SAC LOOKS ON THE BRIGHT SIDE  |  The $616 million fine against SAC Capital Advisors that was announced on Friday by the Securities and Exchange Commission would be enough to cripple some hedge funds. But SAC saw the positive in the penalty, which settles two insider trading lawsuits brought by the government, DealBook’s Peter Lattman writes. The $15 billion hedge fund said in a statement that the settlements were “a substantial step toward resolving all outstanding regulatory matters.”

Some investors also cheered the development, as it removed the fund’s exposure to litigation against two former employees. The Blackstone Group, whose $550 million investment makes it SAC’s largest outside client, views the settlements favorably, Mr. Lattman reports. But it is still too early t say what Blackstone will decide to do come the mid-May deadline to ask for its money back, a person familiar with Blackstone’s thinking said.

Rival hedge fund managers and securities lawyers criticized the settlements of $602 million and $14 million as too weak, even though the S.E.C. called the larger penalty the biggest settlement ever of an insider trading case. “While $616 million would normally be a massive penalty, for Cohen this is basically a drop in the bucket,” said Bradley D. Simon, a criminal defense lawyer and former federal prosecutor in New York. “There is also no debarment or admission of wrongdoing.”

DIMON’S CLOUT IS QUESTIONED  |  The Senate hearing on Friday over JPMorgan Chase’s huge trading loss shines an uncomfortable spotlight on Jamie Dimon, the bank’s influenti! al chief executive. Though Mr. Dimon was not present while his top lieutenants were being questioned, the hearing and the Senate panel’s report could create fresh challenges for an executive long considered an expert manager of risk, Ben Protess and Jessica Silver-Greenberg report in DealBook.

Some investors and even members of the bank’s board are becoming frustrated with Mr. Dimon’s “off-putting arrogance,” as one shareholder put it. Mr. Dimon is not likely to face a serious threat to his power. Still, two board members are concerned about the repercussions of Mr. Dimon’s comments last April that dismissed the disastrous trades as a “tempest in a teapot,” people briefed on the board’s thinking said. “The concern is that those statements â€" made months after Mr. Dimon learned the trades had breached the firm’s internal alarm system hundreds of times, accordig to the Senate report â€" could put the bank in a precarious situation with regulators investigating the trades,” DealBook writes.

“And government officials who would speak only anonymously say that Mr. Dimon, faulted in the Senate report for strong-arming regulators, is also losing sway with some authorities in Washington.”

STOCKS FALL ON CYPRUS BAILOUT  |  Shares of big banks fell on Monday after the announcement this weekend that bank depositors in Cyprus would be required to share the cost of a European bailout. HSBC fell more than 2 percent in Hong Kong trading, and Standard Chartered was down about 2 percent in trading in London.

The scene in Cyprus was chaotic. “The euro fell sharply against major currencies ahead of the action, as investors aro! und the w! orld absorbed the implications of Europe’s move,” Liz Alderman and Landon Thomas Jr. write in The New York Times.

European Union leaders are proposing a 6.75 percent tax on deposits of up to 100,000 euros to help pay for the bailout. Nicos Anastasiades, the Cypriot president, who said he was trying to persuade the leaders to modify those demands, described in apocalyptic detail what might happen if Cyprus did not approve the rescue: a “complete collapse of the banking sector,” major losses for businesses and depositors and a possible exit for Cyprus from the euro zone.

ON THE AGENDA  |  Chancellor Angela Merkel of Germany holds a press briefing in Berlin with President François Hollande of France at 1:45 p.m. Peter Orszag, a former White House budget director and current Citigroup executive, is on Bloomberg TV at 8:10 a.m. Bart Chilton of the Commodity Futures Trading Commission is on CNBC at 8:30 a.m. The analyst Meredith Whitney is on CNBC at 4:10 p.m.

A BLANKFEIN WEDDING  |  Lloyd C. Blankfein, the chief executive of Goldman Sachs, has gained a daughter-in-law. Mr. Blankfein’s son, Alexander, 27, was married on Saturday at the Vizcaya Museum and Gardens in Miami, in an outdoor ceremony beneath a huppah and a canopy of trees. The bride, Cristina Mercedes Ros, 26, is a founder of Circle of Women, a group in Cambridge, Mass., that promotes women’s education. The couple met at Harvard, where they are both pursuing M.B.A. degrees, according to an item in The New York Times. Rabbi! Judy Kem! pler officiated the ceremony. The groom is to become a consultant at Bain & Company in September, according to The Times.

Among the guests at the wedding was Joshua Kushner, founder of the venture capital firm Thrive Capital. Mr. Kushner, son of the real estate developer Charles Kushner and brother of Jared Kushner, owner of The New York Observer, was Mr. Blankfein’s roommate when they were undergraduates at Harvard.

Mergers & Acquisitions »

Diller Takes on Cable TV  |  Barry Diller, the chairman of IAC/InterActiveCorp, is backing Aereo, a start-up that challenges the television business by streaming broadcast signals over the Internet. “In this environment, your friends really are your enemies. Anything you’re going to do more than ikely disrupts somebody’s business,” Mr. Diller told David Carr of The New York Times. NEW YORK TIMES

Dropbox Buys an E-Mail App  |  Dropbox is buying the maker of the e-mail app Mailbox, in a move to expand beyond file-sharing and storage. The terms were not disclosed. WALL STREET JOURNAL

AT&T Hints That It May Sell Assets  | 
WALL STREET JOURN! AL

In Sweden, Cinema Chains Agree to Merge  |  The combination of Finnkino and SF Bio would have an enterprise value of about $468.85 million, according to Reuters. REUTERS

INVESTMENT BANKING »

HSBC Said to Plan Thousands of Job Cuts  |  The Financial Times reports: “HSBC is gearing up for thousands more job cuts, with Europe’s biggest bank by market value set to outline the next stage in its strategic overhaul at an investor day in two months’ time.” FINANCIAL TIMES

JPMorgan Fund Raises $5 Billion for Corporate Debt  |  Highbridge Capital Management, a hedge fund operator owned by JPMorgan Chase, raised a $5 billion fund to invest in certain types of corporate credit, Reuters reports. REUTERS

Erin Callan: ‘I Leaned In Far’  |  In an interview on “Rock Center With Brian Williams,” Erin Callan, former chief financial officer of Lehman Brothers, discusses issues facing women in the workplace. DealBook »

China Commits $2 Billion to Latin American Investment Fund  | 
REUTERS

PRIVATE EQUITY »

AXA Private Equity Raises $2.3 Billion Fund  |  The private equity arm of AXA, the French insurer, raised a fund to invest in European infrastructure, Reuters reports. REUTERS

Former Goldman Parner Opens Private Equity Firm in Europe  | 
FINANCIAL NEWS

HEDGE FUNDS »

Pershing Square Investors Want Details on J.C. Penney  |  Officials at two state pension funds that are invested in William A. Ackman’s hedge fund, Pershing Square Capital Management, told Reuters that they planned to ask Mr. Ackman for more information about the long-term plan to turn around the ailing retailer J.C. Penney. REUTERS

A Cautionary Tale! at J.C. ! Penney  |  James Surowiecki of The New Yorker writes that Ron Johnson, the chief executive of J.C. Penney, is demonstrating the wisdom of an observation by Warren E. Buffett: “When a manager with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.” NEW YORKER

Paulson Not Planning a Move to Puerto Rico  |  After reports that he had looked at real estate in Puerto Rico for its tax advantages, John A. Paulson issued a statement saying he had no plans to relocate to the island. DealBook »

