The Federal Bureau of Investigation is examining the suspicious trades placed ahead of the $23 billion acquisition of H.J. Heinz, DealBook’s Ben Protess reports. The inquiry adds to the cloud hanging over the deal, after the Securities and Exchange Commission took action over the trading last week.
According to a person briefed on the matter, the F.B.I. is looking into a series of well-timed options trades made before Berkshire Hathaway and 3G Capital Management announced the deal for Heinz, which sent the company’s shares soaring on Thursday. The trades involved 2,533 options bought last Wednesday through a Swiss account at Goldman Sachs, according to the S.E.C., which froze the account last week. “The F.B.I. is consulting with the S.E.C. to see if a crime was committed,†an F.B.I. spokesman said, adding that the New York office, whih was behind the government’s recent inside trading crackdown, was handling the discussions.
The government faces challenges in trying to determine whether wrongdoing was committed. In figuring out who was actually involved in the trading, the S.E.C. will have to scrutinize an account that may allow customers to mask their identity, Peter J. Henning writes in the White Collar Watch column. “Penetrating financial secrecy may be impossible without the assistance of the Swiss authorities, or whatever other country from which the trades originated.†In addition, “if the account is maintained in a jurisdiction that protects client confidentiality, then the S.E.C. could quickly hit a dead end.â€
AN EDGE To EINHORN IN APPLE FIGHT  | A federal judge said on Tuesday that he was leaning toward David Einhorn’s side in the hedge fund manager’s dispute with Apple, which is aimed at getting the company to return some of its $137 billion in cash to shareholders. Mr. Einhorn, the head of Greenlight Capital, had filed a lawsuit arguing that Apple improperly bundled a vote to limit the company’s ability to issue preferred stock with other initiatives. The judge overseeing the case, Richard J. Sullivan, said the facts of the case favored Mr. Einhorn’s interpretation, implying that he believed Securities and Exchange Commission rules prohibited grouping shareholder initiatives.
“I think success on the merits lies with Greenlight,†the judge said at the end of the hearing, though he did not immediately grant Mr. Einhorn’s request for a halt to the vote. Though the fight is over a technicality, the judge’s comments “may provide some ballast to the hedge fund managerâ€s call to other investors,†DealBook’s Michael J. de la Merced writes. Given the Feb. 27 cutoff for voting on Apple’s shareholder proposals, the judge is expected to decide within days whether to grant a preliminary injunction.
BANK OF AMERICA’S CHIEF GETS A RAISE  | Brian T. Moynihan, the chief executive of Bank of America, saw his pay increase by more than 70 percent in 2012, to $12 million, making him one of Wall Street’s best-paid C.E.O.’s, Reuters reports. That pay package included a base salary of $950,000 and three types of stock grants, including restricted and performance-based shares. In 2013, Mr. Moynihan’s base salary is expected to increase to $1.5 million, an unidentified person familiar with the! matter t! old Reuters.
The increase came as other bank chieftains saw their pay fall. Jamie Dimon, head of JPMorgan Chase, made $11.5 million, half of what he earned the previous year, while James P. Gorman, Morgan Stanley’s chief, had his compensation fall 7 percent, to $9.75 million.
ON THE AGENDA Â |Â The Federal Reserve releases minutes from its meeting in late January at 2 p.m. Data on housing starts for January is released at 8:30 a.m. Robert Wolf of 32 Advisors is on CNBC at 7 a.m. Dish Network reports earnings before the market opens.
RETHINKING THE ‘CURRENCY WAR’  | The term “currency war†has become a popular way to describe a supposed race among countries t devalue their currencies in an effort to stimulate growth. But that phrase is being misused, Steven M. Davidoff writes in the Deal Professor column. It was first used in 2010 by Guido Mantega, the Brazilian minister for finance,who “was really talking about the United States. The huge quantitative easing undertaken by the Federal Reserve has created an environment of low interest rates and put downward pressure on the dollar while pushing the currencies of other countries up.â€
“The currency war is really about genuine policy disagreements between economies over how to address the easy money policies of the bigger industrialized countries, in light of the fact that many emerging market companies cannot respond with the same policies. The European Union has chosen another path by declining to adopt a stimulus approach. This explains why the world’s financial officials and ! central b! ankers have not taken much of a stand.â€
Colombian Bank Buys HSBC’s Panama Unit for $2.1 Billion  | Bancolombia said on Tuesday that it had agreed to pay $2.1 billion to acquire HSBC Panama, as the bank continues to expand in Central America. DealBook Â'
NetSpend Sold to Payment Provider for $1.4 Billion in Cash  | NetSpend, a publicly traded provider of prepaid debit cards, is being sold to Tsys for $1.4 billion, the companies announced on Tuesday. DealBook Â'
