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A flawed compromise on the buyout of Dell will save faces all round.
Letting the big transaction fade away would have hurt most shareholders, the board and the company's eponymous founder. A 2 percent increase in the offer price by buyers Michael S. Dell and Silver Lake Partners in return for a tweaked voting procedure won't delight anyone â€" but it should seal the deal.
Rather than going to a vote on Friday that risked killing the deal, almost everyone had reasons to compromise. Selling shareholders will get up to $470 million more, votes that aren't cast won't count against the deal, and a changed record date will mean a different mix of owners when ballots are counted on Sept. 12. These shifts ought to ensure Dell goes private as planned.
Investors don't have much choice. The company is in worse shape now than it was when the founder's $13.65-a-share bid emerged in February. The PC market is shrinking at a 15 percent annual rate, faster than thought six months ago. Dell's stock would surely fall precipitously if the deal falls through.
The flaky alternative proposed by activist Carl C. Icahn â€" more debt, a big dividend and a stub of equity that's supposed to more than make up the difference in value â€" looks risky. Mr. Icahn won't like the new deal, but at least he and other arbitrageurs stand to make a slim profit. Long-term owners such as Southeastern Asset Management will crystallize losses, having bought in at almost twice the buyout price. That kind of valuation is, however, unrealistic today.
Dell's board also had few options. Directors changed the voting procedure in exchange for a relatively small bump in price and a concession on breakup fees. That's better than recommending a deal investors don't accept, and then seeing them suffer losses.
For his part, Michael Dell's credibility would have suffered had the vote gone against him. Having kicked in a bit more cash to push the purchase across the line, he'll have more autonomy to turn the company around â€" even assuming he would have been allowed to remain as chief executive with a different outcome.
There's even a bright spot for Silver Lake. The private equity shop is buying a company whose prospects are looking less promising by the day. But the firm will avoid the reputational damage that might have occurred had it walked away. There may be grumbles on all sides â€" but the alternative would have been worse.
Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.
Daniel S. Loeb has been steadily ratcheting up his critique of Sony in recent days. But the conglomerate found a defender in a somewhat unlikely source: George Clooney.
The actor and producer took time during an interview with Deadline Hollywood - ostensibly to discuss his coming movie, “The Monuments Men†- to inveigh against the activist shareholder and his campaign against Sony.
Since unveiling a stake in Sony that is now about 7 percent, Mr. Loeb sharpened the tone of his critique of Sony, which he is pressing to separate its entertainment arm from its electronics business and to streamline its operations. In the latest investor letter sent by his hedge fund, Third Point, the acid-tongued investor wrote: “Given entertainment's perpetual underperformance, perhaps Sony's reluctance to discuss it candidly stems from (understandable) embarrassment.â€
It's worth noting that Sony backs Mr. Clooney's production shop. But the Oscar winner unleashed a torrent of criticism on the hedge fund manager, accusing him of not understanding the movie business. We've picked out some of the choicest comments below.
A spokeswoman for Mr. Loeb declined to comment.
Former trader is found liable in fraud case. | Trader's hiring offers a glimpse of SAC practices. | Banks find S.&P. more favorable in bond ratings. | Million denied bank accounts for past errors. | JPMorgan looks to pay to settle U.S. inquiries. | Hunting for luxury, retail giant buys Saks.
A look back on our reporting of the past week's highs and lows in finance.
Dell and Buyers Reach Compromise on Takeover Bid | Under the terms of the new agreement, Michael S. Dell and his partner will pay $13.75 a share. In return, the special committee will agree to change the rules for victory. DealBook '
Deal Professor: With Fewer Barbarians at the Gate, a New Threat Emerges | Companies may no longer fear the threat of a hostile takeover, but their focus has shifted to activist investors, says Steven M. Davidoff. DealBook '
Hunting for Luxury, Retail Giant Buys Saks | A $2.4 billion deal is the latest for Richard Baker, who successfully waded into retail with Lord & Taylor. DealBook '
Banks Find S.&P. More Favorable in Bond Ratings | The ratings agency's chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis. DealBook '
Barclays to Raise $12 Billion in Capital | Nearly a year after taking over as chief executive, Antony P. Jenkins is still wrestling with the bank's past wrongdoings. DealBook '
If Its Customers Love a Business, This Equity Firm Does, Too | Brentwood Associates invests in a wide variety of companies, but all have one thing in common - a fiercely loyal customer base. DealBook '
Former Trader Is Found Liable in Fraud Case | The S.E.C. got its first significant victory in a case stemming from the financial crisis. DealBook '
Case Against SAC Aided by Hiring of Fired Trader | Richard S. Lee is said to possesses a rich vein of information about other illicit activity at Steven Cohen's hedge fund. DealBook '
U.S. May Move Against Bank Over Jumbo Loan Securities | Regulators are investigating Bank of America and Merrill Lynch as both companies try to move past the problems of the financial crisis. DealBook '
New York Scrutinizes Bank Account Blacklists | The attorney general sent letters to six banks seeking information about the use of databases that disqualify people seeking to open checking or savings accounts. DealBook '
Judge Rejects Fed's Cap on Debit Card Fees | The billions of dollars that banks earn when consumers swipe their debit cards are under threat after a federal court ruling. DealBook '
The Trade: The Power Behind the Throne at the Federal Reserve | Few outside the world of banking regulation understand the influence held by the staff of the Federal Reserve, which includes Scott G. Alvarez, its general counsel, says Jesse Eisinger of ProPublica. DealBook '
Million Denied Bank Accounts for Past Errors | Being rejected for a bank account can lead to a succession of fees for cashing checks, paying bills and wiring money. DealBook '
JPMorgan Looks to Pay to Settle U.S. Inquiries | The payouts started on Tuesday when JPMorgan struck a $410 million settlement with the nation's top energy regulator. DealBook '
‘Blame It on the Boogie' | Who should be held responsible for the financial crisis? Ask ‘The Jackson 5.' DealBook '
A federal jury in New York decided on Friday that a woman who was one of 11 people in her division at Bank of New York Mellon laid off in 2010 was not a victim of sex discrimination. The case was unusual in that it even went to trial.
The plaintiff, Rochelle Cohen, a 56-year-old portfolio officer in the wealth management division of Bank of New York Mellon, lost her $124,000-a-year job on Sept. 20, 2010, in one of the rounds of postfinancial crisis layoffs at the bank. Nine of the other employees in her division who lost their jobs were women. And Ms. Cohen testified at the trial that two years before she was fired, she asked her managers why she was not getting paid as much as the men. She contended that her managers became critical of her after she brought up gender issues.
The Federal District Court jury deliberated for just one day before delivering its verdict. Kevin Heine, a spokesman for the bank, said afterward, “We are pleased with the jury's unanimous verdict, which clearly confirms that Ms. Cohen's pay and performance were judged solely on the merits, not on her gender.â€
Ms. Cohen said she was disappointed, “but I'm glad I fought the fight and hope it will make a difference for other women.†Her lawyer, Milton L. Williams Jr., of the New York firm Vladeck, Waldman, Elias & Engelhard, declined to comment.
Most discrimination complaints by Wall Street women are relegated to private, industry-run arbitration or settled before a jury gets a chance to review the evidence. The number of cases that make it to trial is further reduced because “a huge percentage that don't settle get dismissed in summary judgment,†said Michael E. GrenertÖ, an employment lawyer at the New York firm Liddle & Robinson.
