No Criminal Case Is Likely in Loss at MF Global

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm's demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government's struggle to charge financial executives. Just a few individuals - none of them top Wall Street players - have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.

In the most telling indication yet that the MF Global investigation is winding down, federal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.

Those developments indicate that federal prosecutors do not expect to file criminal charges against the former New Jersey governor. Mr. Corzine has not yet received assurances that he is free from scrutiny, but two rounds of interviews with former employees and a review of thousands of documents have left prosecutors without a case against him, say the people involved in the case who spoke on the condition of anonymity.

While the government's findings would remove the darkest cloud looming over Mr. Corzine - the threat of criminal charges - the former Goldman Sachs chief is not yet in the clear. A bankruptcy trustee on Wednesday joined customers' lawsuits against Mr. Corzine, and regulators are still considering civil enforcement actions, which could cost him millions of dollars or ban him from working on Wall Street.

Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family's wealth.

If he is successful as a hedge fund manager, it would be the latest career comeback for a man who was ousted from both the top seat at Goldman Sachs and the New Jersey governor's mansion.

A spokesman for Mr. Corzine declined to comment.

Even with the worst behind him, Mr. Corzine's reputation has suffered lasting damage.

After the collapse of the firm, which left farmers and other MF Global customers out millions of dollars, Mr. Corzine became another face of Wall Street recklessness. Lawmakers called him ba ck to Washington, a humbling return to the town where he once served as a Democratic senator from New Jersey, to seek answers and to criticize him. With a criminal case unlikely to materialize, the anger over the collapse of MF Global is likely to grow.

Typically in white-collar cases, investigators start their interviews with lower-level employees and build up to the top executives of a firm. In July, when federal authorities first approached Mr. Corzine's lawyers, it was not clear whether he would agree to an interview. But the signs were good. In such cases, if prosecutors have damning information, they often file charges rather than extend an offer for a voluntary interview.

Though he is now expected to attend the meeting, questions remain about which government agencies will join. Because Mr. Corzine still faces scrutiny from regulators, including the Commodity Futures Trading Commission, their attendance could pose a problem. These agencies, which have a lo wer bar to proving civil wrongdoing than do criminal authorities, are examining whether top executives misled investors about the firm's health and failed to protect customer money.

The C.F.T.C, the Federal Bureau of Investigation and the United States attorney's office in Manhattan declined to comment for this article.

As the government's focus shifts away from Mr. Corzine, it remains interested in a lower-level employee in the firm's Chicago office, who was known as the “keeper of the books” at MF Global. That employee, Edith O'Brien, oversaw the transfer of customer money during the firm's final week, when the client cash vanished into the hands of banks, clearinghouses and even other customers.

Ms. O'Brien, an assistant treasurer, has declined to cooperate with authorities without receiving immunity from criminal prosecution. The government is hesitating to grant her request, suspecting that Ms. O'Brien is the highest-ranking employee with potential liability, one of the people involved in the case said. Ms. O'Brien has not been accused of any wrongdoing.

If Mr. Corzine agrees to a meeting next month with the F.B.I. and federal prosecutors, the authorities are expected to question him about his interactions with Ms. O'Brien. But Mr. Corzine is unlikely to offer damning evidence or a critical view of Ms. O'Brien, another person briefed on the matter said. The statements Mr. Corzine provides cannot be used against him under the expected terms of the interview, but authorities can use it to build their broader case. And if Mr. Corzine were to arouse suspicions during the interview, he could find himself a target.

Mr. Corzine has already given his version of events publicly. In Congressional testimony last year, he detailed an exchange he had with Ms. O'Brien days before the firm's collapse. The back and forth involved a $175 million transfer to JPMorgan Chase to cover an overdrawn account. The transfer, it tur ned out, came from customer money.

But internal e-mails suggest that Mr. Corzine did not know the origin of the funds. An e-mail reviewed by The New York Times shows Ms. O'Brien explicitly stated that the money belonged to the firm, not customers. It is possible that with the books in disarray, Ms. O'Brien was not aware that customer money was in jeopardy.

