Morning Agenda: Currency Trades Draw U.S. Scrutiny

U.S. INVESTIGATES CURRENCY TRADES BY BIG BANKS  |  Federal investigators suspect that a group of traders at some of the world’s biggest banks shared a mission to alter the price of foreign currencies, the largest and yet least regulated market in the financial world, Ben Protess, Landon Thomas Jr. and Chad Bray report in DealBook. “Much like companies that rigged the price of vitamins and animal feed, the traders were competitors that hatched alliances for their own profits, federal investigators suspect.”

Now, instant messages among some traders, along with similar activity among others, “are at the center of an international investigation into banks like Barclays, the Royal Bank of Scotland and Citigroup, according to recent public disclosures by the banks and interviews with investigators who spoke on the condition of anonymity. The investigators secured the cooperation of at least one trader, a development that has not been previously disclosed. Although the investigation is at an early stage, authorities are already signaling the likelihood of a legal crackdown,” according to the DealBook report.

“The manipulation we’ve seen so far may just be the tip of the iceberg,” the United States attorney general, Eric H. Holder Jr., said in a rare interview discussing an active investigation. “We’ve recognized that this is potentially an extremely consequential investigation.”

The banks all declined to comment, and no one has been accused of wrongdoing. Any improper actions probably would have involved only a corner of the overall market, DealBook writes.

MORGAN STANLEY CHIEF’S VISION SHOWS SOME SUCCESS  |  Morgan Stanley’s recent earnings report reflected the results of a three-year effort by James P. Gorman, the chief executive, to reduce risk-taking and to expand into the safer business of advising people on how to manage their wealth, Susanne Craig and Rachel Abrams report in DealBook. “I felt for a long time that path was clear, but it was disputed and we were doubted many times,” Mr. Gorman said recently.

Ms. Craig and Ms. Abrams write: “The transformation has not been easy, and Mr. Gorman still has some naysayers. Despite the strong third-quarter results, Morgan Stanley produced a return on equity of just 6.2 percent in the quarter, excluding a charge related to its credit spreads. Simply to cover its debt expenses and other capital costs, Morgan Stanley must achieve a return on equity closer to 10 percent. Mr. Gorman said he hoped the bank would hit that number by 2015.”

TEPPER GIVING $67 MILLION TO CARNEGIE MELLON  |  Carnegie Mellon University, which traces its roots to the giants of America’s Gilded Age a century ago, has received a major gift from a product of a new gilded age, the hedge fund billionaire David A. Tepper, DealBook’s Peter Lattman reports. The school will announce on Friday that Mr. Tepper has given it $67 million, bringing his total giving to Carnegie Mellon in the last decade to more than $125 million.

“Carnegie Mellon tied everything together for me and gave me a great foundation,” said Mr. Tepper, founder of Appaloosa Management and a graduate of the university’s business school. “My earlier gifts were a payback to the university, and this is a continuation of that.”

ON THE AGENDA  |  Frederick Smith, the chief executive of FedEx, is on CNBC at 8:40 a.m. Noah Glass, an often overlooked co-founder of Twitter, is on CNBC at 10 a.m. Data on industrial production in October is released at 9:15 a.m.

HEDGE FUNDS TURN TO FEDEX  |  Daniel S. Loeb announced his firm’s position in FedEx at the DealBook conference earlier this week, but it turns out that at least two his fellow hedge fund moguls had the same idea in the third quarter, Michael J. de la Merced reports in DealBook. While Third Point disclosed that it had accumulated two million FedEx shares in the quarter, firms run by George Soros and John Paulson also disclosed new positions. Soros Fund Management disclosed that it had bought 1.5 million shares and call options representing an additional 375,000 shares, and Paulson & Company showed that it had bought 646,800 shares.

Mergers & Acquisitions »

Jos. A. Bank Ends Effort to Buy Men’s Wearhouse  |  Jos. A. Bank sent a letter to the chief executive of Men’s Wearhouse, calling off its proposal to buy the company for $48 a share in cash. In a statement, Jos. A. Bank said a Nov. 14 deadline had passed for the board of Men’s Wearhouse to engage in talks.
PRESS RELEASE

Berkshire Buys $3.45 Billion Stake in Exxon Mobil  |  Warren E. Buffett’s firm owned roughly 40 million shares of Exxon Mobil at the end of September, less than 1 percent of the oil giant’s 4.4 billion outstanding shares.
DealBook »