Women in finance have not fared well in the years since the 2008 financial crisis, as their share of jobs among the nine largest firms dropped to 36 percent from 40 percent from 2007 to 2011, according to a report by the Securities Industry and Financial Markets Association.
Ms. Cohen sued Bank of New York Mellon in January 2011 for gender discrimination and violations of the Equal Pay Act, seeking back pay, earnings lost after she was fired and punitive damages.
On Thursday, the jury heard closing arguments in the case after a seven-day trial. The testimony often diverted from issues of pay and promotion to focus on complaints about a bank salesman who had been reprimanded after reports that he had engaged in “inappropriate and unprofessional behavior†with female colleagues.
According to testimony at the trial, the bank's tristate region, covering New York, New Jersey and Connecticut, eliminated 10 women and one man from the wealth management division from July through October 2010. Doris P. Meister, president of United States Markets-Tristate at Bank of New York Mellon, told jurors on Thursday, “I can assure you gender discrimination did not play a role in this list.â€
Ms. Cohen, who had 21 years of experience in the financial services industry when she joined a predecessor company to Bank of New York in 2000, had been earning $120,000 to $150,000 in salary and bonus in the years before she moved to what was then the Mellon Financial Corporation. She accepted a base pay of $47,500 before bonus at Mellon, having been assured that she would be making more money “in no time,†according to her complaint.
Ms. Cohen said in her complaint that the bank told her she was filling the only position available. But her lawyer told jurors that, after hiring her, the bank hired two men with comparable experience and paid them $100,000 a year more than she was making. The bank disputed that Ms. Cohen's experience was comparable to that of the two men, noting that they had educational and professional credentials that she did not have.
The loss of her job took a toll, she told jurors. “Being fired was probably the most humiliating thing that ever happened to me,†Ms. Cohen said. “It was very abrupt. It was very upsetting.†As a result of being fired, she said, her clients and contacts began to “assume that I did something wrong.â€
The bank's lawyer and witnesses dismissed Ms. Cohen's two decades of experience at brokerage firms as being downmarket to the fiduciary role Bank of New York Mellon provides to clients. Asked if the brokerage firm Morgan Stanley had a wealth management division, for example, Ms. Meister responded, “They call it wealth management.â€
In her 2007 performance evaluation, Ms. Cohen received an overall rating of “strong†out of four options that included below target, on target, strong and outstanding. Her manager remarked in that review that she had “a remarkable year.â€
Ms. Cohen testified that in 2008, she began to ask managers why she was not making more money, and that she wanted to make as much as her male peers. One of her former managers admitted in court that Ms. Cohen had brought up the possibility of unequal pay based on gender, but another bank official said she remembered only that Ms. Cohen inquired about making more money.
She had generated revenue of $1,695,000 for the bank in 2009, and her lawyer mentioned several times over the course of the trial that one of the male portfolio officers who earned more money had generated only $1,555,000 that year. Witnesses for the bank have testified that there were aspects of Ms. Cohen's revenue base that caused her accounts to be less profitable than some of her colleagues'.
Ms. Cohen currently works as a broker at the Signature Group of Companies, an insurance and financial planning company based in Garden City, N.Y. She earned $70,000 at Signature last year.
While Ms. Cohen argued that her career got off track after she began to question whether she was being paid less than the men, Lloyd Clareman, a lawyer for the bank, told jurors in his opening statement that Ms. Cohen had been on a strong career track until she made a “serious mistake.â€
According to witnesses for the bank, Ms. Cohen learned in 2005 that a woman she had once worked with, who subsequently was disfigured in an act of domestic violence, had just been hired. Bank officials testified that Ms. Cohen suggested that it had been a mistake to hire the woman because clients would see her. By Ms. Cohen's account, she had brought up the issue because she was concerned that the woman get the support she needed, and that her presence at the bank might pose security challenges given the history of violence by her former boyfriend.
The bank issued a written warning to Ms. Cohen in 2005, telling her she must stop discussing the new employee. The incident was mentioned in her 2006 review, but by 2007, her manager was noting her “remarkable†year.
There was extensive discussion at the trial of behavior by a salesman at the bank, Peter Culver. Like Ms. Cohen, Mr. Culver had received a written warning from the bank. In his case, there had been complaints related to his behavior toward women.
Although the warning to Mr. Culver did not specifically mention it, one woman who was interviewed as part of the bank's internal investigation of Mr. Culver said he was “one of the more known men to ogle women.†Another said that Mr. Culver would sometimes rub her back and, at the end of the day, blow kisses to her.
In a brief telephone conversation, Mr. Culver declined to comment.
Thomas Hurlbrink, managing director in wealth management sales, told a company investigator that Mr. Culver “loses eye contact with a person he is speaking with to stare at a woman,†according to the investigator's notes., and that he had told Mr. Culver that such behavior was “creepy.â€
Mr. Hurlbrink told the investigator that he had hired a coach for Mr. Culver in 2011 and that the coaching initially was effective. But “the minute the coaching stopped, the behavior was back,†he said.
Given the company's willingness to hire a coach for one employee who was described as “a little touchy feely with females†in a company investigation, Mr. Williams, Ms. Cohen's lawyer, asked Patrick Crowe, managing director for the tristate region in wealth management, whether the bank had ever considered getting Ms. Cohen a coach.
There had not been any discussions about that, Mr. Crowe said.
When nine New York residents shuffled into a cramped jury room in the federal courthouse in Lower Manhattan on Wednesday, they were divided over Fabrice Tourre's culpability in a toxic mortgage deal sold to investors.
Then, over more than 13 hours, the five women and four men pored over reams of disclosure documents that Mr. Tourre and his employer Goldman Sachs had provided for investors in 2007, grappling with the nuances of the Securities and Exchange Commission's case. One juror, 32-year-old Tina Oommen, scribbled the various charges facing the former trader on a white board. Others scoured the voluminous transcript from the three-week trial.
Tension mounted among the nine - which included educators, a stockbroker, an Episcopal priest and a digital advertising employee who reads Esquire magazine - as the deliberations dragged on.
“It got really intense; it reminded me of religion,†said the Rev. Beth F. Glover, the 47-year-old priest who initially struck a skeptical tone about aspects of the government's case. She questioned whether Mr. Tourre's supposed violation was “material,†a finding that was needed to rule against the former trader.
At 3:12 p.m. on Thursday, the jury reached a verdict. Mr. Tourre, they decided, was liable for six of the seven counts.
Interviews with five of the nine jurors, an eclectic group spread across Westchester County, Manhattan and the Bronx, pulled back a curtain on the private deliberations in the S.E.C.'s most prominent trial stemming from the financial crisis. The jurors, speaking from their homes and offices a day after the trial, described the genesis of their decision.
They expressed sympathy for Mr. Tourre, alternately calling him a “scapegoat†and a “willing participant†in Goldman's vast mortgage machine.
But ultimately, the jurors said, their decision came down to what they saw as the letter of the law and, for some, a broader concern that Mr. Tourre's actions underscored a fundamental problem with society: Wall Street greed.
“He is what Wall Street is all about and it scared me,†Evelyn Linares, a school principal from the Bronx, said on Friday in an interview from her porch. “You go in thinking you can make a difference and you get sucked in.â€
The S.E.C.'s case hinged on its grim portrayal of Wall Street.
