The Alibaba Group, the Chinese Internet giant that is about to go public in the United States, is said to be in talks with its Alipay payment affiliate about regaining a stake in the business, Michael J. de la Merced writes in DealBook. The two sides have been in talks for nearly a year and a half, and no agreement is imminent. In any case, the possibility that Alibaba could be formally reunited with its payment division would be of great interest to the company’s future shareholders.
Alibaba’s I.P.O. is expected to be the largest technology stock offering in history, but few in Silicon Valley seem to care, Farhad Manjoo writes in the State of the Art column. “San Francisco’s artisanal toast bars have not been abuzz with commentary on Jack Ma, Alibaba’s chairman, and Palo Alto’s Tesla dealerships aren’t bracing for a surge in new buyers,†he writes.
But while Alibaba’s stock offering has barely registered among the Silicon Valley elite, it may start a global fight for users. For quite a while, American and Chinese technology companies have looked to global domination, each essentially ignoring the other. Now, Alibaba’s I.P.O. could signal a shift, “the end of an era of mutually beneficial provincialism,†Mr. Manjoo writes.
LONE BANKER  | The economic catastrophe of 2008 was the largest of its kind since the Depression, but to date, only one investment banker, Kareem Serageldin, has gone to jail for the financial crisis, Jesse Eisinger writes in The New York Times Magazine. “Many assume that the federal authorities simply lacked the guts to go after powerful Wall Street bankers, but that obscures a far more complicated dynamic,†Mr. Eisinger writes.
“During the past decade, the Justice Department suffered a series of corporate prosecutorial fiascos, which led to critical changes in how it approached white-collar crime. The department began to focus on reaching settlements rather than seeking prison sentences, which over time unintentionally deprived its ranks of the experience needed to win trials against the most formidable law firms,†he adds. Part of the Justice Department’s futility can be traced to the rise of its prosecutors’ ambitions, Mr. Eisinger writes. There was also fear that Wall Street institutions were simply too big to indict.
Some federal prosecutors say that the cases that might have landed top Wall Street executives in jail were too complex to investigate and would have been too difficult to explain to juries. They also suggest that deferred prosecutions, with their billions in settlements and additional oversight actions, can be stricter punishments than indictments. But, Mr. Eisinger writes, the fact remains that few, if any, corporate executives ever go to prison anymore. And perhaps, he adds, “One reason Americans have come to begrudge the wealthy is a resentment of their culture of impunity.â€
REGULATOR SAYS BANKS ERRED ON TROUBLED MORTGAGES  | A federal regulator confirmed on Wednesday that the country’s biggest banks committed widespread errors in dealing with homeowners who faced foreclosures at the height of the mortgage crisis, Michael Corkery writes in DealBook. But the report, released by the Office of the Comptroller of the Currency, is unlikely to put to rest questions from lawmakers and others about the extent of the problems.
The latest analysis found that at least 9 percent of the errors discovered in the review involved banks improperly denying loan modifications that would have prevented foreclosures. The report also found that more than half of the errors related to administrative flaws and improper fees charged to homeowners during the foreclosures process. But, Mr. Corkery writes, “While the new report from the comptroller’s office offers a snapshot of the extensive foreclosure problems during the crisis, it does not provide a complete picture of the morass that millions of homeowners encountered in 2009 and 2010.â€
Faced with criticism that the reviews were taking too long and costing hundreds of millions in consulting fees, banks and regulators reached settlements and stopped the process after only a small fraction of the mortgage files had been reviewed. But the report, released on Wednesday, shows that banks had made even less progress in reviews than previously disclosed.
ON THE AGENDA  | The Challenger job cut report is out at 7:30 a.m. Weekly jobless claims are released at 8:30 a.m. Personal income and spending reports are out at 8:30 a.m. The Purchasing Managers’ Manufacturing Index is out at 9:45 a.m. The ISM manufacturing composite index is released at 10 a.m. Construction spending data is also out at 10 a.m. Happy May Day.
On the Hill: Janet L. Yellen, chairwoman of the Federal Reserve, speaks to the Independent Community Bankers of America in Washington at 8:30 a.m. The House Subcommittee on Capital Markets and Government Sponsored Enterprises holds a hearing at 9:30 a.m. entitled “Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies, Part II.â€
FACEBOOK CHANGES RULES FOR LOG-INS  | Facebook announced on Wednesday that its 1.3 billion users would be able to reveal a little less about themselves, Vindu Goel writes in The New York Times. Before, depending on the site or app, using the Facebook log-in exposed much of users’ Facebook information to that app or site. But now, users will be able to limit what they reveal to the site or app to just their email addresses and public profile information. Facebook also announced that it was testing another feature to allow people to use their Facebook identity to gain access to other sites or apps through a button marked “Log in anonymously.†With the moves, Facebook is responding to longtime user complaints.
