In the middle of a closely watched vote on whether to split the roles of chairman and chief executive at JPMorgan Chase, the firm providing tabulations of the results has stopped giving voting snapshots to the shareholders that sponsored the proposal, Susanne Craig and Jessica Silver-Greenberg report in DealBook. The firm says the change followed a request from Wall Street’s main lobbying group.
“The pension fund shareholders that are promoting a split at the top of the bank are crying foul. Knowing the current tally is critical for both sides in shaping their campaigns, they say â€" cutting off access to them gives JPMorgan, which is getting frequent updates, an upper hand,†DealBook writes. Michael Garland, assistant comptroller who heads corporate governance for New York City’s comptroller, John Liu, said: “It’s like playing a game where only the home team gets to know the score.â€
Lyell Dampeer, a senior executive at Broadridge, the firm providing the voting information, said he received a call last week from an employee of the Securities Industry and Financial Markets Association, Wall Street’s main lobbying group, requesting that Broadridge cut off access to organizations that are sponsoring proposals. The association represents JPMorgan and other financial firms.
The debate around the shareholder vote has drawn an unusual degree of attention to Jamie Dimon, the bank’s leader. “In an unfortunate way, but that’s the way life is, it is all coming down to this vote around the guy who has been at the forefront of being a successful banker, running a bank that’s still making money and somebody who speaks his mind,†William Daley, who was JPMorgan’s Midwest chairman until 2011, told Bloomberg Businessweek. Others found the pressure on Mr. Dimon unwarranted. “They’re jealous,†James E. Cayne, former chief of Bear Stearns, said of Mr. Dimon’s critics.
BIG BANKS GET A BREAK IN DERIVATIVES RULES  | “Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market,†DealBook’s Ben Protess reports. “The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.â€
After derivatives played a starring role in the financial crisis, regulators initially planned to require asset managers to contact at least five banks when seeking a price for a derivatives contract. “Now, according to officials briefed on the matter, the Commodity Futures Trading Commission has agreed to lower the standard to two banks,†Mr. Protess reports. “About 15 months from now, the officials said, the standard will automatically rise to three banks. And under the trading commission’s new rule, wide swaths of derivatives trading must shift from privately negotiated deals to regulated trading platforms that resemble exchanges.â€
But critics fear the plan now hews too closely to the way things were before the crisis. “The rule is really on the edge of returning to the old, opaque way of doing business,†said Marcus Stanley, the policy director of Americans for Financial Reform, a group that supports new regulations for Wall Street.
THIRD POINT LEAVES MORGAN STANLEY; JANA BUYS INTO GROUPON  | Daniel S. Loeb has ended his engagement with Morgan Stanley. Mr. Loeb’s hedge fund, Third Point, disclosed in a filing on Wednesday that it had sold its 7.8 million shares in the firm during the first quarter, not long after accumulating the stake. An activist investor, Mr. Loeb had taken aim at the compensation of Morgan Stanley’s board members. Third Pointk, which this week called for a breakup of Sony, likely made money on its Morgan Stanley investment.
At the same time, Jana Partners, the hedge fund run by Barry Rosenstein, disclosed big new stakes in the online commerce company Groupon and the game maker Zynga on Wednesday. The firm reported owning 21.9 million shares in Groupon, giving it a 3.3 percent stake, and 25.5 million shares in Zynga, for a 4.3 percent stake, making Jana one of the top six shareholders for both companies.
ON THE AGENDA  | The Hess Corporation, which is engaged in a proxy contest with Elliott Management, holds its annual meeting. The Consumer Price Index for April is out at 8:30 a.m. Wal-Mart reports earnings before the market opens. J.C. Penney announces results Thursday evening. The House Financial Services Committee holds a hearing at 10 a.m. on the Securities and Exchange Commission’s budget request. Bart Chilton of the Commodity Futures Trading Commission is on CNBC at 7:30 a.m.