In his opening argument to the jury, Matthew T. Martens, the leading lawyer for the agency, depicted the case against Mr. Tourre as an assault on “Wall Street greed,†arguing that the former trader had created a deal “to maximize the potential it would fail.â€
Mr. Tourre, Mr. Martens later declared in his closing remarks, was living in a “Goldman Sachs land of make-believe†where deceiving investors is not fraudulent.
That argument resonated with the jurors.
“Mr. Martens told us at the beginning that we would see this was all about Wall Street greed, and we did get to see that,†Ms. Linares said.
And jurors said that they trusted Mr. Martens, with one describing the clean-cut lawyer as “Marine-like.â€
For Mr. Martens, the case was his final act at the S.E.C. He has already notified the agency's enforcement chiefs that he will soon depart for a white-shoe law firm, a person briefed on the matter said. Mr. Martens, the person said, is currently choosing between Latham & Watkins and WilmerHale.
For the S.E.C., whose credibility as a regulator came into question after failing to thwart the crisis, the jury delivered a long-sought courtroom victory. The triumph over Mr. Tourre follows one disappointment after another for the S.E.C., including two similar mortgage-related cases that crumbled last year.
In an e-mail to the trial team after the verdict, an S.E.C. official thanked the lawyers for securing a victory. “We needed this,†the official said.
Still, some critics have questioned why the agency chose to make Mr. Tourre - a midlevel employee who was 28 at the time of the mortgage deal - the face of the crisis. Not one executive at Lehman Brothers, which filed Wall Street's biggest bankruptcy ever at the height of the crisis, was charged with wrongdoing.
Mr. Tourre's lawyers seized on that sentiment, painting the trader as a scapegoat who abandoned his Wall Street career to pursue a doctorate in economics from the University of Chicago. The lawyers also noted that senior Goldman executives had approved the deal.
The jurors were sympathetic to that argument. After reflecting on Mr. Tourre's case, Beverly Rhett, a former special education teacher known as juror No. 2, commented: “I could characterize him as somewhat of a scapegoat.â€
Ms. Glover, the priest, echoed those remarks. “It is a shame lower-level employees get pulled in,†she said. “There's a part of me that felt it was very unfair.â€
Yet his lower-level status, jurors say, did not erase what he did.
“We were asked to look at his actions,†Ms. Glover said, as she sipped coffee, with a button pinned to her shirt saying “We Care About Your Spiritual Needs.â€
“They portrayed him as a cog, but in the end a machine is made up of cogs and he was a willing part of that,†she said.
Ms. Linares, the school principal, said, “We don't think he deserved to take the blame for everything but he did play along.â€
The scheme, according to the S.E.C., involved the marketing of a mortgage deal in 2007. At the heart of the agency's case was the claim that Mr. Tourre and Goldman sold investors the deal without disclosing a crucial conflict of interest: a hedge fund that helped construct the deal also bet that it would fail.
Mr. Martens also cited an e-mail in which Mr. Tourre stated that the riskiest slice of the mortgage trade - a piece typically bought by someone betting that the deal would succeed - was “precommitted,†when in fact it was not even going to be offered.
Mr. Tourre, his lawyers argued, corrected that misstatement in offering documents that followed, calling that slice N/A or not applicable. But some jurors said they didn't feel that convincing, because the tranche the hedge fund bought was also listed as N/A when it wasn't.
His lucrative paycheck - $1.7 million in 2007, the year he assembled the mortgage deal in question - also swayed some jurors.
Still, Ms. Glover was not initially convinced. She debated whether it was “material†for investors to know the hedge fund's role in the transaction.
“Industry practice was also not to disclose,†she said, reciting a line from the defense's playbook.
And when the S.E.C. quoted embarrassing love notes Mr. Tourre sent to his girlfriend, some jurors felt sympathy rather than condemnation. Ms. Linares also prayed for Mr. Tourre - and the other witnesses - every day during the trial.
Other jurors were more adamant that Mr. Tourre was liable. When they couldn't agree on a particular charge, they would shift to another issue.
“At times things got heated. We were trying to play both sides of the fence and there were times when we didn't agree on things,†Leonel Lopez, the Esquire-reading advertising employee, added.
Mr. Tourre lost, the jurors said, despite performing well on the witness stand over three days.
In fact, some jurors questioned why Mr. Tourre's lawyers didn't keep him there longer.
“It was a big shock to us that they didn't ask more questions,†Ms. Glover said. “He was likable and engaging,†she said, adding it would have been easier for jurors if he was more villainlike.
While the loss also raised questions about the defense team declining to call a single witness, most jurors said that decision did not sway their vote. Mr. Lopez, 27, said the decision “didn't strike me as odd because they did get a chance to question the prosecution's witnesses.â€
According to legal experts, defense lawyers commonly present no defense when the government has already called their client as a witness.
“It's both a show of confidence and a tactic to get the jury to focus on the fact that the burden of proof rests with the government,†said Evan T. Barr, a former federal prosecutor who now defends white-collar cases as a partner at Steptoe & Johnson. “I would not be second-guessing the decision.â€
A lawyer for Mr. Tourre declined to comment. Goldman Sachs, which settled its part in the case by paying a $550 million fine in 2010, also declined to comment. The bank has paid for Mr. Tourre's defense, and is likely to continue doing so.
While Mr. Tourre was the one on trial, the case weighed on jurors as well. Some traveled from more than an hour away each day, and then were forced to cram in work every evening.
Jurors were provided muffins or doughnuts by the court on some mornings. Nonetheless, Ms. Linares, on a special diet she started just before trial, says she lost 20 pounds - taking her muffin home for her 87-year-old mother.
“It's been a long three weeks,†Reece Pate, 37, a graphic designer known as juror No. 7, said. “I'm trying to get back into my normal routine.â€
For Ms. Rhett, the retired teacher, the trial ended just in time for her to make a cruise. Reached late Thursday night, Ms. Rhett said she returned home after the verdict and began to read media articles.
“I had no idea how big the case was. I had not read anything or heard anything.â€
After the verdict on Thursday, Steven Zucker, the jury foreman, suggested a reunion, and Ms. Rhett collected everyone's e-mails. One person recalled Mr. Zucker, the former stockbroker, saying, “We should all go out for a drink.â€
William Alden contributed reporting.
Say what you want about the evil of printer companies.
“Why, the ink costs more than the printer!†Yes, we know. “They give away the razor, and sell you expensive blades!†Correct. “They say we have to use their own brand of ink! That's just to stop us from using other companies' cheaper ink!†Bingo.
But that's inkjet printers.
In the black-and-white, personal laser-printer realm, I've been pleasantly surprised. The one I bought in 2003, an H.P. LaserJet 1300, was cheap, compact and networkable; it served me flawlessly for a decade.
A couple of months ago, it finally gave up the ghost - or, rather, started printing lighter and lighter pages, even with fresh cartridges. I considered getting it repaired, but when I saw that I could get a much faster, much better, brand-new laser printer for around $100, I decided to leap into the future. ($100. Man. My first laser printer was an NEC SilentWriter for which a buddy and I paid $6,000 in the late '80s.)
Now, I generally don't review printers. The reason is simple: I'm a one-man operation, and there are hundreds of printer models to review. I'd lose that war fast.
The one I actually bought, though, deserves a special mention. It's the Hewlett-Packard Pro P1606dn ($150 online). Fortunately, whoever names these things doesn't design them. This is one rockin' printer.
