Total Pageviews

Big Name Is Leaving Boies’s Firm After a Year

Last August, when the renowned trial lawyer David Boies announced the hiring of David M. Bernick, general counsel at the tobacco giant Philip Morris, he called the move a “huge step” for his firm, Boies Schiller & Flexner.

But after just a year at Boies Schiller, Mr. Bernick is leaving. He is expected to announce on Friday that he is moving to the law firm Dechert, according to people briefed on the matter.

“David is simply one of the best lawyers out there,” Andrew J. Levander, the chairman of Dechert, said in a statement provided to The New York Times. “He is one of a handful of elite lead trial lawyers operating on the national stage.”

It is the third time in recent months that a well-known partner has left Mr. Boies’s firm. In April, Matthew Friedrich, a defense lawyer who formerly served as acting head of the Justice Department’s criminal division, decamped to Freshfields Bruckhaus Deringer. And David W. Shapiro, a former interim United States attorney in San Francisco, started his own firm.

The moves are raising eyebrows in the corporate law world, given that few partners have ever left Boies Schiller, which Mr. Boies started in 1997 and built into one of the country’s most profitable law firms.

Last year, Boies Schiller partners earned an average of $2.7 million, according to the magazine American Lawyer.

Mr. Bernick’s departure is in large part because conflicts of interest with existing Boies Schiller clients prohibited him from representing certain other companies, said Dawn Schneider, a spokeswoman for Boies Schiller.

“We wish him well for the future,” Ms. Schneider said.

Still, the departures highlight the transformation that has taken place at corporate law firms over the last several decades and has only accelerated in recent years. Once staid partnerships where lawyers spent their entire careers, firms are increasingly collections of individuals with portable books of business. It is an era of free agents, where partners commonly switch firms, sometimes obtaining multimillion-dollar guaranteed contracts. Dechert, the firm that Mr. Bernick is joining, has grown rapidly by aggressively recruiting lawyers from rivals.

All of the movement comes at a challenging time for the law industry.

The market for high-end legal services continues to shrink, according to a recent report by the law firm group at Citi Private Bank.

Industry analysts say there are too many lawyers at the country’s largest firms, with some estimating the excess capacity at as much as 10 percent of the lawyer population.

Many expect a round of law-firm layoffs. Earlier this year, Weil Gotshal & Manges became the first large firm to announce heavy cutbacks. A leading firm with about 1,200 lawyers, Weil let go of 60 lawyers and more than 100 support staff and also cut compensation of some of its partners.

The partner moves at Boies Schiller are unrelated to any economic weakness at the firm, people briefed on the matter said.

Mr. Boies and his partners are working on a number of prominent assignments. Jonathan D. Schiller is leading the firm’s representation of the nutritional-supplement maker Herbalife in its battle with the activist investor William A. Ackman. He is also defending Barclays in cases related to the possible manipulation of the interest rate known as Libor. Mr. Boies continues to handle numerous lawsuits for Maurice R. Greenberg, the former head of the American International Group, and is expected to represent the British financier Guy Hands in a retrial of a fraud case against Citigroup this fall.

Rather than reflecting problems at the 250-lawyer firm, people say, the departures are explicable on a case-by-case basis.

Conflict-of-interest issues aside, Mr. Bernick’s hiring was always seen as something of a “wild card” inside Boies Schiller because the firm rarely brings in partners from the outside. Mr. Bernick joined Philip Morris in 2010 after 32 years at the law firm Kirkland & Ellis, where he defended tobacco makers, breast implant manufacturers and asbestos companies. Then, after only two years at Philip Morris, he joined Boies Schiller, saying that he missed trying cases.

At Boies Schiller, Mr. Bernick earlier this year lost a trial defending Dow Chemical in a urethane price-fixing lawsuit. A federal judge ordered Dow to pay a $1.2 billion judgment in the case, triple a $400 million jury verdict. Dow is appealing the order.

This week, Mr. Bernick, 59, filed a lawsuit on behalf of two American Indian tribes against New York state’s financial regulatory agency, challenging its crackdown on Internet lending businesses, several of which are owned by tribes. He is expected to take that case to Dechert.

