said it would buy the paint pigments and performance additives businesses of Rockwood Holdings for $1.1 billion in cash.
REUTERS
Tencent of China Buys Stake in Search Company  | The Asian Internet giant Tencent Holdings paid $448 million for a 36.5 percent stake in the Sogou search unit of Sohu.com, with an option to increase it to 40 percent, Bloomberg News reports.
BLOOMBERG NEWS
KPN Books Loss on Sale of German Unit  | The Dutch cellphone operator KPN announced on Monday that it would book a $4.9 billion loss on the sale of its German unit E-Plus to the Spanish giant Telefónica, possibly making KPN more valuable to América Móvil, which is seeking to acquire it.
DealBook »
Boise Inc. Is Sold for $1.28 Billion  | The Packaging Corporation of America agreed on Monday to buy a rival, Boise Inc., for $1.28 billion.
PRESS RELEASE
The Financial Crisis, Five Years Later  | Andrew Ross Sorkin remembers the day the economic collapse began and offers answers to three tough, lingering questions.
DealBook »
Since Lehman’s Collapse, Companies More Forthcoming on Compliance  | Since the collapse of Lehman Brothers, companies are committing a lot more time, money and resources to comply with a host of regulatory requirements, Peter J. Henning writes in the White Collar Watch column.
DealBook »
By Their Own Measures, Banks Claim to Be Safer  | “The results of internal stress tests released on Monday may have been helped by the banks having built capital levels in recent months as the economy showed some signs of improvement and they earned more money,†Reuters writes.
REUTERS
Goldman Names New Chief Information Officer  | Goldman Sachs named R. Martin Chavez to become chief information officer when Steven Scopellite retires at the end of the year, Reuters reports, citing internal memos on Monday.
REUTERS
Banks’ Pitch to Expatriate Indians: Loans for Dollar Deposits  | Reuters reports: “Foreign banks are pushing to raise billions of dollars from expatriate Indians in response to New Delhi’s drive to defend its weak currency, which could mean the government can avoid the need for a sovereign bond or state-backed deposit scheme to attract inflows.â€
REUTERS
In Britain, a Tax Crackdown on Private Equity  | Danny Alexander, chief secretary to the Treasury in Britain, plans to announce “a crackdown on tax loopholes being used by the ‘vast majority’ of partners in private equity and accountancy firms to shelter their earnings from the taxman,†The Financial Times reports.
FINANCIAL TIMES
Morgan Creek Starts Mutual Fund  | The new fund will allow average stock and bond investors to get a taste of the exclusive world of hedge funds, traditionally reserved for pension funds, charities, big institutions and the ultra wealthy.
DealBook »
For Twitter, Key to Revenue Is No Longer Ad Simplicity  | Virtually all of Twitter’s revenue, estimated to be $583 million this year, currently comes from three basic ad formats, reports Vindu Goel for The New York Times.
DealBook »
Twitter’s Plans May Run Into China’s Attitudes Toward the Internet  | Twitter has opportunities to sell advertising to Chinese enterprises, but it may do well to pay attention to the government’s approach there to managing the Internet, Bill Bishop writes in the China Insider column.
DealBook » | DealBook: Looking to Twitter to Reignite Tech I.P.O.’s
With Its Stock Rising, Pandora Plans to Sell Shares  | Pandora Media and one of its investors plan to offer 14 million shares by the end of the week.
WALL STREET JOURNAL
Marchionne Still Low-Balling Chrysler  | A Chrysler initial public offering would cost Fiat time and money better spent on integrating the companies. It’s time for the chief executive, Sergio Marchionne, to increase his offer for the remaining stake, Olaf Storbeck of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS
Facebook and Twitter Blocked Again in Iran  | The New York Times reports: “Internet users in Iran lost access Tuesday to Facebook and Twitter, a day after they were surprised to find that they could get on the sites without having to evade a government’s firewall that had blocked direct access to the Web sites for years.â€
NEW YORK TIMES
Push for Yellen to Lead the Fed Gains Momentum  | Janet L. Yellen, who had told friends she did not expect to be nominated as the next chairman of the Federal Reserve, has now “became the front-runner by elimination, officials close to the White House said,†The New York Times reports.
NEW YORK TIMES
Storm Brewing as the Fed Plans to End Its Stimulus  | Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corporation, writes in an essay in The Financial Times that “gale-force winds are possible†when the Federal Reserve “tapers†its bond-buying program.
FINANCIAL TIMES
Barclays Faces Fine in Qatar Deal  | Barclays said on Monday that Britain’s financial regulator had concluded the bank acted “recklessly†when it raised emergency money from Qatari investors during the financial crisis and could be fined $79 million.
DealBook »
Britain Sells Stake in Lloyds for $5.1 Billion  | Britain has sold a 6 percent stake of Lloyds Banking Group stock for $5.1 billion, which reduces the government holding in the firm to 33 percent.
DealBook »