A lawyer for Ms. O'Brien declined to comment.

While Mr. Corzine also testified that he never authorized or intended to authorize the misuse of customer money, his risky trading strategy helped pave the firm's downfall.

Known as an obsessive trader who had the highest returns at the firm, Mr. Corzine frequently inhabited a desk on the trading floor. One visitor to MF Global recalled that during a tour of the firm's Manhattan headquarters, his guide suggested that if he “stuck around” he might catch the chief executive trading a few million dollars in bonds.

As the firm's leader, Mr. Corzine was upbeat about its future, writing an e-mail to employees in January 2011: “Let's be an example of how to do it right and play a leadership role in restoring confidence in our industry.”

But a $6.3 billion wager on the debt of European sovereign debt proved fatal. The size of the bet was enough to wipe out the firm many times over, and as questions about Europe's health grew, a run on MF Global ensued. In the panic, the firm tapped customer money to stay afloat, which scuttled a last-minute deal to save the firm. Mr. Corzine resigned just days after the firm filed for bankruptcy.

Since then, Mr. Corzine has kept a low profile.

Risk Builds as Junk Bonds Boom

Money market funds pay next to nothing. Interest rates on United States Treasuries are dismal. The volatile stock market has been dead money for more than a decade.

The market for junk bonds, risky corporate debt that pays high interest rates, is red hot. Such debt, also known as high-yield bonds, has returned 10.2 percent year-to-date, according to a JPMorgan high-yield index. Junk bond funds are on a pace to take in a record amount of money this year. Companies with less than stellar credit are issuing hundreds of billions of dollars of bonds.

Fueling this frenzy are investors of all stripes - including individuals, mutual funds and state pensions - who are desperate for returns in their bond portfolios and willing to take more risk to get them. Demand is insatiable, even as analysts warn that the market has become overheated and is ripe for a fall.

“In a yield-starved world, high-yield bonds are right now the only game in town,” said Les Levi, a ma naging director at the investment bank North Sea Partners. “The market is giddy.”

But on Wall Street - as the old saying goes - somewhere, someone is making money. And these days, that somewhere is junk bonds.

But a funny thing has happened as everyone has piled into this bond market: high-yield bonds have become something of a misnomer.

The average yields on these bonds have dropped to 6.6 percent, hovering near a record low, according to the Barclays high-yield index. Historically, the interest rate paid on high-yield bonds has been 10 percent or higher. And over the last weeks, several companies have issued speculative-grade debt at yields hardly ever seen in the junk bond market.

“It's amazing: You're now seeing 4 to 5 percent yields for weaker companies,” said Adam B. Cohen, founder of Covenant Review, a credit research firm. “These are the type of yields that you used to see for blue chips like Exxon and Pepsi.”

Consider the CI T Group, the small-business lender, which three years ago was on the brink of collapse. The company eventually emerged from bankruptcy, hobbled from the wounds it suffered in the financial crisis.

Late last month, investors snapped up $3 billion worth of bonds sold by CIT, which credit ratings agencies continue to view as a risky issuer. The company is paying an interest rate of 4.25 percent on one part of the bonds, and 5 percent on the other. CIT has raised almost $10 billion in junk debt in 2012, making it the year's largest issuer of high-yield bonds.

The record-low yields in the junk bond market are a function of several factors.

First, they reflect the low-interest rate world that has persisted since the crisis. Treasuries are the benchmark for pricing high-yield bonds. Investors receive a higher interest rate for junk bonds, a so-called spread over Treasuries, because the risk of default is higher. And since interest rates on government bonds are so low - the 10-year Treasury is paying a paltry 1.8 percent - companies do not have to pay as much on their bonds.

Yields on junk bonds have also declined because the price of a bond moves inversely to its yield. So as junk bond prices have appreciated, yields have dropped. The return on a bond is made up of its interest rate and price appreciation.

Corporate borrowers look less risky, too. With the economy recovering, albeit unevenly, corporate default rates have fallen and are expected to stay low. The percentage of high-yield issuers that have defaulted on their debt in the last year stands at about 2.8 percent, according to Standard & Poor's, well below the historical norm of 4.5 percent.