As for Mr. Friedrich, the white-collar criminal defense partner in Washington, he left for Freshfields, a larger firm, because he wanted a bigger platform to handle large international investigations, said a person familiar with his thinking. And Mr. Shapiro, who spent a decade at Boies Schiller in San Francisco, had long wanted to hang his own shingle, a person said.

Mr. Friedrich, who is on vacation, could not be reached for comment, nor could Mr. Shapiro.

A lingering concern at Boies Schiller is planning for succession once Mr. Boies decides to retire. Mr. Boies, 72, is one of the country’s most celebrated lawyers, having represented the former vice president Al Gore at the Supreme Court over the contested 2000 presidential election. He shows no signs of slowing down, having recently represented the software maker Oracle in several matters and helped to lead the successful challenge of Proposition 8, California’s ban on same-sex marriage.

Boies Schiller has other leaders besides Mr. Boies in place, with Mr. Schiller and Donald L. Flexner serving as managing partners. It has begun transitioning some management responsibilities to other partners, and continues to grow, with plans to open a London office in the coming months.



In Markets’ Tuned-Up Machinery, Stubborn Ghosts Remain

A generation ago, when the stock market crashed on Oct. 19, 1987, the Nasdaq stock market appeared to have done much better than the New York Stock Exchange. While the Dow Jones industrial average fell 23 percent that day, the Nasdaq composite index was off just 11 percent.

It was not, it turned out, that Nasdaq stocks were more highly regarded. It was, instead, a question of the technology used.

At the New York Exchange, trading was still largely done by people, in person. At Nasdaq, trades were done by phone. The difference was that the market makers at the Big Board could not escape dealing with the flood of sale orders. But many Nasdaq market makers could, and did, decide not to answer their phones.

The Nasdaq market appeared to be operating, even though it really wasn’t.

Markets are far more automated and far more fragmented today. That makes trading much faster and â€" when everything works â€" more efficient.

And when it doesn’t? Chaos can briefly emerge while people try to figure out what went wrong with the computers.

That has been demonstrated twice this week. In the most publicized failure, the Nasdaq market found itself unable to put out stock quotes and halted trading in all its listed stocks for more than three hours on Thursday.

Most such problems last only a little while. On Monday morning, options markets were briefly roiled by a computer error at Goldman Sachs, which caused it to send out ridiculous trade orders for options on stocks whose ticker symbols began with the letters I, J or K.

In a less publicized problem, soon before the Nasdaq market had to be shut down on Thursday, the Arca electronic exchange, operated by the same company that runs the New York Exchange, NYSE Euronext, was unable to report trades on Nasdaq stocks whose ticker symbols came after TACT in the alphabet. It canceled some orders during the period, which lasted less than nine minutes. Other markets routed orders away from Arca.

Just what went wrong in each case will be sorted out eventually, as were the technical failures that caused the “flash crash” on May 6, 2010, when some stocks fell to $1, and the disastrous first day of trading in Facebook shares on May 18, 2012, when Nasdaq’s computers were overwhelmed. It was just more than a year ago that Knight Capital, a large market maker in Nasdaq stocks, suffered significant losses when its computer system caused numerous incorrect trade orders to be submitted.

Why is this happening, and happening so often?

One reason is the need for speed. Another is increased competition.

The need for speed comes from a market in which high-frequency traders expect to be able to get in and out of positions within a second. Any market that cannot offer such speed will be at a competitive disadvantage. But such speed is not compatible with safety features that could cause suspicious orders to be delayed while someone â€" a slow person, perhaps â€" checked to see whether something was amiss.

The competition comes from the fact that there are now numerous exchanges for every stock. That has caused the cost of trading to plunge. But it has also meant that each exchange is under pressure to keep costs to a minimum, which itself could be a deterrent to safety features.

While Nasdaq’s failure on Thursday appears to be one of the most significant technology problems to strike the markets, it was less important than the earlier errors in one key way.

When Nasdaq determined it was unable to distribute quotes on all stocks listed on its exchange, it asked that other markets that trade Nasdaq stocks also halt trading, and they did. As a result, no one could trade. Traders who have grown used to the idea they can get in and out of positions quickly were frustrated, and Nasdaq suffered another humiliation. Investors curious about the market reaction to specific news events had to wait. But it does not appear that any bad trades were made.

