The upstart stock exchange SecondMarket, which made a name for itself allowing investors to buy shares of private companies, is turning to the next new thing: bitcoin. On Thursday, SecondMarket is expected to begin raising money for an investment fund â€" the first of its kind in the United States â€" that will hold only bitcoins, allowing wealthy investors to bet on the future price of the trendy but much debated virtual currency, Peter Lattman and Nathaniel Popper report in DealBook. The fund will be called the Bitcoin Investment Trust.
“If you speak with people who have tried to purchase bitcoin in the past â€" you’ll hear, ‘it’s a difficult process,’ ‘it’s a confusing process,’ ‘it’s a scary process,’†said Barry Silbert, the chief executive of SecondMarket, based in New York. “We want to make it an accessible asset class.â€
SecondMarket’s bitcoin venture is likely to feed the debate about the legitimacy and legality of a form of money that exists outside the conventional banking system and is sometimes used in illicit transactions. The technology investors Cameron and Tyler Winklevoss announced the creation of a similar product a few months ago, but their vehicle will be an exchange-traded fund, or E.T.F., accessible to all investors, meaning it must go through a lengthy and uncertain review process with federal regulators.
MISSED OPPORTUNITY IN CASE INVOLVING JPMORGAN  | “Both the Securities and Exchange Commission and JPMorgan Chase won great public relations victories last week. But the public lost â€" and in ways that go far beyond this one spat,†Jesse Eisinger of ProPublica writes in his column, The Trade. “By cracking down on the bank for its faulty internal controls in the $6 billion London Whale trading loss, the S.E.C. can claim to be the ferocious regulator we have all been waiting for. JPMorgan and its chief executive, Jamie Dimon, got the best coverage they could have hoped for under the circumstances.â€
The admission of wrongdoing that the S.E.C. wrung from JPMorgan “was nice,†Mr. Eisinger writes, “but the S.E.C. did not charge any top executives with misleading disclosure.†Mr. Eisinger continues: “The Senate Permanent Subcommittee on Investigations, in its huge report on the trading loss, made a convincing case that the chief financial officer at the time, Douglas L. Braunstein, made several highly misleading statements in an April 13, 2012, conference call with shareholders and the public.â€
DETROIT’S EXTRA PENSION PAYMENTS  | “Detroit’s municipal pension fund made payments for decades to retirees, active workers and others above and beyond normal benefits, costing the struggling city billions of dollars and helping push it into bankruptcy, according to people who have reviewed the payments,†Mary Williams Walsh reports in DealBook. “The payments, which were not publicly disclosed, included bonuses to retirees, supplements to workers not yet retired and cash to the families of workers who died before becoming eligible to collect a pension, according to reports by an outside actuary and other people with knowledge of the matter.â€
A report on the pension system from Detroit’s auditor general and inspector general is expected to be released on Thursday. Ms. Walsh continues: “How much each person received is not known. But available records suggest that the trustees approving the payments did not discriminate; nearly everybody in the plan received them. Most of the trustees on Detroit’s two pension boards represent organized labor, and for years they could outvote anyone who challenged the payments.â€
ON THE AGENDA Â |Â The third estimate of gross domestic product in the second quarter is released at 8:30 a.m. Barry Silbert, the chief of SecondMarket, is on CNBC at 6:30 a.m. Naval Ravikant, the chief executive of AngelList, which allows companies to raise money under new rules, is on CNBC at 11 a.m. Chelsea Clinton is on Bloomberg TV at 8:30 a.m. Hamilton E. James, president of the Blackstone Group, is on Bloomberg TV at 11:15 a.m.
ORACLE’S VICTORY AT SEA  | Larry Ellison, the software billionaire who runs Oracle, skipped a long-scheduled keynote address at his company’s annual conference in San Francisco this week so he could watch his sailing team from a chase boat. Though his priorities were questioned, Oracle Team USA achieved victory in the 34th America’s Cup on Wednesday. It was the “greatest comeback in America’s Cup history and one of the most dramatic in any sport,†The New York Times writes.