First, it's shiny, black and tiny: 15 inches wide, 11 deep, 9.5 inches tall. We keep it on a bookshelf, believe it or not. It weighs 15 pounds, which is very light. (My old SilentWriter, by contrast, was roughly the size and weight of a Volkswagen Beetle.)
Keeping it in the main living area of the house is also made possible by this printer's environmentally thoughtful narcolepsy; it goes to completely silent sleep when you're not printing. And even when it is, it has a Quiet mode that's slower but quieter than normal.
Second, the printer practically sets itself up. The Smart Install feature means that the drivers and software you need are built into the printer; you don't need a CD or a download. Any computer you connect to it with a USB cable instantly grabs the software it needs, all by itself. (Smart Install is for Windows. Our Macs didn't need it; OS X comes with the driver already built in.)
The first page pops out only a few seconds after you click Print, and then the printer absolutely blazes: 25 pages a minute. It makes inkjet printers look positively sluglike.
The printouts look fantastic, crisp and black. The input and output trays hold 150 sheets; there's also a “priority†slot for envelopes, label sheets and other special paper. You get about 2,000 pages from each $78 cartridge, which isn't bad.
But for my family, the P1606dn's star features are these:
* Built-in networking. Plug an Ethernet cable into the back, and suddenly this thing is on the network, so any Mac or PC in the house can send printouts to it wirelessly. No setup.
* AirPrint. You can send printouts to this printer from an iPhone, iPad or iPod Touch - or at least any app with a Print command - without any setup. For example, we routinely use the phone as a scanner. (We use a scanner-like app, JotNot, to capture page images, then print them instantly and wirelessly on the HP. Double sided.)
* Double-sided printing. I've never seen duplex printing on a personal laser printer before, but it's awesome. It saves a ton of paper and serves manuscripts and musical scores especially well. It's amazing to watch. Each page spits out of the printer, then gets sucked back in, and finally slides out a second time, now printed on both sides.
Here's what you sacrifice. This printer doesn't have a screen or even a status panel - only three indicator lights - but I've never once missed them. No memory-card slot, either. And, like most printers, this one comes without any cables. You're expected to supply your own USB or Ethernet cable.
Incredibly fast, superb quality, dirt cheap; no wonder this printer gets rave reviews on Amazon. Here's one more. If you're looking for a home laser printer, you'll fall in love with this one - whatever it's called.
In May, Yahoo riled up photography lovers everywhere by revamping its popular Flickr photo-sharing site. The new Flickr offers everyone 1 terabyte of free storage. That's a lot. It's enough to back up and display 600,000 photos at full resolution. (Here's my review.)
But the new Flickr eliminates the unlimited-storage plan for new members and drops a few features of the old Flickr. This infuriated some of the harder-core photographers.
There could be no better time, therefore, for Flickr's rival SmugMug to step into the fray with its own revamp, which it says has been in the works for two years. It zigs exactly the way Flickr just zagged: by offering features that cater to high-end photo buffs instead of offending them.
“Over time,†explained the chief of SmugMug, Don MacAskill, “SmugMug became a lot less beautiful.†Buttons, links and other distracting elements cluttered up the screen. The mantras of the new SmugMug, which went live this morning, are “less clutter†and “customization.â€
You'll notice the cleaned-up design immediately. But the real fun is lurking in the Customize menu when you're logged into your account.
“Choose a New Site Design†opens a palette of 24 new layouts for your SmugMug world. Each offers different color and type schemes, photo layouts and sizes. With one click, you can make your collection look like a photo wall, an architectural coffee-table book or a commercial brochure.
The Customize menu also contains the command Customize Site, which lets you go much, much farther.
Now you can hand-tweak every single aspect of every page of your site. Change the color and texture of each gallery. Adjust the top, bottom or side margins of the Web page. Add or move navigation buttons, headings, even a map showing where the pictures were taken. Insert logos or bits of text. Choose a picture to fill the background behind your photos. Place the Comments box, links to your Facebook and Twitter streams and so on.
The point is to take SmugMug beyond simple photo sharing. It's to turn your SmugMug account into your Web site for displaying pictures - something no other photo-sharing site can match. You can see how varied and attractive some of the members' redesigned sites are here, here and here.
That's the good news.
The bad news is that the controls for all of this customization are dizzying. Of course, it's totally fine to stick with one of the 24 canned designs. But if you do decide to hand-craft the look of your site, you'll have to dedicate serious time to learning the controls.
SmugMug isn't free. It's $40 a year for the basic plan (no photo selling) and as much as $300 a year for pros who want to run a business selling their wares on SmugMug. All the plans offer unlimited photo storage.
But it's hard to compete with free. Is SmugMug's rebirth enough to woo the masses away from the free of Flickr?
Fortunately, SmugMug doesn't have to worry about the masses. It caters to people who care enough about photos to pay for their presentation online. And those are precisely the people who will probably appreciate the much improved design, beautiful templates and infinite customization of the new SmugMug.
An earlier version of this post referred incorrectly to the design of the beta-testers' SmugMug sites. The sites referred to were not the latest, customized versions of their sites. It also misstated what is included in the basic plan. Videos are included.
When nine New York residents shuffled into a cramped jury room in the federal courthouse in Lower Manhattan on Wednesday, they were divided over Fabrice Tourre’s culpability in a toxic mortgage deal sold to investors.
Then, over more than 13 hours, the five women and four men pored over reams of disclosure documents that Mr. Tourre and his employer Goldman Sachs had provided for investors in 2007, grappling with the nuances of the Securities and Exchange Commission’s case. One juror, 32-year-old Tina Oommen, scribbled the various charges facing the former trader on a white board. Others scoured the voluminous transcript from the three-week trial.
Tension mounted among the nine â€" which included educators, a stockbroker, an Episcopal priest and a digital advertising employee who reads Esquire magazine â€" as the deliberations dragged on.
“It got really intense; it reminded me of religion,†said the Rev. Beth F. Glover, the 47-year-old priest who initially struck a skeptical tone about aspects of the government’s case. She questioned whether Mr. Tourre’s supposed violation was “material,†a finding that was needed to rule against the former trader.
At 3:12 p.m. on Thursday, the jury reached a verdict. Mr. Tourre, they decided, was liable for six of the seven counts.
Interviews with five of the nine jurors, an eclectic group spread across Westchester County, Manhattan and the Bronx, pulled back a curtain on the private deliberations in the S.E.C.’s most prominent trial stemming from the financial crisis. The jurors, speaking from their homes and offices a day after the trial, described the genesis of their decision.
They expressed sympathy for Mr. Tourre, alternately calling him a “scapegoat†and a “willing participant†in Goldman’s vast mortgage machine.
But ultimately, the jurors said, their decision came down to what they saw as the letter of the law and, for some, a broader concern that Mr. Tourre’s actions underscored a fundamental problem with society: Wall Street greed.
“He is what Wall Street is all about and it scared me,†Evelyn Linares, a school principal from the Bronx, said on Friday in an interview from her porch. “You go in thinking you can make a difference and you get sucked in.â€
The S.E.C.’s case hinged on its grim portrayal of Wall Street.
In his opening argument to the jury, Matthew T. Martens, the leading lawyer for the agency, depicted the case against Mr. Tourre as an assault on “Wall Street greed,†arguing that the former trader had created a deal “to maximize the potential it would fail.â€
Mr. Tourre, Mr. Martens later declared in his closing remarks, was living in a “Goldman Sachs land of make-believe†where deceiving investors is not fraudulent.
