Investors with SAC Capital Advisors may withdraw several billion dollars from the embattled hedge fund by a scheduled quarterly deadline on Monday, DealBook’s Peter Lattman and Ben Protess report. Investors are mindful of a separate deadline for law enforcement officials; over the next several weeks, the authorities must decide whether to bring a criminal case against SAC related to suspicious trading in two drug stocks.
Authorities have explored how they might bring a criminal case against the firm and possibly a civil action against its founder, Steven A. Cohen, people briefed on the case said, according to DealBook. Already, the government has brought charges against Mathew Martoma, a former SAC employee, connected to the suspicious trades, which involved Mr. Cohen. The intensifying scrutiny is making investors increasingly nervous.
If SAC has too many withdrawals it “could shut its door to outside investors and manage only internal funds,†DealBook writes. “But the ultimate fate of the fund may be determined this summer, as the government’s investigation enters the final stages. Prosecutors expect four senior SAC executives who received subpoenas last month to testify before a grand jury, according to the people briefed on the case.â€
The situation facing Mr. Martoma, a 38-year-old former portfolio manager at SAC, can be understood as a version of what in game theory is known as the “prisoner’s dilemma,†James B. Stewart, a columnist for The New York Times, writes. Mr. Martoma may, or may not, be in a position to implicate Mr. Cohen. “So far, Mr. Martoma has defiantly asserted his innocence and refused to cooperate with prosecutors. He could change his mind, but the clock is ticking,†Mr. Stewart writes.
RIVALS UNITED OVER BLOOMBERG  | Goldman Sachs and JPMorgan Chase found common ground in their frustration with the Bloomberg news and financial data empire, Susanne Craig and Jessica Silver-Greenberg report in DealBook. One day in April, Jake Siewert, Goldman’s public relations chief, called his counterpart at JPMorgan Chase, Joe Evangelisti, with a simple question: “Do you have any issues with Bloomberg?†DealBook writes: “The two men shared one major concern: they believed that Bloomberg reporters were using the company’s data terminals to monitor Wall Street sources â€" the executives at the banks that were spending thousands of dollars a year to use the data-rich machines. That phone call lifted the lid on a long-simmering, but seldom discussed, tension between Bloomberg and Wall Street.â€
WALL STREET BEHIND CHINESE PORK BID  | It was the Chinese executives of Shuanghui International who announced the company’s $4.7 billion bid last week to take over the American pork producer Smithfield Foods. “But behind the bid was a group of savvy investors and global deal makers who hold a substantial stake in the Chinese company: Goldman Sachs, CDH Investments, Singapore’s sovereign wealth fund and New Horizon Capital, a private equity firm co-founded by the son of a former Chinese prime minister, Wen Jiabao,†David Barboza writes in The New York Times.
“The presence of so many of Asia’s power brokers in the bid illustrates not just how deals get done in China these days but also how Wall Street and Asia’s elites are likely to collaborate on future cross-border mergers and acquisitions.â€
ON THE AGENDA Â |Â Shareholders are voting on the deal by IntercontinentalExchange to take over NYSE Euronext. The ISM manufacturing index for May is out at 10 a.m. John Williams, president of the Federal Reserve Bank of San Francisco, speaks in Stockholm at 7:20 a.m. Ian Bremmer, president of the Eurasia Group, is on Bloomberg TV at 7 a.m.
LIFE LESSONS FROM FED CHAIRMAN  | Ben S. Bernanke, chairman of the Federal Reserve, gave a commencement speech at Princeton University over the weekend. His points had “nothing whatsoever to do with interest rates,†he noted. Instead, Mr. Bernanke offered advice like this: “Speaking as somebody who has been happily married for 35 years, I can’t imagine any choice more consequential for a lifelong journey than the choice of a traveling companion.†As for economics, he said it was a “highly sophisticated field of thought that is superb at explaining to policy makers precisely why the choices they made in the past were wrong.â€
I.S.S. Backs Sprint’s Deal With SoftBank  | Institutional Shareholder Services lent its support to Sprint Nextel’s proposed sale to SoftBank amid criticism of the deal by investors and a rival bid by Dish Network. DealBook »
Exor Sells SGS Stake for $2.6 Billion  | Exor, the holding company that controls the Italian automaker Fiat, agreed to sell its 15 percent stake in the Swiss product inspection company SGS to Groupe Bruxelles Lambert for $2.6 billion. DealBook »
Chinese Developer in Deal for Stake in General Motors Building  | The Wall Street Journal reports: “A prominent Chinese developer and a scion of the Safra banking family have purchased a 40 percent stake in the General Motors Building in a deal that values the Manhattan property at approximately $3.4 billion, likely making it the most valuable office building in the U.S., multiple people involved with the deal said.†WALL STREET JOURNAL
Bids for Hulu Said to Top $1 Billion  | Reuters reports: “Satellite operator DirecTV and two other bidders have offered more than $1 billion apiece to buy Hulu, a source with knowledge of the bidding process said on Friday.†REUTERS
