After staking $1 billion on the collapse of the nutritional supplement company Herbalife, William A. Ackman’s activist hedge fund, Pershing Square Capital Management, has been lobbying aggressively to bring it down, Michael S. Schmidt, Eric Lipton and Alexandra Stevenson write in The New York Times. Others have criticized the business practices of Herbalife, which sells vitamins and other supplements through independent distributors, but Mr. Ackman’s attack is “unprecedented in its scale,†they write. For its part, Herbalife continues to strongly deny his accusations that the company is a pyramid scheme.
An investigation by The New York Times found that Mr. Ackman’s team had helped organize protests, news conferences and letter-writing campaigns across the United States to pressure state and federal regulators to investigate Herbalife, although several people who signed the letters say they do not remember sending them. His team has also paid civil rights organizations at least $130,000 to collect names of the people who claimed they were victimized by Herbalife. In response, Herbalife has mobilized its own army of lobbyists to defend the company against Mr. Ackman’s charges. Mr. Ackman has persuaded a number of elected officials, including a New York State senator, to join his cause, arguing that he is trying to protect Hispanics, who he says are most frequently the victims of Herbalife’s scheme.
Mr. Schmidt, Mr. Lipton and Ms. Stevenson write: “Mr. Ackman’s efforts illustrate how Washington is increasingly becoming a battleground of Wall Street’s financial titans, whose interest in influencing public policy is driven primarily by a desire for profit â€" part of an expanding practice in the nation’s capital, with corporations, law firms and lobbying practices establishing political intelligence units to gather news they can trade on.â€
MORE TROUBLE FOR CREDIT SUISSE Â |Â New documents made public on Friday point to mortgage lapses at Credit Suisse as the housing bubble inflated before the financial crisis, Gretchen Morgenson writes in The New York Times. The documents suggest that top officials at the bank routinely put pressure on subordinates to override due diligence standards and accept questionable loans that were then bundled into mortgage investments.
“The documents are noteworthy because Credit Suisse, unlike many other major banks, has refused to settle large lawsuits stemming from the mortgage crisis. The bank has long maintained that its operations were held to a high standard and that the mortgage investments it sold lost value largely because of the broad housing collapse, rather than its practices,†Ms. Morgenson writes, adding, “The previously confidential documents raise questions about the bank’s decision to fight, rather than settle, cases filed by plaintiffs including the Federal Housing Finance Agency and the New York attorney general.â€
The release of the documents, which include emails and other internal communications, is the latest in a string of difficulties for the Swiss bank. In February, United States senators questioned the bank over its role in helping American citizens hide money overseas and avoid taxes. And last year, a former mortgage trader was found guilty of hiding more than $100 million in mortgage bond losses at the bank by inflating the bonds’ value as the housing market collapsed.
JOBS DATA SHOWS SIGNS OF A THAW  | Things may be looking up in the jobs market. Friday’s jobs report showed that the American economy created more jobs in February than in either of the previous two months, suggesting that the labor market might be waking up from a winter slowdown, Nelson D. Schwartz writes in The New York Times. And while analysts warned that the report was not a cause for celebration quite yet, it did ease fears of another prolonged slowdown.
Employers hired 175,000 workers in February, still well short of the pace needed to return the economy to full employment. And while the unemployment rate rose slightly, to 6.7 percent, some economists were nevertheless encouraged because they viewed the uptick as a sign that more Americans were seeing signs of improving job opportunities and returning to the labor force.
ON THE AGENDA Â |Â Charles L. Evans, president of the Chicago Fed, speaks at 12:40 p.m. in Columbus, Ga. John C. Bogle, the founder of Vanguard, is on CNBC at 3:10 p.m. The annual South by Southwest festival continues in Austin, Tex.
A BLOW TO LENDERS IN ROYAL BANK OF CANADA RULING  | A Delaware judge ruled earlier this month against the Royal Bank of Canada over the lender’s advice in the 2011 buyout of Rural/Metro Corporation, an ambulance operator, a decision that might have broad consequences for Wall Street’s deal makers, Reuters writes. The judge said R.B.C. Capital Markets was negligent in its duty to shareholders when it failed to disclose conflicts of interest in the $438 million deal. R.B.C. bankers had pushed for a quick sale to the private equity firm Warburg Pincus at the same time as they were trying to provide financing to the firm to fund the buyout and other transactions. The decision is a blow to banks, which are increasingly facing lawsuits for their roles in mergers.
