The government is taking a tough stance against Fabrice Tourre, the former Goldman Sachs executive found liable for civil fraud this year.
The Securities and Exchange Commission is seeking $910,000 in fines against Mr. Tourre for his role in packaging and selling a failed mortgage investment, DealBook’s Michael J. de la Merced reports. The agency is also looking for the forfeiture of $175,463 in ill-gotten gains and $62,858.03 in interest.
“Tourre’s conduct helped cause more than one billion dollars in losses. He was rewarded with the largest bonus he had ever received,†lawyers for the S.E.C. wrote in a court filing on Monday, arguing in favor of the stiff penalty. “Severe misconduct must have consequences, particularly when the consequent financial loss is of such great magnitude.â€
Mr. Tourre’s lawyers are expected to respond next month, while the judge overseeing the case will ultimately determine how much he must pay.
BIG SHIFT IN WALL ST. BONUSES THIS YEAR As bank executives huddle to figure out how to divide this year’s spoils, an uncomfortable fact is emerging: M.&A. rainmakers and aggressive bond traders are unlikely to be the big winners this year.
Instead, as Andrew Ross Sorkin writes in the DealBook column, the money will flow toward those who have worked on initial public offerings, the beneficiaries of stock markets that kept rising. And the bonuses for many finance professionals who do not work at hedge funds or asset managers will be lower over all.
“It’s hard for some of my guys to accept, but the money is going to different people this year,†a senior executive of a large bank told Mr. Sorkin.
Another senior banker said: “Many of us went into this business in the late 1980s or early 1990s when it was the coolest job in the world. Now being a hedge fund manager or out in Silicon Valley is where the real money is being made.â€
STEINBERG TRIAL GOES TO JURY The fate of Michael S. Steinberg, a former top official at SAC Capital Advisors accused of insider trading in technology stocks, now rests with the federal jury in his criminal case.
Whether he is found guilty will likely hinge on if the jury believes the government’s star witness, a former subordinate who has already pleaded guilty to his own insider trading charges, DealBook’s Alexandra Stevenson writes.
Wrapping up his defense on Monday, Mr. Steinberg’s lawyer, Barry H. Berke, called the analyst, Jon Horvath, a liar. “If you don’t believe something a witness says, you can reject his entire testimony,†Mr. Berke told the jury.
SURGE IN HERBALIFE SHARES AFTER RE-AUDIT Herbalife shares jumped by nearly 10 percent on Monday after the nutritional supplements maker said it had finished re-auditing its last three years’ worth of books with no major changes made, Mr. de la Merced writes.
The stock jump again put the hammer on William A. Ackman, who is betting that Herbalife would collapse, asserting that it is an illegal pyramid scheme. But investors have kept pushing up the stock price, making Mr. Ackman pay dearly.
Nevertheless, Mr. Ackman is undaunted, with his spokeswoman declaring in a statement: “Herbalife is a pyramid scheme that will be shut down by regulators.â€
Frontier to Buy AT&T’s Connecticut Wireline Network  | The Frontier Communications Corporation has agreed to pay $2 billion in cash to acquire AT&T’s wireline business and fiber network in Connecticut. DealBook »
Cooper Tire Loses Bid to Force Apollo’s Hand in Merger  | Cooper Tire & Rubber was dealt a setback by Delaware’s highest court on Monday, opening the door for Apollo Tyres to scrap their proposed $2.3 billion merger, Reuters reports. Reuters
Weinsteins to Reunite With Miramax in Disney Deal  | The New York Times writes: “Bob and Harvey Weinstein, who founded Miramax but left in a split with its then-owner, Walt Disney, in 2005, will produce and distribute films and television shows based on the studio’s library.†New York Times
Comcast Said to Weigh Options for Time Warner Cable  | Comcast is considering several potential deals with Time Warner Cable, including making an offer for a full takeover of the company or buying some of its markets, Reuters reports. Reuters
JPMorgan Chase Puts Asia Investment Unit Up For Sale  | The Financial Times writes, “JPMorgan Chase has put up for sale its Global Special Opportunities Group, an Asia-based principal investment business, for a valuation likely to be more than $1 billion.†Financial Times
Former Top Goldman Executive to Run Cushman & Wakefield  | Edward C. Forst, a former co-head of Goldman’s investment management division, will be president and chief executive of the commercial real estate giant. DealBook »
R.B.S. Exits Government Guarantee Program  | The Royal Bank of Scotland has exited a British government guarantee program that would have pumped as much as 8 billion pounds, or about $13 billion, into the bank if it faced further financial difficulty after its government bailout during the financial crisis. DealBook »
Regional Bank Says It Will Take a Charge Because of Volcker Rule  | Zions Bancorporation says it is taking a charge of $387 million to rid itself of a sizable portfolio of trust-preferred collateralized debt obligations and other C.D.O.’s. DealBook »
Britain Passes ‘Ring Fence’ Bill  | Britain’s House of Lords passed a banking reform bill on Monday that will require banks to separate, or “ring fence,†their retail operations from riskier trading by their investment banking operations, but the legislation’s backers say there is more to be done, The Financial Times writes. Financial Times