I.P.O./OFFERINGS »

Moleskine to Woo Investors Before I.P.O.  |  The notebook maker Moleskine is about to embark on its roadshow before an offering in Milan that could value it at up to $732.5 million, Dow Jones reports. DOW JONES

Empire State Building Moves Closer to I.P.O.  |  According to a letter sent to investors on Friday, “the owner of New York’s Empire State Building has secured nearly three-quarters of the votes it needs to proceed” with a controversial I.P.O., The Financial Times reports. FINANCIAL TIMES

VENTURE CAPITAL »

Square’s Dorsey Has Political Ambitions  |  Jack Dorsey, the entrepreneur behind Twitter and Square, has dreams of becoming New York City mayor, he told “60 Minutes.” CBS NEWS

Tech Investors Back Start-Ups to Curb Gun Violence  |  These investors are betting that “smart guns” and other technologies to prevent gun violence will be big business in the future, Reuters reports. REUTERS

LEGAL/REGULATORY »

Central Banks Urge Overhaul of Libor  |  The London interbank offered rate should be replaced by a set of rates based on actual transactions, a group of central bankers said on Monday, Reuters reports. REUTERS

To Reassure Investors, Fed Expected to Continue Stimulus  |  “When the Fed’s policy-making committee meets on Tuesday and Wednesday, its members are likely to spend a lot of time talking about the potential costs of the current stimulus campaign. Then the Fed’s chairman, B! en S. Ber! nanke, will probably seek to reassure investors that the Fed plans to press on,” Binyamin Appelbaum writes in The New York Times. NEW YORK TIMES

Attorneys General Press White House to Fire Housing Regulator  |  A group of state attorneys general is arguing that the policies overseen by Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, are impeding the economic recovery, The New York Times reports. NEW YORK TIMES

S.E.C. Files Fewer Fraud Cases as Crisis Fades  | 
WALL STREET JOURNAL

SAC LOOKS ON THE BRIGHT SIDE  |  The $616 million fine against SAC Capital Advisors that was announced on Friday by the Securities and Exchange Commission would be enough to cripple some hedge funds. But SAC saw the positive in the penalty, which settles two insider trading lawsuits brought by the government, DealBook’s Peter Lattman writes. The $15 billion hedge fund said in a statement that the settlements were “a substantial step toward resolving all outstanding regulatory matters.”

Some investors also cheered the development, as it removed the fund’s exposure to litigation against two former employees. The Blackstone Group, whose $550 million investment makes it SAC’s largest outside client, views the settlements favorably, Mr. Lattman reports. But it is still too early t say what Blackstone will decide to do come the mid-May deadline to ask for its money back, a person familiar with Blackstone’s thinking said.

Rival hedge fund managers and securities lawyers criticized the settlements of $602 million and $14 million as too weak, even though the S.E.C. called the larger penalty the biggest settlement ever of an insider trading case. “While $616 million would normally be a massive penalty, for Cohen this is basically a drop in the bucket,” said Bradley D. Simon, a criminal defense lawyer and former federal prosecutor in New York. “There is also no debarment or admission of wrongdoing.”

DIMON’S CLOUT IS QUESTIONED  |  The Senate hearing on Friday over JPMorgan Chase’s huge trading loss shines an uncomfortable spotlight on Jamie Dimon, the bank’s influenti! al chief executive. Though Mr. Dimon was not present while his top lieutenants were being questioned, the hearing and the Senate panel’s report could create fresh challenges for an executive long considered an expert manager of risk, Ben Protess and Jessica Silver-Greenberg report in DealBook.

Some investors and even members of the bank’s board are becoming frustrated with Mr. Dimon’s “off-putting arrogance,” as one shareholder put it. Mr. Dimon is not likely to face a serious threat to his power. Still, two board members are concerned about the repercussions of Mr. Dimon’s comments last April that dismissed the disastrous trades as a “tempest in a teapot,” people briefed on the board’s thinking said. “The concern is that those statements â€" made months after Mr. Dimon learned the trades had breached the firm’s internal alarm system hundreds of times, accordig to the Senate report â€" could put the bank in a precarious situation with regulators investigating the trades,” DealBook writes.

“And government officials who would speak only anonymously say that Mr. Dimon, faulted in the Senate report for strong-arming regulators, is also losing sway with some authorities in Washington.”

STOCKS FALL ON CYPRUS BAILOUT  |  Shares of big banks fell on Monday after the announcement this weekend that bank depositors in Cyprus would be required to share the cost of a European bailout. HSBC fell more than 2 percent in Hong Kong trading, and Standard Chartered was down about 2 percent in trading in London.

The scene in Cyprus was chaotic. “The euro fell sharply against major currencies ahead of the action, as investors aro! und the w! orld absorbed the implications of Europe’s move,” Liz Alderman and Landon Thomas Jr. write in The New York Times.

European Union leaders are proposing a 6.75 percent tax on deposits of up to 100,000 euros to help pay for the bailout. Nicos Anastasiades, the Cypriot president, who said he was trying to persuade the leaders to modify those demands, described in apocalyptic detail what might happen if Cyprus did not approve the rescue: a “complete collapse of the banking sector,” major losses for businesses and depositors and a possible exit for Cyprus from the euro zone.

ON THE AGENDA  |  Chancellor Angela Merkel of Germany holds a press briefing in Berlin with President François Hollande of France at 1:45 p.m. Peter Orszag, a former White House budget director and current Citigroup executive, is on Bloomberg TV at 8:10 a.m. Bart Chilton of the Commodity Futures Trading Commission is on CNBC at 8:30 a.m. The analyst Meredith Whitney is on CNBC at 4:10 p.m.

A BLANKFEIN WEDDING  |  Lloyd C. Blankfein, the chief executive of Goldman Sachs, has gained a daughter-in-law. Mr. Blankfein’s son, Alexander, 27, was married on Saturday at the Vizcaya Museum and Gardens in Miami, in an outdoor ceremony beneath a huppah and a canopy of trees. The bride, Cristina Mercedes Ros, 26, is a founder of Circle of Women, a group in Cambridge, Mass., that promotes women’s education. The couple met at Harvard, where they are both pursuing M.B.A. degrees, according to an item in The New York Times. Rabbi! Judy Kem! pler officiated the ceremony. The groom is to become a consultant at Bain & Company in September, according to The Times.

Among the guests at the wedding was Joshua Kushner, founder of the venture capital firm Thrive Capital. Mr. Kushner, son of the real estate developer Charles Kushner and brother of Jared Kushner, owner of The New York Observer, was Mr. Blankfein’s roommate when they were undergraduates at Harvard.