BANKERS SWAP FEES FOR DEAL CREDIT Â |Â Bloomberg News reports that Morgan Stanley and Goldman Sachs gave up millions of dollars in fees last month to get credit on a big deal they did not work on. Instead, the investment banks asked for credit in league tables, which are rankings of advisers on mergers and acquisitions maintained by Bloomberg and Dealogic, for working on the $25 billion sale last month of Forest Laboratories to Actavis.
“The trade highlights the importance of league tables to investment banks â€" which use them to pitch for new business â€" and the lengths to which banks will go to climb the rankings,†Bloomberg News writes. The banks’ previous contracts with Forest had a clause that entitled them to fees even if the company was sold by another bank.
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Chiquita to Buy Irish Fruit Distributor Fyffes in Stock Deal  | The combination would create the world’s largest producer and distributor of bananas, with annual revenue of about $4.6 billion. The transaction values Fyffes at about $526 million. DealBook »
Reckitt Benckiser Buys K-Y Lubricants Brand From Johnson & Johnson  | The British consumer goods company Reckitt Benckiser, which owns the Durex brand of condoms, said no fixed assets or employees were included in the transaction, which is expected to close in mid-2014. DealBook »
HGGC to Buy Serena Software From Silver Lake  | The investment firm HGGC Capital plans to announce on Monday that it has bought the enterprise software maker from its current owner, the private equity firm Silver Lake. DealBook »
Unilever Acquires Majority Stake in Chinese Water-Purification Company  | The deal for the Qinyuan Group represents Unilever’s largest acquisition in China in more than a decade. The maker of water purifiers and other drinking water equipment had annual revenue of nearly 1.2 billion renminbi, or about $200 million, last year. DealBook »
China’s Tencent to Buy Stake in JD.com as Part of E-Commerce Push  | The Chinese Internet company Tencent said it would pay $215 million for a 15 percent stake in JD.com as the two firms seek to challenge the dominance of Alibaba, China’s largest e-commerce company. DealBook »
Bouygues to Sell Network if SFR Bid Is Accepted  | Bouygues Telecom of France has agreed to sell its mobile network and much of its wireless spectrum to a rival, Iliad, for as much as $2.5 billion if Vivendi accepts Bouygues’ bid for its cellphone unit, SFR, Reuters writes. The move suggests that Bouygues is pre-emptively addressing antitrust concerns that could complicate its merger proposal. REUTERS
Newspaper Publishing Group Puts Cars.Com Up for Sale  | A group of newspaper publishers, including Gannett, the Tribune Company and McClatchy, is seeking to sell the online marketplace cars.com at a price of up to $3 billion, The Wall Street Journal reports, citing unidentified people familiar with the situation. WALL STREET JOURNAL
Behind Barclays’ About-Face on Bonuses  | Antony P. Jenkins, the chief executive of the British bank Barclays, said this week that after the bank cut pay at its investment bank to below-market levels in 2012, it ended up losing top bankers. But the bank’s own numbers throw a different light on the subject. DealBook »
Goldman Sachs’s Special Situations Chief Departs  | Albert Dombrowski, the chief of Goldman Sachs’s special situations group in the Americas, has left the bank after 12 years, Bloomberg News reports. The group is part of the firm’s investing and lending division, which generated the most profit last year of any of the bank’s four segments. BLOOMBERG NEWS
BlackRock Hires New Head of China Equities  | BlackRock, the world’s largest asset-management company, said it had hired Helen Zhu, a former Goldman Sachs executive, as a managing director and head of its China equities business. DealBook »
New Movie Studio Is Formed, With China and Self-Distribution in Mind  | A group is looking to make $40 million movies with big stars, as an alternative to the blockbusters now favored by Hollywood. DealBook »
K.K.R. Executive Who Led Investments in Retailers Retires  | Michael M. Calbert, a 14-year veteran of Kohlberg Kravis Roberts who led the team that invests in the retail industry, is retiring and has been succeeded by Nathaniel H. Taylor, a K.K.R. partner. DealBook »
In Safeway Buyout, a Reminder of a Painful Takeover  | Two decades ago, Safeway was a symbol of the human toll sometimes extracted when private equity used large amounts of debt to take over a company. This week, another private equity firm is taking over the grocery chain, with none of the uproar of the earlier deal. DealBook »
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JPMorgan’s Sale of Private Equity Unit Stalls  | The auction of One Equity Partners, JPMorgan Chase’s private equity arm, which has been on the market since at least November, has come to a halt, Reuters writes, citing unidentified people familiar with the situation. REUTERS
Ackman vs. Herbalife, a History  | A look at some of the crucial events in William A. Ackman’s fight over the nutritional supplements company Herbalife. DealBook »
