SAC’s Steven Cohen Declines to Testify

Steven A. Cohen has declined to testify before a grand jury, raising the stakes in the government’s long-running insider trading investigation into his giant hedge fund, SAC Capital Advisors.

Rather than subject Mr. Cohen to wide-ranging questions from prosecutors in a grand jury setting, his lawyers have informed the government that he would assert his constitutional right against self-incrimination, according to two people briefed on the matter.

In contrast, five senior SAC executives who also received subpoenas have met with prosecutors in recent weeks, said the people briefed on the matter, who were not authorized to speak publicly about the case. It is unclear whether those interviews were in lieu of testifying before the grand jury. The five are Thomas Conheeney, the firm’s president; Solomon Kumin, chief operating officer; Steven Kessler, chief compliance officer; Phillipp Villhauer, head of trading, and Anthony Vaccarino, a portfolio manager.

None of the executives have been ccused of any wrongdoing. And neither the firm nor Mr. Cohen, who owns it, has been charged. The 57-year-old billionaire has maintained that he behaved appropriately at all times.

A spokesman for SAC declined to comment.

The developments in the case come as prosecutors face a looming deadline to bring charges against SAC connected to suspicious trading in two drug stocks. The government has already charged a former SAC employee, Mathew Martoma, connected to those trades, saying that he bet against shares of Elan and Wyeth while in possession of secret information about the companies’ drug trials. Because the trades started on July 21, 2008, the government has roughly four weeks to bring additional charges before the five-year limitation runs out.

With that deadline approaching, prosecutors are contemplating a case against SAC! itself, according to the people briefed on the matter. Such a move, which would effectively destroy the fund, could include bringing charges against SAC related to Mr. Martoma’s trades on a theory of corporate criminal liability, the people said. Under that theory, the government can impute criminal liability to a company based on the benefit it received from its employees’ alleged criminal acts.

While the government has said that Mr. Cohen played a role in authorizing the trades, it has not alleged that he was aware of the confidential data that Mr. Martoma is accused of obtaining.

Mr. Cohen’s decision not to testify was expected. Last month, The New York Times reported that Mr. Cohen had received a subpoena and planned to invoke his Fifth Amendment right. At that time, SAC notified its investors that “While we have in the past told you of our cooperation with the government’s investigation, our cooperation is no longer unconditional.”

It is unclear whether Mr. Cohen appearedin person to assert his constitutional right. Typically, when a witness’s lawyer has indicated that the client refuses to testify, the United States attorney’s office in Manhattan will instead accept a letter conveying those plans. Bloomberg News earlier reported that Mr. Cohen had formally declined to testify.

As criminal authorities continue to scrutinize SAC, federal regulators are also weighing action. In March, the hedge fund agreed to pay $616 million to settle two civil cases brought by the Securities and Exchange Commission related to the Elan and Wyeth trades, as well as trading in Dell.

Yet the S.E.C. is still contemplating a civi! l action ! against Mr. Cohen, according to people briefed on the case. Among the possible claims against the hedge fund manager, the S.E.C. could accuse Mr. Cohen of insider trading related to the drug stocks. The agency has also weighed citing Mr. Cohen for failing to supervise his employees, a civil charge that another federal regulator leveled this week against Jon S. Corzine, the former chief executive of MF Global.

The S.E.C., which could assess a fine and seek to ban Mr. Cohen from the securities industry, has a lower burden for proving a case than criminal authorities do. While prosecutors must prove their case beyond a reasonable doubt, the regulator would have to show only a prepondrance of the evidence.

With the government’s relentless pursuit of SAC, the fund’s investors have pulled out money in droves. In addition to withdrawing $1.7 billion earlier in the year, investors this month asked to redeem an even larger sum, according to a person briefed on the matter, leaving SAC with a fraction of the $6 billion in outside capital it had at the beginning of 2013. Mr. Cohen’s fortune accounts for more than half of the fund’s assets.

Mr. Cohen has privately expressed frustration with the toll that the protracted inquiry has taken. In a recent conversation with a senior Wall Street executive, Mr. Cohen said, “I sleep at night and I didn’t do anything wrong but that doesn’t mean that they can’t ruin my business.”

Week in Review: Corzine’s Legal Battle May Last Years

Suit accuses Jon Corzine of a failure at the helm. | Cost of public projects is rising, and pain will be felt for years. | Bank gains by putting the brakes on traders. | Exit from the bond market is turning into a stampede. | Andrew Ross Sorkin says that economists are asking: Did Ben Bernanke tip the Fed’s hand? | Mass layoffs at a top-flight law firm. | Deals in the works involving two luxury retailers.

A look back on our reporting of the past week’s highs and lows in finance.