ALIBABA HEADED TO NEW YORK FOR I.P.O.  | “No business represents the rapid rise of the Internet in China quite like Alibaba, a company that is part eBay, part Google and part PayPal,†DealBook’s Michael J. de la Merced writes. “Alibaba is now moving forward with plans for one of the biggest initial public offerings since Facebook’s rocky debut last year â€" but in New York and not in its home market. Much is at stake for the Chinese company, as well as its prospective advisers and potential investors.â€
Lixil of Japan to Buy Grohe for $4.1 Billion  | The Japanese building products company Lixil and the Development Bank of Japan have agreed to buy the German bathroom fittings company Grohe for $4.1 billion. DealBook »
Concerns Mount Over J.C. Penney  | The retailer’s shares fell 15 percent on Wednesday after Goldman Sachs debt analysts released a downbeat assessment of its prospects, The Wall Street Journal writes. WALL STREET JOURNAL
Dr. Martens Said to Be in Advanced Talks to Be Sold  |Â
WALL STREET JOURNAL
It’s Time for Gates to Part Ways With Microsoft  | Bill Gates’s many talents do not include effectiveness as chairman, Robert Cyran of Reuters Breakingviews writes. Under his leadership, Microsoft’s board left Steven A. Ballmer, the chief executive, in place too long. REUTERS BREAKINGVIEWS
Blankfein’s Message to Occupy Wall Street  | On a panel at the Clinton Global Initiative meeting on Wednesday afternoon, Lloyd C. Blankfein, the chief executive of Goldman Sachs, was asked to reflect on the second anniversary of the Occupy Wall Street movement. “I would say to Occupy Wall Street that business has helped lift more people out of poverty than philanthropy,†he said, according to CNBC. CNBC
Deutsche Bank Said to Propose a New Bond Platform  | The German firm Deutsche Bank “is trying to drum up interest with some of its largest competitors to create a multidealer U.S. bond trading platform at the same time that asset managers discuss ways to make buying and selling debt easier, according to people familiar with the matter,†Bloomberg News reports. BLOOMBERG NEWS
In China, the Case of the Disappearing Moguls  | Several prominent tycoons in China have recently disappeared from public view amid a corruption scandal that may “indicate a fresh front in Chinese political infighting,†The Wall Street Journal reports. WALL STREET JOURNAL
Barclays to End Wealth Management Services in 130 Countries  | “This is part of our new strategy, focusing on reducing complexity and competing where we can win,†a spokesman for Barclays told Reuters. REUTERS
BlackBerry Cancels Conference Call to Discuss Results  | BlackBerry said that while its quarterly financial results would still be released, the call scheduled for Friday had been called off because of a conditional and tentative bid for the company. NEW YORK TIMES
Fairfax Chief Expresses Confidence Over BlackBerry Bid  | “We wouldn’t put our name to such a high-profile deal if we didn’t feel confident that at the end of the day that our due diligence would be fine and we’d be able to finance it,†Prem Watsa, the head of Fairfax Financial Holdings, told Reuters. REUTERS
A Hedge Fund Drama, With Hot Dogs  | In a fictional script, Bess Levin of Dealbreaker imagines what might have happened when Steven A. Cohen of SAC Capital Advisors arranged for a hot dog truck to supply free food to the hedge fund’s employees. DEALBREAKER
Bank of England Says Hedge Funds Could Pose Risk to Stability  | The financial policy committee of the Bank of England said it planned to gather more information on hedge funds so that “a more complete assessment of risks to financial stability can be made.†WALL STREET JOURNAL
Twitter Strikes Advertising Pact With N.F.L. Â |Â The announcement about the deal with the National Football League came after Twitter forged another advertising deal with CBS. ALLTHINGSD
Fearing Change at a Publicly Traded Twitter  | “Twitter is, fundamentally, a strange, nearly surreal service. Unlike Facebook, it isn’t for everyone. That’s what the initiated love about it â€" but now that Twitter is going public and looking for growth, Twitter’s inherent weirdness is at risk,†Farhad Manjoo, a columnist for The Wall Street Journal, writes. WALL STREET JOURNAL
Tech Giants Fear Patent Wars in Europe  | “In the United States, technology companies like Google, Apple and Microsoft have spent years and hundreds of millions of dollars to defend patent-infringement lawsuits by companies that make a business of buying technology patents primarily for suing software companies and makers of products like smartphones,†The New York Times writes. “Now they worry that Europe could soon become a broad battleground for similar court battles.†NEW YORK TIMES
ICAP to Pay $87 Million Fine in Libor-Fixing Case  | The Justice Department also brought criminal charges against three former ICAP employees on Wednesday over their roles in manipulating the benchmark London interbank offered rate. DEALBOOK
Citigroup to Pay $395 Million in Freddie Mac Settlement  |Â
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