That argument resonated with the jurors.
“Mr. Martens told us at the beginning that we would see this was all about Wall Street greed, and we did get to see that,†Ms. Linares said.
And jurors said that they trusted Mr. Martens, with one describing the clean-cut lawyer as “Marine-like.â€
For Mr. Martens, the case was his final act at the S.E.C. He has already notified the agency’s enforcement chiefs that he will soon depart for a white-shoe law firm, a person briefed on the matter said. Mr. Martens, the person said, is currently choosing between Latham & Watkins and WilmerHale.
For the S.E.C., whose credibility as a regulator came into question after failing to thwart the crisis, the jury delivered a long-sought courtroom victory. The triumph over Mr. Tourre follows one disappointment after another for the S.E.C., including two similar mortgage-related cases that crumbled last year.
In an e-mail to the trial team after the verdict, an S.E.C. official thanked the lawyers for securing a victory. “We needed this,†the official said.
Still, some critics have questioned why the agency chose to make Mr. Tourre â€" a midlevel employee who was 28 at the time of the mortgage deal â€" the face of the crisis. Not one executive at Lehman Brothers, which filed Wall Street’s biggest bankruptcy ever at the height of the crisis, was charged with wrongdoing.
Mr. Tourre’s lawyers seized on that sentiment, painting the trader as a scapegoat who abandoned his Wall Street career to pursue a doctorate in economics from the University of Chicago. The lawyers also noted that senior Goldman executives had approved the deal.
The jurors were sympathetic to that argument. After reflecting on Mr. Tourre’s case, Beverly Rhett, a former special education teacher known as juror No. 2, commented: “I could characterize him as somewhat of a scapegoat.â€
Ms. Glover, the priest, echoed those remarks. “It is a shame lower-level employees get pulled in,†she said. “There’s a part of me that felt it was very unfair.â€
Yet his lower-level status, jurors say, did not erase what he did.
“We were asked to look at his actions,†Ms. Glover said, as she sipped coffee, with a button pinned to her shirt saying “We Care About Your Spiritual Needs.â€
“They portrayed him as a cog, but in the end a machine is made up of cogs and he was a willing part of that,†she said.
Ms. Linares, the school principal, said, “We don’t think he deserved to take the blame for everything but he did play along.â€
The scheme, according to the S.E.C., involved the marketing of a mortgage deal in 2007. At the heart of the agency’s case was the claim that Mr. Tourre and Goldman sold investors the deal without disclosing a crucial conflict of interest: a hedge fund that helped construct the deal also bet that it would fail.
Mr. Martens also cited an e-mail in which Mr. Tourre stated that the riskiest slice of the mortgage trade â€" a piece typically bought by someone betting that the deal would succeed â€" was “precommitted,†when in fact it was not even going to be offered.
Mr. Tourre, his lawyers argued, corrected that misstatement in offering documents that followed, calling that slice N/A or not applicable. But some jurors said they didn’t feel that convincing, because the tranche the hedge fund bought was also listed as N/A when it wasn’t.
His lucrative paycheck â€" $1.7 million in 2007, the year he assembled the mortgage deal in question â€" also swayed some jurors.
Still, Ms. Glover was not initially convinced. She debated whether it was “material†for investors to know if the hedge fund’s role in the transaction.
“Industry practice was also not to disclose,†she said, reciting a line from the defense’s playbook.
And when the S.E.C. quoted embarrassing love notes Mr. Tourre sent to his girlfriend, some jurors felt sympathy rather than condemnation. Ms. Linares also prayed for Mr. Tourre â€" and the other witnesses â€" every day during the trial.
Other jurors were more adamant that Mr. Tourre was liable. When they couldn’t agree on a particular charge, they would shift to another issue.
“At times things got heated. We were trying to play both sides of the fence and there were times when we didn’t agree on things,†Leonel Lopez, the Esquire-reading advertising employee, added.
Mr. Tourre lost, the jurors said, despite performing well on the witness stand over three days.
In fact, some jurors questioned why Mr. Tourre’s lawyers didn’t keep him there longer.
“It was a big shock to us that they didn’t ask more questions,†Ms. Glover said. “He was likable and engaging,†she said, adding it would have been easier for jurors if he was more villainlike.
While the loss also raised questions about the defense team declining to call a single witness, most jurors said that decision did not sway their vote. Mr. Lopez, 27, said the decision “didn’t strike me as odd because they did get a chance to question the prosecution’s witnesses.â€
According to legal experts, defense lawyers commonly present no defense when the government has already called their client as a witness.
“It’s both a show of confidence and a tactic to get the jury to focus on the fact that the burden of proof rests with the government,†said Evan T. Barr, a former federal prosecutor who now defends white-collar cases as a partner at Steptoe & Johnson. “I would not be second-guessing the decision.â€
A lawyer for Mr. Tourre declined to comment. Goldman Sachs, which settled its part in the case by paying a $550 million fine in 2010, also declined to comment. The bank has paid for Mr. Tourre’s defense, and is likely to continue doing so.
While Mr. Tourre was the one on trial, the case weighed on jurors as well. Some traveled from more than an hour away each day, and then were forced to cram in work every evening.
Jurors were provided muffins or doughnuts by the court on some mornings. Nonetheless, Ms. Linares, on a special diet she started just before trial, says she lost 20 pounds â€" taking her muffin home for her 87-year-old mother.
“It’s been a long three weeks,†Reece Pate, 37, a graphic designer known as juror No. 7, said. “I’m trying to get back into my normal routine.â€
For Ms. Rhett, the retired teacher, the trial ended just in time for her to make a cruise. Reached late Thursday night, Ms. Rhett said she returned home after the verdict and began to read media articles.
“I had no idea how big the case was. I had not read anything or heard anything.â€
After the verdict on Thursday, Steven Zucker, the jury foreman, suggested a reunion, and Ms. Rhett collected everyone’s e-mails. One person recalled Mr. Zucker, the former stockbroker, saying, “We should all go out for a drink.â€
William Alden contributed reporting.
A federal jury in New York decided Friday that a woman, who was one of 11 people in her division at Bank of New York Mellon laid off in 2010, was not a victim of sex discrimination. The case was unusual in that it even went to trial.
The plaintiff, Rochelle Cohen, a 56-year-old portfolio officer in the wealth management division of Bank of New York Mellon, lost her $124,000-a-year job on Sept. 20, 2010, in one of the rounds of post-financial crisis layoffs at the bank. Nine of the other employees in her division who lost their jobs were women. And Ms. Cohen testified at the trial that two years before she was fired, she asked her managers why she was not getting paid as much as the men. She contended that her managers became critical of her after she brought up gender issues.
The Federal District Court jury deliberated for just one day before delivering its verdict. Kevin Heine, a spokesman for the bank, said afterward, “We are pleased with the jury’s unanimous verdict, which clearly confirms that Ms. Cohen’s pay and performance were judged solely on the merits, not on her gender.â€
Ms. Cohen said she was disappointed, “but I’m glad I fought the fight and hope it will make a difference for other women.†Her lawyer, Milton L. Williams Jr., of the New York firm Vladeck, Waldman, Elias & Engelhard, declined to comment.