Mergers & Acquisitions »

Diller Takes on Cable TV  |  Barry Diller, the chairman of IAC/InterActiveCorp, is backing Aereo, a start-up that challenges the television business by streaming broadcast signals over the Internet. “In this environment, your friends really are your enemies. Anything you’re going to do more than ikely disrupts somebody’s business,” Mr. Diller told David Carr of The New York Times. NEW YORK TIMES

Dropbox Buys an E-Mail App  |  Dropbox is buying the maker of the e-mail app Mailbox, in a move to expand beyond file-sharing and storage. The terms were not disclosed. WALL STREET JOURNAL

AT&T Hints That It May Sell Assets  | 
WALL STREET JOURN! AL

In Sweden, Cinema Chains Agree to Merge  |  The combination of Finnkino and SF Bio would have an enterprise value of about $468.85 million, according to Reuters. REUTERS

INVESTMENT BANKING »

HSBC Said to Plan Thousands of Job Cuts  |  The Financial Times reports: “HSBC is gearing up for thousands more job cuts, with Europe’s biggest bank by market value set to outline the next stage in its strategic overhaul at an investor day in two months’ time.” FINANCIAL TIMES

JPMorgan Fund Raises $5 Billion for Corporate Debt  |  Highbridge Capital Management, a hedge fund operator owned by JPMorgan Chase, raised a $5 billion fund to invest in certain types of corporate credit, Reuters reports. REUTERS

Erin Callan: ‘I Leaned In Far’  |  In an interview on “Rock Center With Brian Williams,” Erin Callan, former chief financial officer of Lehman Brothers, discusses issues facing women in the workplace. DealBook »

China Commits $2 Billion to Latin American Investment Fund  | 
REUTERS

PRIVATE EQUITY »

AXA Private Equity Raises $2.3 Billion Fund  |  The private equity arm of AXA, the French insurer, raised a fund to invest in European infrastructure, Reuters reports. REUTERS

Former Goldman Parner Opens Private Equity Firm in Europe  | 
FINANCIAL NEWS

HEDGE FUNDS »

Pershing Square Investors Want Details on J.C. Penney  |  Officials at two state pension funds that are invested in William A. Ackman’s hedge fund, Pershing Square Capital Management, told Reuters that they planned to ask Mr. Ackman for more information about the long-term plan to turn around the ailing retailer J.C. Penney. REUTERS

A Cautionary Tale! at J.C. ! Penney  |  James Surowiecki of The New Yorker writes that Ron Johnson, the chief executive of J.C. Penney, is demonstrating the wisdom of an observation by Warren E. Buffett: “When a manager with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.” NEW YORKER

Paulson Not Planning a Move to Puerto Rico  |  After reports that he had looked at real estate in Puerto Rico for its tax advantages, John A. Paulson issued a statement saying he had no plans to relocate to the island. DealBook »

I.P.O./OFFERINGS »

Moleskine to Woo Investors Before I.P.O.  |  The notebook maker Moleskine is about to embark on its roadshow before an offering in Milan that could value it at up to $732.5 million, Dow Jones reports. DOW JONES

Empire State Building Moves Closer to I.P.O.  |  According to a letter sent to investors on Friday, “the owner of New York’s Empire State Building has secured nearly three-quarters of the votes it needs to proceed” with a controversial I.P.O., The Financial Times reports. FINANCIAL TIMES

VENTURE CAPITAL »

Square’s Dorsey Has Political Ambitions  |  Jack Dorsey, the entrepreneur behind Twitter and Square, has dreams of becoming New York City mayor, he told “60 Minutes.” CBS NEWS

Tech Investors Back Start-Ups to Curb Gun Violence  |  These investors are betting that “smart guns” and other technologies to prevent gun violence will be big business in the future, Reuters reports. REUTERS

LEGAL/REGULATORY »

Central Banks Urge Overhaul of Libor  |  The London interbank offered rate should be replaced by a set of rates based on actual transactions, a group of central bankers said on Monday, Reuters reports. REUTERS

To Reassure Investors, Fed Expected to Continue Stimulus  |  “When the Fed’s policy-making committee meets on Tuesday and Wednesday, its members are likely to spend a lot of time talking about the potential costs of the current stimulus campaign. Then the Fed’s chairman, B! en S. Ber! nanke, will probably seek to reassure investors that the Fed plans to press on,” Binyamin Appelbaum writes in The New York Times. NEW YORK TIMES

Attorneys General Press White House to Fire Housing Regulator  |  A group of state attorneys general is arguing that the policies overseen by Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, are impeding the economic recovery, The New York Times reports. NEW YORK TIMES

S.E.C. Files Fewer Fraud Cases as Crisis Fades  | 
WALL STREET JOURNAL

Senate Report on JPMorgan Loss May Provide Fresh Evidence

The Senate report and hearing on JPMorgan Chase’s multibillion-dollar trading loss provides a portrait of a bank that went right to the edge of acceptable practices, and may have even stepped over the line. The questions now are what type of enforcement action the bank could face, and whether any individuals will be ensnared by the case.

The bar for any criminal case will be high. The report shows JPMorgan employees playing fast and loose with the rules for valuing securities and making proper disclosures, but bringing a criminal case against any individuals would be difficult because of the standard of proof required in prosecutions. Nor is this the type of misconduct that would normally lead to criminal charges against the bank because - at least if the “too big to jail” approach persists - the harm was largely self-inflicted.

he Securities and Exchange Commission may have a better chance in its efforts. There are two probable strands the S.E.C. can pursue: the improper valuation of derivatives that led JPMorgan to underreport growing losses, and statements made by senior managers in April 2012 reassuring investors that the portfolio presented no significant risks.

The report, released last week by the Senate’s Permanent Subcommittee on Investigations, highlights how JPMorgan shifted to a flawed risk model that permitted the derivatives portfolio managed by its chief investment office to increase substantially. Its traders also changed how they valued the securities to keep the losses from growing too large, helping to mask the problems even further, according to the report.

Ther! e is even the closest thing we will see to a smoking gun in this type of case: a trader maintained a spreadsheet for a few days to track losses using the more common valuation method. Yet the chief investment office reported a lower figure to senior management based on more favorable prices, effectively hiding the growing danger from its derivatives bets, the report found.

E-mails and recorded conversations will, as usual, provide the crucial evidence to show that some inside JPMorgan were aware that its losses were growing yet failed to disclose that information in a timely manner to the public or the bank’s chief regulator, the Office of the Comptroller of the Currency. When the bank restated its fiancial statement a few months later, it effectively conceded that its valuations had been off.

What is interesting about the e-mails and recordings is the absence of the kinds of hyperbolic statements seen in other cases that can be used to embarrass a company. There are no parodies of song lyrics or boastful claims about misconduct. But that may be traceable more to the situation JPMorgan faced as panic seemed to grip the chief investment office, giving the communications more of a funereal tone.

The lack of incendiary evidence does not diminish the fact that the bank is likely to face civil charges over the valuation of the derivatives or timely reports about its growing problems. Securities laws require a company to maintain accurate records and report them properly, which does not seem to have been the case with the bad bet.

The S.E.C. could pursue cases against individuals for their role in valuing the investments. Traders in the chief investment office could be charged bec! ause they! were required to record accurate information. If so, the S.E.C. may scrutinize the actions of the group’s former head, Ina R. Drew, who was in regular communication with the traders.

The S.E.C. is also likely to look at statements last April by the chief executive, Jamie Dimon, and a former chief financial officer, Douglas L. Braunstein, playing down problems in the derivatives portfolio. While Mr. Dimon’s now-famous dismissal of concerns as a “tempest in a teapot” garnered the headlines, Mr. Braunstein made much more detailed statements that could have violated disclosure rules.

Senator Carl Levin, chairman of the Senate subcommittee, pressed Mr. Braunstein at the hearing over a statement about his “comfort” with the investments and that “all of those positions are fully transparent to the regulators.” Mr. Braunstein eventually conceded that the government received only summary information from the bank, not a detailed report on the portfolio, although he maintained his statement was accurate based on the information at the time.

To make matters worse, in August 2011 JPMorgan temporarily suspended providing daily information to the Office of the Comptroller of the Currency, its primary regulator, about its investment bank because of concerns about security breaches. Regardless of the reason, it certainly was a questionable decision, and it made Mr. Braunstein’s statement about transparency with regulators look even less defensible.