Icahn Discloses He’s Now on Facebook  | The billionaire investor Carl C. Icahn said in a regulatory filing on Friday that he planned to start using the social network as another platform for his activism campaigns. He is already on Twitter and has his own corporate blog. DealBook »
Nonbanks Move Into Business of Servicing Home Loans  | Regulatory efforts to push banks out of the mortgage servicing business have opened up opportunities for hedge funds and nonbank financial arms to handle customers’ loans, The Wall Street Journal writes. WALL STREET JOURNAL
A Deeper Conversation on Women in Hedge Funds  | Readers offer their own experiences and suggestions in response an Another View column by Whitney Tilson that described the problem of having too few women in hedge funds. DealBook »
GlaxoSmithKline Increases Stake in Indian Pharmaceutical Unit  | The British drug giant GlaxoSmithKline said it paid 64 billion rupees, or $1.05 billion, to increase its stake in GlaxoSmithKline Pharmaceuticals Limited to 75 percent from 50.7 percent. The Indian unit will continue to trade publicly after the deal. DealBook »
With Its Stock Riding High, FireEye Sells More Shares for $1.1 Billion  | Taking advantage of a fourfold increase in its stock price since its market debut, the cybersecurity company raised $1.1 billion for itself and some of its backers with a secondary offering. DealBook »
Japan Display Sets I.P.O. Price  | Japan Display, the world’s biggest maker of screens for tablets and smartphones, set the price of its initial public offering at the bottom of its guidance range after foreign investors responded to the offering without much enthusiasm, Reuters writes. REUTERS
European Real Estate Companies See Investor Confidence Return  | European property companies are taking advantage of a surge in international investors’ confidence to go public and issue new equity, The Financial Times writes. This year, initial public offerings have raised 1.6 billion euros, more than a third of the €3.9 billion raised in all of 2013. FINANCIAL TIMES
Spotify’s Credit Facility Hints at I.P.O.  | The music streaming giant Spotify has secured a $200 million credit facility from lenders including Morgan Stanley, suggesting the company might be nearing a potential initial public offering, The Financial Times reports, citing unidentified people familiar with the situation. FINANCIAL TIMES
Digital Trade School Raises $35 Million in Financing Round  | General Assembly, a three-year-old academy for budding entrepreneurs, said it had raised more than $35 million in a new round as it seeks to build out its global ambitions. DealBook »
Wayfair Secures $2 Billion Valuation  | Wayfair, an online vendor of home goods, announced it had raised $157 million from a group of investors including T. Rowe Price as it prepared for an initial public offering in the coming months, The Wall Street Journal writes. WALL STREET JOURNAL
Ride-Sharing App Lyft Files for $150 Million Funding Round  | The company behind Lyft, a ride-sharing application for mobile phones, has filed for a Series D funding round worth $150 million, ReCode writes. When closed, the funding round is expected to give the company a $700 million valuation, according to an unidentified person familiar with the situation. RECODE
Vox.com Aims to Make Journalism More Palatable  | A short video posted on Ezra Klein’s new website, Vox.com, explains that the site’s goal is to make the “vegetables†or “spinach†of the news world more palatable, New York magazine reports. NEW YORK MAGAZINE
Newsweek Sets Off a Bitcoin Storm  | The magazine’s story claiming to have uncovered the founder of the digital currency Bitcoin drew a wave of attention, much of it negative, The New York Times reports. NEW YORK TIMES
Former Jefferies Trader Found Guilty of Fraud  | A jury on Friday convicted Jesse C. Litvak, a former senior trader at the Jefferies Group, of securities fraud for misrepresenting the prices of mortgage-backed securities he sold to brokerage clients after the financial crisis. DealBook »
Guy Hands Drops Lawsuit Against Citigroup in U.S.  | The British financier Guy Hands has agreed to end a lawsuit against Citigroup in the United States, though the legal battle over the 2007 buyout of EMI may continue in England. DealBook »
European Banks Face Billions in Legal Costs  | Five of Europe’s largest lenders could face an extra 10 billion euros in legal costs in the next two years to deal with claims of foreign exchange manipulation and other legal issues, The Financial Times writes. FINANCIAL TIMES
New York Regulator Vows to Clean Up Wall Street  | Benjamin M. Lawsky, New York’s top banking regulator, told The Financial Times that he would hold accountable the individuals, as well as the institutions, whose conduct contributed to the financial crisis. “Corporations are a legal fiction. You have to deter bad individual conduct within corporations,†he said in an interview. FINANCIAL TIMES
Whistle-Blower Gets $63.9 Million as a Result of JPMorgan Settlement  | A Louisiana man who once worked for JPMorgan in its government insurance unit helped federal prosecutors make their case against the bank. DealBook »