Most discrimination complaints by Wall Street women are either relegated to private, industry-run arbitration or settled before any jury gets a chance to review the evidence. The number of cases that make it to trial is further reduced because “a huge percentage that don’t settle get dismissed in summary judgment,†said Michael E. Grenert, an employment lawyer at the New York firm Liddle & Robinson.
Women in finance have not fared well in the years since the 2008 financial crisis, as their share of jobs among the nine largest firms dropped to 36 percent from 40 percent from 2007 to 2011, according to a report by the Securities Industry and Financial Markets Association.
Ms. Cohen sued Bank of New York Mellon in January 2011 for gender discrimination and violations of the Equal Pay Act, seeking back pay, earnings lost after she was fired and punitive damages.
On Thursday, the jury heard closing arguments in the case after a seven-day trial. The testimony often diverted from issues of pay and promotion to focus on complaints about a bank salesman who had been reprimanded after reports that he had engaged in “inappropriate and unprofessional behavior†with female colleagues.
According to testimony at the trial, the bank’s tristate region, covering New York, New Jersey and Connecticut, eliminated 10 women and one man from the wealth management division from July through October 2010. Doris P. Meister, president of U.S. Markets-Tristate at Bank of New York, told jurors on Thursday, “I can assure you gender discrimination did not play a role in this list.â€
Ms. Cohen, who had 21 years of experience in the financial services industry when she joined a predecessor company to Bank of New York in 2000, had been earning $120,000 to $150,000 in salary and bonus in the years before she moved to what was then the Mellon Financial Corporation. She accepted a base pay of $47,500 before bonus at Mellon, having been assured that she would be making more money “in no time,†according to her complaint.
Ms. Cohen said in her complaint that the bank told her she was filling the only position available. But her lawyer told jurors that, after hiring her, the bank hired two men with comparable experience and paid them $100,000 a year more than she was making. The bank disputed that Ms. Cohen’s experience was comparable to that of the two men, noting that they had educational and professional credentials that she did not have.
The loss of her job took a toll, she told jurors. “Being fired was probably the most humiliating thing that ever happened to me,†Ms. Cohen said. “It was very abrupt. It was very upsetting.†As a result of being fired, she said, her clients and contacts began to “assume that I did something wrong.â€
The bank’s lawyer and witnesses dismissed Ms. Cohen’s two decades of experience at brokerage firms as being downmarket to the fiduciary role Bank of New York Mellon provides to clients. Asked if the brokerage firm Morgan Stanley had a wealth management division, for example, Ms. Meister responded, “They call it wealth management.â€
In her 2007 performance evaluation, Ms. Cohen received an overall rating of “strong†out of four options that included below target, on target, strong and outstanding. Her manager remarked in that review that she’d had “a remarkable year.â€
Ms. Cohen testified that in 2008, she began to ask managers why she wasn’t making more money, and that she wanted to make as much as her male peers. One of her former managers admitted in court that Ms. Cohen had brought up the possibility of unequal pay based on gender, but another bank official said she remembered only that Ms. Cohen inquired about making more money.
She had generated revenues of $1,695,000 for the bank in 2009, and her lawyer mentioned several times over the course of the trial that one of the male portfolio officers who earned more money had generated only $1,555,000 that year. Witnesses for the bank have testified that there were aspects of Ms. Cohen’s revenue base that caused her accounts to be less profitable than some of her colleagues’.
Ms. Cohen currently works as a broker at the Signature Group of Companies, an insurance and financial planning company based in Garden City, N.Y. She earned $70,000 at Signature last year. “The market is placing a value of about $70,000 on her services,†Lloyd Clareman, a lawyer for Bank of New York Mellon, said in his closing argument.
While Ms. Cohen argued that her career got off track after she began to question whether she was being paid less than the men, Mr. Clareman told jurors in his opening statement that Ms. Cohen had been on a strong career track until she made a “serious mistake.â€
According to witnesses for the bank, Ms. Cohen learned in 2005 that a woman she had once worked with, who subsequently was disfigured in an act of domestic violence, had just been hired. Bank officials testified that Ms. Cohen suggested that it had been a mistake to hire the woman because clients would see her. By Ms. Cohen’s account, she had brought up the issue because she was concerned that the woman get the support she needed, and that her presence at the bank might pose security challenges given the history of violence by her former boyfriend.
The bank issued a written warning to Ms. Cohen in 2005, telling her she must stop discussing the new employee. Lilian Kandt, administrative and planning manager in wealth management marketing at the bank, told jurors that in her opinion, Ms. Cohen should have been fired for offering her opinion on the hiring of the woman. The incident was mentioned in her 2006 review, but by 2007, her manager was noting her “remarkable†year.
There was extensive discussion during the trial of behavior by a salesman at the bank, Peter Culver. Like Ms. Cohen, Mr. Culver had received a written warning from the bank. In his case, there had been complaints related to his behavior toward women.
Although the warning to Mr. Culver did not specifically mention it, one woman who was interviewed as part of the bank’s internal investigation of Mr. Culver said he was “one of the more known men to ogle women.†Another said that Mr. Culver would sometimes rub her back and, at the end of the day, blow kisses to her.
In a brief telephone conversation, Mr. Culver declined to comment.
Thomas Hurlbrink, managing director in wealth management sales, told a company investigator that Mr. Culver “loses eye contact with a person he is speaking with to stare at a woman,†according to the investigator’s notes, and that he had told Mr. Culver that such behavior was “creepy.â€
Mr. Hurlbrink told the investigator that he had hired a coach for Mr. Culver in 2011 and that the coaching initially was effective. But “the minute the coaching stopped, the behavior was back,†he said.
Given the company’s willingness to hire a coach for an employee who was described as “a little touchy feely with females†in a company investigation, Ms. Cohen’s lawyer, Mr. Williams asked Patrick Crowe, managing director for the tristate region in wealth management, whether the bank had ever considered getting Ms. Cohen a coach.
There had not been any discussions about that, Mr. Crowe said.
A federal jury in New York decided Friday that a woman, who was one of 11 people in her division at Bank of New York Mellon laid off in 2010, was not a victim of sex discrimination. The case was unusual in that it even went to trial.
The plaintiff, Rochelle Cohen, a 56-year-old portfolio officer in the wealth management division of Bank of New York Mellon, lost her $124,000-a-year job on Sept. 20, 2010, in one of the rounds of post-financial crisis layoffs at the bank. Nine of the other employees in her division who lost their jobs were women. And Ms. Cohen testified at the trial that two years before she was fired, she asked her managers why she was not getting paid as much as the men. She contended that her managers became critical of her after she brought up gender issues.
The Federal District Court jury deliberated for just one day before delivering its verdict. Kevin Heine, a spokesman for the bank, said afterward, “We are pleased with the jury’s unanimous verdict, which clearly confirms that Ms. Cohen’s pay and performance were judged solely on the merits, not on her gender.â€
Ms. Cohen said she was disappointed, “but I’m glad I fought the fight and hope it will make a difference for other women.†Her lawyer, Milton L. Williams Jr., of the New York firm Vladeck, Waldman, Elias & Engelhard, declined to comment.
Most discrimination complaints by Wall Street women are either relegated to private, industry-run arbitration or settled before any jury gets a chance to review the evidence. The number of cases that make it to trial is further reduced because “a huge percentage that don’t settle get dismissed in summary judgment,†said Michael E. Grenert, an employment lawyer at the New York firm Liddle & Robinson.