TESLA’S BID FOR CASH FUELS DEBATE  | Tesla Motors, the maker of electric cars led by Elon Musk, announced plans on Wednesday to raise approximately $830 million by selling new shares and debtlike securities. Mr. Musk personally plans to buy $100 million of shares in the offering, the company said. “The plans could raise questions about the company’s ability to generate cash flows from its operations,†DealBook’s Peter Eavis writes. While the sentiment surrounding the company has recently been positive, “the financing announced on Wednesday could prove a pivotal development in the intense debate over Tesla’s future,†Mr. Eavis says. “The company’s shares have risen by 150 percent this year as more investors have started to express belief that the company will make electric vehicles that people will flock to buy because thy perform as well as gasoline cars. Other investors, however, remain unconvinced.â€
Hulu Said to Draw Interest From Pay-TV Operators  | “At least two pay-TV operators, including cable giant Time Warner,†are considering investing in Hulu, The Wall Street Journal reports, citing unidentified people familiar with the matter. WALL STREET JOURNAL
A Swirl of Activity Around Actavis  | Actavis, which disclosed last week that it was in preliminary talks to buy Warner Chilcott, is also drawing interest from larger companies as a possible takeover target. The Swiss drug giant Novartis “is considering whether to enter the fray, possibly by launching its own bid,†The Wall Street Journal reports, citing an unidentified person familiar with the matter. WALL STREET JOURNAL
Roche Said to Explore Sale of Diabetes Device Unit  | The discussions over a potential sale of Roche Holding’s blood glucose meters business are in an early stage, Reuters reports. REUTERS
Krawcheck Agrees to Buy a Women’s Network  | Sallie L. Krawcheck, a former executive of Bank of America and Citigroup, has agreed to buy 85 Broads, a global organization that supports women. DealBook »
A Tech M.&A. Machine Hits the Brakes  | Nuance Communications, which has attracted Carl C. Icahn’s interest, has no shortage of well-defined operations like medical, enterprise and consumer that could be sold or spun off, Robert Cyran of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
JPMorgan Seeks Details of What Bloomberg Saw  | JPMorgan Chase said it had sent a formal legal request to Bloomberg L.P. to ask for details on what private information Bloomberg News reporters could see. REUTERS
Goldman Energy Banker Leaves the Firm  | One of the top energy bankers at Goldman Sachs, Stephen Daniel, has retired “a year after his personal stock holdings in a pipeline company proved a point of controversy in a takeover deal,†The Wall Street Journal writes. WALL STREET JOURNAL
As Larger British Rivals Perk Up, a Heralded Small Bank Stumbles  | Just as larger banks in Britain are recovering from the financial crisis, the Co-operative Bank, a smaller lender championed by lawmakers as an alternative model, is floundering. DealBook »
Bets on Citigroup Pay Off  | Bloomberg News reported that Moore Capital Management and Appaloosa Management were among hedge funds that counted Citigroup Inc. “among their top holdings before the bank posted a 16 percent rally in a month and a half.†BLOOMBERG NEWS
Bain Capital Said to Lead Bidding for Yankee Candle  | Reuters reported that Bain Capital had emerged as the last party standing in the race for the Yankee Candle Company, citing three people familiar with the matter said, “making it likely that the largest scented candle maker in the United States will stay in private equity hands.†REUTERS
Hansen Is Foiled as N.B.A. Owners Vote to Keep Team in Place  | N.B.A. owners voted on Wednesday to prevent the Sacramento Kings from moving to Seattle, a decision that, though expected, was a setback for an investment group led by the hedge fund manager Chris Hansen. NEW YORK TIMES
Why Fund Mangers May Be Right on the Fed  | What hedge fund investors are expressing should trouble all of us: they have almost no confidence in the Federal Reserve or the economics profession, Jesse Eisinger writes in his column, The Trade. DEALBOOK
Some Hedge Funds Sour on Apple  |Â
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Sinopec Engineering I.P.O. Said to Raise $1.8 Billion  | The deal was Hong Kong’s biggest initial public offering this year, Bloomberg News reports. BLOOMBERG NEWS
New Zealand Plans I.P.O. for Power Company  |Â
BLOOMBERG NEWS
Aereo Begins Expansion Beyond New York  | Other cities are getting access to a service that poses a threat to broadcasters, The Wall Street Journal’s Heard on the Street column writes. WALL STREET JOURNAL
Google Unveils a New Maps Service  | In online mapping, Google “is showing that experience pays dividends,†The New York Times writes. NEW YORK TIMES
Holder Revises Comment on Prosecuting Big Banks  | Attorney General Eric Holder Jr. â€" who had earlier said he feared some banks were so big it had become difficult to prosecute them â€" said at a Congressional hearing on Wednesday that there is “no bank, there’s no institution, there’s no individual who cannot be investigated and prosecuted by the United States Department of Justice.†MARKETWATCH
With Europe in a Slump, Politics Hinder Response  | “As the euro zone economy shrank in the first three months of the year â€" a record sixth consecutive quarter â€" economists say the region seems to be in policy paralysis,†The New York Times writes. NEW YORK TIMES
Japanese Economy Grows at 3.5% Annualized Rate  | The preliminary data for the first quarter was “the first sign that the bold monetary and economic policies of Prime Minister Shinzo Abe were starting to bear fruit,†The New York Times writes. NEW YORK TIMES
Bank of England Raises Outlook for Growth  | Mervyn A. King, in his last scheduled news conference before retiring as governor of the Bank of England in July, said a recovery was “in sight.†NEW YORK TIMES
Chinese Couple Agree to Pay $3.75 Million in Fraud Case  | The S.E.C. said Zou Dejun and Qiu Jianping of Rino International used money from a stock offering to buy a California home. DealBook »
In Denmark, Proposal on Big Banks Meets Resistance  | Bloomberg News reports: “Denmark’s opposition bloc said a proposal to raise capital buffers for the biggest banks is too draconian as lawmakers fail to find common ground on how to treat the lenders.†BLOOMBERG NEWS
