DOCTOR ENSNARED IN SAC INSIDER TRADING CASE  | Joel Ross, a prominent New Jersey doctor specializing in Alzheimer’s disease, is one of two physicians who federal prosecutors say leaked secret information about clinical drug trials to Mathew Martoma, then a portfolio manager at the hedge fund SAC Capital Advisors, a person with direct knowledge of the case tells DealBook’s Peter Lattman. The charges against Mr. Martoma are at the center of the government’s prosecution of SAC, which is owned by the billionaire investor Steven A. Cohen.
Last month, prosecutors filed an updated indictment against Mr. Martoma, adding a claim that he had received confidential data from an unidentified second doctor about a drug being developed by the pharmaceutical companies Elan and Wyeth. Dr. Ross, who did not immediately return a call seeking comment, has not been charged with any wrongdoing. The government’s court filing calls him a “co-conspirator.†Prosecutors say the tips that Mr. Martoma received about the clinical tests allowed SAC to earn profits and avoid losses totaling $276 million.
WHEN MEGABANKS LOSE FOCUS  | “Bailouts were necessary in 2008 to keep the financial system operating, but it is now more important than ever to distinguish why that was important,†Floyd Norris, a columnist for The New York Times, writes. “We need banks to provide payment systems, safe places for deposits and loans to individuals and businesses. In other words, we need them to provide the services that were traditionally provided by commercial banks and savings and loans. It is those functions that justify offering deposit insurance as well.â€
“It was once taken for granted that letting the banks do all those other things somehow made them stronger. We now know that need not be true, and that it is possible the opposite will often be the case.†JPMorgan Chase, the big bank that seemed to most successfully navigate the 2008 crisis, is a case in point: Now, many of the bank’s legal troubles stem from activities outside traditional commercial banking.
BIOTECH KING DETHRONED  | David Blech was once hailed as the king of biotechnology, quick to draw his checkbook to start new companies or prop up faltering ones. Now, though, he is about to begin a four-year prison term, about $11 million in debt, Andrew Pollack writes in The New York Times. “He squandered his fortune with reckless borrowing and stock trading in a quest for even greater riches.â€
“There’s no question that if I had been in a coma for the last 20 years, I would wake up a billionaire today,†Mr. Blech, 57, said. His downfall, Mr. Pollack writes, reflects “the maturation of the biotechnology industry from its get-rich-quick days, when someone like Mr. Blech, a music major with no scientific training, could make a difference with a few million dollars. Now billions are invested by funds managed by teams of doctors and scientists with Ph.D.’s.â€
ON THE AGENDA Â |Â The jobs report for August is released at 8:30 a.m. Smithfield Foods, which agreed to be sold to Shuanghui International of China, reports earnings before the market opens. Howard S. Marks, the chairman of Oaktree Capital Management, is on Bloomberg TV at 11 a.m.
FOSSIL FUELS ARE NEW DIVESTMENT FOCUS  | It was South Africa in the 1980s, tobacco in the 1990s. Now, fossil fuels are the focus of those who would change the world through the power of investing, Randall Smith reports in DealBook. “A student movement has gathered momentum at more than 300 campuses over the last year. Members have encouraged college and university endowments to divest themselves of their holdings of companies in the fossil fuel business to avoid profiting from the release of carbon associated with the risk of global warming.â€
“While the efforts have gained some traction, they have also met strong opposition from critics who favor the traditional proxy-voting process of engagement, in which institutional investors try to prod corporations to change their practices, with divestiture a last resort.â€
Suntory Said to Be in Talks to Buy GlaxoSmithKline Brands  | Suntory Beverage and Food of Japan “is in advanced talks to buy the Lucozade and Ribena brands from GlaxoSmithKline for more than 1 billion pounds ($1.6 billion) in a deal that would pre-empt an auction of the iconic British drinks, two people close to the process said,†Reuters reports.
REUTERS
Bushnell, Maker of Gun Accessories, Is Sold for $985 Million  | The deal is one of the first since the Newtown, Conn., school shooting, an incident that has put pressure on some owners of gun manufacturers and related products to sell their holdings.
DealBook »
Amgen Investors Gain From Having an Ex-Investment Banker as C.E.O.  | Amgen’s deal to buy Onyx Pharmaceuticals shows the value of having a tough negotiator at the helm, Rob Cox of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS
JPMorgan Chase to Stop Making Student Loans  | “We just don’t see this as a market that we can significantly grow,†Thasunda Duckett, chief executive for auto and student loans at the bank, told Reuters.