Under Armour Buys MapMyFitness for $150 Million  |  “Under Armour is making a major play to gain a foothold in the fitness-tracking market, which is led by the likes of Nike, Fitbit, and Jawbone,” The Verge writes.
THE VERGE

A Sign of Desperation in Facebook’s Snapchat Offer  |  There’s a disquieting element about a company spending billions for a simple application it could almost certainly have replicated for next to nothing, Robert Cyran of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

INVESTMENT BANKING »

Moody’s Downgrades Show Doubts About a Government Backstop  |  The credit ratings company Moody’s downgraded the senior holding company debt ratings of Morgan Stanley, Goldman Sachs, JPMorgan Chase and Bank of New York Mellon, “reflecting the agency’s belief that there is an increased likelihood the government wouldn’t support them in the event of a crisis,” The Wall Street Journal reports.
WALL STREET JOURNAL

Morgan Stanley Is Said to Seek Dual Status for Financial Advisers  |  Morgan Stanley “is seeking regulatory approval to make financial advisers dual employees of its bank subsidiary in addition to the broker-dealer as the firm increases mortgage lending, a person briefed on the matter said,” Bloomberg News reports.
BLOOMBERG NEWS

Wall Street Reaches Out to Gay Students  |  Bloomberg News writes: “Beyond embracing gay rights, the country’s largest banks, brokerages and consulting firms are vying to retire their conservative image and try to improve profits along with diversity.”
BLOOMBERG NEWS

Competing Views on the Stock Market  |  “If you’ve been wondering whether it’s possible to regularly beat the stock market averages â€" a natural question with the market at an all-time high â€" you didn’t get any guidance from the Nobel Prize committee this year,” the financier Steven Rattner writes in an opinion essay in The New York Times.
NEW YORK TIMES

PRIVATE EQUITY »

Carlyle to Buy Stake in Insurance Broker  |  The Carlyle Group has agreed to buy a controlling stake in Edgewood Partners Insurance Center, the company said.
REUTERS

HEDGE FUNDS »

Speculation Over Sale of Cohen’s Artworks at Auction  |  The answer to the whispered question at art auctions this week â€" “How’s Steve’s stuff selling?” â€" in the wake of the guilty plea by Steven A. Cohen’s hedge fund, SAC Capital Advisors.
DealBook »

Starboard Joins Fight Over Fate of Compuware  |  The hedge fund disclosed on Thursday that it owns a 5 percent stake in the business software maker as it urged the company to consider a sale or other changes.
DealBook »

I.P.O./OFFERINGS »

Kimberly-Clark to Spin Off Health Care Unit  |  The business that would be separated focuses on selling surgical and anti-infection products and medical devices for pain management, respiratory and digestive health.
DealBook »

Zulily, E-Commerce Site, Prices I.P.O. Above Range  |  Zulily raised $253 million in its initial public offering, pricing its shares at $22 each.
WALL STREET JOURNAL

VENTURE CAPITAL »

Milner Invests in Genetics Company  |  The Russian investor Yuri Milner is backing a genetics start-up called GenapSys, which raised a total of $37 million in the financing round, VentureBeat reports.
VENTUREBEAT

LEGAL/REGULATORY »

When a Deal Goes Bad, Blame the Ratings  |  Trustees for two Bear Stearns funds that collapsed contend that credit ratings agencies should be held responsible for the dubious securities that ended up in the funds. But even if the ratings agencies are found to have acted wrongly, that in no way should absolve money managers from blame for investing billions of dollars in securities they knew little about, Floyd Norris writes in the High & Low Finance column in The New York Times.
DealBook »

Virtual Money Draws Notice of Regulators  |  New York’s financial services superintendent, Benjamin M. Lawsky, will conduct a hearing on the feasibility of methods making the virtual currency market more like that for more traditional money.
DealBook »

In Yellen Hearing, Senators Push for Changes at Fed  |  “The questions that Janet L. Yellen faced on Thursday from senators considering her nomination to lead the Federal Reserve made two things fairly clear: The job is hers, and it’s not going to be easy,” The New York Times writes.
NEW YORK TIMES

Yellen on Stimulus: Full Speed Ahead  |  Monitoring the remarks on Thursday of Janet L. Yellen, President Obama’s choice to lead the Federal Reserve, “traders concluded that she would stick with policies that have sent shares soaring,” The New York Times writes.
NEW YORK TIMES

Ireland to Exit Bailout Without Safety Net  |  “Ireland announced on Thursday that it would make a clean break from its international bailout program next month and do it without first seeking a precautionary credit line,” The New York Times reports.
NEW YORK TIMES