President Obama will nominate Timothy G. Massad as the new chairman of the Commodity Futures Trading Commission on Tuesday, choosing a senior Treasury Department official to run an agency that polices some of Wall Street’s riskiest activity, Alexandra Stevenson and Ben Protess report in DealBook. Mr. Massad, if confirmed by the Senate, would succeed Gary Gensler, who is credited with turning one of Wall Street’s laxest regulators into one of its most aggressive.
THE BIG IDEAS MACHINE  | “Wall Street is littered with clever plans to use financial instruments to change behavior â€" carbon trading, for example. Some have changed the world, and others failed miserably,†Andrew Ross Sorkin writes in the DealBook column, introducing the special section on ideas and innovation. “Several ideas about using financial instruments and a for-profit approach in the world of nonprofits are now taking hold.â€
One such idea started with a simple question: What if? That’s how Lindsay Beck, a two-time cancer survivor and the founder of a successful charity, started thinking about how the world of finance could revolutionize the staid nonprofit industry. She envisioned the equivalent of a profit-driven stock market for nonprofits. It was a “radical idea, and maybe I was naïve,†she acknowledged, but the concept has gained enough traction that it has won her meetings with executives at Goldman Sachs, Deutsche Bank and members of the Obama administration. The idea “has the potential to upend an entire part of the global economy if it succeeds,†Mr. Sorkin writes.
Even in the profit-driven world, fresh ideas can be found. Take activist investing â€" the latest threat that is putting boardrooms on edge. “With dozens of activist hedge funds pushing for change at companies large and small, executives, directors and advisers are scrambling to calibrate their defenses,†David Gelles reports. “To prepare for activists, who often show up with detailed white papers assailing a target’s performance, companies conduct a handful of exercises to give management and boards a better understanding of their perceived vulnerabilities.â€
Hedge funds, for their part, are increasingly turning to self-help programs to try to improve their game, Alexandra Stevenson reports. “To cater to this demand, a whole new cottage industry has cropped up in which statisticians track performance data, and coaches and psychiatrists work to help hedge fund managers make smarter decisions by getting them to talk about their personal histories and biases. The thinking goes that if an athlete can use coaches, why not traders?â€
Since John C. Bogle started the world’s first index mutual fund in 1976, such funds have swept the world. “People say they want to build a better mousetrap,†Mr. Bogle said. “Forgive me if I doubt it.†And yet, several companies say they already have created a better mousetrap, beating the overall market, even including fees, Jeff Sommer writes in the Strategies column. “In terms of performance, the verdict is not yet in. The performance of the newer indexes â€" and of the funds based on them â€" is close to that of the older ones.â€
Innovation is also taking hold in the world of private equity. For decades, private equity firms relied on highly paid middlemen to raise money. But soon, the process may be as simple as logging on to a website. In an effort to change the way the notoriously secretive industry finds investors, several start-ups are pitching online matchmaking services to the world’s biggest private equity players.
Washington’s revolving door â€" in which officials swap their government résumés for seven-figure salaries at law firms and lobbying shops â€" continues to stoke concerns of a clubby culture. “To address those concerns, watchdog groups, former government officials and even the White House are pushing policies that might better protect the public interest,†Ben Protess reports. “Now, groups like Public Citizen and the Project on Government Oversight are thinking bigger, advocating novel, if long-shot, ideas to narrow the revolving door.†And then, Mr. Protess writes, there is Sheila C. Bair’s idea: “a lifetime ban on former regulators’ working for institutions they once policed. A former banking regulator who shunned the revolving door herself, Ms. Bair said such a ban could erase any incentive regulators have to curry favor with Wall Street.â€
Finance and technology intersect with bitcoin, the hot but controversial virtual money that has swept the Internet. “As questions still swirl around bitcoin’s legality, many technology entrepreneurs are trying to sidestep the currency’s pitfalls by devising new ways to make payments in a cashless future,†Nathaniel Popper reports. Ripple, one online payment system seen as having a good chance of supplanting bitcoin, “holds out the promise not just of a new currency, but also of a novel method to send money around the world. With that potential, it is winning something that has proved elusive for virtual currencies: involvement from more mainstream players in the financial system.â€
One entrepreneur, Anne Wojcicki, the co-founder and chief executive of 23andMe, is convinced that personal genetics will change health care. Her company offers a $99 DNA test, as easy as spitting into a tube, that provides detailed genetic information from disease risk to family lineage. “Genetics is going to be a ubiquitous part of health care. I think that everyone is going to get their genome. At some point, health care is going to reimburse for it,†Ms. Wojcicki tells Claire Cain Miller in an interview.