Oligarchs Assemble Team for Oil Deals | The Russian billionaires Mikhail Fridman and German Khan have surrounded themselves with some highly regarded global executives to help them invest in the international energy market. DealBook »

Losing Ground on Nook, Barnes & Noble Ceases Its Own Manufacture of Color Versions | Company executives were silent about talks with Leonard S. Riggio, arnes & Noble’s chairman, who has sought to buy the chain’s 675 stores. Nor did they discuss the state of talks with Microsoft. DealBook »

Deal Professor: Clearwire Deal Is a Lesson in High-Stakes Bidding | Depending upon how well the directors play and when they decide to fold or up the ante, shareholders can be up or down billions of dollars, says Steven M. Davidoff. DealBook »

Deals in the Works Involving 2 Luxury Retailers | The private equity owners of Neiman Marcus filed for an initial public offering and the owner of Lord & Taylor is exploring a potential bid for Saks. DealBook »

Vodafone to Buy Germany’s Top C! able Giant for $10 Billion | Analysts were quick to play down the idea of a wider rebound in deals across Europe. DealBook »

Ratings Service Finds Pension Shortfall | Moody’s Investors Service, dissatisfied with the way states measure what they owe their retirees, released its own numbers, showing that the 50 states have, in aggregate, just 48 cents for every dollar in pensions they have promised. DealBook »

An Old Champion Returns for Mortgage-Based Bonds | Lewis S. Ranieri’s new firm, Shellpoint Partners, priced its first mortgage bond deal. The structure of the offering was changed to offer buyers more protection against losses. DealBook »

Cost of Public Projects Is Rising, and Pain Will Be Felt for Years | Interest rates have been inching up everywhere, sending America’s vast market for municipal bonds into a steep decline. DealBook »

Bank Gains by Putting the Brakes on Traders | In the financial equivalent of the Tortoise and the Hare, Royal Bank of Canada has risen up the ranks of the biggest stock trading firms in the United States by embracing a rather Canadian restraint and prudence. DealBook »

Exit From the Bond Market Is Turning Into a Stampede | Many in the market say they think that the recent swings are driven more by fear than by a rational assessment of what bonds are worth. DealBook »

DealBook Column: Economists Are Asking: Did Bernanke Tip Fed’s Hand? | Ben Bernanke’s words moved the market because they filled in gaps that a statement from the Fed could never fully communicate, says Andrew Ross Sorkin. DealBook »

Venture, and Friendship, Sour After Insider Conviction | A year after being convicted of insider trading, Rajat Gupta is embroiled in a dispute over a private equity fund he helped found. DealBook »

Court Upholds Rajaratnam Conviction | The ruling validates the aggressive tactics deployed by federal prosecutors in the government’s sweeping investigation into insider trading on Wall Street. DealBook »

I.P.O.’s Face Road Blocks as Markets Turn Shaky | Once ebullient markets have had a bout of shakiness, driven largely by concern that the Federal Reserve will soon begin pulling back on its economic stimulus. DealBook »

Suit Accuses Corzine of a Failure at the Helm | Jon S. Corzine, no stranger to bare-knuckle brawls after spending nearly 40 years on Wall Street and in New Jersey politics, now faces the biggest fight of his career: a showdown with the United States government. DealBook »

• U.S. Civil Charges Against Corzine Are Seen as Near | The Commodity Futures Trading Commission informed Jon Corzine’s lawyers that it would file the case without offering! him the ! opportunity to settle, setting up a legal battle that could drag on for years. DealBook »

S.E.C. Begins an Inquiry Into Thomson Reuters Data | Federal securities regulators have opened an inquiry into how the media company releases closely watched manufacturing data to its trading clients. DealBook »

New Rules Expected for Insurance Accounting May Lead to Erratic Earnings | The Financial Accounting Standards Board proposed new rules that seem likely to increase volatility in reported profits for many insurers and lower reported revenue for rapidly growing companies. DealBook »

Lawyer Accused of Faking is Expenses Over 6 Years | Lee M. Smolen, a partner at DLA Piper, has been accused by an Illinois disciplinary board of fabricating more than $120,000 in expenses submitted to Sidley Austin, including about $70,000 in taxi trips. DealBook »

The Trade: In Shareholder Say-on-Pay Votes, Whispers, Not Shouts | The Dodd-Frank financial overhaul law gave shareholders the ability to vote on the pay packages of top executives, and it turns out that they fall over themselves to approve, says Jesse Eisinger. DealBook »

Mass Layoffs at a Top-Flight Law Firm | Weil, Gotshal & Manges says that the market for high-end legal services is continuing to shrink. DealBook »

‘Back on the Chain Gang’ | Some readers are quoting the Pretenders in calling for harsh punishment for Jon Corzine. YouTube »

Oligarchs Assemble Team for Oil Deals

LONDON â€" They were once the partners of the British oil giant BP, until that arrangement unraveled in turmoil and litigation.