But proving a violation of the disclosure rules, or that the comptroller’s of! fice was ! misled, is not necessarily a slam dunk despite the language of the Senate subcommittee report. How much information a bank is required to disclose to its regulator is not always clear, so a phrase like “fully transparent” is subject to differing interpretations. And JPMorgan can always try to fall back on the excuse offered by anyone caught not disclosing bad news - “you never asked for it.”

The S.E.C. has taken a harder line recently on the failure to adequately disclose risks to investors. For example, it recently settled a case with Illinois over misleading disclosure about how it was funding its pension obligations.

It took JPMorgan a month to disavow its earlier statements and reveal the losses from its derivatives trading. Although the prior statement did not contain any blatantly false information, the S.E.C. could pursue a case for giving misleading statements that did not adequately inform investors of the potential loses the bank faced.

Mr. Braunstein may also face a charge for violating the securities laws for his statement. A chief financial officer is usually held to a higher standard for disclosures to investors because of the importance of that position for providing investors with details about a company’s accounting and the risks it faces.

If charges are filed, this is not the type of case JPMorgan would want to litigate because of the potential that even more embarrassing information might come out. So a settlement with the S.E.C. is likely.

An interesting question would be how the payment of any monetary penalty would be handled. In the S.E.C.’s settlement with Bank of America over inadequate disclosure in soliciting proxies to approve its acquisition of Merrill Lynch, Judge Jed S. Rakoff of Federal District Court in Manhattan objected to a penalty that effectively required shareholders to bear the costs when they were the victims.

It would be a similar situation if JPMorgan were required to pay a fine for making misleading statements to its own investors. If it hopes to gain approval from the court, the S.E.C. may need to structure any settlement so the shareholders are its beneficiaries, not the ones responsible for paying all of the costs.

Royal Bank of Canada Hires Co-Heads of U.S. Technology Banking

The Royal Bank of Canada said on Monday that it had hired Michal Katz and Michael Carter as co-heads of its United States technology investment banking group. The bank also hired Erik-Jaap Molenaar as a managing director in technology mergers and acquisitions. All three come from Barclays, and had previously worked at Lehman Brothers.

A Blankfein Wedding

Lloyd C. Blankfein, the chief executive of Goldman Sachs, has gained a daughter-in-law.

Mr. Blankfein’s oldest son, Alexander, 27, was married on Saturday at the Vizcaya Museum and Gardens in Miami, in an outdoor ceremony beneath a huppah and a canopy of trees. The bride, Cristina Mercedes Ros, 26, is a founder of Circle of Women, a group in Cambridge, Mass., that promotes women’s education.

The couple met at Harvard, where they are both pursuing M.B.A. degrees, according to an item in The New York Times on Sunday. Rabbi Judy Kempler officiaed the ceremony.

The groom, who has worked previously at Goldman Sachs, is to become a consultant at Bain & Company in September, according to The Times. The bride shares an interest in education with her mother-in-law, Laura Jacobs Blankfein, who is a leader for after-school and Saturday programs at the Association to Benefit Children in East Harlem.

Among the guests was Joshua Kushner, founder of the venture capital firm Thrive Capital. Mr. Kushner, son of the real estate developer Charles B. Kushner and brother of Jared Kushner, owner of The New York Observer, was Mr. Blankfein’s roommate when they were undergraduates at Harvard.

The elder Mr. Blankfein gave a well-received speech, according to a person who was there. A photograph surfaced that appears to show the Goldman chief on the dance floor.

The bride and groom danced under a tent, while photographers snapped pictures. At one point, standing in front of a stage, the couple read prepared remarks.

Guests spent time at the Four Seasons, taking advantage of the hotel’s pool.

The event was documented with Instagram pictures. DealBook readers, can you identify the designer of the dress that the bride wore

[View the story " A Goldman Wedding" on Storify]

Cyprus Bailout Puts New Pressure on Europe’s Banks

12:14 p.m. | Updated

LONDON - Just as pressure was easing on Europe’s financial sector, the situation in Cyprus has once again created chaos.

After a proposed levy on retail deposits in Cyprus, shares in many of Europe’s largest financial institutions tumbled on Monday. Shares of Barclays fell 4.9 percent, while shares in Deutsche Bank were down 3.3 percent.

Shares in American banks were also largely down, though not by as much. The most affected were the stocks of Citigroup and Morgan Stanley, which were down 2 percent and 2.9 percent, respectively.

Investors are worried that other banks, especially those in highly indebtedcountries like Italy and Spain, could face further troubles.

In a rare move, Cyprus is trying to raise around 5.8 billion euros ($7.5 billion) from a one-time bank charge on local deposits. Unlike in other European countries, local banks only have a small amount of outstanding bonds, which have their own set of legal complications. So the Cypriot government was unable to require the banks’ creditors to take major losses to finance the bailout.

“Authorities have taken a calculated risk. If the problem escalates, the entire euro zone banking system could implode,” said Cormac Leech, a banking analyst at Liberum Capital, in London. The deposit levy “shows that it’s O.K. to break the rules. Politicians are betting that they won’t have to do this again.”

In other struggling countries, bondholders would likely be the first to feel the pain.

Analysts warned that investors in Southern European banks, which already have received bailouts from local governments, could fac! e more losses if additional funds were required to support them. Bondholders in Northern European banks could also take a hit if governments require them to bear the brunt of any future write-downs.

Fearing similar moves to those in Cyprus, local depositors in countries like Spain and Italy may look to shift their money to banks in stronger European economies. Such moves would reduce those institutions’ much-needed retail deposits at a time when banks across the Continent are being required to raise their capital reserves in case of future financial shocks.

“The Cyprus bailout highlights the continued weak links in the system,” Huw van Steenis, a banking analyst at Morgan Stanley, told investors in a research note on Monday. “The pressure on many European banks, particularly the mid-cap peripherals, is intense.”

The resurgent fears bout European banks come after significant efforts taken by authorities to calm investor anxieties.

Last year, Mario Draghi, president of the European Central Bank, said he would do whatever it took to preserve the euro, including the purchase of European government bonds to help bring down local borrowing costs. The central bank also unveiled more than $1.5 trillion of short-term loans to the Continent’s banks in late 2011 and early 2012 after many firms were unable to raise money in the capital markets as banks feared that competitors would not be able to repay the loans.

In response, European banks have continued to sh! ed assets! , increase capital reserves and cut costs in an attempt to improve profitability. The efforts to strengthen Europe’s financial sector had been paying off. Many of the largest banks had raised billions of dollars from new bond issuances, while the local equity markets also had reopened to capital-raising efforts and initial public offerings.

Royal Bank of Scotland, which is 81 percent owned by the British government after receiving a bailout during the financial crisis, said last month that it planned to sell a stake in its American unit Citizens, as part of plans to raise new funds. A number of European I.P.O.’s, including from LEG Immobilien, a German real estate company owned by the Goldman Sachs investment fund Whitehall, also had raised investor hopes that the worst of the debt crisis was over.

But the proposed levy on retail deposits in Cyprus has rekindled uncertainty over the financial services sector. “This is certainly new territory,” said Pete Hahn, a banking professor at Cass Business School in London. “What is confronting Cyprus is a unique situation, but the idea could be applied in other places in Europe.”

Analysts say bank bondholders could be particularly hard hit if other European countries take unilateral steps to repay bailout funds, or take over local firms that have run into trouble.