The modern junk bond market was built in the freewheeling debt binge of the 1980s. Michael R. Milken, a financier at the investment bank Drexel Burnham Lambert, initiated the issuance of high-risk, high-yield bonds to pay for hostile takeovers. The market collapsed in 19 90 when Drexel declared bankruptcy and Mr. Milken pleaded guilty to securities fraud.

Today looks very different from the go-go 1980s. Companies issuing junk bonds are rarely using the proceeds to make big acquisitions or invest in new businesses. Instead, they are taking advantage of the record-low interest rates to refinance their balance sheets, replacing more expensive debt with cheaper money. By reducing borrowing costs - and in many cases pushing back loan maturities - these companies are reducing the risk that they will default.

“It is a very hospitable environment for issuers,” said Howard Marks, the chairman of Oaktree Capital Management. “If you want to fix a problem, you can fix a problem.”

Companies have issued record amounts of high-yield debt since the financial crisis. With $184 billion in new public issues sold this year, the market is on pace to approach 2010s record $264 billion in high-yield issuance, according to Thomson Reuters. This month, $25 billion worth of deals have occurred, the most for August.

Companies owned by private equity firms have benefited from the boom in junk bond issuance. Debt-heavy companies taken private in last decade's buyout boom are strengthening their balance sheets by replacing more expensive debt with new high-yield bonds.

Even the most troubled businesses have been able to access the junk bond market. Energy Future Holdings, the Dallas-based utility acquired by the private equity firms Kohlberg Kravis Roberts & Company and TPG in 2007, has struggled amid low natural gas prices. Yet last week, the company raised $600 million in junk bonds, 20 percent more than it had planned to issue.

“It is fair to say that a very strong high-yield market is helping to keep Energy Future Holdings afloat for the time being,” said Peter J. Thornton, an analyst at the credit research firm KDP Investment Advisors.

Several Wall Street analysts said there had bee n very few periods when conditions had been so well suited to the high-yield bond market, both for the companies issuing the bonds and for the investors buying them. With the Federal Reserve saying that it intends to keep interest rates near zero through at least 2014, the demand for riskier, higher-yielding debt as an alternative to Treasuries is expected to continue.

While inflows into the stock market remain weak, investors are pouring money into junk-bond mutual funds and exchange-traded funds. This year, $20 billion has flowed into these funds, with $9 billion invested in the last nine weeks, Lipper said.

Still, a growing chorus of market players is starting to sound alarm bells. A recent report by Bank of America warned investors against diving headlong into junk bonds at these record-low yields. Not only is there little hope for additional price appreciation, but the companies issuing this debt are vulnerable to a cyclical swing in the economy and slowing business conditions.

“This is not a sustainable state of affairs,” wrote the Bank of America analysts Hans Mikkelsen and Oleg Melentyev in a recent report. “While the bid for high-quality yield is understandable in this environment, we question the extension of this reach into the economically and risk appetite-sensitive portions of the credit spectrum.”

Mr. Levi of North Sea Partners put it in plainer English, “This could pave the way for some heartbreak down the road.”

State Regulators Widen Libor Investigation

State regulators are widening their investigation into interest rate manipulation, pursuing wrongdoing at seven of the world's biggest banks.

New York Attorney General Eric T. Schneiderman subpenaed several banks last month, including JPMorgan Chase, Deutsche Bank and the Royal Bank of Scotland, a person briefed on the matter said. The requests for information follow Mr. Schneiderman's decision earlier this year to open inquires into Citigroup and UBS, the person said.

HSBC and Barclays, the British bank that recently settled rate-rigging accusations with federal authorities, have also received subpenas from Mr. Schneiderman.

The New York regulator's push to ramp up his investigation reflects the broader escalation of the rate-rigging case. The Connecticut Attorney General, George Jepsen, has joined the New York investigation, while state attorneys general in Massachusetts and Maryland have opened their own inquiries.

