Morning Agenda: Lew Sizes Up Financial Reform

TREASURY CHIEF TO DECLARE GAINS IN FINANCIAL REFORM  |  Treasury Secretary Jacob J. Lew plans to say on Thursday that the Obama administration’s overhaul of the financial system is close to accomplishing its goal of shielding society from the dangers posed by big banks, according to a draft of the speech, DealBook’s Peter Eavis reports. In a broad policy speech to be given at the Pew Charitable Trusts office in Washington, Mr. Lew will also call on overseas regulators to make their rules tougher â€" comments that will most likely upset foreign governments.

“We will press other jurisdictions to match our robust standards â€" including in Europe and across Asia,” Mr. Lew will say, according to the draft. He will also argue that, more than three years after the overhaul began, big banks are safer today. “Earlier this year, I said if we could not with a straight face say we ended ‘too big to fail,’ we would have to look at other options,” Mr. Lew will say. “Based on the totality of reforms we are putting in place, I believe we will meet that test, but to be clear, there is no precise point at which you can prove with certainty that we have done enough.”

Mr. Eavis writes: “The Treasury secretary’s comments are likely to add more fuel to the debate over the adequacy of the rules that stem from the Dodd-Frank Act, which Congress passed in 2010. Critics of the legislation say it does not solve the too-big-to-fail problem, because, they say, it does not directly limit or reduce the size of the nation’s largest lenders.”

ICAHN’S LATEST PUSH FOR AN APPLE BUYBACK  | 
Carl C. Icahn has a new platform to make his case that Apple should buy back a large amount of shares: the cover of Time magazine. The activist investor tells the magazine that he has filed an initiative to let shareholders vote on a nonbinding proposal urging Apple to use its huge cash stockpile for a big buyback. The subheadline of the article: “Why Carl Icahn Is the Most Important Investor in America.”

Mr. Icahn is taking a relatively mild approach, rather than a full-blown proxy contest, DealBook’s Michael J. de la Merced writes. He keeps his tone civil in the Time article, saying that Apple’s chief executive “is doing a good job with the business,” and adding that “I think he’s good whether he does what I want or not.” But he adds: “Apple is not a bank.”

MEMORY LAPSE FOR TOP WITNESS IN SAC CASE  | 
Jon Horvath’s memory failed him again during the insider trading trial of his former boss at SAC Capital Advisors, Michael S. Steinberg, DealBook’s Matthew Goldstein reports. In court on Wednesday, Mr. Horvath had difficulty recalling how he learned that a friend, who was an analyst at another hedge fund, was passing on illegal inside information about the computer company Dell.

“I don’t remember when I figured it out,” Mr. Horvath, 44, testified. “Clearly in 2008, I was aware I got” inside information several times, he said. It was the second day that Mr. Horvath’s memory failed him during cross-examination.

ON THE AGENDA  | 
The second estimate of gross domestic product in the third quarter is released at 8:30 a.m. Eastern time. Jos. A. Bank reports earnings before the market opens. The Deal holds a conference at the New York Stock Exchange on deal making and the economy. The hedge fund manager J. Kyle Bass is on Bloomberg TV at 10:30 a.m.

G.M. SAID TO PLAN SALE OF ALLY STAKE  | 
General Motors plans to sell the last of its holdings in its onetime financing arm Ally Financial through a private placement of shares, a person briefed on the matter tells DealBook’s Michael J. de la Merced. “The move would allow G.M. to avoid a lockup of its shares if Ally were to move forward with a long-awaited initial public offering. Such sales usually require existing stockholders to hold on to their shares for several months.” The private placement would be valued at about $900 million, according to The Wall Street Journal, which first reported the news.

Mergers & Acquisitions »

Merck to Buy British Materials Firm for $2.6 Billion  |  The pharmaceutical company Merck, which also makes liquid crystals used in television and smartphone screens, has agreed to buy AZ Electronic Materials of Britain to bolster its specialist chemicals, Reuters reports.
REUTERS

An Oral History of BlackBerry’s Rise and Fall  |  Bloomberg Businessweek has interviewed “dozens of current and former BlackBerry employees, vendors and associates” to hear their story of the smartphone maker’s trajectory.
BLOOMBERG BUSINESSWEEK

Credit Suisse Said to Be Selling German Private Bank  |  Reuters reports: “Credit Suisse is selling its business serving wealthy customers in Germany to Frankfurt-based Bethmann Bank, sources familiar with the transaction told Reuters on Wednesday.”
REUTERS

Verizon Wireless Spectrum Attracts Bidders  |  The Wall Street Journal reports: “AT&T Inc. is considering a bid for a block of spectrum licenses held by Verizon Wireless, setting up a potential contest for the airwaves with smaller rival T-Mobile US Inc., people familiar with the matter said.”
WALL STREET JOURNAL

Container Shipping Lines in Talks to Merge  |  The Financial Times reports: “Two of the world’s highest-profile container shipping lines, Germany’s Hapag-Lloyd and Chile’s CSAV, are in talks about a potential merger that would create the world’s fourth-largest container ship fleet.”
FINANCIAL TIMES