Last month, the Netherlands wiped out holders of subordinated bonds in the Dutch bank SNS Reaal after the local government nationalized the firm, which had faced major capital losses because of defaulting real estate investments. The Irish government also recently announced that it would liquidate the former Anglo ! Irish Ban! k in a deal that required the firm’s bondholders to take major losses.

For banks in Southern European countries, the proposed levy in Cyprus could also prompt consumers to move their money to more secure firms in countries like Germany or France.

Analysts said the move was more likely as the policy in Cyprus represented a major about-face for the local government, which had repeatedly told citizens that it would not impose the one-time tax. With other European countries on shaky ground, many questioned whether it was just a matter of time before other governments imposed comparable levies in a bid to repay bailouts from the European Union.

“One can’t help thinking that this move has crossed a sacred line,” Deutsche Bank analysts said on Monday. “Depositors in any bank domiciled in a country relant on the largess of the E.U. should in theory now think very carefully about alternative places to store money, whatever the size of their holdings.”

Senate Report on JPMorgan Loss May Provide Fresh Evidence

The Senate report and hearing on JPMorgan Chase’s multibillion-dollar trading loss provides a portrait of a bank that went right to the edge of acceptable practices, and may have even stepped over the line. The questions now are what type of enforcement action the bank could face, and whether any individuals will be ensnared by the case.

The bar for any criminal case will be high. The report shows JPMorgan employees playing fast and loose with the rules for valuing securities and making proper disclosures, but bringing a criminal case against any individuals would be difficult because of the standard of proof required in prosecutions. Nor is this the type of misconduct that would normally lead to criminal charges against the bank because - at least if the “too big to jail” approach persists - the harm was largely self-inflicted.

he Securities and Exchange Commission may have a better chance in its efforts. There are two probable strands the S.E.C. can pursue: the improper valuation of derivatives that led JPMorgan to underreport growing losses, and statements made by senior managers in April 2012 reassuring investors that the portfolio presented no significant risks.

The report, released last week by the Senate’s Permanent Subcommittee on Investigations, highlights how JPMorgan shifted to a flawed risk model that permitted the derivatives portfolio managed by its chief investment office to increase substantially. Its traders also changed how they valued the securities to keep the losses from growing too large, helping to mask the problems even further, according to the report.

Ther! e is even the closest thing we will see to a smoking gun in this type of case: a trader maintained a spreadsheet for a few days to track losses using the more common valuation method. Yet the chief investment office reported a lower figure to senior management based on more favorable prices, effectively hiding the growing danger from its derivatives bets, the report found.

E-mails and recorded conversations will, as usual, provide the crucial evidence to show that some inside JPMorgan were aware that its losses were growing yet failed to disclose that information in a timely manner to the public or the bank’s chief regulator, the Office of the Comptroller of the Currency. When the bank restated its fiancial statement a few months later, it effectively conceded that its valuations had been off.

What is interesting about the e-mails and recordings is the absence of the kinds of hyperbolic statements seen in other cases that can be used to embarrass a company. There are no parodies of song lyrics or boastful claims about misconduct. But that may be traceable more to the situation JPMorgan faced as panic seemed to grip the chief investment office, giving the communications more of a funereal tone.

The lack of incendiary evidence does not diminish the fact that the bank is likely to face civil charges over the valuation of the derivatives or timely reports about its growing problems. Securities laws require a company to maintain accurate records and report them properly, which does not seem to have been the case with the bad bet.

The S.E.C. could pursue cases against individuals for their role in valuing the investments. Traders in the chief investment office could be charged bec! ause they! were required to record accurate information. If so, the S.E.C. may scrutinize the actions of the group’s former head, Ina R. Drew, who was in regular communication with the traders.

The S.E.C. is also likely to look at statements last April by the chief executive, Jamie Dimon, and a former chief financial officer, Douglas L. Braunstein, playing down problems in the derivatives portfolio. While Mr. Dimon’s now-famous dismissal of concerns as a “tempest in a teapot” garnered the headlines, Mr. Braunstein made much more detailed statements that could have violated disclosure rules.

Senator Carl Levin, chairman of the Senate subcommittee, pressed Mr. Braunstein at the hearing over a statement about his “comfort” with the investments and that “all of those positions are fully transparent to the regulators.” Mr. Braunstein eventually conceded that the government received only summary information from the bank, not a detailed report on the portfolio, although he maintained his statement was accurate based on the information at the time.

To make matters worse, in August 2011 JPMorgan temporarily suspended providing daily information to the Office of the Comptroller of the Currency, its primary regulator, about its investment bank because of concerns about security breaches. Regardless of the reason, it certainly was a questionable decision, and it made Mr. Braunstein’s statement about transparency with regulators look even less defensible.

But proving a violation of the disclosure rules, or that the comptroller’s of! fice was ! misled, is not necessarily a slam dunk despite the language of the Senate subcommittee report. How much information a bank is required to disclose to its regulator is not always clear, so a phrase like “fully transparent” is subject to differing interpretations. And JPMorgan can always try to fall back on the excuse offered by anyone caught not disclosing bad news - “you never asked for it.”

The S.E.C. has taken a harder line recently on the failure to adequately disclose risks to investors. For example, it recently settled a case with Illinois over misleading disclosure about how it was funding its pension obligations.

It took JPMorgan a month to disavow its earlier statements and reveal the losses from its derivatives trading. Although the prior statement did not contain any blatantly false information, the S.E.C. could pursue a case for giving misleading statements that did not adequately inform investors of the potential loses the bank faced.

Mr. Braunstein may also face a charge for violating the securities laws for his statement. A chief financial officer is usually held to a higher standard for disclosures to investors because of the importance of that position for providing investors with details about a company’s accounting and the risks it faces.

If charges are filed, this is not the type of case JPMorgan would want to litigate because of the potential that even more embarrassing information might come out. So a settlement with the S.E.C. is likely.

An interesting question would be how the payment of any monetary penalty would be handled. In the S.E.C.’s settlement with Bank of America over inadequate disclosure in soliciting proxies to approve its acquisition of Merrill Lynch, Judge Jed S. Rakoff of Federal District Court in Manhattan objected to a penalty that effectively required shareholders to bear the costs when they were the victims.

It would be a similar situation if JPMorgan were required to pay a fine for making misleading statements to its own investors. If it hopes to gain approval from the court, the S.E.C. may need to structure any settlement so the shareholders are its beneficiaries, not the ones responsible for paying all of the costs.

Royal Bank of Canada Hires Co-Heads of U.S. Technology Banking

The Royal Bank of Canada said on Monday that it had hired Michal Katz and Michael Carter as co-heads of its United States technology investment banking group. The bank also hired Erik-Jaap Molenaar as a managing director in technology mergers and acquisitions. All three come from Barclays, and had previously worked at Lehman Brothers.

A Blankfein Wedding

Lloyd C. Blankfein, the chief executive of Goldman Sachs, has gained a daughter-in-law.

Mr. Blankfein’s oldest son, Alexander, 27, was married on Saturday at the Vizcaya Museum and Gardens in Miami, in an outdoor ceremony beneath a huppah and a canopy of trees. The bride, Cristina Mercedes Ros, 26, is a founder of Circle of Women, a group in Cambridge, Mass., that promotes women’s education.

The couple met at Harvard, where they are both pursuing M.B.A. degrees, according to an item in The New York Times on Sunday. Rabbi Judy Kempler officiaed the ceremony.