Now the Russian billionaires Mikhail Fridman and German Khan want to go back into the international energy market, investing much of the $14 billion they received from the sale of their piece of that partnership earlier this year.

And in case Westerners might worry about doing business with Mr. Fridman and Mr. Khan, given their tempestuous history with BP, they have surrounded themselves with some highly regarded global executives â€" including the former chief executive of BP.

John Browne, that former BP chief, is among the paid advisers recruited to the new Fridman-Khan investment fund, L1 Energy, which intends to acquire oil and natural gas properties in North American and emerging markets. Also adding industry credibility are James T. Hackett, former chief of the American exploration company Anadarko Petroleum, and Andrew Gould, onetime head of the oil sevices giant Schlumberger and now chairman of BG, the British oil and gas producer.

Will those prestigious advisers be enough to reassure potential partners of L1 Energy that it is safe to do business with oligarchs?

Mr. Hackett and Lord Browne did not return calls seeking comment. In a telephone interview, Mr. Gould said the Russian executives’ history of litigation was ‘‘a cause for reflection,’’ but added, ‘‘I don’t think you should take the past as a guide for the future.’’

That past might be best forgotten if it wasn’t so colorful.

In 2008, after Lord Browne’s departure from BP, bickering over the management of the Russian partnership, known as TNK-BP, led the Russians to demand the resignation of the BP-appointed chief executive of TNK-BP, Robert W. Dudley.

Eventually, Mr. Dudley left Russia after the partners maneuvered to have his visa revoked, according to BP. Things reached such a pitch that Mr. Dudley said he felt it necessary to work! for a time in hiding outside Russia.

Warring broke out again in 2011 after Mr. Dudley became chief executive of BP and concluded an Arctic exploration deal with the Russian state-owned oil giant Rosneft, a rival to the oligarchs in TNK-BP. They successfully blocked that Rosneft pact through legal action in London.

During that struggle, a Russian minority shareholder in the partnership filed a $16 billion lawsuit in Siberia against BP and some of its executives, seeking damages from the Rosneft deal. The claim became the basis for a raid on BP’s office in Moscow that year by the police armed with assault rifles.

The lawsuit melted away as soon as BP and the Russian partners in TNK-BP agreed in late 2012 to sell the company to Rosneft, a deal that closed early this year.

And somewhere along the way, according to a WikiLeaks document from the United States Embassy in Moscow, a former TNK-BP executive described to an American diplomat how Mr. Khan had shown up for dinner at a remotehunting lodge with a chrome-plated pistol and confided to the executive that he considered the 1972 film ‘‘The Godfather’’ a ‘‘manual for life.’’

A spokesman for Mr. Khan did not respond to a query about the incident.

Representatives for Mr. Khan and Mr. Fridman said neither executive was available for interviews.

Given their past, the Russian billionaires ‘‘will have to legitimize their company by bringing in prominent names,’’ said Fadel Gheit, an oil analyst at Oppenheimer & Company in New York. ‘‘They will have to recruit an all-star team.’’

Mr. Fridman and Mr. Khan are longtime friends and among the founders of an investment firm, the Alfa Group, that also has banking and telecommunications interests. As with many of Russia’s current generation of billionaires, the two made their fortunes by being well placed to capitalize during the sell-off of state-owned assets in the early 1990s. Their main trophy was a company called Tyumen Oil.

The t! wo have done very well since, accruing estimated wealth of $16.5 billion for Mr. Fridman and $10.5 billion for Mr. Khan, according to Forbes.

Mr. Fridman is the dominant figure in the partnership and the strategic thinker, associates say, while Mr. Khan has been the point man for oil investments. They plan to funnel as much as $10 billion of their own money into oil and gas deals, including a couple they say they are looking at in North America. With borrowed money, they plan to leverage their money into a $20 billion war chest.

The energy investments will be part of a broader effort to diversify Alfa Group outside of Russia and, possibly, create a publicly listed company, according to a person close to the planning. Such diversification is a natural move for Russian oligarchs and other top business figures in emerging markets who want some of their golden eggs kept outside home-country baskets.

L1 Energy, which will be run by Mr. Khan from London, aims to make a few large investments ovr the next few years, working with existing management at the target companies or installing new executives as it sees fit.

‘‘We are not interested in just having a seat on the board â€" we want to be in a position to influence a company,’’ Stan Polovets, the lead member of the advisory board, said in an interview at the Berkeley Hotel in London. He is the one lining up L1 Energy’s outside advisory board.

