Britain’s Serious Fraud Office has filed eight fraud charges against a former UBS trader, Tom Hayes, in connection with the manipulation of the London interbank offered rate, or Libor. The charges are the first brought by British prosecutors in the Libor case, DealBook’s Julia Werdigier reports.
British prosecutors said Mr. Hayes was charged on Tuesday morning with conspiracy to defraud in connection with the continuing investigation into Libor manipulation. Previously, Mr. Hayes, a British national who worked in Tokyo, and another former UBS trader, Roger Darin of Switzerland, were charged with conspiracy by the United States Justice Department in a criminal complaint that was unsealed in December.
“The public need to have confidence that white-collar criminals are dealt with as criminals, that they are not given some special rosy path with a cop-out sentence at the end of the day,†David Green, director of the Serious Fraud Office, told Ms. Werdigier in an interview this month. Mr. Green says he is aiming to revive confidence in his office as a top-tier prosecutor of fraud and corruption.
CRACKING DOWN ON BANK CONSULTANTS  | The top financial regulator of New York State is preparing to crack down on the consulting firms that banks hire to navigate legal problems, Jessica Silver-Greenberg and Ben Protess report in DealBook. Benjamin M. Lawsky, New York’s superintendent of financial services, plans to use an obscure banking law to rein in banks’ use of consultants and force change on a sector that operates with scant supervision, people briefed on the plans said.
“Among the aggressive moves under consideration, Mr. Lawsky is said to be weighing whether to ban temporarily at least one firm with a poor track record from advising banks chartered in New York. His office is also considering a new code of conduct for consultants, the people briefed on the plan said,†DealBook writes. The regulator’s plan is the latest challenge to the multibillion-dollar consulting industry, which has been criticized in Washington as something of a “shadow regulator†of Wall Street.
“The move by Mr. Lawsky â€" who has a history of irking his federal counterparts by running ahead of them â€" could spur regulators in Washington to act against the consulting firms,†DealBook writes. In a speech in Washington this year, Mr. Lawsky discussed the consultants’ â€lack of independence,†saying: “The monitors are hired by the banks, paid by the banks, and depend on the banks for future engagements.â€
HEADHUNTER FOR THE RICH TURNS ON THEM  | Adrian Barrie Smith, a British recruiter who supplies butlers, maids and other domestic workers to some of the world’s wealthiest families, has turned on former clients, Andrew Ross Sorkin writes in the DealBook column. “Over the last 18 months, Mr. Smith has filed lawsuits against the families of some of the most prominent names in finance, including Stephen A. Schwarzman, the chairman of the Blackstone Group; Carl C. Icahn, the activist investor; Leonard Blavatnik, the Russian investor who recently acquired Warner Music; Howard Lutnick, the chairman and chief executive of Cantor Fitzgerald; and George Soros’s former wife, Susan Soros Webber.†Mr. Smith often accuses his clients of some form of breach of contract, with complaints about age and race discrimination. His targets view it as mudslinging or even etortion.
“I could tell you stories that you simply would never believe,†Mr. Smith told Mr. Sorkin in a recent e-mail. “Who sits in the private planes and homes, dinner parties of the elite? The butlers, the nannies, the housekeepers.†He added, “And who do they e-mail, and tell all the gossip to? Me.â€
“When I first heard of Mr. Smith a little more than a year ago, I have to admit, I was intrigued,†Mr. Sorkin writes. “But I came to believe that his intent could well be to tell fanciful stories in hopes of drawing media attention to extract settlement payments in his lawsuits.â€
ON THE AGENDA  | The House Financial Services Committee holds a hearing at 10 a.m. called “Examining How the Dodd-Frank Act Hampers Home Ownership.†The Senate Banking committee holds a hearing at 10 a.m. on reverse mortgages. The Consumer Price Index for May, and data on housing starts for May, are out at 8:30 a.m. Don Harrison, the head of mergers and acquisitions at Google, is on Bloomberg TV at 1 p.m.
Former F.T.C. CHAIRMAN TO JOIN DAVIS POLK  | Jon Leibowitz, a former chairman of the Federal Trade Commission, has been hired by Davis Polk & Wardwell, as the law firm bolsters its presence in Washington, DealBook’s Peter Lattman reports. Mr. Leibowitz, who served four years as head of the F.T.C., left his post in February and was elected to the Davis Polk partnership on Monday, his 55th birthday. At the agency, Mr. Leibowitz pushed for consumer privacy protections, policed merger activity and reined in predatory lending practices, Mr. Lattman writes.
“Davis Polk, which is based in New York, plans to use Mr. Leibowitz’s expertise to advise its corporate clients on competition issues related to mergers and acquisition transactions, as well as to counsel companies in the area of privacy law,†Mr. Lattman says.