European Banks Shed $1.1 Trillion in Assets  | Bloomberg News reports: “European Union banks have shed more than $1.1 trillion of assets since the end of 2011 in a shift away from risky investments such as asset-backed debt as regulators push lenders to shore up their balance sheets.†Bloomberg
K.K.R. to Buy Debt-Trading Affiliate for $2.6 Billion  | The transaction will allow the investment giant to simplify its corporate structure while expanding its balance sheet. DealBook »
Private Equity’s Lucrative Second Bite of a Chip Company  | Silver Lake just about quintupled its money on its initial carve-out of Avago Technologies from Hewlett-Packard. Now it’s back, underwriting Avago’s $6.6 billion purchase of rival LSI, notes Robert Cyran of Reuters Breakingviews. DealBook »
BlackRock Quiet on Where It Stands in Telecom Italia Fight  | BlackRock confirmed it was now the second largest investor in Telecom Italia, but did not say who it would side with ahead of a vote over control of the company’s board, Reuters reports. Reuters
Treasury Finds Less Risk-Taking in Hedge Funds  | Hedge funds are less risky than previously thought, based on leverage levels, risk controls and their levels of illiquid assets, Reuters reports, citing a newly formed office in the Treasury Department created by the Dodd-Frank regulatory overhaul. REUTERS
Diamond Raises $325 Million for African Investment Venture  | Robert E. Diamond Jr., who was ousted as chief executive of Barclays nearly 18 months ago amid a rate-fixing scandal, has raised $325 million for a new venture, which will focus on potential acquisitions in the African financial sector. DealBook »
Rice Energy Files for $800 Million I.P.O. Â |Â Rice Energy, a natural gas exploration and production company, is seeking to raise as much as $800 million in an initial public offering, Reuters writes. Reuters
AMC’s Slowing Growth May Hobble I.P.O.  | Analysts are bearish about the prospects of AMC’s initial public offering, as the movie theater chain trails rivals in revenue growth while laboring under a $2 billion debt load, according to Bloomberg News. BLOOMBERG
Nasdaq Must Face Lawsuits Over Facebook I.P.O.  | The Nasdaq OMX Group must face a series of lawsuits contending that the stock exchange operator’s mishandling of Facebook’s market debut cost investors some $500 million, a judge ruled on Monday, according to Bloomberg News. Bloomberg
Boeing Unveils $10 Billion Share Buyback  | Boeing is preparing to buy back up to $10 billion in shares over the next two to three years, Reuters writes. Reuters
Uber Customers Fume Over Snowy Day’s Price Surge  | Uber upset customers over the weekend when the taxi-like start-up raised its prices during a New York City snowstorm to as much as seven times the normal fare, charging customers $35 per mile, Nick Bilton writes in Bits. BITS
Atara Raises $38.5 Million in New Round  | Atara Biotherapeutics, a start-up biotechnology company focused on debilitating diseases, has raised $38.5 million in a second round of financing. New investors include Amgen Ventures, Celgene and EcoR1 Capital, while returning investors include Alexandria Venture Investments, DAG Ventures, Domain Associates and Kleiner Perkins Caufield & Byers. NEWS RELEASE
Rakoff Takes Wall Street’s Watchdogs to Task  | Judge Jed S. Rakoff argues in an essay for The New York Review of Books that when it comes to holding executives accountable for the practices that rattled the financial system in 2008, the Justice Department has failed in its responsibilities, Adam Liptak notes in the Sidebar column of The New York Times. DealBook »
Former Trader Pleads Not Guilty to Libor Charges  | Tom Hayes, a former UBS and Citigroup trader, and two others pleaded not guilty in London on Tuesday to criminal charges that they tried to manipulate benchmark interest rates, Reuters reports. Reuters
U.S. Regulator Seeks to Enforce Swaps Rules Overseas  | The Commodity Futures Trading Commission may try to require overseas financial companies to comply with its rules on swaps, creating a potential showdown among regulators over who should have the final say on regulating such transactions, The Wall Street Journal writes. Wall Street Journal
Inquiry Into JPMorgan’s Response to Madoff Investigation  | Reuters reports: “A U.S. Treasury Department watchdog tried to examine whether JPMorgan Chase & Co. interfered with a regulatory probe into its relationship with convicted felon Bernard Madoff but the largest U.S. bank was able to nip the inquiry in the bud, a government official said on Monday.†Reuters
Swiss Banks Warn U.S. Clients to Declare Secret Assets  | Politico writes: “Swiss banks are quietly warning wealthy U.S. clients with secret accounts to come clean with the tax man in the next two weeks â€" or risk jail time.†Politico
Accountant Taken Into Custody in China Investigation  | The China National Petroleum Corporation’s chief accountant has been taken into custody and ordered to assist in an investigation into corruption at Asia’s largest energy company, The Financial Times reports. Financial Times
Former UBS Executive Gets $10.5 Million Bail in Tax Case  | Raoul Weil, a former UBS executive, has been granted $10.5 million bail as he made his first appearance on charges that he helped Americans hide billions of dollars overseas from United States tax authorities, Bloomberg News writes. Bloomberg