Chairman of Barrick Gold Is Stepping Down  |  Reuters reports: “Barrick Gold, facing criticism from some shareholders for a series of missteps in a tough market, said on Wednesday that its 86-year-old chairman and founder would leave the board in the spring, along with two other directors.”
REUTERS

INVESTMENT BANKING »

BNP Paribas to Take Control of Polish Unit of Rabobank  |  In a deal valued at about $1.36 billion, the Dutch lender Rabobank would sell a 98.5 percent stake in its Polish unit to the French bank BNP Paribas.
DealBook »

China Bars Banks From Using Bitcoin  |  The New York Times reports: “China moved on Thursday to restrict its banks from using Bitcoin as currency, citing concerns about money laundering and a threat to financial stability.”
NEW YORK TIMES

From Greenspan, a Dose of Skepticism on Bitcoin  |  “It’s a bubble,” the former Federal Reserve chairman, Alan Greenspan, said of Bitcoin on Bloomberg TV. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.”
BLOOMBERG NEWS

UBS Shuffles Executive Roles  |  UBS said that Ulrich Koerner, the bank’s operations chief, would run the asset management division when its head retires next year, and that Tom Naratil, the finance chief, would take on the operations role, Reuters reports.
REUTERS

Standard Chartered Warns on Consumer Banking Profit  |  Peter Sands, chief of the London-based bank, attributed a “double-digit drop” in the consumer banking results to unprofitable business in South Korea.
DealBook »

PRIVATE EQUITY »

From a Union, a Hat Tip for Private Equity  |  A United Steelworkers local in Philadelphia plans to honor an energy executive and a managing director of the Carlyle Group. “I suppose there’s a feel of the lions laying down with the jackals â€" natural enemies and natural predators,” said Philip Rinaldi, chief executive of Philadelphia Energy Solutions, who is one of the honorees, according to The Inquirer.
PHILADELPHIA INQUIRER

House Votes to Exempt Private Equity From New Rules  |  The bill passed by the House Representatives would largely spare private equity funds from rules requiring them to register with the Securities and Exchange Commission. But the bill is not likely to become law.
REUTERS

HEDGE FUNDS »

Hayman Capital Is Said to Build a Stake in G.M.  |  Hayman Capital, the hedge fund founded by J. Kyle Bass, “has taken a stake in General Motors Co. and believes the U.S. automaker’s stock could rise more than 40 percent over the next 12-18 months after the U.S. Treasury sells its stake in the company, a source familiar with investment said on Wednesday,” Reuters reports.
REUTERS

I.P.O./OFFERINGS »

China Cinda Said to Raise $2.5 Billion in Hong Kong I.P.O.  |  A bad bank created to absorb problem loans made by state lenders, China Cinda Asset Management on Thursday priced its shares at the top of the marketed range in Hong Kong’s biggest new listing this year.
DealBook »

AMC Singles Out Fans With Coming I.P.O.  |  Members of AMC Theaters’ loyalty rewards program will be able to participate in AMC’s initial public offering through Loyal3 Holdings, a brokerage firm that caters to smaller investors.
DealBook »

VENTURE CAPITAL »

Chinese Firm Increases Stake in Brazilian Tech Company  |  The Internet company Qihoo 360 led a funding round for a cloud-based security company, as more Chinese firms look toward Latin America.
DealBook »

Mobile Payments Catch On Among India’s Poor  |  “MoneyOnMobile, an Indian start-up, is latching on to an idea that began six years ago in Kenya of transferring money with a few taps of the keypad on an everyday cellphone,” The New York Times writes.
NEW YORK TIMES

A Look at Uber’s Internal Numbers  |  The Gawker site Valleywag writes that Uber, a car hailing service, “is making a lot more money than its investors had anticipated.”
VALLEYWAG

LEGAL/REGULATORY »

Wall Street Challenges Overseas Swaps Rules  |  The move is a response to an initiative led by the Commodities Futures Trading Commission’s chairman, Gary Gensler, to increase oversight of derivatives trading in markets like London and Hong Kong.
DealBook »

Fifth Third Bank and Executive Settle Charges With the S.E.C.  |  The case involved improper accounting for soured mortgages around the time of the financial crisis.
DealBook »

Banks Failing to Comply With Parts of Mortgage Deal, Report Says  |  The New York Times reports: “Three of the nation’s largest mortgage lenders are still failing to comply with key requirements of a national settlement over mortgage abuses, according to a new report that suggests that some borrowers are still trapped in a tangle of red tape and errors as they try to save their homes from foreclosure.”
NEW YORK TIMES

Big Companies Are Prepared to Pay Price on Carbon  |  The New York Times reports: “More than two dozen of the nation’s biggest corporations, including the five major oil companies, are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming.”
NEW YORK TIMES

Libor Bank Fines Reflect Rewards of Cooperating  |  The lenient treatment of Barclays and UBS, the first banks to settle with financial agencies in the Libor case, highlights the risks in delaying settlements, Dominic Elliott and George Hay of Reuters Breakingviews write.
REUTERS BREAKINGVIEWS