‘‘Alfa shareholders know well how to be successful in the former Soviet Union; that doesn’t necessarily translate into success when they step outside in such a major way,’’ said Mr. Polovets, who was previously the chief executive of Alfa-Access-Renova, the vehicle for the Russian holdings in TNK-BP.

Mr. Polovets says that L1 Energy’s key investment strengths will include comfort with emerging-market risks and the ability to make decisions quickly.

It was Lord Browne, the first of the advisers Mr. Polovets recruited to L1 Energy, who presided over th! e creatio! n of the TNK-BP partnership with the Russian billionaires in 2003, by combining BP’s Russian assets with Mr. Fridman and Mr. Khan’s Tyumen Oil.

BP made more than five times its original $8 billion investment through dividends and the cash and share sale of TNK-BP to Rosneft last year. But the repeated bouts of quarreling with the Russian partners sapped management time and alarmed BP shareholders.

Mr. Gould, whose former employer, Schlumberger, played a vital role in reviving the Russian oil industry after the fall of the Soviet Union, said he had joined the L1 Energy advisory board ‘‘because it’s a group of people I know well; it is fun to be together.’’ He said that the group ‘‘had a vast amount of experience’’ in the oil and gas industry and ‘‘can provide quality advice on the deals the fund may be contemplating.’’

The question is whether Mr. Fridman and Mr. Khan will be able to thrive outside of Russia.

A Western executive, who knows Mr. Khan andspoke on the condition of anonymity because he does not want to risk business relationships, said the Russian partners understood the oil business. But he wondered whether they would be able to make big money outside their home country and away from ‘‘the kangaroo Siberian courts.’’

‘‘They will be surprised,’’ he said, ‘‘when they look at the returns they get playing by real rules.’’

Sun Capital Sells Parent of American Standard Brands

An affiliate of Sun Capital Partners, the private equity firm co-founded by Marc J. Leder, sold ASD Americas Holding, the parent company of American Standard Brands, to the Lixil Corporation of Japan at an enterprise value of $542 million. Based in New Jersey, American Standard makes the popular brand of kitchen and bath fixtures.

Noodles & Co. Proves Irresistible in Tough Week for I.P.O.’s

Investors showed reduced appetite for an electronics retailer, a construction services provider or an advertising technology company. But on Friday, they proved especially hungry for pad Thai and macaroni and cheese.

Shares in Noodles & Company, a fast-casual restaurant chain, doubled their initial public offering price by midafternoon on Friday, at $36.15. That’s after having climbed higher earlier in the morning.

The company raised $97.2 million in its offering and is now valued by the market at more than $803 million.

The hunger among investors (apologies for the puns, but it’s lunchtime, and DealBook is starving) may prove a relief to the I.P.O. community after a rough week for companies making their market debuts. Three prominent offerings â€" those for the CDW Corporation, HD Supply and Tremor Video â€" priced below their anticipated ranges on Wednesday, citing the recent marketchoppiness.

Concerns that the Federal Reserve may begin pulling back on its economic stimulus program have led to a halting of what had once seemed like a steadily climbing market, giving jitters to potential investors in risky transactions like I.P.O.’s. That led issuers and their advisers to choose to stay safe and price below expectations to ensure better trading of the newly public stocks.

But even that caution may not have helped. HD Supply was trading at $18.41 by midday Friday after having priced at $18, while Tremor Video was down nearly 20 percent from its offering price, at $8.05. CDW has fared a little better: at $18.66, its shares are up nearly 10 percent over their I.P.O. level.

Like CDW and HD Supply, Noodles & Company is owned by private equity sponsors, in this case Catterton Partners and Canada’s Publ! ic Sector Pension Investment Board. But investors seemed less concerned about the level of debt at Noodles & Company, which was $93.7 million as of Jan. 1.

And unlike Tremor Video, which is the first of several advertising technology companies to go public, Noodles & Company has a readily understandable and proven business. Led by Kevin Reddy, a former chief operating officer for Chipotle Mexican Grill, the company plans to expand its reach nationally.

For the quarter ended Jan. 1, Noodles & Company reported a 17 percent gain in revenue, to $300 million, and a nearly 37 percent gain in net income, to $5.2 million.

Noodles & Co. Proves Irresistible in Tough Week for I.P.O.’s

Investors showed reduced appetite for an electronics retailer, a construction services provider or an advertising technology company. But on Friday, they proved especially hungry for pad Thai and macaroni and cheese.

Shares in Noodles & Company, a fast-casual restaurant chain, doubled their initial public offering price by midafternoon on Friday, at $36.15. That’s after having climbed higher earlier in the morning.