The groom, who has worked previously at Goldman Sachs, is to become a consultant at Bain & Company in September, according to The Times. The bride shares an interest in education with her mother-in-law, Laura Jacobs Blankfein, who is a leader for after-school and Saturday programs at the Association to Benefit Children in East Harlem.

Among the guests was Joshua Kushner, founder of the venture capital firm Thrive Capital. Mr. Kushner, son of the real estate developer Charles B. Kushner and brother of Jared Kushner, owner of The New York Observer, was Mr. Blankfein’s roommate when they were undergraduates at Harvard.

The elder Mr. Blankfein gave a well-received speech, according to a person who was there. A photograph surfaced that appears to show the Goldman chief on the dance floor.

The bride and groom danced under a tent, while photographers snapped pictures. At one point, standing in front of a stage, the couple read prepared remarks.

Guests spent time at the Four Seasons, taking advantage of the hotel’s pool.

The event was documented with Instagram pictures. DealBook readers, can you identify the designer of the dress that the bride wore

[View the story " A Goldman Wedding" on Storify]

Lawyer for French Rogue Trader Is Found Dead

French lawyer Olivier Metzner's body was found floating near his private island in Brittany. A suicide was reportedly found at his house. Photograph: NIVIERE/SIPA/Rex Features

One of the giants of the French legal system was found dead near his private island in Brittany on Sunday morning. A suicide note was discovered at his home nearby.

Olivier Metzner, 63, nicknamed the "gangsters' lawyer", was a larger-than-life figure known for his spirited defence of high-profile and controversial defendants including the Panamanian former dictator Manuel Noriega, the "rogue trader" Jérôme Kerviel and Continental Airlines, accused of causing the catastrophic Concorde crash in 2000.

In recent years, he had argued for the former prime minister Dominique de Villepin in the Clearstream scandal, represented rock star Bertrand Cantat when he as accused of killing his actor girlfriend, and argued the case of Françoise Bettencourt-Meyers who tried to have her ailing mother, the the L'Oréal heiress Liliane Bettencourt, declared a ward of court.

Named France's most powerful lawyer by GQ magazine last year, Metzner was often to be seen standing at the top of the Palais de Justice's monumental steps, puffing away on his trademark cigar. Occasionally, he would ignore the no-smoking signs and light up inside, confident that no court official or police officer would dare challenge him.

Outside the courts, where he would pick holes in legal procedure to get his clients off the hook, often in the most blunt of terms and so successfully that Libération described him as the "criminal fraternity's specialist", Metzner was a discreet figure.

Born in 1949 to dairy farmers in Normandy, whose ancestors had fled Prussia i! n the late 19th century, Metzner described himself as the product of a modest but "rigorous Normand and Protestant education". All three Metzner children escaped the countryside; his brother became a scientist and his sister a teacher in Canada.

He chose law after devouring the works of Kafka and reading a story in his local paper about a shepherd who had been sentenced to death.

"He was from the mountains and incapable of explaining his defence in any understandable language. It made me want to be an interpreter for those who had difficult expressing themselves in front of the court and at the same time explain the justice system to them, because the incomprehension goes both ways," he once said.

After studying in Caen, he headed for Paris, saying two decades in the "damp countryside" was long enough, and a career that was rewarding in every sense. Decades after his first case, in which he successfully defended a thief, he admitted his hourly fee had risen to €450 (£390). His last case last month, was defending the Swiss petrol group Vitol, accused of breaking the United Nations "food for oil" embargo in Saddam Hussein's Iraq.

Metzner never married and described himself as "leftwing at heart".

In 2010 he bought Boëdic Island in the Morbihan Gulf in Brittany, which he described as a "magnificent, remarkable place". But at the end of last year he announced his intention to sell it, saying he had "more interesting plans". "I am a man of projects," he told AFP in November.

His body was found at about 10am on Sunday floating near the island.

The Surfers Versus Khosla

A prominent Silicon Valley venture capitalist has stepped into the middle of a long-standing controversy over a California tradition: open access to the state’s famed beaches.

In a lawsuit filed this week, the Surfrider Foundation, a coastal protection group, alleges that the owner of a beachfront property south of San Francisco has violated the law by closing an access road that has long been used by local surfers and fisherman to reach a spit of sand called Martin’s Beach.

“It’s the most beautiful beach in San Mateo County,” said Mark Massara, a lawyer for Surfrider. Massara says he surfs often at the beach and believes the law provides for access to everyone.

While documents list the owner of the property as Martin’s Beach LLC, a person familiar with the matter says the owner is Vinod Khosla, a co-founder of Sun Microsystems and a prominent venture capitalist known for investing in clean-energy technology.

In California, unlike in most other states, all beaches are open to the public under the constitution. But private landowners are not always required to allow access to the coastline across their property, and many disputes have arisen over the years - often involving wealthy beachfront homeowners.

In the case of the Martin’s Beach property, the previous owner had long allowed locals to access the beach for a fee. But the new owner, who bought the property in 2008 and soon after installed gates on the access road and hired guards to keep people out - infuriating locals, who staged a protest at the property on Thursday.

Lawyers for Surfrider say California’s Coastal Act calls for permits around activities that change the use or intensity of use at a beach - permits Martin’s Beach LLC failed to acquire before installing the gates.

Joan Gallo, a lawyer for Martin’s Beach LLC, did not respond to phone messages. A spokeswoman for Khosla did not respond to requests for comment.

HEIRESSES, EXECUTIVES AND MOGULS

The dispute echoes record mogul David Geffen’s long battle to prevent use of a walkway near his Malibu home. In 1983, Geffen agreed to allow a pathway to Carbon Beach when he sought permits for a pool and other additions, but he later filed suit to fight the access. In 2005, Geffen settled the suit and allowed the public walkway.

More recently, heiress Lisette Ackerberg has been fighting an easement on her Carbon Beach property, where she has built a tennis court and a generator that block the easement. She is appealing a 2011 order from a California Superior Court judge that require her to clear the right of way.

The tiff also evokes some other neighborly disputes in recent years involving wealthy technology executives including late Apple co-founder Steve Jobs, Lotus founder Mitch Kapor, Lucasfilm founder George Lucas and Oracle founder Larry Ellison.

Jobs fought a bitter battle with neighbors in Woodside, California, over a 1920s-era house he owned but wanted to tear down and replace with something more sleek. He twice won demolition permits that were contested by preservationists; the wrecking ball finally came to the house in 2011, months before his death. The property is now vacant.

Also that year, Ellison settled a case he had filed against his neighbors over trees he said blocked the bay views from his house in San Francisco’s Pacific Heights neighborhood.

Last year, special-effects pioneer Lucas, the creator of “Star Wars,” got so fed up with his development-fighting neighbors in Marin County, California, that he scrapped plans to expand his Skywalker Ranch and said he would instead sell it to a developer to build low-income housing.

And this year, the California Supreme Court is reviewing a case that pits software mogul Kapor against his neighbors in the hills of Berkeley, California, where he hopes to build a 10,000-square-foot house.

In the latest conflict, Martin’s Beach LLC lawyer Joan Gallo told the San Francisco Chronicle earlier this week that she welcomed the case. “All we’ve wanted from the very beginning was an opportunity to have a court decide the rights and obligations of the parties.”

Khosla made his name as a co-founder of Sun Microsystems and later joined the blue-chip venture firm Kleiner Perkins Caufield & Byers. He started Khosla Ventures in 2004, and the firm known for investing in clean-technology companies such as renewable energy company KiOR and renewable-products company Amyris.