Rio Tinto Ore Business Draws Prospective Buyers  | Glencore Xstrata and the Blackstone Group are among potential bidders looking at a 59 percent stake in a Canadian iron ore business being sold by Rio Tinto, The Wall Street Journal reports, citing unidentified people familiar with the matter. WALL STREET JOURNAL
Buffett’s Energy Gamble in Las Vegas  | Warren E. Buffett’s $5.6 billion bet on NV Energy in Nevada suggests he is coming up short on decent ways to deploy his cash, Christopher Swann of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
In China, Concern of a Chill on Foreign Investments  | A ruling by the top court is one of a number of recent signals that China’s long-assumed tolerance for foreign investment may be on the wane. DEALBOOK
China’s State Capitalism Goes Global  | “By buying companies, exploiting natural resources, building infrastructure and giving loans all over the world, China is pursuing a soft but unstoppable form of economic domination,†Heriberto Araújo and Juan Pablo Cardenal write in an opinion essay in The New York Times. NEW YORK TIMES
Borrowing Like It’s 2007  | “American investors have taken out more margin loans than ever before. That indicates that speculative investing has grown among retail investors, reaching levels that in the past indicated the market was getting to unsustainable levels and might be in for a fall,†Floyd Norris writes in The New York Times. NEW YORK TIMES
Bank Profits May Not Be Sustainable  | At first glance, bank profits seem to be experiencing a strong recovery, and bank stocks are on a tear. “But, as is often the case, a more nuanced tale emerges when you look more closely at the profit figures,†Gretchen Morgenson writes in The New York Times. NEW YORK TIMES
Barclays Comes Up in Money Laundering Investigation  | The British bank Barclays was pulled into a United States investigation into money laundering when prosecutors discovered a suspect held an account with the bank. REUTERS
A Rude Surprise for Mortgage Investors  | The Wall Street Journal reports: “Some mortgage investors got an unexpected refresher course on the risks of subprime debt when they received notice of $1 billion of previously undisclosed losses.†WALL STREET JOURNAL
Keep Calm and Carry On  | Each of us has a finite reservoir of energy in any given day. But there are techniques to avoid feeling exhausted, Tony Schwartz writes in the Life@Work column. DealBook »
Dell Looks to Build Support for Buyout Proposal  | Reuters reports: “Dell Inc. called on shareholders on Friday to approve a $24.4 billion buyout offer by founder and C.E.O. Michael Dell and the private equity firm Silver Lake, saying the bid was superior to other strategic options.†REUTERS
Carlyle Group Sells New York Tower for $1.3 Billion  | The deal set a record for price per square foot in New York. BLOOMBERG NEWS
Now on the Line, the Dark Knight  | A man going by “Bruce Wayne of Wayne Enterprises†popped up during an earnings call held by Archer, an oil company. He was apparently looking for some help fighting crime in Gotham City. DealBook »
Short-Seller Turns to Silicon Valley  | Carson C. Block, founder of Muddy Waters, made his name with critical research on Chinese companies. Now, he tells The Wall Street Journal, he is taking a hard look at companies in Silicon Valley. WALL STREET JOURNAL
A Trader Recounts His Flameout  | A new Wall Street memoir, “The Buy Side,†by Turney Duff, is a “portrait of a young man who seemingly never met a temptation he could deny,†Bryan Burrough writes in a review in The New York Times. NEW YORK TIMES
Brazilian Cement Producer Plans $4.8 Billion I.P.O.  | Brazil’s largest cement producer, Votorantim Cimentos, is planning to raise as much as $4.8 billion, in what would be one of the largest initial public offerings this year. DealBook »
Rio Tinto Said to Pursue I.P.O. of Gem Unit  |Â
BLOOMBERG NEWS
The Silicon Valley Echo Chamber  | “Sometimes, tech entrepreneurs in San Francisco and Silicon Valley to the south create companies best appreciated by other people who live and breathe technology,†Nick Bilton writes on the Bits blog. NEW YORK TIMES
Apple Is Said to Be Pressing to Finalize Deals for Internet Radio Service  |Â
NEW YORK TIMES
Bank of America Mortgage Settlement Goes to Court  | Two years after Bank of America struck an $8.5 billion deal with mortgage bond investors, a judge is set to consider the settlement this week. BLOOMBERG NEWS
Former Goldman Sachs Partner Fined for Unauthorized Trades  | Goldman Sachs and Glenn Hadden, one of Wall Street’s top traders, have been fined by the CME Group over a Treasury futures trade in 2008. Mr. Hadden also faces a 10-day suspension. DealBook »
E-Book Antitrust Trial Puts Apple in Spotlight  | A trial begins this week over whether Apple conspired with publishers to raise prices in the e-book market, and it will “tell a broader story of how the introduction of e-books created upheaval in the publishing industry,†The New York Times writes. NEW YORK TIMES
Google’s Advocate in Washington  | Susan Molinari, Google’s chief Washington lobbyist, is a “brassy, well-connected New York Republican who served seven years in the House,†The New York Times writes. NEW YORK TIMES
Money Market Fund Overhaul Is Early Test for Dodd-Frank  | The success or failure of efforts to overhaul the money market fund industry depends in large part on how much power can be exerted by a regulatory body created under Dodd-Frank, David Zaring, assistant professor of legal studies at the Wharton School of Business at the University of Pennsylvania, writes. DealBook »