In the earlier Arca problem, it is possible that some trades that had been sent to the market were not executed, and that as a result someone missed a brief market opportunity to send the order somewhere else. But, as with Nasdaq, there do not appear to be any trades that someone will want to cancel.

That was not true on Monday, during the period when Goldman’s computers were spewing out mistaken orders, just as it was not a year ago when the Knight computers went haywire.

When that happens, exchanges have to decide which orders to cancel, and they have developed rules about just how ridiculous a trade has to be to justify canceling it.

Myron Scholes, who shared a Nobel Prize for developing the Black-Scholes options pricing model, told the Financial Times this week that no options trades should be canceled. If Goldman and other firms “internalized all of the losses associated with program errors and bad algorithms, they would be more careful,” he said.

That might work in options, where Goldman’s errors appear to have led Goldman itself to make bad trades. But in other cases, it would create its own injustices. During the “flash crash,” erroneous sell orders caused some $30 stocks to fall to $1. Innocent individual investors who had put in orders to sell shares at the market price lost money when their trades were executed. Others who had put in “stop loss” orders, to sell a stock if it fell below a given price, found they had similarly suffered.

None of that would have happened back in 1987. Then there were people involved, and if there was a crescendo of sell orders they would not all get executed at lower and lower prices. On the Big Board, where the specialists could not avoid the orders, they could â€" and in some cases did â€" halt trading to sort things out.

Those halts, as it happened, helped to end the crash. It had largely been caused by foolish institutional investors using something called “portfolio insurance,” which required them to sell stock index futures when stock prices fell, and to sell more when prices fell further. The market makers who bought the futures then tried to hedge by selling stocks, which drove prices down further, and so on and so on.

When the Big Board began to halt a lot of stocks on Oct. 20, the Chicago futures exchanges threatened to halt trading in index futures contracts. Only then did Goldman and Salomon Brothers, the two largest brokerage firms serving institutional investors at the time, step in and offer to put up capital to reopen trading in stocks. Prices began to recover.

Now, in most cases exchanges are not willing to halt trading just because prices have defied all logic. They figure that would send business to their competitors.

What distinguishes Thursday’s Nasdaq mishap from other recent computerized trading malfunctions is that it involved the dissemination of prices, not the submission of bad orders. With no prices available, trading had to halt. Brokers and exchanges lost business, but it does not appear that anyone lost money from making bad trades.

In that sense, it was a return to what was good about 1987. When things were out of control, markets could stop until sanity returned. There’s no guarantee that will happen in the future.



Moody’s Threatens to Cut Credit Ratings of Banks

Believing that the government is now more likely to let large banks fail in a crisis, Moody’s Investors Service threatened on Thursday to downgrade the credit ratings of several big financial firms.

If it follows through, Moody’s could reduce the ratings of Wall Street giants like Goldman Sachs, Morgan Stanley and JPMorgan Chase as much as two grades.

Such a move might weigh most heavily on Morgan Stanley because a two-notch downgrade would leave the company just above a junk credit rating. But the effects on the bank may also be muted. Confidence in large banks, judging by their stock prices and other financial indicators, appears to have risen since Moody’s cut their ratings last year.

Banks, more than other types of corporations, borrow huge sums of money to finance their activities. As a result, a lower credit rating can make it harder for them to find buyers for their debt, pushing up their borrowing costs. A lower rating can also deter trading partners from entering certain types of lucrative transactions with a bank.

Financial companies’ reliance on borrowed money is what made them so unstable in the 2008 financial crisis. The government has introduced measures, many of which are contained in the 2010 Dodd-Frank financial overhaul law, that are intended to put banks on a firmer financial footing.

Dodd-Frank also tries to set up a process for an orderly winding down of failing banks. Lawmakers wanted to avoid a repetition of the 2008 situation, where taxpayers were effectively forced to bail out banks to prevent their failure from hurting the wider economy.

The orderly wind-downs envisioned in Dodd-Frank could lead to big losses for creditors to banks. In recent months, regulators have started to flesh out how they might liquidate a collapsing bank. This progress prompted Moody’s to consider the downgrades now to reflect the lower possibility of government support.

