Dr. Joel S. Ross took the witness stand for a second day at the insider trading trial of Mathew Martoma, a former hedge fund manager at SAC Capital Advisors. During his testimony, Dr. Ross told the jury of seven men and five women how Mr. Martoma knew so much detail about a confidential presentation on a clinical drug trial that Dr. Ross had attended, “it was like he was in the room with me,†Alexandra Stevenson reports in DealBook.
The presentation detailed results of a clinical trial for an Alzheimer’s drug, which were not made public until the following day. The shares of the companies developing the drug, Elan and Wyeth, fell sharply when news of the disappointing outcome surfaced. The government contends that Mr. Martoma’s advance knowledge of the clinical trial’s failure helped SAC avoid losses and generate profits of $276 million for the firm.
Mr. Martoma’s lawyers tried to cast doubt on Dr. Ross’s motives, questioning whether the doctor had suffered financially because of Mr. Martoma’s indictment. Dr. Ross answered that he had lost business after his name became associated with Mr. Martoma’s.
GOLDMAN REPORTS EARNINGS BEFORE THE BELL Â |Â Goldman Sachs is reporting fourth-quarter earnings at 7:30 a.m. today. Net income for the period a year ago was $2.89 billion, or $5.60 a share.
Goldman’s fourth-quarter results follow strong quarterly results from Bank of America, which reported fourth-quarter earnings on Wednesday of $3.4 billion, or 29 cents a share, up from $732 million, or 3 cents a share, in the period a year earlier. Net revenue rose 15 percent, to $21.7 billion.
Wells Fargo also posted a strong quarterly report on Tuesday, with earnings of $5.6 billion, slightly beating expectations. JPMorgan Chase fell slightly below analyst expectations on Tuesday, posting net profit of $5.28 billion, a 7.3 percent year over year drop driven by the bank’s legal costs.
YAHOO FIRES NO. 2 EXECUTIVE Â |Â Marissa Mayer, the chief executive of Yahoo, fired Henrique de Castro, her No. 2 executive, on Wednesday, only slightly more than a year after she had lured him from Google to help her transform the once-robust company, Vindu Goel reports in The New York Times.
Mr. de Castro was let go unceremoniously, with Yahoo refusing to issue a comment apart from a two-sentence document filed with the Securities and Exchange Commission after the market closed on Wednesday saying he would be leaving the company on Thursday.
Yahoo has lost much of its former luster, slipping out of its position as the second-largest digital ad seller, driven in part by the company’s failure to transition its advertising from desktop to mobile.
ON THE AGENDA Â |Â The Consumer Price Index for December is out at 8:30 a.m. The January Housing Market Index is released at 10 a.m. John C. Williams, president of the Federal Reserve Bank of San Francisco, gives a speech on lessons from the Great Recession in Washington at 9:15 a.m. Ben S. Bernanke, the departing chairman of the Federal Reserve, speaks in Washington at 11:10 a.m. on the challenges facing central banks. The Senate Committee on Banking, Housing and Urban Affairs holds a progress report on public transportation at 10 a.m. Financial institutions of note reporting fourth-quarter results: Goldman Sachs, Citigroup and BlackRock release details before the bell. American Express and Capital One report after the market closes. Laurence D. Fink, the chief executive of BlackRock, is on CNBC at 6 a.m.
‘BE THE WORLD’S GREATEST DEAL MAKER’  | Ansarada, a company based in Sydney that provides virtual data rooms for deal-making activity, released a game for mobile devices on Thursday called the M.&A. Game, which encourages users to become “the world’s greatest deal maker.â€
The game, which simulates the M.&A. transaction process, has generated considerable excitement from young finance professionals on Twitter and on the online finance community website Wall Street Oasis. The website, where Wall Street’s young set shares grievances and seeks industry advice, posted a link to download the game on Wednesday in advance of its official release.
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Apollo to Buy Out Chuck E. Cheese Parent for $1.3 Billion  | Apollo Global Management has agreed to acquire CEC Entertainment, which operates 577 Chuck E. Cheese’s restaurants, for $1.3 billion, including the assumption of debt. DealBook »
At JPMorgan’s Health Care Conference, Deal Talk Abounds  | Few events are bigger in the world of corporate health care than JPMorgan Chase’s annual conference in San Francisco. And this year, much of the buzz seems to surround the prospect of more deals. DealBook »
Handybook Purchases Exec in Deal for On-Demand World  | Handybook, a website for booking household services, has purchased Exec, a start-up based in San Francisco that enables users to book house cleaners using a mobile application, the Bits blog reports. The $10 million deal, which joins two on-demand companies, was paid out in Handybook stock, said an unidentified person familiar with the matter. NEW YORK TIMES BITS
A Case of Mistaken Identity Sends a Worthless Stock Soaring  | After Google announced it was buying Nest Labs on Monday, shares jumped for a stock with the ticker symbol NEST â€" a different, and defunct, company. DealBook »
China’s Tencent Aims for Growth in E-Commerce  | Tencent, a Chinese online services operator, announced on Wednesday it had agreed to purchase a 9.9 percent stake in China South City Holdings, a logistics firm, for $193 million, taking aim at the e-commerce giant Alibaba, The Wall Street Journal reports. WALL STREET JOURNAL
After Crisis, Iceland Holds a Tight Grip on Its Banks  | Iceland is a living experiment in what can happen when a country forces its financial firms to go under, rather than bailing them out. DealBook » |Â
Richard Parsons’s New Restaurant Receives Accolades  | The New York Times on Wednesday gave high marks to the Cecil, a restaurant that counts Richard Parsons, Citigroup’s former chairman, and Alexander Smalls, a former opera singer, as owners. DealBook »