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Hoping for Stability, Utility Operator Exelon Agrees to Buy Pepco  | The $6.8 Billion acquisition is the latest effort by a utility to cut costs by growing larger as the industry contends with declining electricity sales and natural gas prices. DealBook »
High Price in Utility Deal  | There is a strategic logic to a merger between Exelon and Pepco, Christopher Swann of Reuters Breakingviews writes, yet there is also a high premium. DealBook »
AT&T May Be Interested in DirecTV Â |Â AT&T is said to have approached DirecTV, a satellite television company, about a possible acquisition, The Wall Street Journal writes, citing unidentified people familiar with the situation. WALL STREET JOURNAL
Merck Considering Sale of Drug Portfolio  | Merck is said to be exploring a possible sale of a portfolio of mature drugs that could fetch more than $15 billion, Reuters writes, citing unidentified people familiar with the situation. REUTERS
Profit Falls at Lloyds Bank, but Outlook Improves  | The Lloyds Banking Group said first-quarter profit declined 24.7 percent, to about $2 billion, from the period a year earlier. The bank is still aiming to restart paying a dividend this year. DealBook »
Britain Bars Former UBS Senior Trader From Financial Industry  | The Financial Conduct Authority of Britain barred the former senior UBS trader, John Christopher Hughes, from the financial industry for his role in a $2.3 billion trading loss incurred by another former trader, Kweku M. Adoboli, who is serving a seven-year prison sentence for fraud. DealBook »
What Bank of America’s Accounting Mistake Can Teach the Market  | Do big banks have strong enough management of their risks and good internal controls to detect accounting problems? Mayra RodrÃguez Valladares examines the problem in the Another View column.
DealBook »
Profit at Carlyle Falls 18% as Real Estate Investments Underperform  | Private equity may be a booming business, but the Carlyle Group was weighed down by declines in its global market strategies business and real assets segment. DealBook »
Pioneer of Leveraged Buyouts Brings Wit to Charity Gala  | Thomas H. Lee, who was honored on Tuesday night for his philanthropy at an event organized by the UJA-Federation of New York, knows how to work a room. DealBook »
Silver Lake Unit Is Said to Have Spun Off to Raise New Fund  | The middle-market unit of the private equity firm Silver Lake Management is said to have spun off as a separate company after its parent gave up on efforts to raise a $1 billion fund, Bloomberg News reports, citing unidentified people familiar with the situation. The new firm is now aiming to raise $600 million to make private equity investments in technology companies focused on growth. BLOOMBERG NEWS
Abercrombie Settles Board Fight With Engaged Capital  | The move will end a battle between Abercrombie & Fitch and Engaged Capital, which argued that the retailer needed new blood on its board to help turn around a slump that has lasted for years. DealBook »
Funds for Troubled Mortgages Are on the Rise  | Distressed-mortgage funds are suddenly hot, but it is unclear whether the strategy of investing in delinquent home loans will live up to the marketing hype. DealBook »
Energizer to Split in Two  | Energizer said that it planned to split into two publicly traded companies: one for household products like Energizer batteries, the other for personal care products like Schick razors. DealBook »
Energizer Split Leaves Biggest Problem Intact  | The main challenge is mustering enough resources to take on the consumer products behemoth Procter & Gamble, Kevin Allison writes for Reuters Breakingviews. DealBook »
Time Warner’s Profit Rises as Spinoff Nears  | The growth from movie and cable businesses helped spur a 9 percent increase in Time Warner’s revenue, to $7.5 billion from $6.9 billion in the period a year earlier, The New York Times writes. The company said it was on track to spin off its Time Inc. magazine business by the end of June. NEW YORK TIMES
Box May Delay I.P.O. Â |Â Box, an online storage start-up, is said to be pushing back plans for an initial public offering until June or later because of weakening demand for technology stocks, The Wall Street Journal reports. WALL STREET JOURNAL
Silicon Valley Sometimes Needs More Bureaucracy  | A female engineer’s complaint of a culture of bullying at GitHub demonstrates the value of a human resources department, Claire Cain Miller writes in The Upshot. NEW YORK TIMES UPSHOT
A Club at M.I.T. Is Giving Out Bitcoin to Students  | The M.I.T. Bitcoin Club plans to give every undergraduate student on campus $100 worth of Bitcoin in the fall to see what would happen when an entire community has access to a digital currency, The Verge writes. THE VERGE
Silicon Valley Has a Stake in India’s Elections  | Indian immigrants who have worked in Silicon Valley are using their experiences in United States politics to try to bring change to India’s government, Quartz reports. QUARTZ
Intrade Co-Founder Opens Fantasy Sports Site  | By styling the new company as a fantasy sports site and not a betting and prediction market, Tradesports.com hopes to avoid the kind of regulatory trouble that hastened Intrade’s demise. DealBook »
Senators Express Concern on Reverse Mortgage Rules  | Senators Charles Schumer and Barbara Boxer urged the Department of Housing and Urban Development to clarify loans that have saddled middle-age children with their parents’ mortgages. DealBook »
Forecasting a Speedup in Growth, Fed Again Cuts Bond Purchases  | At its policy-making meeting, the Federal Reserve said it would pare its purchases of Treasury and mortgage-backed securities by $10 billion, to $45 billion a month, beginning this month, The New York Times reports. NEW YORK TIMES
Once More, Economy Exhibits Weakness  | The economy grew only 0.1 percent in the first quarter, hurt by harsh winter weather and slow gains in inventories after stockpiles grew robustly in the second half of 2013, The New York Times reports. NEW YORK TIMES
Clinton Defends His Economic Legacy  | Amid charges of being out of step with income inequality, former President Bill Clinton spoke out about the effect of policies like the welfare overhaul and the earned-income tax credit â€" a message his wife could use if she runs in 2016, The New York Times writes. NEW YORK TIMES