“The conviction on this subject is clear, even growing,” David Fanger, a bank analyst at Moody’s, said. “This could lead to a one- or two-notch downgrade for some of these firms.”

Goldman, whose rating is A3, and JPMorgan Chase, whose rating is one notch higher at A2, declined to comment.

Many critics of the Dodd-Frank liquidation provisions doubt that the government would have the stomach to inflict losses on bank creditors in times of systemic stress. In April, Paul Volcker, a former chairman of the Federal Reserve, expressed skepticism about Dodd-Frank’s wind-down approach. “No one in the market believes it,” he said.

Still, Moody’s thinks the efforts have credibility, in part because regulators have started to describe the exact steps they might take in a liquidation. Under the plans, the government would seize the parent company of a bank and turn its debt into equity capital to make it stronger financially. In the process, regulators would most likely not seize the affected bank’s subsidiaries. That is why Moody’s on Thursday threatened to downgrade parent company ratings but not always those of bank subsidiaries.

Moody’s decision to review the ratings will reinforce the beliefs of those who say Dodd-Frank’s measures are sufficient to deal with the “too big to fail” issue. But the actions of lawmakers who do not feel the act is adequate may have also contributed to Moody’s actions. In recent months, lawmakers have introduced two bills that aim to do more to rein in large banks.

“They simply indicate the conviction within the United States government to solve the ‘too big to fail’ problem,” Mr. Fanger said. “They clearly put pressure on regulators to make the current law work.”

Mr. Fanger added that the Dodd-Frank liquidation process might lead to lower losses for creditors than a potentially less orderly approach. To reflect that possibility, any downgrades may be less severe, he said.

Citigroup and Bank of America, large banks that have relatively low ratings, may not have to worry about Moody’s latest action. The agency said their ratings had been placed on review “direction uncertain.” Moody’s perceives improved financial health at the two banks’ subsidiaries. That could offset the downward pressure on ratings from the Dodd-Frank liquidation process, Moody’s said.



Case Against a Former SAC Trader Is Expanded

Federal prosecutors filed an updated indictment in the criminal insider trading case against a former SAC Capital Advisors portfolio manager, adding a claim that he received secret information about drug trials from a second doctor.

The government said that Mathew Martoma, the former SAC portfolio manager, corrupted two doctors to obtain confidential data about a drug being developed by the pharmaceutical companies Elan and Wyeth.

In November, prosecutors said that one doctor leaked him the results of clinical tests, allowing SAC to earn profits and avoid losses totaling $276 million.

The first doctor, Sidney Gilman, a neurologist at the University of Michigan, has already been named by the government. Prosecutors have agreed to not prosecute him in exchange for his testimony against Mr. Martoma.

Prosecutors said in Thursday’s court filing that a second doctor met with Mr. Martoma as a paid consultant, providing him with secret information. There was a quid pro quo arrangement, the government said, with Mr. Martoma, a health care industry specialist, promising to assist the doctor in obtaining additional clinical trial work.

The doctor has not been charged in the case and was described only as a “co-conspirator.”

A lawyer for Mr. Martoma, Richard M. Strassberg, declined to comment.

He and federal prosecutors are expected in Federal District Court in Manhattan on Friday morning for a pretrial hearing in the case. A trial is scheduled for Nov. 18.

Mr. Martoma is a central figure in the government’s investigation into insider trading at SAC. Last month, Preet Bharara, the United States attorney in Manhattan, brought criminal charges against the giant hedge fund, a rare prosecution of a corporate entity. A week earlier, the Securities and Exchange Commission filed a civil action against Steven A. Cohen, the owner of SAC, accusing him of failing to reasonably supervise his employees, including Mr. Martoma.

Ten former SAC employees have either been charged with or implicated in illegal trading while at the fund; of those, five have admitted guilt.

An SAC spokesman has said that the fund has never “encouraged, promoted or tolerated insider trading.”

Mr. Martoma’s case dates back to 2006, when he met Dr. Gilman through the Gerson Lehrman Group, a so-called expert network firm that connects Wall Street money managers with industry specialists. Dr. Gilman was helping oversee clinical trials for a new Alzheimer’s drug being jointly developed by Elan and Wyeth.