Kabel Deutschland Discloses Takeover Approach by Liberty Global  | Kabel Deutschland said on Monday that it had received a preliminary takeover bid by John C. Malone’s Liberty Global, setting up a potential bidding war for the German cable operator. DealBook »
Sprint Sues Dish Over Clearwire Offer  | Sprint Nextel accused Dish Network of trying to “fool†Clearwire shareholders into tendering their shares and rejecting Sprint’s rival bid, Reuters reports. REUTERS
AT&T Ready for a Deal, but Nowhere to Go  | The report of a $93 billion bid for Telefónica, which was later denied, is a sign of the problem AT&T faces: it has a lofty stock multiple, which makes mergers tempting, but it seems shut out of both domestic and foreign deals, Robert Cyran of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Mexico May Open Energy Sector to Private Investment  | The government hopes such a move would attract billions of investment dollars, The Wall Street Journal writes. WALL STREET JOURNAL
A.I.G. Gives Chinese Buyers of Its Plane-Leasing Unit More Time  | The American International Group says it has given a group of Chinese investors more time to complete a deal to buy its big airplane-leasing unit, nearly three weeks after the consortium missed a down payment. DealBook »
Battle for Elan in Doubt After Share Buyback Plan Is Approved  | Elan, the embattled Irish drug company, said on Monday that an unsolicited takeover bid by Royalty Pharma had lapsed because Elan’s shareholders had voted in favor of a share buyback plan. DealBook »
Activist Investor Calls for Breakup of Smithfield Foods  | Starboard Value wrote in a letter to the board of Smithfield Foods that it believed the company was worth much more separately, rather than sold whole to Shuanghui International of China for $34 a share. DealBook »
Office Depot Sets Annual Meeting for Aug. 21 Â |Â
REUTERS
‘Wolf of Wall Street’: Boiler-Room Antics on the Big Screen  | Jordan Belfort’s memoir about his scheme to manipulate stocks at a Long Island brokerage firm in the 1990s has been turned into a movie directed by Martin Scorsese. DealBook »
An Effort to Remake the Swiss Banking Industry  | The finance minister of Switzerland, Eveline Widmer-Schlumpf, “has until the end of this week to convince the Swiss Parliament of a plan she says will end a five-year-old dispute with the U.S. over untaxed assets in Swiss bank accounts. If she succeeds, it would be another step in the quest to crack down on tax evaders,†Bloomberg News reports. BLOOMBERG NEWS
Commerzbank Said to Be Cutting More Than 5,000 Jobs  |Â
BLOOMBERG NEWS
From N.Y.U., Loans for Summer Homes  | Star professors and executives of New York University receive loans from the university for expensive vacation homes, The New York Times writes. NEW YORK TIMES
Some Investors See Buying Opportunity in Japanese Stocks  |Â
WALL STREET JOURNAL
Bonderman’s Focus on Environmental Concerns  | For some investors, environmental, social and governance considerations are increasingly important factors in business decisions. David Bonderman, co-founder of TPG Capital, tells Privcap in a video interview that of those categories, an environmental focus is “the most obvious place where you can see financial rewards.†PRIVCAP
Looking to Sell Unit, Johnson Controls Turns to Private Equity  | Reuters reports: “Johnson Controls is speaking to private equity firms about selling its roughly $1 billion automotive electronics unit, after buyout interest from many rival auto parts suppliers faltered, according to several people familiar with the matter.†REUTERS
Loeb’s Third Point Raises Stake in Sony and Presses Split-Off Plan  | The activist hedge fund manager Daniel S. Loeb has raised his bet on Sony, as he continues his campaign to persuade the embattled Japanese giant into spinning off part of its entertainment arm. DealBook »
Tim Hortons Faces Another Activist Investor  | Scout Capital Management disclosed on Monday that it recently increased its stake in the restaurant chain Tim Hortons to 5.5 percent from about 1.5 percent, Reuters reports. The company already faced pressure from the investor Highfields Capital. REUTERS
LinkedIn as Publisher  | Once known as a staid social media platform, LinkedIn began offering its own content last fall. Now, the site is “filled with New Age chief executive talk,†The New York Times writes. NEW YORK TIMES
Suntory of Japan Sets Wide Price Range for I.P.O. Â |Â Suntory Beverage and Food would raise about $5 billion at the top of its expected price range, and about $1 billion less than that at the lower end, Bloomberg News reports. BLOOMBERG NEWS
Car Dealers Pose a Hurdle for Tesla  | Tesla wants to sell its cars directly to customers, but dealers “are flexing their considerable muscle in states including Texas and Virginia to stop him,†The Wall Street Journal reports. WALL STREET JOURNAL
Relationship Science Raises $30 Million  | The networking start-up Relationship Science has raised $30 million from a group that includes David Komansky, a former chairman of Merrill Lynch, and Stephen Luczo, the chief executive of Seagate. DealBook »
No Talk of Sharing Pain in Detroit  | Though Detroit appears to be on the brink of bankruptcy, there is little talk of sharing the pain, The New York Times reports. “Instead, the fiscal crisis in Michigan is setting up as a gigantic clash between bondholders and city retirees.†NEW YORK TIMES
Danske Bank Is Ordered to Set Aside More Capital  |Â
REUTERS
Chesapeake Energy Hires Former S.E.C. Lawyer  | Patrick Craine, a partner at Bracewell & Giuliani and a former attorney with the Securities and Exchange Commission, was hired as the chief compliance officer of Chesapeake Energy, Reuters reports. REUTERS
A Guide to Federal Reserve Metaphors  |Â
REUTERS
Lawsuit Tries Creative Approach Against Fannie and Freddie Bailout  | Shareholders of Fannie Mae and Freddie Mac are relying on a constitutional argument against the government rescue of the two to try to recover money from the government, Stephen J. Lubben writes in the In Debt column. DealBook »
In China, a Push for Cleaner Air  | An ambitious package of measures to combat air pollution and a summit meeting between President Obama and President Xi Jinping of China might have been overshadowed by Edward J. Snowden and his disclosures about the National Security Agency’s cyberactivities, Bill Bishop writes in the China Insider column. DealBook »