The state scrutiny comes on top of a wide-ranging federal investigation, involving regulators and the Justice Department, as well as several examinations from authorities overseas. Some traders at banks around the world are also facing potential criminal charges.

The case centers on how banks set a key benchmark, the London interbank offered rate, which affects the cost of trillions of dollars in mortgages and other loans. In June, Barclays agreed to pay $450 million for reporting false rates to bolster its profits and project a rosy image of its health.

Spokeswomen for the attorneys general in New York and Connecticut declined to comment. News of the subpenas first appeared in Bloomberg.

Bridgewater to Spend $750 Million on New Offices

There are hedge funds, and then there is Bridgewater Associates.

If its assets, which at $130 billion more than double the size of its closest competitor, were not enough to set it apart from the rest of the industry, then a new $750 million headquarters on the Connecticut waterfront certainly will.

On Wednesday, Governor Dannel P. Malloy of Connecticut announced that the asset manager would be constructing a state-of-the-art facility along the Stamford waterfront as part of an economic and community development initiative. As part of the program, which will give the firm as much as $115 million in incentives as part of the deal, Bridgewater has also promised to add another 750 to 1,000 new high-level jobs to its current staff of 1,225.

“For a long time, our state failed to compete for the kinds of good paying jobs with good benefits that will grow and sustain our economy,” Governor Malloy said. “To have a company of Bridgewater's stature make th e business decision to invest $750 million in our state and significantly increase its workforce is not only an extraordinary economic ‘win,' but signals to the rest of the world that Connecticut is strengthening its leadership position in the very competitive financial services sector.”

The move is an extraordinary one for a hedge fund, and is another example of Bridgewater's efforts to institutionalize itself. In addition to making top-level hires to diversify leadership at the firm, Bridgewater sold an ownership stake to a public pension fund in Texas in February to expand its ownership base. Both measures were aimed at creating a sustainable business for the future.

But such moves can be perilous. Hedge funds have notoriously fragile businesses. Several shut down last year after federal agents raided them as part of an insider trading investigation. Investment decisions go wrong and firms blow up â€" a lesson that numerous funds learned during the financi al crisis. And even in the absence of extraordinary circumstances, the business model is tough to sustain.

While major corporations with predictable business models have long taken advantage of tax breaks for new facilities and hiring, hedge funds are fragile businesses. Their profits depend on performance, and with markets caught in a state of uncertainty it's hard for any firm to know how much money it will make in a given year.

Bridgewater has managed to set itself apart on that front in recent years. During the last two years, it has notched some of the industry's biggest gains, even as competitors' returns flagged. And over the last 20 years, the firm has returned an average 15 percent a year to investors, placing it among the top of the industry.

“There's no guarantees on investments and there will always be some fluctuations in there, but Bridgewater's model has been proven successful fore more than 30 years,” said Ronald F. Angelo, Jr., the depu ty commissioner of the state's department of economic and community development. “The company obviously feels confident in their business model.”

The firm, led by its enigmatic founder, Ray Dalio, has taken heat in recent years for its peculiar culture. Mr. Dalio, a Harvard Business School graduate, is a disciple of radical transparency, a belief set founded on the pursuit of truth at all costs. Such honesty can be a tough pill to swallow, and has prompted some employees to depart the firm. Still, everyone is allowed to speak freely â€" midlevel employees can take upper management to task if they disagree with their thinking.

Former employees jokingly say the current offices, spread over five different buildings in Westport, Conn., evoke Big Brother. In the interest of transparency, overhead cameras tape employees throughout the day, for instance.

It is unclear what kind of surveillance the new facility, to be completed by 2017, will have.

The new offices will have about 750,000 square feet spread across two eco-friendly buildings that will front the water in the Harbor Point development area. Bridgewater has promised to clean up the contaminated site and reforest the area, creating a park-like campus for its employees with public access.