REUTERS
Morgan Stanley’s Chief Sees Slim Chance of Another Crisis  | James Gorman, Morgan Stanley’s chief executive, spoke on the “Charlie Rose†show about the chances of another financial crisis. “The probability of it happening again in our lifetime is as close to zero as I could imagine,†he said, according to Bloomberg News. “The way these firms are managed, the amount of capital that they have, the amount of liquidity that they have, the changes in their business mix â€" it’s dramatic.â€
BLOOMBERG NEWS
Raymond James Hires Team From Morgan Stanley  | Raymond James Financial hired four former financial advisers from Morgan Stanley Wealth Management to join the firm in Maine, Reuters reports.
REUTERS
A Hamptons Property â€" Or a Footpath? â€" Incites a Bidding War  | “The 1,885-foot-long strip of land, just 1 foot wide, runs through East Hampton Town from Montauk Highway to the Atlantic Ocean,†Newsday reports. “Suffolk County had a modest goal: sell it for $10. But a pair of Manhattan financiers had other ideas for the path that bordered their East End getaways. They launched a bidding war and the price soared â€" to $120,000.â€
NEWSDAY
K.K.R. to Buy Mitchell, a Property and Car Claims Software Maker  | Kohlberg Kravis Roberts agreed on Thursday to buy Mitchell International, a maker of software for property and casualty car claims, from a fellow private equity firm, the Aurora Capital Group.
DealBook »
K.K.R. Said to Be Favored in Panasonic Healthcare Deal  | The private equity firm K.K.R. “is set to gain preferential negotiating rights for a majority stake in Panasonic Corp.’s healthcare unit, sources familiar with the matter said, a potential $1.5 billion deal that would mark the U.S. firm’s largest investment in a Japanese company,†Reuters reports.
REUTERS
A Stream of Fees for Private Equity May Be Ending  | Fees that an acquired company pays its private equity owners for management and advisory services may be on the wane, according to Fortune’s Dan Primack.
FORTUNE
Timken Agrees to Split in Two After Pressure From Activist Investors  | Activist investors scored another victory on Thursday when the board of the Timken Company agreed to spin off its steel business from its industrial bearings operations amid pressure from two big shareholders.
DealBook »
A Tech Investor Has I.P.O.’s on the Horizon  | The venture capitalist Peter Fenton, “best known for his early bet on Twitter, is a board member of at least five more companies that could go public within the next 18 months, including two â€" Lithium Technologies and Zuora â€" that each announced $50 million financing rounds this week,†Bloomberg News reports.
BLOOMBERG NEWS
An App Takes Off in Asia  | Line, a two-year-old messaging application in Japan, has 230 million monthly users and ambitions of becoming the first global Internet company from Asia, The New York Times reports.
NEW YORK TIMES
Stanford Plans to Invest in Student Start-Ups  | A Stanford University investment fund overseen by the school’s vice president for business affairs plans to invest in student companies, TechCrunch reports.
TECHCRUNCH
Thai Trader Settles Smithfield Insider Trading Case  | A Bangkok-based trader has agreed to pay $5.2 million to settle charges that he traded on insider information tied to Smithfield Foods’ proposed $4.7 billion sale to a Chinese food processor, the Securities and Exchange Commission announced on Thursday.
DealBook »
The President’s Choice for the Fed  | The reputation of Lawrence H. Summers, the economist who is said to be a contender to be the next chairman of the Federal Reserve, “is replete with evidence of a temperament unsuited to lead the Fed,†the editorial board of The New York Times writes.
NEW YORK TIMES
Brazilian Regulators Open a New Inquiry Into Batista  | Brazil’s securities and exchange commission says it has opened a new formal investigation into the business dealings of Eike Batista, the onetime billionaire, and five other executives of the petroleum company OGX.
DealBook »
A Banking Bankruptcy That Takes a Different Path  | A small bank holding company in Wisconsin plans to use Chapter 11 to recapitalize, not to liquidate as typically happens, Stephen J. Lubben writes in the In Debt column. The company hopes to use the bankruptcy to save its bank, AnchorBank.
DealBook »
S.E.C. Lawyer Said to Be Leaving for Private Practice  | Matthew Martens, the trial lawyer who led the Securities and Exchange Commission’s case against Fabrice Tourre, “is looking to leave public service for a job in private practice and could exit as early as October,†according to The New York Post.
NEW YORK POST
