Three former top executives of Dewey & LeBoeuf, the giant law firm that filed for bankruptcy protection in 2012, are expected to be charged on Thursday with misleading other lawyers and lenders about the financial health of the firm, Matthew Goldstein and Ben Protess write in DealBook. The details of the charges are still unclear, but two people said the lawyers might be accused of grand larceny.
“The filing of charges against the three lawyers would be the most significant event yet in the collapse of a once-mighty firm that was created by the 2007 merger of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, two of New York City’s most prestigious law firms,†Mr. Goldstein and Mr. Protess write. The firm once had 26 offices around the globe and employed 1,300 people. The Securities and Exchange Commission is also expected to file a civil action related to apparent misrepresentations in the firm’s 2010 sale of $125 million in debt notes to refinance some of its bank debt, and civil and criminal charges could also be filed against others who once worked at the firm.
FOREIGN EXCHANGE SCANDAL SNAGS BANK OF ENGLAND  | In the latest twist in the global inquiry into the foreign exchange scandal, the Bank of England said on Wednesday that it had suspended an employee and escalated a review into claims that officials had known about or condoned potential manipulation of the currency markets, Chad Bray writes in DealBook. The move comes as regulators in Britain, the United States and other countries are looking into whether traders at the world’s largest banks colluded to manipulate foreign exchange rates.
The central bank said an extensive internal review of documents, thousands of emails and chat room recordings and more than 40 hours of recorded telephone calls had uncovered no evidence that Bank of England employees colluded to manipulate the currency market or shared confidential client information. “The bank requires its staff to follow rigorous internal control processes and has today suspended a member of staff, pending investigation by the bank into compliance with those processes,†the bank said.
The central bank also released minutes of meetings between officials and industry representatives that indicated there were concerns about possible manipulation for rates like the 4 p.m. fix for the pound to the United States dollar as early as July 2006. In the minutes of a July 2006 subcommittee meeting, “It was noted that there was evidence of attempts to move the market around popular fixing times by players that had no particular interest in that fix.â€
A STAR TRADER SETTLES DOWN Â |Â Colleagues of Paul Tudor Jones II used to be in awe of his ability to post huge profits on big market swings. Indeed, as late as 2001 to 2002, he gained 48.1 percent over two years during the sell-off in technology stocks. But lately, his trading results have dimmed. And while Mr. Jones can still claim long-term annual returns of close to 19.5 percent in his $10.3 billion flagship fund, Tudor BVI Global, it has been 11 years since he last hit that level, Randall Smith writes in DealBook.
It’s difficult to pinpoint exactly why Tudor has not been able to perform as well as it once did. One possible reason is that low interest rates over the last five years hurt many macro traders like Mr. Jones. He also began managing more money from pension funds and other institutions, prompting him to invest more conservatively to curb losses. The 2008 stock market crash did not help his returns, and neither did increasing competition in the hedge fund universe, which limited trading opportunities. But one investor said that perhaps it was simply that Mr. Jones was distracted by the accumulation of wealth. “Your life becomes more complicated, and a little part of your brain has to deal with that,†this investor said.
From an October 2007 article in The New York Times, on Mr. Jones: “Don’t expect Mr. Jones to relive his 1987 glory. One investor who has spoken with him in the last week, who asked not to be identified because he is not authorized to speak publicly about Mr. Jones’s investment strategies, said that the recent rate cut had made Mr. Jones increasingly bullish. Indeed, as opposed to 1987, Mr. Jones is said to be reminded of 1998, when cuts by the Federal Reserve led to the stock market boom of the late 1990s.â€
ON THE AGENDA  | February’s Challenger report on job cuts is out at 7:30 a.m. Weekly jobless claims are out at 8:30 a.m. January factory orders are out at 10 a.m. William C. Dudley, the president of the New York Fed, speaks at 8:30 a.m. Charles I. Plosser, the president of the Philadelphia Fed, gives a speech on the economy in London at 1 p.m. William H. Gross, the co-founder of Pimco, is on CNBC at 2 p.m.