The company raised $97.2 million in its offering and is now valued by the market at more than $803 million.

The hunger among investors (apologies for the puns, but it’s lunchtime, and DealBook is starving) may prove a relief to the I.P.O. community after a rough week for companies making their market debuts. Three prominent offerings â€" those for the CDW Corporation, HD Supply and Tremor Video â€" priced below their anticipated ranges on Wednesday, citing the recent marketchoppiness.

Concerns that the Federal Reserve may begin pulling back on its economic stimulus program have led to a halting of what had once seemed like a steadily climbing market, giving jitters to potential investors in risky transactions like I.P.O.’s. That led issuers and their advisers to choose to stay safe and price below expectations to ensure better trading of the newly public stocks.

But even that caution may not have helped. HD Supply was trading at $18.41 by midday Friday after having priced at $18, while Tremor Video was down nearly 20 percent from its offering price, at $8.05. CDW has fared a little better: at $18.66, its shares are up nearly 10 percent over their I.P.O. level.

Like CDW and HD Supply, Noodles & Company is owned by private equity sponsors, in this case Catterton Partners and Canada’s Publ! ic Sector Pension Investment Board. But investors seemed less concerned about the level of debt at Noodles & Company, which was $93.7 million as of Jan. 1.

And unlike Tremor Video, which is the first of several advertising technology companies to go public, Noodles & Company has a readily understandable and proven business. Led by Kevin Reddy, a former chief operating officer for Chipotle Mexican Grill, the company plans to expand its reach nationally.

For the quarter ended Jan. 1, Noodles & Company reported a 17 percent gain in revenue, to $300 million, and a nearly 37 percent gain in net income, to $5.2 million.

What I Learned From My Daughter’s Wedding

Many years ago, in the predigital world, when my friends and I graduated from college, we scattered across the country to begin our first jobs.

Gradually, but inexorably, we began to lose connection. It wasn’t easy to keep up. Long-distance phone calls were expensive. It took a real investment of time to write a letter, put a stamp on it and drop it in a mailbox.

Pursuing a career, and raising a family, began to take precedence over investing in those once precious relationships. Over time, most of us lost touch altogether.
Not so for my daughter Kate, now 31, or for her friends, who are equally scattered geographically, but keep in touch constantly on Facebook, Twitter, Instagram, Foursquare and Pinterest and by text, e-mail, Gchat and Skype.

In truth, I didn’t take any of these forms of communication seriously. They struck me as superficial, and often self-absorbed, updates on the most prosaic details of their lives. Yes, I occasionally posted on Facebook, but not about where went for dinner or being stuck in traffic. I bought into the idea that the millennial generation’s obsession with social media was undermining the depth of their relationships.

Then last week, Kate got married â€" over four days at a location she and her fiancé, Philip, had chosen in western Massachusetts, three hours from our home in New York. The wedding weekend made me realize that it was the ultimate expression of all the ways Kate stays connected to her friends.

On Thursday evening, there was a dinner for the early arrivals, in advance of the Friday rehearsal dinner, which was the prelude to the wedding itself on Saturday. More than two dozen friends of Kate and Philip showed up for the Thursday event, and the dinner went on for hours.

The following evening, 160 people appeared for the rehearsal dinner, meaning the vast majority of those who planned to attend the actual wedding.

One friend after another offered toasts, a genre that often runs to the maudlin and the ge! neric. To my surprise, these talks were rich in details and nuance, attuned to and appreciative of the complex person I know Kate to be.

Among the highlights were dramatic readings of two verbatim transcripts of Gchat conversations Kate had with different friends two years earlier, shortly after she’d been contacted on OkCupid by a guy from high school who would eventually become her husband.

Kate and Philip spent a year planning their wedding, down to the smallest detail. As the long weekend progressed, I realized it wasn’t just their union they wanted to celebrate, but at least equally all of the people they love - and they love a lot of people. Generalization though this is, my strong sense is that members of her generation aren’t willing to let ambitions trump their relationships.

Their community is much wider than mine and my wife’s. Kate, Philip and their friends don’t move on when they move to new cities. They simply add on. They keep in touch through hundreds of tiny digial connections, and these moments add up. The constancy of contact helps to sustain the freshness and the intensity of their relationships.

What Kate has taught me - never so much as last weekend â€" is that it’s possible to be both intensely focused at work and also intensely engaged in other people’s lives; ambitious in the world and generously giving in relationships, discerning and perceptive about people and their foibles, but simultaneously able to focus on the best in each of them.

This energy was contagious. I rarely stay up past 11 p.m. On the wedding night, I finally went back to my room at 1 a.m. Dozens of Kate and Philip’s friends stayed much later than I did, and most of them were back again at 9:30 the next morning, for the post-wedding brunch.