The government said that Dr. Gilman provided Mr. Martoma with the trial results, violating his duty to the drug companies and breaching his agreement with Gerson Lehrman not to divulge confidential information. Dr. Gilman had roughly 42 consultations with Mr. Martoma, earning $108,000 from his work for SAC, the government said.

In Thursday’s updated indictment, the government said that an unnamed financial services firm linked Mr. Martoma with another doctor who was involved in the Elan and Wyeth drug trials.

The updated charges mesh with the accusations contained in the S.E.C. lawsuit brought against Mr. Cohen last month. In that civil complaint, securities regulators said that Mr. Cohen knew of a second doctor who might have had secret information about the clinical trials.

Rather than raise concerns about the fund’s possible possession of confidential information, Mr. Cohen encouraged Mr. Martoma to talk further with the doctor, the government said.



Icahn Tweets Dinner Plans With Apple’s Chief, and Investors Applaud

Despite the hullaballoo over the Nasdaq stock market’s failure on Thursday afternoon, traders remained fixated squarely on Apple Inc.’s then-frozen stock price.

Why? Because Carl C. Icahn had taken to Twitter again.

“Tim,” of course, is Timothy D. Cook, Apple’s chief executive. And Mr. Icahn’s tweet suggests that “Tim” is in agreement on a stock buyback. Perhaps that’s not surprising: the company announced in April that it would raise its share repurchases to $60 billion from $10 billion after pressure from the hedge fund manager David Einhorn.

So far, the famously irascible Mr. Icahn has kept his tweets about Apple civil, calling the company undervalued even as the company’s stock drifted downward.

Shares in Apple closed up slightly on Thursday, at $502.96. They are up nearly 8 percent since Aug. 13, when Mr. Icahn first disclosed he had accumulated a position in the company, adding some $22 billion in market value.



Computer Bugs and Squirrels: a History of Nasdaq’s Woes

It was yet another technical difficulty for Nasdaq.

On Thursday, when a problem at the Nasdaq stock market halted trading in all Nasdaq-listed stocks, it brought back memories of past problems at the exchange, which trades shares of some of the world’s most prominent technology companies.

Squirrels have caused power failures, and computer glitches have led to market interruptions. Last year, the initial public offering of Facebook was plagued by errors at the exchange.

On the occasion of each embarrassment, observers have often been left wondering: Shouldn’t a stock exchange focused on technology be able to prevent technological problems?

Below is a look back at some of the more memorable mishaps at Nasdaq.

1987: A troublesome squirrel | Just two months after a historic stock market crash, a stray squirrel touched off a power failure in Trumbull, Conn., that shut down the Nasdaq for 82 minutes, preventing an estimated 20 million shares from being traded. The squirrel lost its life.

1994: Another squirrel, and computer bugs | After running for years without interruption, Nasdaq suffered a series of technical breakdowns that summer. To cap it off, a squirrel chewed through an electric company’s power line, leading to a 34-minute interruption when the exchange’s own backup power system in Trumbull failed to kick in. “No one is yet ready to describe the recent problems as anything more than a run of bad luck,” The New York Times wrote at the time.

2000: Delays and failures | Nasdaq was doing a fine job promoting itself as a home for technology companies, but its own technology was exposing the exchange to criticism. Arthur Levitt, then the chairman of the Securities and Exchange Commission, said that Nasdaq’s SelectNet system, which matched orders electronically, “continues to be plagued with shortcomings, delays during heavy trading volume and even outages.”

2011: Computer breach | Hackers breached a Nasdaq system, causing concern among companies doing business with the exchange. But there was no sign that the trading platform had been affected. The breach was confined to a Web-based application on which corporations stored and shared information, the company said.

2012: Facebook I.P.O. | The chief executive of Nasdaq, Robert Greifeld, acknowledged that technical errors had marred Facebook’s debut but said that the problems had not affected the stock price. The following year, though, the company’s board cut Mr. Greifeld’s bonus by 62 percent as a result of the botched I.P.O. The company was also fined $10 million by the S.E.C. for “poor systems and decision making” before and after the public offering.



Goldman Banker Arrested on Rape Charges in East Hampton

New York Banker Arrested on Rape Charges in East Hampton

A Goldman Sachs banker has been charged with raping a young woman in an East Hampton rental home, the authorities announced on Thursday.