In 2011, Khosla committed half his fortune to charity as part of the Giving Pledge, an initiative started by Microsoft founder Bill Gates and Berkshire Hathaway chief Warren Buffett.

But he is somewhat of a maverick who has complained about environmentalists. Last year at the Berkeley-Stanford Cleantech Conference, he said clean technology has been hurt by environmentalists more than any other group, because environmentalists back idealized solutions that “don’t make any economic sense.”

The lawsuit in Superior Court of California, San Mateo County, is Surfrider Foundation v. Martins Beach 1, LLC, case number 520336.

(Reporting By Sarah McBride; Editing by Jonathan Weber and Douglas Royalty)

Image: Surfer Joao Demacedo heads to a surfing spot at Martin’s Beach, a popular surfing and fishing spot, in Half Moon Bay, California March 14, 2013. Credit: Reuters/Robert Galbraith

With New Chinese Leaders in Place, Waiting for an Agenda to Emerge

China’s leadership succession that began last autumn is now complete. Xi Jinping holds the three top positions as general secretary of the Communist Party, chairman of the Central Military Commission and president. Li Keqiang is the new premier.

A year ago, the Bo Xilai scandal was just breaking against the backdrop of a generational leadership succession. There was obviously turmoil and infighting last year but because of the opaque nature of Chinese politics we do not know whether the 2012 jockeying was actually worse than that of previous succession years.

In fact, a year later, the handover to Mr. Xi and Mr. Li has apparently ended up as the most institutionalized transition in the history of the People’s Republic of China. This transfer of power was the first in the Internet and Weibo era, China has never been so important to the world economy and there are many more China pundits and analysts than the last time the country changed leaders. It is possible that the “normal” political machinations in this black box system were simply more exposed and amplified.

Mr. Li’s informal style is welcome, but he is not going to enjoy much of a honeymoon period. Among the many seemingly intractable challenges China faces, the economy, environment and corruption are at the top of the list.

The premier pledged in his first news conference to fight graft and pollution, but no one expects quick solutio! ns. There were several bad air days in Beijing during the legislative session, and 850 delegates expressed their dissatisfaction with the pollution by voting against the lineup for the environmental protection and resources conservation committee of the National People’s Congress.

Now we are waiting for the Xi-Li reform agenda. The Financial Times argues that the premier has set “the reform bar lower“:

The key question is not whether a Chinese leader is a reformer - but rather what kind of reformer he or she is. The contrast between Mr. Li’s program and that of Wen Jiabao, his predecessor, is illuminating. Mr. Li’s agenda, which he outlined at the ed of China’s annual parliament on Sunday, is more limited and more singular in its focus on economics. It also appears to be more concrete and therefore more achievable.

CHINESE REAL ESTATE and the government’s latest attempts to cool the market was discussed in the previous China Insider column. The new rules sparked a surge of buying and a jump in divorces by couples seeking to avoid possible new taxes and purchase restrictions. In February, home prices rose in 62 of 70 cities, putting further pressure on the go! vernment.! Beijing is dancing on a knife’s edge, as it needs to moderate housing price increases and provide more affordable housing. But it cannot drop prices so much that it angers the large and important property owning class and ends up doing even more damage to the economy.

The Shanghai stock market is down 8 percent from its 2013 high in February, and an index of property stocks has lost 17 percent since then. At least two sell-side analysts have turned negative on the prospects for the economy and the equity markets.

On Monday, JPMorgan Chase cut China to underweight.

Perhaps more worrisome, Nomura economists published a report over the weekend in which they argued that China increasingly looked the United States on the eve of the 2008 crash

They do think the country still has time to avoid a systemic financial crisis, as long as the government is not afraid to start tightening now. That will come at a cost in terms of this year’s growth outlook - but growth could still be as high as 8.1 percent in the first half of the year and 7.3 percent in the second half, Mr. Zhang and Ms. Chen estimate. Early tightening could lead to a manageable number of defaults, they think.

The alternative would be a continuation of loose policy and growth of over 8 percent this year, followed by a crash perhaps as early as 2014.

Premier Li has so far said the right things. I am somewhat optimistic that by the Third Plenum of the 18th Party Congress later this year, we will see progress on deeper economic reforms, but the new government may have to move faster than it would like.

Man Group Imposes Limits on Cash Bonuses for Executives

LONDON â€" The Man Group, the largest publicly traded hedge fund firm in the world, is imposing its own bonus cap for top executives.

Annual cash bonuses will now be capped at 250 percent of salary, Man said in its annual report released on Monday. The fund manager also said it would not pay any bonuses to its top managers for 2012, when money outflows continued to hurt the business.

The firm has been under pressure for continuing to pay bonuses even as clients withdraw money. In the three months that ended Dec. 31, the Man Group’s funds reported a sixth consecutive quarter of money withdrawals. Assets under management fell 2.4 percent, to $57 billion at the end of December. The company had an annual loss of $745 million in 2012, compared with a profit of $187 million a year earlier.

The “2012 remuneration reflects the deterioration in company performance,” Man wrote in its annual report. “The new plan will increase transparency and alignment with shareholders.”

Emmanuel oman, who took over as chief executive last month after Peter Clarke retired, received a base salary of $1 million for 2012 and will not receive a pay increase in his new role as chief executive, the firm said.

Under the new remuneration plan, Man also plans to award deferred bonuses only after a three-year assessment of the performance of the executive.

In an effort to bolster profitability, the firm has announced plans to cut costs by almost $200 million by the end of 2013. Overall compensation costs in 2012 were down 23 percent, the company’s report said.

The firm’s shares were down about 0.75 percent on Monday in London trading.

Excessive banker pay has become a contentious issue worldwide, and the European Union is seeking to limit bonuses for many bankers to no more than the equiva! lent of their annual salaries.

What Comes Next for SAC

The two settlements reached between SAC Capital Advisors, the hedge fund controlled by Steven A. Cohen, and the Securities and Exchange Commission raise the question of what comes next for the firm.

The S.E.C. noted that its investigations were “continuing,” and the Justice Department’s criminal case against a former SAC portfolio manager, Mathew Martoma, is not affected.

The bulk of the settlements, $602 million, involved trades in July 2008 right before the announcement of problems in a drug trial being conducted by Wyeth and Elan. SAC sold its holdings in the two companies and then shorted shares hat allowed it to avoid losses and reap gains totaling about $275 million, according to the government. The firm disgorged that amount, plus it paid interest and a one-time penalty.

Mr. Martoma has been accused of insider trading based on a tip from Dr. Sidney Gilman, who was a consultant on the drug trial. Shortly before SAC began selling its stock positions through one of its funds, CR Intrinsic Investors, Mr. Martoma had a 20-minute conversation with Mr. Cohen. That discussion has been the focus of federal investigators, who were unable to gain Mr. Martoma’s cooperation before he was charged last November.

Mr. Martoma’s lawyer, Charles A. Stillman, commented on the settlement by stating: “SAC’s business decision to settle with the S.E.C. in no way changes the fact that Mathew Martoma is an innocent man. We will never give up our fight for his vindication.”

The second case involves trading by another SAC fund in Dell and Nvidia based on inside information received by Jon Horvath, a former analyst at the firm who pleaded guilty to insider trading. SAC’s settlement required it to pay $14 million for trading that resulted in gains of about $6.4 million.