DEAL FOR SAFEWAY GETS COMPLICATED  | The private equity firm Cerberus Capital Management is looking to seal a deal valued at more than $9 billion for the Safeway grocery store chain, but its efforts have been complicated by the Kroger Company, a supermarket giant, which is considering a bid of its own, The Wall Street Journal reports. Cerberus, which already owns Albertsons supermarkets, is thought to be more likely to emerge with a deal, in part because of antitrust risk associated with a merger between Safeway, which is the nation’s second-largest grocery chain, and Kroger, its largest rival. Cerberus is offering to pay $40 a share for the company.
A deal would be one of the largest supermarket buyouts in years. But this would not be the first time Safeway came under private ownership: The grocery chain’s relationship with private equity firms dates to the mid-1980s, when Kohlberg Kravis Roberts executed a $4.8 billion buyout of the company.
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Morgan Stanley Is Said to Weigh Sale of Its Swiss Private Bank  | Morgan Stanley is in the early stages of a strategic review of its private banking business in Switzerland, and the options it is exploring include selling the unit, according to a person familiar with the matter. DealBook »
Behind Closed Doors, Microsoft’s Board Reportedly Battled Chief Over Nokia Deal  | In its latest issue, Bloomberg Businessweek reports that Steven A. Ballmer, then Microsoft’s chief executive, chafed when fellow directors questioned the wisdom of buying any part of Nokia’s hardware operations. DealBook »
Yahoo Acquires Social Data Start-Up Vizify  | Vizify announced on its website Wednesday that it had been purchased by Yahoo, The Wall Street Journal reports. The terms of the deal were not disclosed. WALL STREET JOURNAL
Vivendi Receives Bids for Mobile Unit  | Vivendi, based in Paris, said it had received two separate bids from its French rival Bouygues Telecom and the cable and cellphone provider Altice for its mobile unit SFR, Bloomberg News writes. Altice’s offer is said to be valued at about $20 billion. BLOOMBERG NEWS
Barclays Chief Defends Contentious Increase in Bonus Pay  | Barclays’ chief executive, Antony P. Jenkins, said in a newspaper interview that he decided to increase bankers’ pay last year in spite of falling profits to avoid a “death spiral†in the investment bank unit. DealBook »
In Banking Overhaul Fight, a Ruckus Over an Obscure Product  | The banking industry has been making loud noises about the regulation of collateralized loan obligations, a little-known but risky financial product, Jesse Eisinger writes in The Trade column. The Trade »
Standard Chartered Cuts Bonuses  | Peter Sands, the chief executive of London’s Standard Chartered, reduced the bank’s bonus pool and highlighted its financial strength after the bank reported its first annual profit drop in a decade, Bloomberg News writes. BLOOMBERG NEWS
Goldman Hires New Chief of For-Exchange Trading  | Goldman Sachs has hired a former JPMorgan Chase executive as its new global chief of foreign exchange trading, Bloomberg News writes. The executive, Kayhan Mirza, headed JPMorgan’s foreign exchange trading in Europe, the Middle East and Africa and was global chief of foreign exchange options trading.