Women in finance have not fared well in the years since the 2008 financial crisis, as their share of jobs among the nine largest firms dropped to 36 percent from 40 percent from 2007 to 2011, according to a report by the Securities Industry and Financial Markets Association.
Ms. Cohen sued Bank of New York Mellon in January 2011 for gender discrimination and violations of the Equal Pay Act, seeking back pay, earnings lost after she was fired and punitive damages.
On Thursday, the jury heard closing arguments in the case after a seven-day trial. The testimony often diverted from issues of pay and promotion to focus on complaints about a bank salesman who had been reprimanded after reports that he had engaged in “inappropriate and unprofessional behavior†with female colleagues.
According to testimony at the trial, the bank’s tristate region, covering New York, New Jersey and Connecticut, eliminated 10 women and one man from the wealth management division from July through October 2010. Doris P. Meister, president of U.S. Markets-Tristate at Bank of New York, told jurors on Thursday, “I can assure you gender discrimination did not play a role in this list.â€
Ms. Cohen, who had 21 years of experience in the financial services industry when she joined a predecessor company to Bank of New York in 2000, had been earning $120,000 to $150,000 in salary and bonus in the years before she moved to what was then the Mellon Financial Corporation. She accepted a base pay of $47,500 before bonus at Mellon, having been assured that she would be making more money “in no time,†according to her complaint.
Ms. Cohen said in her complaint that the bank told her she was filling the only position available. But her lawyer told jurors that, after hiring her, the bank hired two men with comparable experience and paid them $100,000 a year more than she was making. The bank disputed that Ms. Cohen’s experience was comparable to that of the two men, noting that they had educational and professional credentials that she did not have.
The loss of her job took a toll, she told jurors. “Being fired was probably the most humiliating thing that ever happened to me,†Ms. Cohen said. “It was very abrupt. It was very upsetting.†As a result of being fired, she said, her clients and contacts began to “assume that I did something wrong.â€
The bank’s lawyer and witnesses dismissed Ms. Cohen’s two decades of experience at brokerage firms as being downmarket to the fiduciary role Bank of New York Mellon provides to clients. Asked if the brokerage firm Morgan Stanley had a wealth management division, for example, Ms. Meister responded, “They call it wealth management.â€
In her 2007 performance evaluation, Ms. Cohen received an overall rating of “strong†out of four options that included below target, on target, strong and outstanding. Her manager remarked in that review that she’d had “a remarkable year.â€
Ms. Cohen testified that in 2008, she began to ask managers why she wasn’t making more money, and that she wanted to make as much as her male peers. One of her former managers admitted in court that Ms. Cohen had brought up the possibility of unequal pay based on gender, but another bank official said she remembered only that Ms. Cohen inquired about making more money.
She had generated revenues of $1,695,000 for the bank in 2009, and her lawyer mentioned several times over the course of the trial that one of the male portfolio officers who earned more money had generated only $1,555,000 that year. Witnesses for the bank have testified that there were aspects of Ms. Cohen’s revenue base that caused her accounts to be less profitable than some of her colleagues’.
Ms. Cohen currently works as a broker at the Signature Group of Companies, an insurance and financial planning company based in Garden City, N.Y. She earned $70,000 at Signature last year. “The market is placing a value of about $70,000 on her services,†Lloyd Clareman, a lawyer for Bank of New York Mellon, said in his closing argument.
While Ms. Cohen argued that her career got off track after she began to question whether she was being paid less than the men, Mr. Clareman told jurors in his opening statement that Ms. Cohen had been on a strong career track until she made a “serious mistake.â€
According to witnesses for the bank, Ms. Cohen learned in 2005 that a woman she had once worked with, who subsequently was disfigured in an act of domestic violence, had just been hired. Bank officials testified that Ms. Cohen suggested that it had been a mistake to hire the woman because clients would see her. By Ms. Cohen’s account, she had brought up the issue because she was concerned that the woman get the support she needed, and that her presence at the bank might pose security challenges given the history of violence by her former boyfriend.
The bank issued a written warning to Ms. Cohen in 2005, telling her she must stop discussing the new employee. Lilian Kandt, administrative and planning manager in wealth management marketing at the bank, told jurors that in her opinion, Ms. Cohen should have been fired for offering her opinion on the hiring of the woman. The incident was mentioned in her 2006 review, but by 2007, her manager was noting her “remarkable†year.
There was extensive discussion during the trial of behavior by a salesman at the bank, Peter Culver. Like Ms. Cohen, Mr. Culver had received a written warning from the bank. In his case, there had been complaints related to his behavior toward women.
Although the warning to Mr. Culver did not specifically mention it, one woman who was interviewed as part of the bank’s internal investigation of Mr. Culver said he was “one of the more known men to ogle women.†Another said that Mr. Culver would sometimes rub her back and, at the end of the day, blow kisses to her.
In a brief telephone conversation, Mr. Culver declined to comment.
Thomas Hurlbrink, managing director in wealth management sales, told a company investigator that Mr. Culver “loses eye contact with a person he is speaking with to stare at a woman,†according to the investigator’s notes, and that he had told Mr. Culver that such behavior was “creepy.â€
Mr. Hurlbrink told the investigator that he had hired a coach for Mr. Culver in 2011 and that the coaching initially was effective. But “the minute the coaching stopped, the behavior was back,†he said.
Given the company’s willingness to hire a coach for an employee who was described as “a little touchy feely with females†in a company investigation, Ms. Cohen’s lawyer, Mr. Williams asked Patrick Crowe, managing director for the tristate region in wealth management, whether the bank had ever considered getting Ms. Cohen a coach.
There had not been any discussions about that, Mr. Crowe said.
Former trader is found liable in fraud case. | Trader’s hiring offers a glimpse of SAC practices. | Banks find S.&P. more favorable in bond ratings. | Million denied bank accounts for past errors. | JPMorgan looks to pay to settle U.S. inquiries. | Hunting for luxury, retail giant buys Saks.
A look back on our reporting of the past week’s highs and lows in finance.
Dell and Buyers Reach Compromise on Takeover Bid | Under the terms of the new agreement, Michael S. Dell and his partner will pay $13.75 a share. In return, the special committee will agree to change the rules for victory. DealBook »
Deal Professor: With Fewer Barbarians at the Gate, a New Threat Emerges | Companies may no longer fear the threat of a hostile takeover, but their focus has shifted to activist investors, says Steven M. Davidoff. DealBook »
Hunting for Luxury, Retail Giant Buys Saks | A $2.4 billion deal is the latest for Richard Baker, who successfully waded into retail with Lord & Taylor. DealBook »
Banks Find S.&P. More Favorable in Bond Ratings | The ratings agency’s chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis. DealBook »
Barclays to Raise $12 Billion in Capital | Nearly a year after taking over as chief executive, Antony P. Jenkins is still wrestling with the bank’s past wrongdoings. DealBook »
If Its Customers Love a Business, This Equity Firm Does, Too | Brentwood Associates invests in a wide variety of companies, but all have one thing in common â€" a fiercely loyal customer base. DealBook »
Former Trader Is Found Liable in Fraud Case | The S.E.C. got its first significant victory in a case stemming from the financial crisis. DealBook »
Case Against SAC Aided by Hiring of Fired Trader | Richard S. Lee is said to possesses a rich vein of information about other illicit activity at Steven Cohen’s hedge fund. DealBook »
U.S. May Move Against Bank Over Jumbo Loan Securities | Regulators are investigating Bank of America and Merrill Lynch as both companies try to move past the problems of the financial crisis. DealBook »
New York Scrutinizes Bank Account Blacklists | The attorney general sent letters to six banks seeking information about the use of databases that disqualify people seeking to open checking or savings accounts. DealBook »
Judge Rejects Fed’s Cap on Debit Card Fees | The billions of dollars that banks earn when consumers swipe their debit cards are under threat after a federal court ruling. DealBook »
The Trade: The Power Behind the Throne at the Federal Reserve | Few outside the world of banking regulation understand the influence held by the staff of the Federal Reserve, which includes Scott G. Alvarez, its general counsel, says Jesse Eisinger of ProPublica. DealBook »
Million Denied Bank Accounts for Past Errors | Being rejected for a bank account can lead to a succession of fees for cashing checks, paying bills and wiring money. DealBook »
JPMorgan Looks to Pay to Settle U.S. Inquiries | The payouts started on Tuesday when JPMorgan struck a $410 million settlement with the nation’s top energy regulator. DealBook »
‘Blame It on the Boogie’ | Who should be held responsible for the financial crisis? Ask ‘The Jackson 5.’ DealBook »
Daniel S. Loeb has been steadily ratcheting up his critique of Sony in recent days. But the conglomerate found a defender in a somewhat unlikely source: George Clooney.
