Federal authorities are poised to level criminal charges against SAC Capital Advisors, the hedge fund run by Steven A. Cohen, capping an insider trading investigation into one of Wall Street’s most prominent firms, DealBook’s Ben Protess and Peter Lattman report. Prosecutors and the F.B.I. in Manhattan are expected to announce the charges in the coming days, people briefed on the matter told DealBook. The aggressive action could cripple SAC.
Any last-minute settlement is an unlikely option at this point. While Mr. Cohen is not expected to be charged criminally, authorities are still contemplating bringing charges against other employees of the firm. Authorities plan to navigate around a legal deadline for filing some insider trading charges by filing a broad criminal conspiracy case against SAC, these people said.
YAHOO AFTER LOEB  | Yahoo seems like damaged goods now that it has been abandoned by one of its biggest investors, Daniel S. Loeb, and his hedge fund, Third Point, Steven M. Davidoff writes in the Deal Professor column. Investors reacted negatively to the news that Yahoo had agreed to buy back 40 million shares from Third Point at $1.16 billion â€" a transaction that has the whiff of greenmail, or repurchasing stock to make an investor go away, Mr. Davidoff says.
A year after Marissa Mayer was appointed chief executive â€" a leadership change Mr. Loeb took credit for â€" Yahoo still has a lot of work to do. And yet, Mr. Loeb is ready to get out. “It appears that Mr. Loeb and his cohorts are departing Yahoo midvoyage. Not only that, but the sale is arguably suspect in terms of its timing,†Mr. Davidoff writes.
Yahoo’s stake in the Chinese Internet giant Alibaba Group has driven up its share price of the last two years. “In this light, Mr. Loeb’s departure is being viewed as riding the wave of hype over Yahoo. He is gaining from the unexpected Alibaba rise but not the restructuring he advocated, leaving just before things get hard and the wave crashes.â€
On Tuesday, Mr. Loeb apparently could not help leveling a playground taunt over Herbalife, a company he was invested in earlier this year. The barb, displayed on Mr. Loeb’s Bloomberg terminal profile, appeared to be directed at a rival, William A. Ackman, who is betting against Herbalife, and it apparently referred to the investor Carl C. Icahn, who is betting Herbalife’s shares will rise: “New HLF product: The Herbalife Enema administered by Uncle Carl.â€
ON THE AGENDA Â |Â Shareholders of Dell are scheduled to vote on the $24.4 billion buyout offer from Michael S. Dell and the investment firm Silver Lake. Caterpillar, a target of the prominent short-seller James S. Chanos, reports earnings before the market opens. Facebook reports earnings this evening. Data on sales of new homes in June is out at 10 a.m. Hugh Johnston, the chief financial officer of PepsiCo, is on Bloomberg TV at 7:15 a.m.
DIFFICULTY IN KNOWING A DEAL’S FRIENDS FROM FOES  | A transaction named Abacus 2007-AC1 became one of the most infamous trades of the financial crisis, netting more than $1 billion for the hedge fund Paulson & Company, which bet the housing market would crash. According to a crucial witness who took the stand on Tuesday at the trial of a former Goldman Sachs trader, the trade would never have happened had ACA Management, a firm that helped assemble the security, been told that Paulson & Company was betting the trade would fail. The witness, Laura Schwartz, was testifying at the trial of Fabrice P. Tourre, who has been accused of participating in a scheme to defraud investors in connection to the trade. Ms. Schwartz, who was a senior executive at ACA, is one of most important â€" and controversial â€" witnesss to take the stand in this trial, which on Wednesday will enter its eighth day.
Paulson & Company was referred to in ACA documents as an “equity investor,†contributing to Ms. Schwartz’s understanding that the firm was betting the deal would succeed. In fact, Paulson had taken a short position. “I believed Paulson was the equity investor in the transaction,†Ms. Schwartz said, repeating this refrain multiple times to the jury.