Talk of a Big Merger Gives Office Suppliers’ Stocks a Lift  | Shares of Office Depot and OfficeMax were up significantly in trading on Tuesday, amid reports that the two were in talks to combine in a stock-for-stock deal. DealBook Â'
Pondering the Regulatory Response to an Office Supply Deal  | Reuters reports: “Antitrust experts said on Tuesday there were no guarantees that a deal to merge Office Depot Inc., the No. 2 U.S. office supply retailer, with smaller rival OfficeMax Inc. would win government approval.†REUTERS
For Office Supply Stores, an Obvious Merger  | Consolidation in the sector is long overdue, as the encroaching power of the likes of Amazon and Target has been evident for years, Christopher Swann of Reuters Breakingviews writes. DealBook Â'
Sale of Life Technologies Said to Hit a Snag  | Reuters writes: “An $11 billion-plus sale of Life Technologies Corp. is looking less likely as a gap in price expectations with the company has left potential buyer Thermo Fisher Scientific Inc. skeptical about a deal while buyout firms’ ofers came up short, people familiar with the matter said this week.†REUTERS
Accusations of Chinese Hacking in Coke’s Failed Big Deal  | A new report on Chinese hackers depicts a wide-ranging cyberwar campaign against many American targets. One of them apparently was the Coca-Cola Company, which failed in a bid to buy a Chinese beverage maker. DealBook Â'
French Bank Posts Record Loss on Write-Downs  | Cré! dit Agric! ole said a series of write-downs and other charges had contributed to its largest-ever annual loss, as the bank tries to move beyond the problems in Greece and Italy that have hobbled its recent earnings. DealBook Â'
Bank Lending Falls as Share of Deposits  | Bloomberg News reports: “The biggest U.S. banks including, JPMorgan Chase and Citigroup, are lending the smallest portion of their deposits in five years as cash floods in from savers and a slow economy damps demand from borrowers.†BLOOMBERG NEWS
Businesses Find Credit Has Eased  | Some businesses are finding a “renewed willingness by some banks to lend cheaply and on flexible terms,†The Wall Street Journal writes. WALL STREET JOURNAL
Morgan Stanley Hires Team of Financial Advisers From Merrill Lynch  |Â
REUTERS
Ferries Owned by Goldman Sachs Come to Life  | Goldman Sachs had invested $5 million in two ferry boats that sat idle in New York Harbor for two years. But on Tuesday, the boats began service, carrying passengers between Lower Manhattan and Jersey City, The New York Times reports. NEW YORK TIMES
Report Paints a Rosier Picture of the Private Equity Boom  | Research conducted by the HEC School of Management in Paris and the German fund manager Golding Capital Partners found that the absolute return on 303 private equity transactions between 2006 and 2008 was 5.1 percent through the end of 2011, significantly better than the adjusted public equity return, Fortune’s Dan Primack writes. FORTUNE
Dell Reports Decline in Revenue  | /span> Dell, which received a buyout offer from its founder and the private equity firm Silver Lake, said on Tuesday that its quarterly profit fell 31 percent, as revenue declined 11 percent, Reuters reports. REUTERS
Australian Poultry Producer Said to Attract Buyout Firms  | The Blackstone Group and TPG Capital are considering bidding for Inghams Enterprises, which would be valued at less than $1.04 billion, according to The Wall Street Journal. WALL STREET JOURNAL
Herbalife’s Profit Beats Expectations  |Â
REUTERS
Asian Hedge Funds Have a Strong Start to the Year  |Â
WALL STREET JOURNAL
Countrywide, British Real Estate Firm, Plans an I.P.O.  | A listing by Countrywide Holdings, which is backed by Oaktree Capital, suggests “signs of a thaw†in London’s I.P.O. market, The Financial Times writes. FINANCIAL TIMES
A Site for Pet Lovers, Started by a Hedge Fund Analyst  | David Keh, a former analyst at a hedge fund, started DugDug, a site that aims to let pet owners comparis! on shop o! nline, the Bucks blog writes. NEW YORK TIMES BUCKS
Calpers Votes to Sell Holdings in Gun Makers  | Reuters reports: “The investment committee of Calpers, the biggest American pension fund, voted Tuesday to divest itself of its holdings in two manufacturers of guns and high-capacity ammunition clips banned in California.†REUTERS
Former Deutsche Bank Trader Describes Difficulties in Tokyo’s Rates Market  | In a new book, a former interest-rate trader at Deutsche Bank portrays a fast-moving, high-stakes, ego-fueled market controlled by a handful of players, the same market under investigation for manipulation. DealBook Â'
Judge Dismisses Suit Against Former Siemens Executive  | A federal judge dismissed a lawsuit by the Securities and Exchange Commission that had accused Herbert Steffen and seven other former Siemens executives of paying $100 million in bribes in Argentina, Reuters reports. REUTERS
For Corporate Boards, Lessons From JPMorgan’s Tra! ding Disa! ster  | The governance recommendations that were released as part of a report from JPMorgan Chase are highly relevant across corporate America, not just financial institutions, Michael W. Peregrine, a partner at the law firm McDermott Will & Emery, writes. DealBook Â'
