Five regulatory agencies are preparing to vote on Tuesday on a final draft of the Volcker Rule, the regulation that seeks to rein in risk-taking on Wall Street. But lawyers and lobbyists are gearing up for another round of attacks against it, Matthew Goldstein and Ben Protess report in DealBook.
“In recent letters and meetings with financial regulators, lobbyists for Wall Street banks and business trade groups issued thinly veiled threats about challenging the Volcker Rule in court, people briefed on the matter said. The groups, including the United States Chamber of Commerce, are hinting that they could use litigation to either undercut or clarify the rule, which is intended to bar banks from trading for their own gain and limit their ability to invest in hedge funds,†Mr. Goldstein and Mr. Protess write.
The agencies drafting the Volcker Rule have overcome internal squabbling over the past few months to draft identical versions of the rule before a year-end deadline imposed in July by Treasury Secretary Jacob J. Lew, according to the people briefed on the matter who were not authorized to speak publicly. The agencies wrote a tougher-than-expected final text despite two years of prodding from Wall Street lobbyists to water down an October 2011 draft version.
In a Dec. 4 letter to the heads of the five agencies, the Chamber of Commerce, the Business Roundtable and three other business trade groups wrote, “It is more important to get the Volcker Rule right than meet an artificially imposed deadline.†But the chamber is not expected to rush to court. The Federal Reserve will delay the effective date of the rule to July 2015, the people briefed on the matter said, a move that will probably stave off any litigation for several months as bank lawyers study the rule’s nuances.
JPMORGAN TRACKED BUSINESS LINKED TO CHINA HIRING  | “Federal authorities have obtained confidential documents that shed new light on JPMorgan Chase’s decision to hire the children of China’s ruling elite, securing emails that show how the bank linked one prominent hire to ‘existing and potential business opportunities’ from a Chinese government-run company,†Ben Protess and Jessica Silver-Greenberg report in DealBook.
“The documents, which also include spreadsheets that list the bank’s ‘track record’ for converting hires into business deals, offer the most detailed account yet of JPMorgan’s ‘Sons and Daughters’ hiring program, which has been at the center of a federal bribery investigation for months. The spreadsheets and emails â€" recently submitted by JPMorgan to authorities â€" illuminate how the bank created the program to prevent questionable hiring practices but ultimately viewed it as a gateway to doing business with state-owned companies in China, which commonly issue stock with the help of Wall Street banks.
“The hiring practices seemed to have been an open secret at the bank’s headquarters in Hong Kong, according to the documents, copies of which were reviewed by The New York Times.â€
OWNER OF GUN MAKER TO OFFER INVESTORS A WAY OUT  | Cerberus Capital Management, the owner of the Freedom Group, is planning to give other investors in the company a way to cash out as an attempt to sell it has stalled, DealBook’s Michael J. de la Merced reports. Cerberus plans to unveil the proposal on Monday, a person briefed on the matter said on Sunday. The plan comes after a prolonged effort to sell the gun manufacturer, whose Bushmaster rifle was used in a deadly Connecticut school shooting nearly a year ago.
Cerberus is making an interim step, Mr. de la Merced writes: “Let investors in its funds â€" including those eager to wash their hands of the firearm industry â€" sell their holdings. Among the most vocal of these have been public pension funds like the California State Teachers’ Retirement System, or Calstrs, and New York State’s comptroller, Thomas P. DiNapoli.â€
ON THE AGENDA  | Three regional Federal Reserve presidents â€" James Bullard of St. Louis, Jeffrey Lacker of Richmond and Richard Fisher of Dallas â€" are scheduled to give separate speeches on the economy and banking trends. Vail Resorts reports earnings after the market closes. John C. Bogle, the founder of Vanguard, is on CNBC at 3:10 p.m.
COMCAST HIRES JPMORGAN FOR POSSIBLE TIME WARNER CABLE BID  | Comcast, the nation’s largest cable operator by subscribers, has hired JPMorgan Chase, the country’s biggest bank, to advise it on a possible bid for Time Warner Cable, people briefed on the matter tell DealBook’s David Gelles.