Follow the Race

Nasdaq’s Halt Pauses a Good Day for a Newly Public Company

Before the Nasdaq stock market halted trades just after noon on Thursday, Regado Biosciences had been having a pretty good day.

The biopharmaceutical company’s shares, which had made their market debut on the Nasdaq market earlier in the day, were up about 20 percent. And the latest trade, recorded about 1:38 p.m., showed the stock up 21 percent, at $4.85. That valued the company at $87.3 million.

The jump in share price represented a bit of a comeback for Regado, which priced its initial public offering at $4, a dollar below its expected price. Possibly to offset the disappointing pricing, the drug maker’s underwriters increased the number of shares sold by 28 percent, to 10.75 million.

The company, which was founded in 2003, focuses on anti-clotting drugs for use in treating heart conditions.

Regado bears the distinction of being the only company to price its I.P.O. this week and the 18th this month, according to data from Renaissance Capital. It’s a little unusual to go public in August, given the generally lower trading volumes and Wall Street’s propensity to head for the beach during the final days of the summer season.

A representative for Regado had no immediate comment.



Problems With Your Gadgets? You Need a Consumer Advocate

I get lots and lots of e-mail. I reply to as much as I can â€" but certain categories, I’ll tell you right now, I can’t answer. “What should I buy?” questions, “Solve my technical problems” questions or “Endorse my book, app or product” requests. I hope it’s obvious that there’s no way I could answer all of those.

I’m increasingly convinced, however, that there should be a consumer technology complaint columnist. Many of my correspondents write to complain about problems they’re having with some product, company or service, and they’d like me to shame the perpetrators by writing about them.

Here are the sorts of things people write about:

I’ve been an enthusiastic user on my iPhone of CoPilot, a GPS navigation program. Recently I noticed that one of the modules for giving text directions would pop off, leaving me with just the map. I decided to re-download the app, now updated. I quickly found out that the new version would not work with my older iOS 5.1 operating system and required iOS 6.

I do not argue that they have a need to update their version in tandem with Apple. But to not support old-time users with the ability to re-install a previous version, is rude and a poor encouragement to brand loyalty.

Alas, the rapid appearance of new versions is simply the cost of playing the software game. As I’m fond of saying, buying a software program is more like paying membership dues than buying a vase and owning it. Unfortunately, that seems to be the way the world works.

I bought the new 2013 Nexus 7 tablet when it came out and was very happy with it. But I soon realized there is a HUGE problem. It has to do with how Nexus updates its software through Google Play Store.

Frequently, while downloading updates for all apps, Android users get a “Package File is Not Valid” error. Message boards say the solution is to clear Google Store cache, download cache, etc., but these steps don’t work. So you wind up with a list of 15 to 20 apps that cannot be updated, installed or uninstalled. My one-week-old Nexus in now a $260 paperweight. It’s surprising that this is so unreported in official reviews. It’s depressing there aren’t any official answers or solutions.

As with many software problems, this one is tough for me to condemn from my soapbox, because I haven’t seen it and it doesn’t happen to everyone. If anyone knows of a solution â€" maybe some Google engineer might happen on this post â€" can you let us know in the comments?

Last week I was heading home on the Metro North train. As I was exiting the train, someone turned to me and asked if I had left my Kindle. Nope - I don’t own one. My seatmate, who had gotten off the train 25 miles earlier, had left it.

I opened the device, located his Kindle e-mail address and fired off a message, in hopes of returning the device. I Googled the e-mail address, too; zilch. So, I promptly called Amazon.

Now, I understand that they would never provide me with the owner’s information. But I asked if they would forward my info along, or the Kindle itself, to the owner. After two very frustrating calls and four reps, the only options provided were: 1) bring it to local law enforcement or 2) recycle it.

Insane! A company such as theirs surely could reunite this expensive device with its owner, saving him from spending hundreds of dollars.

I did deduce that the owner lives near White Plains, and that he is likely a lawyer (based on his e-mail handle). I’m hoping he reads your column!

