The Obama administration has reached a critical stage in its effort to rein in Wall Street, Peter Eavis and Ben Protess report in DealBook. The push to reshape financial regulation hinges on negotiations in the coming weeks over the Volcker Rule, which bans banks from trading for their own gain.
“Treasury Secretary Jacob J. Lew has strongly urged federal agencies to finish writing the Volcker Rule by the end of the year â€" more than a year after they had been expected to do so â€" and President Obama recently stressed the importance of the deadline,†Mr. Eavis and Mr. Protess write. “While regulators are optimistic they will complete the rule soon, even after facing a lobbying onslaught from Wall Street, they have little time to overcome the internal wrangling that has stymied them for years. The tension among regulators â€" five agencies are writing the rule â€" has centered on just how stringent to make it.â€
“The tenor of the negotiations underscores how the Volcker Rule has emerged as a litmus test of the strength of Dodd-Frank, especially after regulators weakened other rules under that 2010 law. And although the Volcker Rule is only one of 400 regulations to arise from the sweeping overhaul, its symbolic significance has captivated Washington and Wall Street alike.â€
GEITHNER HEADS TO PRIVATE EQUITY  | In his first prominent position since leaving office as Treasury secretary this year, Timothy F. Geithner will join Warburg Pincus as president, the private equity firm announced on Saturday. “The unusually low-key announcement â€" made with little fanfare on a Saturday morning â€" is Mr. Geithner’s first foray into the private sector in 25 years, after serving in the Treasury Department, the International Monetary Fund and the Federal Reserve Bank of New York,†Michael J. de la Merced and Peter Lattman write in DealBook.
“While Mr. Geithner has been given the lofty title of president, several private equity executives questioned whether he would be much more than a prominent name who would help Warburg Pincus open doors on the fund-raising side, especially with foreign investors like sovereign wealth funds,†Mr. de la Merced and Mr. Lattman write. “Unlike past Treasury Secretaries Henry M. Paulson Jr. and Mr. Rubin (both alumni of Goldman Sachs), Mr. Geithner has been a public servant for most of his career. He has never worked at a bank, and he has no experience making private equity deals.
“Mr. Geithner initially seemed unlikely to join Wall Street. While he was praised for helping prevent the financial crisis from worsening, critics repeatedly assailed his policies during the Obama administration as too friendly to the nation’s biggest banks.â€
FACEBOOK STRIVES TO KEEP CACHET  | Facebook, still the dominant social media service, has been an attractive suitor for many start-ups. But when Snapchat spurned an offer from the social media giant, the snub underscored a changing perception of Facebook in the tech industry, Jenna Wortham, Vindu Goel and Nicole Perlroth report in The New York Times. “As the once scrappy start-up evolves into a sprawling corporation, younger companies who view themselves as disruptive do not find Facebook’s size and cushy campus as appealing.â€
Snapchat most likely envisions a future for itself as a social network that could exist outside of Facebook. Its swift rise suggests a change in how and where people like to spend their time. Despite Facebook’s primacy, a study by the Pew Internet and American Life Project found that Facebook addiction has given way to Facebook fatigue, at least among some users. The survey confirmed what some at the company already knew: In its latest quarterly call with investors, Facebook said its youngest users were spending less time on the service, although overall teenage engagement was stable.
ON THE AGENDA Â |Â
The trial of Michael S. Steinberg, a former portfolio manager at SAC Capital Advisors accused of insider trading, is set to begin this week. Urban Outfitters and Salesforce.com report earnings after the market closes. The CME Group’s Global Financial Leadership Conference kicks off in Naples, Fla.
JPMORGAN’S $4.5 BILLION MORTGAGE SETTLEMENT  | “The checks from JPMorgan Chase just keep on coming as the nation’s largest bank works to move beyond its mortgage-related troubles,†Jessica Silver-Greenberg reports in DealBook. “On Friday, JPMorgan reached a $4.5 billion settlement with a group of investors over claims that the bank sold them shaky mortgage-backed securities that imploded later, leading to large losses. The multibillion-dollar payout is separate from the tentative $13 billion settlement that JPMorgan reached with the Justice Department over the bank’s questionable mortgage practices in the run-up to the financial crisis. That deal could be announced as early as next week, according to people briefed on the settlement.â€
R.B.S. Seeks Buyer for Unit  | The Royal Bank of Scotland said on Monday that it was in talks to sell its structured retail investor products and equity derivatives business. DealBook »
Lloyds Bank to Sell Asset Management Unit for $1.06 Billion  | The deal to combine the Lloyds Banking Group’s Scottish Widows Investment Partnership unit with Aberdeen Asset Management will create Europe’s largest publicly traded asset manager. DealBook »
Convoluted Language Makes Cooper Tire Deal Harder to Execute  | A judge’s ruling related to the provisions of a deal for Cooper Tire to sell itself to an Indian rival brings up an interesting debate about the language of merger agreements, Steven M. Davidoff writes in the Deal Professor column. DealBook »
A Baffling About-Face in Airline Merger  | The announcement that the Justice Department was dropping its lawsuit to block the merger of American Airlines and US Airways after the parties reached a settlement “left many antitrust experts scratching their heads, even as the airlines and their shareholders celebrated,†James B. Stewart writes in the Common Sense column. NEW YORK TIMES