“Securing JPMorgan as its adviser gives Comcast access to the biggest balance sheet on Wall Street, potentially smoothing the way for a deal that would probably top $40 billion,†Mr. Gelles writes. “It also suggests that Comcast is taking seriously Time Warner Cable’s invitation to consider a combination, an overture Time Warner made last month after heightened speculation it could be the target of an unsolicited bid.â€
Covidien to Acquire Medical Technology Company in $860 Million Deal  | Covidien has agreed to acquire the Israel medical technology company Given Imaging for $30 a share, valuing the company at about $860 million and expanding the scope of Covidien’s diagnostic testing operations. DealBook »
Alibaba Invests $360 Million in Logistics Deal with Haier  | The Chinese e-commerce giant Alibaba Group announced a plan Monday to invest in the new venture with Haier Group, a manufacturer and distributor of household appliances in China. DealBook »
A Tricky Airline Merger Has Labor’s Blessing  | “Airline mergers are notoriously difficult to pull off, but when the deal between American Airlines and US Airways closes on Monday, the giant carrier can at least count on having employees on its side,†Jad Mouawad writes in The New York Times. NEW YORK TIMES
Men’s Wearhouse Founder Speaks Out on Firing  | George Zimmer, the founder of Men’s Wearhouse, tells Fortune about the circumstances of his ouster in June: “I got an email about 10 days earlier, which was extremely harsh and mean-spirited. It said that my job status and compensation would remain the same ‘at this time.’ Then they basically began throwing me out of my office, and that was as traumatic as when I was actually terminated because, at that point, it was pretty clear what was happening.†FORTUNE
EADS Is Said to Plan Job Cuts  | The European aerospace and defense group EADS plans to cut 5,000 to 6,000 jobs and sell its headquarters in Paris, the Le Figaro newspaper reported, according to Reuters. REUTERS
Former Barclays Chief Returns to Banking â€" in Africa  | Robert E. Diamond Jr., the former chief executive of Barclays, is “launching a vehicle with Africa’s youngest billionaire that hopes to raise millions of dollars to invest in African banking,†The Financial Times reports. FINANCIAL TIMES
Wall Street Mothers, Stay-Home Fathers  | For growing numbers of women on Wall Street, stay-at-home husbands are enabling them to compete at work with new intensity, Jodi Kantor and Jessica Silver-Greenberg report for The New York Times. DealBook »
Whiskers Unlimited? Not on Wall Street  | Beards are back as a fashion statement, but many bankers have yet to get the memo. NEW YORK TIMES
Behind the Record Prices, a Tepid Market for Fine Art  | “Despite the headlines and the hyperbolic enthusiasm of many auctioneers and dealers, the broad market for fine art is in the doldrums, according to experts who track sales data. Many works are selling near or below their low estimates or failing to sell at all,†James B. Stewart writes in the Common Sense column in The New York Times. NEW YORK TIMES
A Commodity Business in Name and Prospects  | Deutsche Bank’s decision to withdraw from trading in most raw materials markets underscores the contraction in the commodities business and the tough prospects for making money, Antony Currie of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Credit Suisse Highlights Its Break Dancer  | An article in the bank’s magazine notes a more unusual employee achievement. DealBook »
Buyout Firms Circle Tyco Unit in South Korea  | Reuters reports: “K.K.R. & Co. and Bain Capital are among suitors which have placed initial bids for Tyco International Inc.’s South Korean security systems unit, a business valued at about $1.6 billion, people familiar with the matter said.†REUTERS
Carlyle to Invest in Chinese Funeral Company  | Reuters reports: “Carlyle Group, the hedge fund firm Farallon Investors and China Cinda have agreed to buy $45 million worth of shares in Fu Shou Yuan International Group as China’s largest provider of death-care services seeks up to $215 million in a Hong Kong I.P.O.†REUTERS
HSBC Is Said to Weigh Spinoff of British Unit  | HSBC “has in recent weeks asked investors whether they would support the sale of a sizable stake†in the British business, The Financial Times reports. The move “would realize value from its high street banking business and address regulatory pressures.†FINANCIAL TIMES
Chinese Bank Is Said to Seek Up to $2.8 Billion in I.P.O.  | China Everbright Bank “is seeking as much as $2.8 billion in Hong Kong’s biggest first-time share sale this year, three people with knowledge of the matter said,†Bloomberg News reports. BLOOMBERG NEWS
Airbnb Seeks to Woo de Blasio  | Airbnb, which lets people rent out their rooms, has faced opposition from authorities in New York. But the start-up has released a new video aimed at Mayor-elect Bill de Blasio, with hosts making the company’s case. (Hat tip to Capital New York.) YOUTUBE
Tech Giants Call for Limits on Government Surveillance  | The New York Times reports: “Eight prominent technology companies, bruised by revelations of government spying on their customers’ data and scrambling to repair the damage to their reputations, are mounting a public campaign to urge President Obama and Congress to set new limits on government surveillance.†NEW YORK TIMES
The Lawyer Who Must Now Revive Detroit  | Kevyn D. Orr “holds power even more concentrated than that of the emergency control board that intervened when New York City was teetering near bankruptcy, an unelected lawyer chiefly responsible for the reinvention of a major American city in decay,†Monica Davey and Bill Vlasic report in The New York Times. NEW YORK TIMES
Madoff Victims, Five Years Later  | “In recent interviews, a sample of Madoff investors cited some common lessons that emerged from their differing struggles: Diversify your savings. Focus on what really matters. And don’t give up, or give in to rage or frustration,†Diana B. Henriques writes in The New York Times. NEW YORK TIMES
Fed Is Not Expected to Taper Stimulus Until Next Year  | “Federal Reserve officials are in no hurry to retreat from their bond-buying campaign to stimulate the economy and are likely to postpone any cuts to the program until next year, according to public statements by Fed officials and interviews with some of them,†Binyamin Appelbaum reports in The New York Times. NEW YORK TIMES
Drop in Jobless Rates Raises Odds of a Fed Move  | “The stock market rose by more than 1 percent after the jobs report, as traders concluded that the prospect of higher employment and faster economic growth outweighed the increased likelihood that the Federal Reserve would soon begin easing back on its stimulus efforts,†Nelson D. Schwartz writes in The New York Times. “While there is a chance that policy makers will act when they meet later this month, most experts say they believe that Fed officials want to see a little more consistency to the data before they begin tapering, probably early in 2014.†NEW YORK TIMES
Why We Need Higher Unemployment  | The unemployment rate “basically tells us how many people are looking for work. It falls when people get jobs, which is good. But it also falls when people stop looking for work, which of course is not so good,†Binyamin Appelbaum writes in the Economix blog. NEW YORK TIMES ECONOMIX
For Municipal Bond Investors, a Problem of Disclosure  | “Securities laws require issuers of municipal debt to provide the information investors need to make informed decisions when buying or selling these instruments. But lax disclosure practices remain, making it hard to spot signs of problems like those hobbling some states and cities. Disclosures about the soundness of public pensions, for example, can be essential to weighing the health of municipal bond issuers that are responsible for funding them,†Gretchen Morgenson writes in the Fair Game column in The New York Times. NEW YORK TIMES