“We are pleased that the State of Connecticut shares our vision of creating a state of the art and environmentally sustainable office campus, while also restoring this key piece of natural waterfront property in Stamford,” Greg Jensen, co-chief executive of Bridgewater, said in a statement. “We look forward to transforming this industrial site into a spectacularly beautiful forested campus that will be seamlessly integrated into the natural surroundings. The proposed campus will house all of our employees and be designed to facilitate creativity, collaboration and help reinforce Bridgewater's distinct culture which has been so instrumental to our success.”

Treasury Appoints 2 to Ally Financial Board

Ally Financial, the former GMAC, said on Wednesday that Gerald Greenwald and Henry S. Miller had been elected to its board of directors.

The two are appointees of the United States Treasury, which holds a 74 percent stake in the bank holding company. In May, the company's mortgage unit, Residential Capital, filed for Chapter 11 bankruptcy protection.

Mr. Greenwald is a founder of Greenbriar Equity Group, a private equity firm focused on the global transportation sector. From 1994 to 1999, he was chief executive of United Airlines, which at the time was the world's largest company to be majority owned by its employees. Earlier, he was an executive at Ford Motor.

Before retiring nearly a year ago, Mr. Miller was chairman and managing director of the boutique investment bank Miller Buckfire, which he helped found. He has been chairman of Marblegate Asset Management since its formation in 2009. Before Miller Buckfire, Mr. Miller was vice chairman and managi ng director at Dresdner Kleinwort Wasserstein, where he led the financial restructuring group.

“Gerald and Henry are valued additions to the Ally board,” Ally's chairman, Franklin Hobbs, said in a statement. “They bring extensive experience from both the financial and auto sectors and will add key perspectives as Ally continues its transformation.”

The two men join Stephen A. Feinberg of Cerberus Capital Management and Marjorie Magner of Brysam Capital Partners among others on the board, which now expands to 11 directors.

Don\'t Discourage Outside Shareholders

The Securities and Exchange Commission is currently considering a rule-making petition that advocates tightening the rules governing how quickly shareholders must disclose when they hold 5 percent or more of a company's shares.

Such a change could unduly discourage the creation and activism of outside shareholders, who play an important role in corporate governance.

Under current S.E.C. rules established by the Williams Act of 1968, outside shareholders have 10 days to make a public disclosure when they obtain 5 percent of any company's stock. The petition seeks to eliminate the 10-day “window” and require shareholders to disclose their stakes as soon as they accumulate 5 percent or more of a company's stock.

As Robert Jackson and I show in a recent study, the proposal to tighten the rules raises significant policy issues. In contrast to the claims of the petition's authors, the proposal should not be viewed as a “technical” closing of a loophole intended to meet more effectively the objectives of the Williams Act.

The legislative history clearly indicates that the drafters of the Williams Act made a conscious choice not to impose an inflexible 5 percent cap. Senator Harrison Williams's initial proposal would have made it unlawful for an outside shareholder to cross the 5 percent threshold without prior disclosure. Ultimately, however, the 10-day window was adopted after extensive consideration.

This consideration, according to Senator Williams, “carefully weighed both the advantages and disadvantages to the public” and took “extreme care to avoid tipping the scales either in favor of management or in favor of” large shareholders. The choices made were informed by the belief that such shareholders “should not be discouraged, since they often serve a useful purpose by providing a check on entrenched but inefficient management.”

Are there good policy reasons for the S.E.C. to revisit the balance struck by the existing rules? In examining this question, the S.E.C. should give considerable weight to the beneficial role outside shareholders play in corporate governance.

Much research documents that the presence and involvement of outside shareholders enhances a company's value and performance. Large shareholders have an incentive to monitor the performance of incumbent mangers and to engage with them, or even mount a proxy challenge, in the event of underperformance.

Consequently, the presence of large outside shareholders, or the prospect of their emergence, provides an important source of discipline for management. Often, a company's stock price is bolstered after S.E.C. records, known as 13D filings, disclose the emergence of a large outside shareholder. This is a reflection of investors' belief that such a presence can be expected to benefit their fellow shareholders.

The proposed 5 percent hard cap, however, would reduce the amount of sto ck that could be purchased before making a 13D filing. That would lower the potential returns to large outside shareholders produced by identifying an underperforming company and taking a significant stake in it. Consequently, the proposal would probably mean fewer shareholders would move to take large stakes in companies, which in turn could well result in more managerial slack at corporations.