With cities and states in need of more cash, one municipal bankruptcy expert has been devising a structure that may help cities find their way out of the jam, Mary Williams Walsh reports. “James E. Spiotto, a partner with Chapman & Cutler in Chicago, has loosely modeled his idea on the special-purpose entities that helped tide New York City through its fiscal crisis of 1975. He calls his version the Public Pension Funding Authority, and he has been pitching it to federal regulators, credit analysts, bond dealers, academics and lawmakers â€" anyone worried that without some kind of fix, more cities will go the way of Detroit.â€
ON THE AGENDA Â |Â The second annual DealBook conference is held today in Manhattan. Speakers include Preet Bharara, David Bonderman, Ray Dalio, Barry Diller, Laurence D. Fink, Valerie Jarrett, Daniel S. Loeb, Elon Musk, Ruth Porat and David M. Rubenstein, among others. The third annual Veteran Employment Symposium and Resource Fair is held at the headquarters of Goldman Sachs, sponsored by banks including Goldman, Citigroup and Deutsche Bank.
Tyco Is Said to Be in Talks to Sell Korean Unit  | Tyco International “is approaching global private equity giants to sell its Korean security unit Caps Company in entirety, people familiar with the matter said Tuesday,†The Wall Street Journal reports. WALL STREET JOURNAL
The Case Against Too Much Independence on the Board  | While crony-filled boards are gone, Steven M. Davidoff argues in the Deal Professor column there is no evidence that a supermajority of independent directors does any better. DealBook »
BlackBerry’s Turnaround Starts All Thumbs  | The big questions are about John Chen holding the top two jobs at the troubled smartphone maker and his commuting from California, Richard Beales of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
This Wildcatter in Somalia Is BP’s Former Chief  | Tony Hayward, the former chief executive of BP, who now runs Genel Energy, “has joined a breed of wildcatters who deploy a risky and sometimes lucrative strategy: Look for oil in politically or geologically fraught lands after cutting deals with governments that claim the lands, even if those claims are in dispute,†The Wall Street Journal reports. WALL STREET JOURNAL
Big-Ticket Art Coming to Auction  | Carol Vogel writes in The New York Times: “The pressure to sell was so great that Christie’s used the word ‘masterpiece’ three times in the first three paragraphs of its catalog essay promoting a Francis Bacon triptych that it hopes to auction on Tuesday for at least $85 million.†NEW YORK TIMES
Banks May Curb Traders’ Use of Chat Rooms  | Credit Suisse, JPMorgan Chase and other investment banks are said to be considering limiting the ability of their traders to chat electronically with other banks amid a series of investigations of potential manipulation of the foreign exchange market. DealBook »
Honesty That Benefits All  | Doug Steiner, a consultant at a behavioral economics firm, discusses studies that show how minor changes to work practices can have effects on honesty. DealBook »
K.K.R. to Buy Landscaping Company Brickman for $1.6 Billion  | Leonard Green & Partners of Los Angeles, the current owner of the Brickman Group, had been fielding offers for the company for about two months. DealBook »
Colony Capital Sees Opportunity in Single Family Homes  | Thomas J. Barrack Jr., the founder of Colony Capital, says in a video interview with Privcap that he could invest another $1 billion in single-family real estate, adding that the window of opportunity is closing. PRIVCAP
Transocean Makes Peace With Icahn  | Transocean agreed to pay a $3-a-share dividend, make $800 million in cost cuts and undertake shifts in strategy. DealBook »
T-Mobile US Aims to Raise $2 Billion in Offering  | T-Mobile US said it would sell 66.15 million common shares, or about 9 percent of its shares outstanding, and use the proceeds to buy spectrum. REUTERS
Injuries to Players Raise Questions on Athlete I.P.O. Plan  | Sunday was a bad day for Fantex, the fledgling company promoting initial public offerings of National Football League stars, as its first two prospects were sidelined. DealBook »
Start-Up Aims to Make Money on Google Glass  | A New York start-up called the Fancy is “playing with the possibilities Glass provides for augmented reality â€" and making some money to boot,†The Verge reports. THE VERGE
Google Glass to Expand Into Music  | “On Tuesday, Google will unveil a set of features for Glass to search for songs, scan through saved playlists and listen to music in high fidelity,†The New York Times reports. NEW YORK TIMES
Determining the Victims of Insider Trading  | The Justice Department’s prosecution of SAC Capital Advisors raises the question of who the victims of a violation are, Peter J. Henning writes in the White Collar Watch column. DealBook »
Kirkland & Ellis Lures Deal Lawyer Away From Simpson Thacher  | Kirkland & Ellis said on Monday that it had hired Sean Rodgers, a mergers and acquisitions lawyer at Simpson Thacher & Bartlett, as a partner. DealBook »
Jury to Decide How Much Samsung Must Pay in Patent Case  | “Samsung Electronics lost an important patent battle with Apple last year. A new trial expected to start this week will determine how much Samsung has to pay for that loss,†The New York Times reports. NEW YORK TIMES
Slow Growth in Europe Raises New Questions About Euro  | “The 28-member bloc is increasingly confronting a more fundamental problem: whether it is too unwieldy to address the multiplying array of challenges it faces,†The New York Times writes. NEW YORK TIMES
