SAC Capital Advisors, the hedge fund started by Steven A. Cohen, will soon cease to exist as Wall Street has known it. The firm, whose reputation is now intricately linked to an insider trading scandal, is in the midst of rebranding itself, including changing its name and corporate structure. And recently, a major bank distanced itself from the firm. Together, these developments provide the most vivid illustration yet of SAC’s steep fall from powerful hedge fund to marginalized player, Ben Protess and Alexandra Stevenson write in DealBook.
And, at least for now, it is unclear how banks, which once profited handsomely from the hedge fund’s trading activity, will handle the firm’s new look. For one, Wall Street has already become less dependent on SAC’s fees and some of the firm’s banking relationships have slowed. Deutsche Bank severed ties with SAC in recent weeks, citing “reputational risk.â€
Mr. Protess and Ms. Stevenson write: “As other companies tainted by scandal have done, SAC may use its new name and structure as vehicles for a new beginning. SAC’s rebranding, playing out under the watchful eye of the government, might send a message to the authorities that the firm is resigned to a smaller and simpler existence.â€
THE TAMING OF THE ACTIVIST INVESTOR Â |Â Activist investors and large companies have a tendency to butt heads, but now, an unlikely alliance is doing its best to get the two sides to communicate. A group of investors, board members and advisers, calling itself the Shareholder-Director Exchange, is announcing an initiative on Monday to provide companies, boards and investors with the self-help tools they need to avoid sudden blowups, David Gelles writes in DealBook.
The protocol, a voluntary set of standards that companies and investors can adopt, will encourage boards to meet with longtime shareholders. While the purpose is not for board members and shareholders to discuss management topics like operations and financial returns, the two sides are encouraged to discuss corporate governance issues, management changes and long-term plans.
JOS. A BANK WEIGHS EDDIE BAUER PURCHASE  | By now, news on the monthslong takeover battle between Men’s Wearhouse and Jos. A. Bank is old hat. In any case, Jos. A Bank publicly released a letter to Men’s Wearhouse on Sunday accusing its rival of failing to properly disclose the antitrust risks in its takeover bid and said that it was in talks to buy Eddie Bauer, the outdoor clothing retailer.
The move to buy Eddie Bauer may seem unusual. After all, Jos. A. Bank is known for making suits, while Eddie Bauer caters more to the rugged outdoor crowd. But it turns out that Eddie Bauer is owned by the private equity firm Golden Gate Capital, which originally agreed to back Jos. A. Bank’s bid for Men’s Wearhouse with a $250 million equity investment.
THE SUPER BOWL WAS NOT EXCITING  | The Seattle Seahawks dominated Super Bowl XLVIII, thrashing the Denver Broncos 43-8. Perhaps it was an omen when the game started with a safety on the Bronco’s first offensive play, the fastest score in Super Bowl history.
But the event, if not the game itself, did manage to provide some suspense for those watching at home in California. According to the Los Angeles Times, some Time Warner Cable customers in the Los Angeles area were unable to watch a chunk of the game, as well as the halftime show, because of technical issues.
On the plus side, Henry R. Kravis, co-chairman and co-chief executive of the private equity firm Kohlberg Kravis Roberts, was sighted at the Super Bowl sitting next to the actor Michael Douglas. Talking about Wall Street movies, no doubt.
ON THE AGENDA  | The purchasing manager’s index for January is released at 8:58 a.m. The I.S.M. manufacturing index for January comes out at 10 a.m. Construction spending figures for December are out at 10 a.m. The Senate Subcommittee on National Security and International Trade and Finance holds a hearing at 3 p.m. on safeguarding consumers’ financial data. Treasury Secretary Jacob J. Lew speaks at the Bipartisan Policy Center at 9 a.m. Shawn Matthews, the chief executive of Cantor Fitzgerald, is on CNBC at 12:30 p.m.
PRIVATE EQUITY’S ROLE IN THE DEFENSE INDUSTRY  | The Washington Post has a report on the major role private equity firms are playing in the defense industry.