The petition suggests that the proposed tightening is needed to protect shareholders who sell during the 10-day window from a buyer seeking to gain control without paying them for it. But while large shareholders often buy more than the 5 percent level during the 10-day window, they typically end up with blocks that fall substantially short of control. Because they typically do not obtain control, any influence large shareholders have on a company's future decisions is commonly not a result of their ownership stakes but rather their success in persuading fellow shareholders of their views.

The proposal also suggests that revising the rules is called for by changes in market practices and trading technologies, which have expanded opportunities for outside shareholders to accumulate large stakes quickly before being required to make a public disclosure.

Supporters of the petition do not base this claim on systematic evidence. Instead, they rely on four cases from the last five years in which substantial stakes were accumulated before a disclosure. Such cases, however, already occurred as early as the 1980s. What needs to be done - and was not done by the petition's authors - is a systematic analysis of publicly available filings by large outside shareholders. Until such an analysis is done, the S.E.C. should not assume that accumulations of large stakes have recently increased compared with historical levels.

What has clearly changed since the passage of the Williams Act is that state laws have developed in ways that strengthened t he position of incumbent directors when compared with outside shareholders. For one, state law has evolved to allow incumbents to put in place poison pills preventing a large shareholder they disfavor from accumulating more than 10 to 15 percent of a company's shares. The rules governing the balance of power between incumbents and outside shareholders are now substantially tilted in favor of insiders - both relative to earlier times and to other countries - rather than outside shareholders. This tilt counsels against tightening S.E.C. rules in ways that would further disadvantage outsiders.

The Securities and Exchange Commission would do well to conduct a comprehensive examination of the rules governing the balance of power between incumbent directors and outside shareholders. In the meantime, however, the S.E.C. should not impose a hard 5 percent cap. Existing research and evidence raise significant concerns that such a tightening would hurt investors and the economy.

Lucian A. Bebchuk is the William J. Friedman and Alicia Townsend Friedman professor of law, economics and finance, and director of the Program on Corporate Governance at Harvard Law School. He is also a research associate of the National Bureau of Economic Research. His research - which focuses on corporate governance, law and finance, and law and economics - is available on his SSRN page.

Wall Street\'s Race to the 48-Millisecond Trade

It took just 45 minutes this month for one of Wall Street's top trading firms to lose $440 million, a loss that has focused attention on the potential problems associated with high-speed trading. Today's technological challenges are not unlike those faced by traders in the 19th century, whose jobs were revolutionized by the advent of ticker machines.

Even after the introduction of the trans-Atlantic cable in 1865 and the telephone in 1878, brokers still relied on manpower over gadgetry. Market prices were listed on slips of paper, and runners, most younger than 17, would deliver letters between brokerage houses, according to a report by Alexandru Preda at the University of Edinburgh. The new technologies were not seen as reliable. Problems ranged from typographical errors in the closing stock prices listed by newspapers to outright forgery.

In the days after the Civil War ended, traders seeking a timely edge still relied upon foot speed. The fastest man on Wall Street was William Heath, a celebrated runner with a huge drooping mustache, who was nicknamed “The American Deer.” Standing an inch taller than the Olympic sprinter Usain Bolt of Jamaica, Mr. Heath was reported by The New York Times to have been “as quick in his locomotion as in his operation.”

In 1867, Edward A. Calahan, a draftsman with the American Telegraph Company who previously worked as a messenger on Wall Street, unveiled the first stock ticker. The device, which earned its name from the unique sound it created, featured two wheels of type placed under a glass jar. The ticker printed off company names and stock prices on a narrow strip of paper, which was read aloud by a clerk.

Mr. Calahan's machine was the first step in a major technological revolution of Wall Street, but it was also slow and unreliable. Twice a week, the batteries had to be filled with sulfuric acid, which was carried around in buckets. More important, the wheels of typ e would not always print in unison resulting in a mash of letters and numbers.