Even after they finally headed home, they didn’t really leave one another. That night, the next day and the day after that, Kate and her friends were all over social media, posting pictures and sending each other message! s about t! he experiences they’d shared at the wedding.

Inspired, I posted my own first Facebook picture, walking toward the wedding with Kate, just before the ceremony. In response, I heard from old friends I haven’t spoken to in years.

As the comments and “likes” piled up, I was amazed by how filled up I felt by these brief affirmations, and how happy I was to feel reconnected with friends from my past. The next day, I posted a video of Kate singing an incredible original song to Philip about the history of their relationship - have a listen â€" and reveled again in the outpouring that followed.

The day after the wedding, I sent friend requests to a half dozen of Kate’s friends, who quickly accepted. Small as these gestures are, they felt surprisingly intimate and nourishing.

I see now much I’ve given up over he years by keeping my work focus so central and my circle so narrow. I understand more viscerally why Kate and her friends spend so much time keeping up on social media. It’s nearly a week since the wedding, the “likes” keep coming, and my heart still feels wide open.

About the Author

Tony Schwartz is the chief executive of the Energy Project and the author, most recently, of “Be Excellent at Anything: The Four Keys to Transforming the Way We Work and Live.” Twitter: @tonyschwartz

Former Barclays Chief Hits the Red Carpet

Robert E. Diamond Jr, the former Barclays chief executive, has been spotted at a fundraising event at the Savoy Hotel in central London, one of the few times he has been seen in public in Britain since he stepped down last year, reports The Daily Mail.

British Government Takes Step in Selling Stakes of Bailed-Out Banks

LONDON - The British government’s long-awaited sale of its stakes in Royal Bank of Scotland and Lloyds Banking Group is inching closer.

U.K. Financial Investments, the organization that manages the holdings on behalf of the British government, has asked investment banks to make their pitches to help sell the stakes in the two lenders, which both received multibillion-dollar bailouts during the financial crisis.

The tender offer, released on Thursday, comes as the future of the government’s holding in both R.B.S. and Lloyds is at crossroads.

Both banks have shed billions of dollars of assets, reduced their exposure to risky assets and, in the case of R.B.S., slashed its investment banking unit to refocus on its retail operations. British taxpayers currently own a 39 percent stake in Lloyds and a 82 percent holding in R.B.S.

Earlier this month, George Osborne, the country’s chancellor of the Exchequer, said the government was “actively considering options for share sales in Lloyds,” though he played down a similar offloading of R.B.S. shares. Other local lawmakers also have called for the breakup of R.B.S. to separate the firm’s toxic assets from its healthy banking operations.

By inviting investment banks to help sell the British taxpayers’ stakes in the two lenders, U.K. Financial Investment! s has moved the ball forward on the privatizations, though questions remain over how long the eventually share sale will take.

The tender, for which pitches must be submitted by July 8, asks investment banks to apply for four roles in the pending process: bookrunner, co-lead manager, capital markets adviser and financial adviser. Last year, Deutsche Bank helped U.K. Financial Investments to sell its stake in struggling British lender Northern Rock to Richard Branson’s Virgin Money.

The potential privatizations of both Lloyds and R.B.S. are likely to be highly contentious, as local politicians and analysts continue to battle over what to do with British taxpayers’ takes. Some British lawmakers have called for the shares to be sold directly to retail customers to allow them to benefit from any potential increase in the firms’ future share prices. A similar process in the 1980’s led many British taxpayers to buy shares in former state-owned companies like the energy utility British Gas.

Lloyds is likely to be the first to be privatized, as its current share price is above the government’s 61.20 pence (93 cents) breakeven price. Shares in R.B.S., however, are still trading 33 percent below what the British government says it needs to recoup its investment.

On Friday, Lloyds’ shares rose 1.6 percent, to 63.88 pence, in early afternoon trading in London, while R.B.S.’s stock price traded up slightly.

The prospect of the British government selling its stake in R.B.S. took a hit earlier this month when its chief executive, Stephen Hester, abruptly announced that he ! would lea! ve the bank by the end of the year.

Mr. Hester had been widely praised for overseeing R.B.S.’s restructuring, though the timing of any potential share sale had become highly politicized ahead of Britain’s general election to be held in 2015.

The bank’s board said they had asked Mr. Hester to step down so that they could appoint a new leader to oversee the privatization process, which could take the rest of the decade to complete.

China’s Sovereign Wealth Fund Said to Name New Head

China's $500 billion sovereign wealth fund has named a cabinet official as its new chairman, Reuters reports, citing two unidentified sources.