BLOOMBERG NEWS
K.K.R. Raises $2 Billion Energy Fund  | The private equity giant Kohlberg Kravis Roberts is making a bigger push into the North American energy business. DealBook »
Canadian Energy Start-Up Secures $270 Million From Lime Rock  | The Imaginea Energy Corporation, a Canadian energy start-up, announced it had raised $270 million from the American private equity firm Lime Rock Partners, The Wall Street Journal writes. WALL STREET JOURNAL
Carlyle Looks to Raise Debt and Equity  | The Carlyle Group said it would raise both debt and equity in a move that reflects the favorable market conditions for financing and the firm’s plans to expand, The Wall Street Journal writes. WALL STREET JOURNAL
Convicted SAC Trader Loses His Business School Degree  | Mathew Martoma, the former SAC Capital Advisors trader convicted of insider trading in February, can no longer say he has a degree from Stanford Graduate School of Business. The business school now says it has not awarded a degree to Mr. Martoma. DealBook »
LinkedIn Co-Founder Defends eBay Against Icahn  | Reid Hoffman criticized Carl C. Icahn’s campaign against eBay, arguing that the assault is rooted in short-term thinking that runs counter to Silicon Valley’s focus on long-term growth. DealBook »
Riverbed Chief Chastises Activist Shareholders  | Jerry Kennelly, the founder and chief executive of Riverbed Technology, said his company had not received any “credible bids†from buyout firms and should not have been targeted by activist shareholders, including the hedge fund Elliott Management, Bloomberg News reports. BLOOMBERG NEWS
Virgin America Aims for I.P.O. in 2nd Half of 2014 Â |Â Virgin America, the airline that counts Richard Branson as an investor, thinks it may go public in the second half of the year, its chief executive told Reuters on Wednesday. REUTERS
A Deal Maker’s Deal of a Lifetime  | I.P.O. investors will be granting Ken Moelis, founder of the investment bank Moelis & Company, an exceptional degree of control for the opportunity to ride his coattails, Antony Currie writes in Reuters Breakingviews. DealBook »
Demand High for Danish Outsourcing Firm’s I.P.O.  | ISS, the global services company based in Denmark, is said to have demand for all of the shares being sold in an initial public offering, valuing the company at as much as $5.8 billion, Bloomberg News writes, citing unidentified people familiar with the situation. BLOOMBERG NEWS
Peek.com Raises $5 Million in New Financing  | Peek.com, a start-up that plays both travel agent and tour guide, said on Wednesday that it had raised $5 million in a new fund-raising round. DealBook »
Amazon Chief Bezos Pours More Money Into Business Insider  | The online news site Business Insider said it had raised $12 million in new funding from investors including Jeff Bezos, the chief executive of Amazon, The Wall Street Journal reports. The latest funding round is Business Insider’s largest so far and brings the total raised over seven years to $30 million. WALL STREET JOURNAL
Google Capital Buys Minority Stake in Auction.com  | Google Capital, the new investment arm of Google, has acquired a minority stake in the online property marketplace Auction.com for $50 million, The Financial Times writes. The 4 percent stake values the company at $1.2 billion. FINANCIAL TIMES
Winklevoss Twins to Fund Space Trip With Bitcoin  | Cameron and Tyler Winklevoss, who have been strong proponents of Bitcoin, said on Wednesday that they were planning trips on Richard Branson’s Virgin Galactic, which allows people to travel to space for $250,000, New York magazine writes. The twins said they would pay for the trips with Bitcoin. NEW YORK MAGAZINE
Obama Budget Seeks to Eliminate Inversions  | Deep in President Obama’s $3.9 trillion budget request is a proposal that would essentially forbid so-called inversions, a popular maneuver that allows United States companies to relocate and avoid paying millions of dollars in taxes. DealBook »
Justices May Limit Securities Fraud Suits  | Supreme Court justices seemed to be leaning toward setting a higher bar for groups of investors to pursue claims they were misled, The New York Times writes. NEW YORK TIMES
New York Demands Data From Mortgage Firm Nationstar  | New York State’s superintendent of financial services says his office has received “hundreds†of consumer complaints about problems related to Nationstar’s mortgage modifications, improper fees and lost paperwork. DEALBOOK
Plaintiffs in Suit Seek to Freeze Mt. Gox’s U.S. Assets  | Customers of Mt. Gox are trying to freeze assets in the United States of the bankrupt Bitcoin exchange and its chief executive, Mark Karpeles, but they do not know where those assets are. DEALBOOK
For Bitcoin, Secure Future Might Need Oversight  | To save their nascent currency, Bitcoin’s backers may be forced to alter their philosophy and embrace the same messy humans â€" auditors, insurers and even regulators â€" that the currency’s most ardent supporters have long abhorred, Farhad Manjoo writes in the State of the Art column in The New York Times. NEW YORK TIMES
Singapore Police Investigating ‘Unnatural’ Death of American Head of Bitcoin Trader  | Singapore police are investigating what they have called the “unnatural†death of a 28-year-old American woman who ran a small exchange called First Meta that traded virtual currencies, including Bitcoins. NEW YORK TIMES
Fed Confirms Weather’s Effect on Economic Slowdown  | The Federal Reserve on Wednesday said in its “beige book†report that the severe weather that occurred across the United States held back economic growth in January and February. NEW YORK TIMES