Ryanair Says It’s Open to Selling Stake in Aer Lingus  | The airline’s conditional offer was seen by some analysts as more maneuvering in its pursuit of Aer Lingus. DealBook »
Sale of Dexia Unit to GCS Capital Collapses  | Dexia said it had pulled out of talks to sell its asset management arm to GCS Capital of Hong Kong. FINANCIAL TIMES
Cisco to Buy Sourcefire, a Cybersecurity Company, for $2.7 Billion  | Cisco Systems has agreed to buy Sourcefire, a provider of cybersecurity services, for about $2.7 billion in cash, amid a growing fervor for companies that can help guard against computer-based attacks. DealBook »
Big Shareholder of KPN Withholds Support for Telefonica Deal  | Two directors of KPN who were appointed by América Móvil did not vote in favor of the deal to sell KPN’s German operations to Telefónica, The Financial Times reports. Still, there was enough support for the board to approve the deal. FINANCIAL TIMES
KPN’s $10.7 Billion Retreat From Germany  | KPN’s deal to sell its E-Plus mobile unit is heartening for investors in Europe’s fragmented, cutthroat and heavily regulated telecommunications industry, Quentin Webb of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
BlackRock Executive Says No to Top Job at R.B.S.  | After being approached by the Royal Bank of Scotland in its search for a new chief executive, BlackRock’s chairman for the Asia-Pacific region told his staff members on Wednesday that he had no plans to leave. DealBook »
Deutsche Bank to Combine Debt-Trading Units  | The move by Deutsche Bank, intended to cut costs and reduce risk, has led a senior trader in Europe to depart the firm, Bloomberg News reports. BLOOMBERG NEWS
Regulators May Ease a Mortgage Requirement  | Federal regulators “want to loosen a proposed requirement that banks retain a portion of the mortgage securities they sell to investors, according to people familiar with the situation,†The Wall Street Journal reports. WALL STREET JOURNAL
Amid Market Volatility, Concerns Over E.T.F.’s  | The Financial Times reports: “The global sell-off last month sparked the highest amount of settlement failures in parts of the $2 trillion exchange-traded fund market in nearly two years, reviving a debate over whether the popular investment vehicles suffer from structural issues that flare up in times of market stress.†FINANCIAL TIMES
K.K.R.’s Credit Investments Chief Is Stepping Down  | “Orson Welles once said: ‘If you want a happy ending, you need to know when to end your story,’†William Sonneborn, the head of corporate credit and equity investments for K.K.R., said in a conference call on his departure. REUTERS
K.K.R. Said to Secure Low Rates for Gardner Denver Deal  | For its $3.9 billion takeover of Gardner Denver, the private equity firm K.K.R. “secured the cheapest borrowing rates it ever got to fund a leveraged buyout,†Reuters reports, citing unidentified “banking sources.†REUTERS
On Reading the Fed, Humans Triumph Over Machines  | Bloomberg News reports: “Currency funds that use computer models for trading decisions made 0.9 percent this year through May, compared with 2.5 percent for those that don’t, the biggest margin since 2008, according to the latest data from Parker Global Strategies L.L.C.†BLOOMBERG NEWS
Aramark Said to Choose Banks for I.P.O.  | Goldman Sachs, JPMorgan Chase, Credit Suisse and Morgan Stanley have been chosen to handle an initial public offering for Aramark, the Philadelphia-based food services company, The Wall Street Journal reports. (Trivia: Aramark runs Goldman’s cafeteria at its 200 West Street headquarters.) WALL STREET JOURNAL
Twitter Expands Advertising Feature Aimed at TV Viewers  | The service lets advertisers direct their promotions at viewers who post messages about particular TV shows. BLOOMBERG NEWS
Senate Panel Examines Banks’ Involvement in Commodities  | Several witnesses warned of significant risks to the nation’s financial system and to taxpayers if big banks continued to own commodities units that store and ship vast quantities of metals and oil, Edward Wyatt reports in The New York Times. NEW YORK TIMES
Cities Need to Weigh Costs of Private Partnerships  | Cities and states should make certain that the public interest is being served before they enter into deals with profit-making companies, Donald Cohen, the executive director of In the Public Interest, writes. DealBook »
S.E.C. Says Texas Man Operated Bitcoin Ponzi Scheme  | The regulator has also warned investors that “the rising use of virtual currencies in the global marketplace may entice fraudsters.†DealBook »
Summers Seen as Front-Runner for Fed Chairman  | Lawrence H. Summers is “increasingly viewed as the leading candidate†to lead the Federal Reserve once Ben S. Bernanke steps down, Ezra Klein reports in The Washington Post’s Wonkblog. WASHINGTON POST
Japan’s Leader Urges Speedy Action to Support Economy  | After a landslide election victory, Prime Minister Shinzo Abe warned his ministers against triumphalism, The New York Times reports. NEW YORK TIMES