U.S. Takes Aim at Corzine

U.S. TAKES AIM AT CORZINE  |  Jon S. Corzine, a veteran of Wall Street and New Jersey politics, faces the biggest fight of his career: a showdown with the United States government, DealBook’s Ben Protess writes. Federal regulators sued Mr. Corzine on Thursday in connection with the collapse of MF Global and the apparent misuse of customer money during the brokerage firm’s final days. Mr. Corzine ran the firm until its bankruptcy in October 2011.

The lawsuit, filed in the United States District Court in Manhattan, cites dozens of e-mails and captures previously unreleased phone calls to create the first real-time synopsis of a Wall Street blowup using executives’ own haunting words, Mr. Protess writes. In one call, the firm’s global treasurer indicated that the irm’s liquidity “situation” was “not sustainable” and that “we have to tell Jon that enough is enough. We need to take the keys away from him.” Mr. Corzine, who inherited a firm in 2010 that lost money in each of the previous three years, nicknamed this person “the Gravedigger.”

Andrew J. Levander, Mr. Corzine’s lawyer, denounced what he called “an unprecedented lawsuit based on meritless allegations.”

FED OFFICIALS SEEK TO EASE CONCERN  |  In three separate but similar speeches on Thursday, Federal Reserve officials showed their frustration with the rise in interest rates that began in May and accelerated after remarks last week by the central bank’s chairman, Ben S. Bernanke. The economy is the victim of misunderstanding, the officials said, telling investors that they are misguided in believing the Fed’s stimulus campaign is about to wane, Binyamin Appelbaum writes in The New York Times.

“I don’t want to be too cute about a serious matter,” Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said in Marietta, Ga., “but to make an analogy, it seems to me the chairman said we’ll use the patch â€" and use it flexibly â€" and some in the markets reacted as if he said ‘cold turkey.’” The speeches appeared to make an impression; stocks rose modestly while interest rates ticked downward, Mr. Appelbaum writes.

OLD CHAMPION RETURNS FOR MORTGAGE BONDS  | 
Lewis S. Ranieri helped pioneer mortgage-backed securities in the 1980s. On Thursday, his new firm priced its first mortgage bond deal. With the recent turmoil in te bond markets, however, the $251 million offering was not without drama. The structure of the offering was changed to offer buyers more protection against losses, according to a person briefed on the matter who was not authorized to speak about the private deal.

ON THE AGENDA  |  BlackBerry reported earnings. The final version of the Reuters/University of Michigan consumer sentiment index for June is out at 9:55 a.m. Thomas J. Barrack, founder of Colony Capital, is on CNBC at 7 a.m.

DERIVATIVES AS A TOOL FOR DECEIT  |  “For some derivatives, a desire for deception is the only reason they exist,” Floyd Norris, a columnist for The Ne! w York Ti! mes, writes. “That deception can allow those who own derivatives to evade taxes or accounting rules. It can allow activity that might otherwise be illegal, were it not called a derivative, or that would face regulation if it were labeled what it truly is. Sometimes, banks use derivatives they create to help their clients deceive the public. Other times, they enable the banks to deceive those clients.”

“The latest revelation of deception by derivative came in Italian government documents leaked this week to two European newspapers, La Repubblica and The Financial Times,” Mr. Norris continues. “What seems to have happened in Italy is similar to something that we already know Greece did. Rather than borrow money â€" which would increase the reported budget deficit â€" the country entered into a derivatives contract that called for the banks to make large upfront payments in return for larger paymens later from the government.”

Mergers & Acquisitions »

U.S. Said to Take Depositions in Review of Airline Merger  |  The Justice Department is taking sworn testimony as part of its review of the planned merger of American Airlines and US Airways, Reuters reports, citing unidentified people close to the discussions. That indicates the government “has concerns that the proposed merger creates antitrust problems,” Reuters writes.
REUTERS

Owner of Financial Times Says Newspaper Is Not for Sale  |  A spokesman for Pearson, ! the owner! of The Financial Times, denied a report that claimed the company was in talks to sell the newspaper to Rupert Murdoch and Abu Dhabi’s state media group, The Telegraph reports. “The Financial Times is not for sale, and Pearson is not in any talks to sell it,” the spokesman said.
TELEGRAPH

Senate Agriculture Committee Calls Hearing on Smithfield Deal  |  The Senate Agriculture Committee will examine Smithfield Foods’ $4.7 billion sale to a Chinese meat processor, stepping up government scrutiny of the pork producer’s deal.
DealBook »