The actor and producer took time during an interview with Deadline Hollywood â€" ostensibly to discuss his coming movie, “The Monuments Men†â€" to inveigh against the activist shareholder and his campaign against Sony.
Since unveiling a stake in Sony that is now about 7 percent, Mr. Loeb sharpened the tone of his critique of Sony, which he is pressing to separate its entertainment arm from its electronics business and to streamline its operations. In the latest investor letter sent by his hedge fund, Third Point, the acid-tongued investor wrote: “Given entertainment’s perpetual underperformance, perhaps Sony’s reluctance to discuss it candidly stems from (understandable) embarrassment.â€
It’s worth noting that Sony backs Mr. Clooney’s production shop. But the Oscar winner unleashed a torrent of criticism on the hedge fund manager, accusing him of not understanding the movie business. We’ve picked out some of the choicest comments below.
A spokeswoman for Mr. Loeb declined to comment.
A flawed compromise on the buyout of Dell will save faces all round.
Letting the big transaction fade away would have hurt most shareholders, the board and the company’s eponymous founder. A 2 percent increase in the offer price by buyers Michael S. Dell and Silver Lake Partners in return for a tweaked voting procedure won’t delight anyone - but it should seal the deal.
Rather than going to a vote on Friday that risked killing the deal, almost everyone had reasons to compromise. Selling shareholders will get up to $470 million more, votes that aren’t cast won’t count against the deal, and a changed record date will mean a different mix of owners when ballots are counted on Sept. 12. These shifts ought to ensure Dell goes private as planned.
Investors don’t have much choice. The company is in worse shape now than it was when the founder’s $13.65-a-share bid emerged in February. The PC market is shrinking at a 15 percent annual rate, faster than thought six months ago. Dell’s stock would surely fall precipitously if the deal falls through.
The flaky alternative proposed by activist Carl C. Icahn - more debt, a big dividend and a stub of equity that’s supposed to more than make up the difference in value - looks risky. Mr. Icahn won’t like the new deal, but at least he and other arbitrageurs stand to make a slim profit. Long-term owners such as Southeastern Asset Management will crystallize losses, having bought in at almost twice the buyout price. That kind of valuation is, however, unrealistic today.
Dell’s board also had few options. Directors changed the voting procedure in exchange for a relatively small bump in price and a concession on breakup fees. That’s better than recommending a deal investors don’t accept, and then seeing them suffer losses.
For his part, Michael Dell’s credibility would have suffered had the vote gone against him. Having kicked in a bit more cash to push the purchase across the line, he’ll have more autonomy to turn the company around - even assuming he would have been allowed to remain as chief executive with a different outcome.
There’s even a bright spot for Silver Lake. The private equity shop is buying a company whose prospects are looking less promising by the day. But the firm will avoid the reputational damage that might have occurred had it walked away. There may be grumbles on all sides - but the alternative would have been worse.
Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.
The last several months have been, in many ways, the richest, most exciting and most creative period of my life. Still, as I prepare to take off most of the month of August, I’m feeling edgy, worn out and a bit overwhelmed.
I’m sputtering to the finish line, running near empty.
“How often should you vacation?†I was asked after a talk I gave this week. It dawned on me that I’d let my own balance tip. My to do list had runneth over. I have not taken off more than two full days in a row for six months.
The consequence is that I feel not just tired, but less able to think clearly and creatively, more at the mercy of my emotions.
More than ever, we live in a culture that overvalues the ethic of “more, bigger, faster†and undervalues the importance of rest, renewal and reflection. I preach this lesson for a living, but I, too, can get so passionately immersed in my work that I intermittently forget to apply the lesson to myself.
A growing body of evidence suggests that more overall vacation time - intense effort offset regularly by real renewal â€" fuels greater productivity and more sustainable performance. No research I’ve come across defines the ideal amount of vacation time, but my strong instinct is that if you’re in any sort of demanding job, it makes sense to take at least a week of true vacation every three months.
I can choose to do that because I run my own business. Employees at my company get four weeks of vacation beginning in their first year - not just because it’s better for their lives, but also because it makes them more effective at work. The United States is the only developed country that doesn’t mandate employers to provide vacation time. Most companies do provide it, but often stingily and insufficiently.
To my fellow leaders: Two weeks isn’t enough if what you’re seeking from your people is their best. Is there any doubt, for example, that the greater the demand, the more frequent our need to replenish and rejuvenate? Demand in our lives is rising so relentlessly that I’m beginning to believe even four weeks of vacation a year isn’t enough.
The most basic aim of a vacation ought to be restoration - physically, emotionally, mentally, spiritually. For me, that usually means not trying to do much. For you, it may mean travel and adventure, some form of physical challenge, an opportunity to learn something new or some blend of all three.
The key is to choose something you find truly renewing. At a minimum, that usually requires changing channels - not doing whatever you have been doing.
In my case, I plan to completely unplug from digital life for the next several weeks. Right now, I’m feeling the overload acutely. My brain feels like a pitcher of water filled to the brim. New information seems to spill out as quickly as I take it in.
“What information consumes is rather obvious.†the economist Herbert Simon wrote in 1970, before there was a digital life. “It consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention.â€
It isn’t possible to row a boat across a lake â€" to move continuously toward a destination â€" and dive down into the water at the same time. I’m craving time free of urgent and immediate goals, so I can get beneath the surface of the urgent and swim around in the silent depths for a while.
I want to metabolize what I’ve learned over the last six months and get a sense of what I ought to be focusing on next.
For me, the luxury of taking extended time off - free from the noise of digital life and far from the madding crowd - is that it’s a chance to rest and to reflect.
We don’t get our best ideas staring at our computer screens or sitting in meetings. They occur when we’re in the shower, walking in nature, listening to music or working out. They occur to us when we’re not seeking anything in particular. Distractions fall away when we’re feeling relaxed and unhurried. The external volume drops, and it becomes possible to listen again to whatever arises inside us.
I’m looking forward to those moments. I’m also looking forward to the moments when no thoughts arise and all I’m feeling is the pleasure of spending unhurried time with the people I love most. Nothing is more restorative.
See you in September.
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