Over the years, other inventors would improve on Mr. Calahan's invention, and its use became widespread. A battery building provided a central power source for brokers and the floor of the stock exchange, and Henry van Hoveberg created an automatic unison adjustment for the ticker.

A young Thomas Edison was hired to manage a ticker repair operation after he was able to fix the machine at the Gold Exchange. In 1870, he circumvented Mr. Calahan's patent and invented a “ticker that was used with improvements by the Big Board from the early eighteen-eighties until 1930 and by the American Stock Exchange until 1960,” according to a 1963 article in The New York Times.

By the turn of the 20th century, hundreds of tickers were at work throughout New York City, from the dining room of Delmonico's to the bucket shops. Investors were able to track changing stock prices in something lik e real time, following their ticker machines with a fervor matched today by iPhone users tracking how many friends liked their Instagram photographs. When Daniel Drew, a well-known financier and railroad speculator, died in 1879, “his only possessions were a Bible, a sealskin coat, a watch, and a ticker,” according to the author Peter Wyckoff.

“The ticker, combined with the telegraph and the telephone, made time shrink: the investors couldn't let time pass before placing an order anymore, since this could mean losing money,” according to Professor Preda's report.

Beyond speeding up trading, the new technologies spurred societal changes and helped women gain access to the market. In the summer of 1903, The New York Times reported that “women have been trading more extensively in stocks than ever before. This may be the results of the improvement of the telegraph and telephone communications in the country and in the mountains or it may be that in the rec ent excitement they have not been as careful to conceal their operations from idle curiosity seekers and gossips.” Women would not be allowed on the trading floor itself for another 40 years.

Over the decades, the ticker sped up and washed over popular culture. Mr. Edison's device spat out about one character a second. In 1886, office workers rained the contents of their tickers on a parade for the dedication of the Statue of Liberty. The glass-dome ticker, which went out of use in 1930, delivered 285 characters a minute.

The New York Stock Exchange introduced new black-box tickers in 1928 that printed out 500 characters a minute, but they were not fast enough to prevent the confusion that arose when the stock market crashed the next year. As brokers panicked, the tickers fell several hours behind rapidly deflating stock prices.

In 1963, a new electronic gray ticker was installed on the New York Stock Exchange that printed up to 900 characters a minute. T hat year, the width of ticker paper was expanded to an inch from three-quarters of an inch to accommodate the new machine's variable speeds.

The gray ticker, which still had a reporting lag of two to three minutes, would be the last mechanical stock ticker. It was replaced by computers that read market data from punch cards, and the reporting time was cut to seconds.

Computerized trading of stocks, which took off exponentially in the 1980s, is often blamed for accelerating the Black Monday market crash of Oct. 19, 1987. Regulators responded the next year by introducing new competition from more computerized trading and electronic exchanges.

But desktop day traders armed with real-time market quotes and business cable channels have been unable to compete with new powerful algorithms run on giant computers. Stock transactions are measured in microseconds, and they can be ordered and canceled faster than the “American Deer,” as the celebrated stock runner William Heath was known, could blink an eye.

After a spate of flash crashes, including the one in which Knight Capital recently lost $440 million, regulators are discussing steps that would reduce trading volume, including a transaction tax. Although not even the strongest critics of high-speed trading are calling for rules to turn back the clock to 900 characters a minute, there is a growing consensus that the potential negative consequences of raw speed need to be addressed for the good of the financial markets.

Business Day Live: Hassles of Air Travel Push Passengers to Amtrak

With Standard Chartered settlement, a victory for a new regulator. | In Northeast, trains gain ground against airlines. | Importing Russia's top gun

Standard Chartered\'s Shares Rally After Settlement

LONDON â€" Investors in Standard Chartered breathed a collective sigh of relief on Wednesday.

The positive reaction came after the British bank agreed to a $340 million fine related to charges that the bank laundered hundreds of billions of dollars in money with Iran and lied to regulators.

The agreement ends speculation that Standard Chartered might lose its New York banking license. The bank's top executives had been expected to defend its actions in a hearing on Wednesday, which was postponed after the settlement was announced.