“For a typically slow-moving industry such as contracting, private equity investors can provide the money and motivation to help companies adapt and change,†The Post reports. “Today, there are signs that private equity may have some second thoughts about buying into the market, as government spending declines following the conclusion of two wars and the arrival of spending cuts.â€
“Though the fervor among private equity groups to buy into defense contracting has dimmed, there remain investors interested in the market. Some contracting executives are forecasting that 2014 could be the bottom for sales, meaning investors may take a chance on buying at lower prices now, hoping for an upswing in the coming years.â€
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Montagu to Buy Bulk of Rexam’s Health Care Business  | Montagu Private Equity has made an $805 million offer to buy the health care devices and prescription retail divisions of the British consumer packaging company Rexam. DealBook »
British Company to Buy U.S. Medical Device Maker  | The British medical technology company Smith & Nephew said it would pay $1.7 billion in cash for the ArthroCare Corporation and introduce its products to additional markets. DealBook »
Etihad Airways Sets Deadline on Talks With Alitalia  | Etihad Airways of Abu Dhabi says its discussions with Alitalia over a possible investment in the troubled Italian airline have entered “the final phase.†Nicola Clark reports in The New York Times. NEW YORK TIMES
Goldman Bets on Russian Fitness Chain  | Goldman Sachs is increasing its investment in an upscale chain of Russian fitness clubs, Reuters reports. The bank’s special situations group has been supporting entrepreneurs who are hoping to capitalize on the country’s rising middle class. REUTERS
Charter Said to Consider Raising Time Warner Bid  | Charter Communications is said to be discussing increasing its bid for Time Warner Cable in the next few weeks, Reuters reports, citing unidentified people familiar with the situation. REUTERS
Lloyds Bank to Take £1.9 Billion in Added Charges  | The Lloyds Banking Group, which is partly owned by the British government, also said it expected to seek permission to begin paying a “modest†dividend again in the second half of 2014. DealBook »
French Bank to Expand Bond Trading  | The French bank Société Générale is expanding its bond trading units in the United States and Asia, with plans to add up to 150 employees this year, The Financial Times writes. FINANCIAL TIMES
R.B.S. Plans Management Shake-Up  | Ross M. McEwan, chief executive of the Royal Bank of Scotland, is planning to shake up the bank’s management team, The Financial Times reports. The move is intended to help strengthen the bank’s focus on retail and small business customers. FINANCIAL TIMES
The Difficulties of Managing a ‘Bad Bank’  | Managers of “bad banks,†which are created to take troubled assets off a bank’s balance sheet, are charged with selling these assets as quickly as they can. But once these managers sell these assets, they no longer have a job, which may be one of the reasons investors are saying it is difficult to purchase these castoffs, Quartz reports. QUARTZ
Morgan Stanley’s Stock Bet Yields Windfall on Paper  | Purchases of Morgan Stanley stock made years ago by James P. Gorman, the firm’s chief executive, when the Wall Street bank’s shares were trading far lower, have paid off extremely well for his portfolio. DealBook »
K.K.R. to Open Office in Spain  | The private equity firm Kohlberg Kravis Roberts is opening its first office in Spain on Monday, The Wall Street Journal reports. WALL STREET JOURNAL
Private Equity Could Spur Mining M.&A. Â |Â An $8 billion pool of private equity funds could be used to support mergers and acquisitions in the mining assets space, Bloomberg News reports. BLOOMBERG NEWS
K.K.R. Buys Stake in German Soccer Club  | Kohlberg Kravis Roberts has agreed to buy a 9.7 percent stake in Hertha BSC, a soccer club in Berlin. It is virtually unheard-of for an American private equity firm to buy a stake in German soccer. DealBook »
Exfinity to Invest in Indian Start-Ups  | A private equity fund called Exfinity will invest in about 15 start-ups in India, The Wall Street Journal reports. The firm’s chairman discusses his target investments. WALL STREET JOURNAL
Hedge Funds File Suit Against Porsche  | Seven hedge funds have filed a 1.8 billion euro lawsuit against Porsche’s chairman and another board member, accusing the carmaker and its management of misleading the market leading up to its disclosure in 2008 that it was aiming to take control of Volkswagen, The Financial Times reports. FINANCIAL TIMES
Investigation Broadens Into Deals Between Finance Firms and Libya  | The Justice Department is increasing the scope of its investigation of banks, private equity firms and hedge funds, which, they contend, may have violated antibribery laws in dealing with Libya’s government-run investment fund, The Wall Street Journal reports, citing unidentified people familiar with the situation. WALL STREET JOURNAL
Castlight Health Files for I.P.O.  | Castlight Health, an online application that allows companies’ employees to shop for health care benefits, has filed a confidential initial public offering with the Securities and Exchange Commission, Fortune reports. FORTUNE
Coupons.com Prepares to Go Public  | Coupons.com, known for providing coupons that can be used in physical stores, has filed for a $100 million initial public offering, 15 years after its inception, ReCode writes. RECODE
Ezra Klein’s Plans for the Future  | Ezra Klein explains in a New York Magazine article why he left The Washington Post to start a digital news site. NEW YORK MAGAZINE
Bitcoin’s Price Stability  | Bitcoin’s stable pricing in January could indicate a trend for the virtual currency, TechCrunch writes. TECHCRUNCH
Start-Up Aims to Circumvent Rules on Private Stock Sales  | Employees who hold shares in start-ups are often wealthy on paper, but have few ways to access that wealth. A new company, Equidate, is trying to get around rules that restrict employees’ ability to sell their shares with a novel way to provide liquidity. DealBook »
Boss Insists That Staff Members Skip Super Bowl  | Brooke Allen, who has worked for 30 years in the securities industry as a proprietary trader and hedge fund manager, insisted that his staff members attend a start-up event rather than watch the Super Bowl to encourage them to innovate, Quartz writes. QUARTZ
Law Does Not End Revolving Door on Capitol Hill  | Former officials have little trouble passing through loopholes in laws intended to keep them from immediately lobbying their onetime colleagues. DEALBOOK
Detroit Sues to Cancel Some Costly Contracts  | The city contends that some of the complex transactions set up to finance pensions were illegal. DealBook »
A Long Battle for a Retirement Plan  | After a five-year battle, retirement account holders of a collapsed company can finally touch their money, Gretchen Morgenson writes in The New York Times. NEW YORK TIMES
Judge Approves Bank of America Settlement on Bonds  | A New York State judge blessed the 2011 agreement to cover some of the investors’ mortgage losses, but she also excluded some of the legal claims by the investors from the settlement. DealBook »
How the Fed Learned to Communicate  | “Partly but not only because of the global financial crisis â€" which caused the Fed to take unprecedented steps to stabilize the financial system, prevent big banks from going bust and keep interest rates low to stimulate the economy â€" the Fed communicates more than ever before,†Douglas R. Holmes writes in an Op-Ed in The Times. NEW YORK TIMES