Regulators Said Not to Seek Divestitures in Wireless Deal  |  Reuters reports: “U.S. regulators do not plan to ask Sprint Nextel Corp or Clearwire Corp to sell any spectrum as they near a vote on Sprint’s proposed buyout of Clearwire, two sources familiar with the matter said on Thursday.”
REUTERS

Times Company Said to Receive Bids for Boston Globe  | 
REUTERS

INVESTMENT BANKING »

B! ank Deal in Europe Seen as Progress With Flaws  |  “The agreement is intended to reduce the chance that a bank crisis will descend into a government debt crisis, as happened in Spain and Ireland when the cost of bank rescues helped undermine public finances,” The New York Times writes. “But because Germany insisted on high hurdles before its taxpayers would be made liable for bank failures in other countries, there remains a risk that weaker countries could still become victims of the failure of a big domestic bank.”
NEW YORK TIMES

Blankfein on the Federal Reserve  |  “The market understood, but the market overreacted,” Lloyd C. Blankfein, Goldman Sachs’s chief executive, said on CNBC.
CNBC

Goldman’s All-Night Puzzle Challenge  |  Goldman Sachs sponsors a charity event known as Midnight Madness that is a night of extravagant puzzles around New York. The next one is planned for October.
DealBook »

HSBC Stakes a Claim in Asian Deals  |  HSBC has, for the first time, moved into the top five advisers for mergers and acquisitions in Asia excluding Japan, according to preliminary data from Thomson Reuters.
REUTERS

32 Advisors to Open Houston Office  |  The advisory firm 32 Advisors, led by Robert Wolf, has hired Duaine A. Priestley, who will open the firm’s Houston office in July.
PRESS RELEASE

PRIVATE EQUITY »

Slim Pickings for Private Equity Firms  |  “After a robust start to the year, volumes of leveraged buyouts shrank in the second quarter, highlighting the erratic pattern of the market’s recovery since the start of the financial crisis,” The Financial Times reports.
FINANCIAL TIMES

China Prepares to Name New Chief of Wealth Fund  |  China’s sovereign wealth fund “is finally close to naming a new chief, ending a months-long delay during which several candidates turned down the job for fear it would prove to be a poisoned chalice,” The Financial Times reports.
FINANCIAL TIMES

HEDGE FUNDS »

Business Venture, and Friendship, Sour After Insider Conviction  |  A year after being convicted of insider trading, Rajat Gupta is embroiled in a dispute over a private equity fund he helped found with Parag Saxena, an old friend.
DealBook »

Lansdowne Partners Names New Chief  | 
REUTERS

I.P.O./OFFERINGS »

A Tech Debate Over Allowing More Foreign Workers  |  “A the Senate voted on a landmark immigration bill that would let Silicon Valley companies import more foreign engineers, some Americans remain locked in a deeply emotional argument over whether outsiders are taking jobs away” from older workers, The New York Times reports.
NEW YORK TIMES

K.K.R. Said to Tap Banks for I.P.O. of Tarkett  |  An offering of Tarkett, a French floor maker, could raise about $651 million, Bloomberg News reports.
BLOOMBERG NEWS

VENTU! RE CAPITAL »

Adobe to Buy Neolane, a Digital Marketing Company, for $600 Million  |  Adobe Systems agreed on Thursday to buy Neolane, a digital marketing services provider, for about $600 million, as more companies look for ways to add social media advertising to their offerings.
DealBook »

Square Hires Facebook’s Director of Advertising Products  | 
ALLTHINGSD

LEGAL/REGULATORY »

Moody’s Shows Wider Pension Gap for States  |  Moody’s Investors Service released numbers showing that states may be misstating what they owe retirees, averaging just 48 cents for every dollar of pensions they have promised.
DealBook »

S.E.C. Begins an Inquiry of Thomson Reuters Data  |  The Securities and Exchange Commission is investigating why certain clients of Thomson Reuters received and traded on manufacturing data ahead of its official release.
DealBook »

Cengage Learning Said to Be Ne! ar Bankru! ptcy  |  The Wall Street Journal reports: “Cengage Learning Inc., the struggling textbook publisher owned by private-equity firm Apax Partners, is preparing to file for bankruptcy protection in the coming days, said several people familiar with the plans.”
WALL STREET JOURNAL

Senate Finance Committee Makes Push for Tax Reform  |  The Democratic and Republican leaders of the Senate Finance Committee asked all senators to identify what tax breaks, deductions and credits should be kept, The New York Times reports.
NEW YORK TIMES

Ireland Slides Back Into Recession  |  Though Ireland is held up as an example of how austerity can help a country emerge stronger from the European crisis, “Ireland’s economy is disappointing its fans â€" again,” The New York Times reports.
NEW YORK TIMES

In Tourre Trial, a Disagreement Over a Witness  | 
REUTERS