The British bank, which mainly operates in fast-growing emerging markets, has operated a New York office since 1976. That office primarily operates a dollar-clearing business, processing around $190 billion a day for clients from around the world.

Standard Chartered may still face fines from other U.S. regulatory authorities, but analysts said the agreement with New York's Department of Financial Services had drawn a line under many of the accusations.

The British bank and the New York regulator have been at loggerheads over the level of money laundering activity at the firm.

New York authorities had claimed that Standard Chartered schemed for nearly a decade with Iran to hide 60,000 transactions worth $250 billion from regulators. The British bank has maintained the transaction value of the laundering activities had totaled only $14 million.

“Whilst disproportionate, the settlement protects shareholder and customer interests against the regulatory assault,” Ian Gordon, a banking analyst at Investec in London, said in a note to investors. “In our view, Standard Chartered has acted with pragmatism and integrity in the face of extreme provocation.”

Shares in the British bank rose around 5 percent in early market trading in London on Wednesday, though the stock is still down 9 percent since the money laundering allegations were first announced in early August. Sta ndard Chartered's shares had dropped as much as 25 percent - their sharpest one-day decline in more than two decades - a day after the allegations were first made on Aug. 6.

Standard Chartered is not the first European bank to face money-laundering charges.

Rival British firm HSBC has set aside $700 million to cover the potential fines, settlements and other expenses related to allegations from U.S. authorities. The Dutch bank also agreed to a $619 million fine in June for processing financial transactions for Cuban and Iranian companies.

Carlyle in $3.3 Billion Deal for Getty Images

The Carlyle Group announced on Wednesday that it had reached a deal to acquire Getty Images, the well-known distributor of photography, video and multimedia products, from Hellman & Friedman for $3.3 billion.

The private equity firm will take a controlling stake in Getty Images, while the co-founder and the chairman of Getty Images, Mark Getty, and the Getty family will roll substantially all their ownership interests into the acquisition. Other top Getty Images executives, including Jonathan Klein, co-founder and chief executive, will also invest significant equity in the company.

As DealBook reported on Tuesday, Carlyle had been bidding against other private equity firms, including CVC Capital Partners, for Getty Images. Hellman & Friedman had acquired the company in 2008 for about $2.4 billion.

“This partnership with the Carlyle Group reflects and bolsters our ongoing strategy, strong management team and the talent of our dedicated employees,” Mr. Klein said in a statement.

JPMorgan Chase, Barclays, Credit Suisse, Goldman Sachs and RBC Capital Markets are providing debt financing for the deal, which is expected to close later this year.

Lloyds Banking Group to Sell Private Equity Assets for $1.6 Billion

LONDON â€" Lloyds Banking Group, the part-nationalized British bank, agreed on Wednesday to sell a number of its private equity investments to the British firm Coller Capital for around £1 billion, or $1.6 billion.

The move comes as the British bank, which is part owned by local taxpayers after receiving a bailout, looks to shed so-called non-core assets in an effort to shrink its balance sheet.

Under the terms of the deal, the British private equity firm Coller Capital, which specializes in purchasing assets from investors, will buy a portfolio of investments from Lloyds Banking Group worth around £1 billion. The agreement also includes the transfer of £220 million of unused investment capital to the private equity firm, according to a statement from the British bank.

Last year, the portfolio of investments currently owned by the British bank generated a £40 million loss, and will continue to be overseen by Lloyds Banking Group, w hich will earn an annual management fee of £10 million.

Along with other European banks, Lloyds Banking Group is offloading assets in an effort to improve its profitability and reduce its exposure to risky assets.

During the first six months of the year, the British bank cuts its non-core assets to £117.5 billion, a 27 percent decline over the same period in 2011.

Lloyds Banking Group reported a £641 million net loss in the first half of the year after setting aside an additional £700 million to cover costs related to the inappropriate sale of insurance to customers.

The firm also said a number of its employees had received subpoenas or information requests from authorities related to the manipulation of the London interbank offered rate, or Libor.