How Banks Work, as Told by ABN Amro’s Chairman (in Drag)  | To help explain ABN Amro’s core values this week, Gerrit Zalm dressed up as his “sister,†Priscilla, wearing a bright blue dress and a vivid red wig. Oh, and his fake sibling just happens to be a brothel owner. DealBook »
Research Analysts Fantasize About Bank Mergers  | Analysts, who are accustomed to influencing the markets with their reports, also engage in “fantasy M.&A.†reports that discuss takeover targets and deals between companies, Quartz writes. Recently, these analysts have focused on banks, spurring rumors of spinoffs and deals that could influence the industry. QUARTZ
Skeptics Question Banks’ Bottom Lines  | While Bank of America and Wells Fargo reported healthy profits in the last quarter, some observers are concerned that the banks are quickly depleting their rainy day funds. DealBook »
Junior Bankers May Not Benefit From Weekend Work Limits  | “Even a good rule isn’t the best way to make junior investment bankers’ lives better. The best solution is for senior investment bankers to be better managers,†Ben Walsh writes on the Reuters Counterparties blog. REUTERS
Carlyle Is Said to Be Near a Deal for Johnson & Johnson Unit  | The Carlyle Group is near a deal to buy Johnson & Johnson’s clinical testing arm for about $4.1 billion, a person briefed on the matter said on Wednesday. DealBook »
Kelso Targets Smaller Fund  | The private equity investment firm Kelso & Company is aiming to raise $2.5 billion to $3 billion for its next fund, smaller than the $5.1 billion target for its previous fund, Bloomberg News reports, citing an unidentified person familiar with the situation. BLOOMBERG NEWS
Want Better Hedge Fund Returns? Try One Led by a Woman  | In the years since the financial crisis, hedge funds managed by women performed better than a broader index reflecting the performance of the industry, a report found. DealBook »
Auction Houses Woo Big Sellers With a Cut  | Auction houses like Christie’s and Sotheby’s, which is owned by the activist hedge-fund investor Daniel S. Loeb, are luring sellers of artwork by forgoing commission on the sales, leading analysts to wonder if the houses are running oversize risks, The New York Times reports. NEW YORK TIMES
German Financier Documents Rise and Fall  | Florian Homm, a former fund manager from Germany who faces extradition to the United States on security fraud, has willingly documented his exploits, Jack Ewing writes in The New York Times. “Mr. Homm has been more than willing to recount his womanizing and cocaine abuse, his ties to dubious characters, and his five years living incognito in South America,†Mr. Ewing writes. NEW YORK TIMES
Deutsche Bank Spinout Seeks $250 Million  | Philippe Azoulay, a former head of trading at Deutsche Bank, is aiming to increase the assets under management for his managed futures hedge fund from $50 million to $250 million in the next year, The Financial News writes. FINANCIAL NEWS
Former Hedge Fund Chief’s Investment in Treasure Hunt Proves Costly  | Dean Barr, the former head of Citigroup’s hedge fund business, invested in the X-marks-the-spot Emerald Reef venture after a real estate investor showed him a treasure map that led to a trove of emeralds on the sea floor, Bloomberg Businessweek reports. But the emeralds Mr. Barr had been shown to entice him to invest in the venture disappeared, costing him over $1 million. BLOOMBERG BUSINESSWEEK
Zendesk Prepares for I.P.O. Â |Â Zendesk, a start-up based in San Francisco that makes online customer service software, has hired Goldman Sachs and Morgan Stanley to prepare for an initial public offering, The Wall Street Journal reports, citing unidentified people familiar with the situation. WALL STREET JOURNAL
France to Sell a Piece of Airbus Group  | France announced on Wednesday that it was planning to sell a 1 percent stake in the Airbus Group, the European aerospace company, to raise cash, Reuters reports. REUTERS
Contently Raises $9 Million  | Contently, a start-up that advertisers use to create blog posts for websites, has raised $9 million, which it will use to increase its staff size and improve its software, Bloomberg News reports. The company has raised $11.7 million since it was founded in 2010 and expects to have revenue of $20 million this year. BLOOMBERG NEWS
Investments in Online Games Increased in 2013  | Investment in online games increased 16 percent in 2013 from the previous year, signifying a return to the levels before Zynga’s disappointing initial public offering scared off investors, ReCode reports.
RECODE
Lawmakers Seek Curbs on Trading Commodities  | Lawmakers on Wednesday pressed the Federal Reserve to act more forcefully, and quickly, to limit investment banks’ involvement in the physical commodities business, activity that has been blamed for inflating prices on everyday items like electricity and canned beverages, David Kocieniewski reports in The New York Times. NEW YORK TIMES
Lawmakers Consider Next Candidate for Volcker Rule Change  | Congress and industry members are fighting for a change to the Volcker Rule that currently requires many banks that own collateralized loan obligations to divest them, The Wall Street Journal writes. WALL STREET JOURNAL
Officials Had Knowledge of Rate-Fixing Long Before Investigation  | Senior currency dealers and the Bank of England discussed trading practices that contributed to manipulating foreign exchange rates 18 months before the regulators began formally investigating the practice, Bloomberg News reports. BLOOMBERG NEWS
Washington’s Victory Over Wall Street  | Washington began fighting Wall Street’s banks in 2009, and five years later, the “war is largely over. And Washington won in a blowout,†Ben White writes in Politico. POLITICO
Central Bank Advocates Threshold for Stress Test  | The European Central Bank said lenders should have to show that their capital would not fall below 6 percent of their assets when analyzed in a simulated stressful economic environment, Bloomberg News reports. BLOOMBERG NEWS