SAC disclosed last year that it had received a so-called Wells notice from the S.E.C. stating that the agency was considering filing civil charges based on the firm’s failure to properly oversee its employees, known as “controlling person” liability. Under this approach, a company can be held liable for insider trading if it did not have in place adequate measures to prevent violations, even though it did not direct the improper transactions.

The settlements with SAC were not based on controlling person liability, however, and instead the S.E.C. complaint claims that the funds involved directly violated the law. That indicates the S.E.C. concludedthat there was enough evidence to go after SAC itself for its involvement in the trading rather than just claiming that the firm did not effectively supervise its employees.

Because the CR Intrinsic settlement deals only with trading in Wyeth and Elan shares in late July 2008, the S.E.C. is free to pursue additional transactions by SAC in those companies if there is evidence that it received other inside information.

One problem the agency could face in pursuing a case involving earlier trading, however, is that a recent Supreme Court decision limits its ability to obtain penalties for violations that are more than five years old, unless the firm waived the statute of limitations.

The criminal prosecution of Mr. Martoma continues, and it raises the intriguing question about whether prosecutors will call anyone from SAC as a witness against him.

One issue in proving insider trading is demonstrating that the defendant breached a fiduciary duty of trust and confidence by misusing! the mate! rial, nonpublic information. In addition, a fraud charge requires proof of criminal intent, and showing that a defendant was aware of an internal policy prohibiting insider trading could be important evidence to show knowledge of wrongdoing along with a breach of fiduciary duty.

When Mr. Martoma was charged, a spokesman for SAC stated, “Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry.”

That cooperation may entail having someone from the firm come into court to testify about its policies on insider trading and how that was communicated to Mr. Martoma.

It is also likely the government will need someone from SAC to testify about the trading in Wyeth and Elan to establish the gains made and losses avoided in order to prove there was fraud in connection with the purchase and sale of securities, an element of the crime. Thus, one or more witnesses from SAC will in all likelihood be an important part of the proecution of Mr. Martoma.

Could prosecutors even call Mr. Cohen as a witness It’s is unlikely, because of questions that could be raised about his conversation with Mr. Martoma before the trading at issue, but it is certainly not impossible. Whether he would be willing to testify for the government, given the continuing investigation of the firm, is another interesting question.

Recall that at the trials of Raj Rajaratnam and Rajat Gupta for insider trading, Goldman Sachs‘s chief executive, Lloyd C. Blankfein, testified for the government. He spoke about the importance of corporate information and the obligations of a director like Mr. Gupta to maintain its confidentiality. And this testimony came only months after a Senate subcommittee made a referral to the Justice Department concerning testimony by Goldman witnesses at a hearing about the financial crises, although no charges were ever brought.

After the S.E.C. settlement, a spokesman for SAC stated, “These settlements are a substantial step toward resolving all outstanding regulatory matters and allow the firm to move forward.”

While certainly helpful for the firm, the impending prosecution of Mr. Martoma will make it, along with Mr. Cohen, a featured player in a criminal trial.

What Comes Next for SAC

The two settlements reached between SAC Capital Advisors, the hedge fund controlled by Steven A. Cohen, and the Securities and Exchange Commission raise the question of what comes next for the firm.

The S.E.C. noted that its investigations were “continuing,” and the Justice Department’s criminal case against a former SAC portfolio manager, Mathew Martoma, is not affected.

The bulk of the settlements, $602 million, involved trades in July 2008 right before the announcement of problems in a drug trial being conducted by Wyeth and Elan. SAC sold its holdings in the two companies and then shorted shares hat allowed it to avoid losses and reap gains totaling about $275 million, according to the government. The firm disgorged that amount, plus it paid interest and a one-time penalty.

Mr. Martoma has been accused of insider trading based on a tip from Dr. Sidney Gilman, who was a consultant on the drug trial. Shortly before SAC began selling its stock positions through one of its funds, CR Intrinsic Investors, Mr. Martoma had a 20-minute conversation with Mr. Cohen. That discussion has been the focus of federal investigators, who were unable to gain Mr. Martoma’s cooperation before he was charged last November.

Mr. Martoma’s lawyer, Charles A. Stillman, commented on the settlement by stating: “SAC’s business decision to settle with the S.E.C. in no way changes the fact that Mathew Martoma is an innocent man. We will never give up our fight for his vindication.”

The second case involves trading by another SAC fund in Dell and Nvidia based on inside information received by Jon Horvath, a former analyst at the firm who pleaded guilty to insider trading. SAC’s settlement required it to pay $14 million for trading that resulted in gains of about $6.4 million.

SAC disclosed last year that it had received a so-called Wells notice from the S.E.C. stating that the agency was considering filing civil charges based on the firm’s failure to properly oversee its employees, known as “controlling person” liability. Under this approach, a company can be held liable for insider trading if it did not have in place adequate measures to prevent violations, even though it did not direct the improper transactions.

The settlements with SAC were not based on controlling person liability, however, and instead the S.E.C. complaint claims that the funds involved directly violated the law. That indicates the S.E.C. concludedthat there was enough evidence to go after SAC itself for its involvement in the trading rather than just claiming that the firm did not effectively supervise its employees.

Because the CR Intrinsic settlement deals only with trading in Wyeth and Elan shares in late July 2008, the S.E.C. is free to pursue additional transactions by SAC in those companies if there is evidence that it received other inside information.

One problem the agency could face in pursuing a case involving earlier trading, however, is that a recent Supreme Court decision limits its ability to obtain penalties for violations that are more than five years old, unless the firm waived the statute of limitations.

The criminal prosecution of Mr. Martoma continues, and it raises the intriguing question about whether prosecutors will call anyone from SAC as a witness against him.

One issue in proving insider trading is demonstrating that the defendant breached a fiduciary duty of trust and confidence by misusing! the mate! rial, nonpublic information. In addition, a fraud charge requires proof of criminal intent, and showing that a defendant was aware of an internal policy prohibiting insider trading could be important evidence to show knowledge of wrongdoing along with a breach of fiduciary duty.

When Mr. Martoma was charged, a spokesman for SAC stated, “Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry.”

That cooperation may entail having someone from the firm come into court to testify about its policies on insider trading and how that was communicated to Mr. Martoma.

It is also likely the government will need someone from SAC to testify about the trading in Wyeth and Elan to establish the gains made and losses avoided in order to prove there was fraud in connection with the purchase and sale of securities, an element of the crime. Thus, one or more witnesses from SAC will in all likelihood be an important part of the proecution of Mr. Martoma.

Could prosecutors even call Mr. Cohen as a witness It’s is unlikely, because of questions that could be raised about his conversation with Mr. Martoma before the trading at issue, but it is certainly not impossible. Whether he would be willing to testify for the government, given the continuing investigation of the firm, is another interesting question.

Recall that at the trials of Raj Rajaratnam and Rajat Gupta for insider trading, Goldman Sachs‘s chief executive, Lloyd C. Blankfein, testified for the government. He spoke about the importance of corporate information and the obligations of a director like Mr. Gupta to maintain its confidentiality. And this testimony came only months after a Senate subcommittee made a referral to the Justice Department concerning testimony by Goldman witnesses at a hearing about the financial crises, although no charges were ever brought.

After the S.E.C. settlement, a spokesman for SAC stated, “These settlements are a substantial step toward resolving all outstanding regulatory matters and allow the firm to move forward.”

While certainly helpful for the firm, the impending prosecution of Mr. Martoma will make it, along with Mr. Cohen, a featured player in a criminal trial.