Apple Is Said to Be in Talks to Buy PrimeSense  | AllThingsD reports: “Several sources confirm that Apple is in talks to buy 3-D sensing company PrimeSense, following a report in the Israeli publication Calcalist. However, those sources stressed that the deal is not yet done, and that its reported valuation would not represent a huge win for investors.†ALLTHINGSD
Forbes Media Seeks Buyer  | Forbes Media, which publishes Forbes magazine and has been making an extensive push into digital media and native advertising, is up for sale, the company confirmed in an email to the staff Friday morning, Christine Haughney and David Gelles write in The New York Times. DealBook »
Jos. A. Bank Ends Its Offer for Men’s Wearhouse  | The withdrawal of the $2.3 billion bid ends a campaign to combine two of the country’s biggest sellers of men’s suits. DealBook »
Former British Bank Chairman Is Identified in Drug Video  | The Daily Mail reports: “The chairman who oversaw the near-collapse of the Co-operative Bank has been caught buying and using illegal drugs including crystal meth, crack cocaine and ketamine.†DAILY MAIL
N.Y.S.E. and Nasdaq Said to Be Near Deal on Data Streams  | The Wall Street Journal reports: “The committees that control consolidated data feeds for Nasdaq OMX Group and NYSE Euronext are close to an agreement on a plan to back up one another’s streams, according to people familiar with the matter.†WALL STREET JOURNAL
Bloomberg’s News Unit to Lay Off Staff  | The news division of Bloomberg L.P. “will lay off about 50 people or about 2 percent of its newsroom, according to people familiar with the company’s plans, the latest financial news and data provider to make job reductions,†The Wall Street Journal reports. WALL STREET JOURNAL
Dear 1 Percent, Relax  | “A discernible angst is descending over New York City’s affluent residents, who are worried about the coming mayoralty of Bill de Blasio,†Neil Barsky, a film director and former hedge fund manager, writes in an essay in The New York Times. “As someone who has spent his adult life raising a family and running a financial business in New York, I have some words of wisdom for my anxious friends: Calm down.†NEW YORK TIMES
A Citigroup Chairman Turned Jazz Club Owner  | “I always thought one day I’d love to own a jazz supper club where there was good music, nice ambience, and good food,†Richard D. Parsons, Citigroup’s former chairman, tells New York magazine. NEW YORK
Finding Strength in Humility  | Genuine humility implies self-confidence, not weakness or insecurity, and it gives leaders permission to acknowledge their limitations and learn from them, Tony Schwartz writes in the Life@Work column. DealBook »
Advent Offers to Buy Dutch Software Company  | The private equity firm Advent International has offered about $1.58 billion in cash for UNIT4, a Dutch software firm, the company said on Monday. REUTERS
ValueVision Rejects Demands From Activist Investor  | The Clinton Group has been agitating for change at the top for more than two weeks and has called for an overhaul of the board. DealBook »
Zulily Surges in Market Debut  | Shares in Zulily, the retailer that focuses on flash sales of products for children and mothers, rose more than 70 percent in their market debut on Friday. DealBook »
G.E. Announces Plans to Take Retail Finance Unit Public  | General Electric formally disclosed its plans to hold an initial public offering of its North American retail finance unit on Friday, as part of an effort to shrink its enormous finance arm. DealBook »
General Electric Finally Gets Past the Jack Welch Era  | The spinoff of GE Capital’s North America retail finance business will help the company focus on its core businesses, Antony Currie of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
New York State Comptroller Invests in Lerer-Backed Tech Company  | The New York State comptroller’s office said on Friday that it had invested in a website backed by Kenneth Lerer, the veteran venture capitalist, as it continues to support homegrown technology companies. DealBook »
A Choice for Start-Up Leaders: Cash In or Stay Independent?  | “When Snapchat’s founders rejected the buyout offer, it conjured memories among start-up founders who once faced a similar decision. Nine recounted their thoughts in that moment â€" when the money was on the table and the future was unpredictable,†The New York Times writes. NEW YORK TIMES
In Mortgage Case, a Question of Who Has Your Back  | An $8.5 billion settlement that is awaiting approval by a justice in New York State Supreme Court centers on a crucial question, Gretchen Morgenson writes in the Fair Game column in The New York Times: “What is the duty of a trustee to protect investors?†NEW YORK TIMES
Jury Finds Pipe Maker Defrauded Governments  | Three years after a whistle-blower’s original complaint, a federal jury in California has found JM Eagle to be responsible for selling defective PVC pipes to municipalities across the country. DealBook »
More Cities May Use Eminent Domain to Halt Foreclosures  | The New York Times reports: “New cities are joining the effort to head off home foreclosures by using a twist on the power of eminent domain, despite threats of financial retaliation from Wall Street and Washington.†NEW YORK TIMES
Despite Monetary Easing, a Reluctance to Borrow in Japan  | “The dearth of borrowers illustrates the reality behind Japan’s economic-policy experiment: It is easier to increase the money supply than to get people to put the cash to work,†The Wall Street Journal writes. WALL STREET JOURNAL
Around the World, Inflation Is Falling  | In the United States and in many European countries, inflation is falling to levels lower than any seen in recent years, Floyd Norris writes in the Off the Charts column in The New York Times. NEW YORK TIMES