For years, the big hardware makers (Apple, Google and Microsoft, for example) have been reluctant to enter the returning-lost-articles business. There’s some reassuring evidence that tech and wireless companies are finally starting to address the problem. Maybe e-reader companies will start to prioritize such efforts, too.

I have been happily using Norton (Symantec) 360 and its predecessors for years. The programs have kept me virus free, and the backup feature has saved me from potential catastrophic data loss a couple of times. For several years I have had my subscription to the program on auto-renewal. Never again will I be so stupid.

I recently received notice of an upcoming auto renewal at a price of $80 per year for a personal license on up to three machines. I checked out what Amazon would charge for the same download â€" about a third of the Symantec price. How can Symantec get away with such piracy?

All I can do is to restate the lesson you’ve just learned: in software, cameras, accessories and other categories, you’ll almost always pay top dollar if you buy directly from the manufacturer.

Have you ever written about eBay/PayPal? They certainly do not play ethical with legitimate sellers, who are being defrauded by customers.

On 8/28/2012, I sold a copy of Adobe Creative Suite on eBay. When the buyer got the software, he complained that the serial number didn’t work, and asked for a refund. The eBay folks approved the refund, and advised him to return the software to me.

But when I received the package, what I found inside the software box was â€" a paperback book. “Clark Howard’s Living Large in Lean Times.”

I contacted eBay immediately about the fraudulent return; they advised me to file a police incident report. Meanwhile, the buyer disputed the credit card payment, and PayPal sided with him. So now he’s got both my software and my money. What am I supposed to do?

I’m afraid I have no idea. But if you think publicizing your sad tale might help â€" well, consider it done!

My trying to get to the bottom of these issues would take so much time, I’d have no bandwidth left for my primary column duties.

The world really needs a tech consumer advocate, a new kind of columnist who can get satisfaction for these unfortunate souls. Any takers?



The Nasdaq Is Down? It’s Time to Tweet.

When a technical problem caused the Nasdaq to halt trading in Nasdaq-listed stocks, Wall Street watchers once again turned to social media sites to share their insight.

Many reacted with levity.

Others decided to PANIC!

As usual, Zero Hedge set out prove why they are The Onion for the CNBC crowd.

The cause of the technical glitch was not immediately known, but combining two unrelated news events is Comedy 101.

And if Nasdaq needs any help repairing their technical difficulties, we know some people experienced in handling Web site failures.



Nasdaq Market Halts Trading

A problem at the Nasdaq stock market halted trading in all Nasdaq-listed stocks on Thursday, including major names like Apple and Microsoft.

Nasdaq sent out an alert at 12:14 p.m. on Thursday telling traders that it was “halting trading in all” stocks listed on the Nasdaq exchange “until further notice.” The exchange said the issue was a result of problems with the system on which trades are recorded. Trading was also halted on all Nasdaq options markets.

Trading was still halted more than a half an hour after the problem first emerged, creating the unusual sight of the popular Nasdaq stock index flat lining during the middle of the trading day.

The Securities and Exchange Commission said in a statement: “We are monitoring the situation and in are close contact with the exchanges.”

Traders were scrambling to assess the impact of the outage in some of the most popular and widely-traded stocks. At least some trading was able to go ahead on other trading platforms and exchanges.

The outage appears to be one of the most significant technology problems to hit a trading world that has become accustomed to glitches. Earlier this week, Goldman Sachs sent out a barrage of erroneous options trade that briefly crippled the market.



British Credit Card Customers to Be Reimbursed

LONDON - Some of the largest banks and credit card companies in Britain will have to pay a total of up to £1.3 billion, or $2 billion, to customers who were sold inappropriate financial products, a British regulator said on Thursday.

The compensation is the latest in a series of fines that British banks have been forced to pay as a result of actions taken during the financial crisis and is a further blow to chief executives who are trying to rehabilitate the banks’ reputations.

So far, banks including Barclays, HSBC and Royal Bank of Scotland have set aside more than £12 billion combined to cover fines and settlements. The transgressions include inappropriate sales of insurance and complex financial products to consumers and small businesses. Banks have also paid regulatory fines related to the Libor rate-rigging scandal.

In the latest ruling, the Financial Conduct Authority, the British regulator, said on Thursday that it had reached an agreement with 13 banks and credit card companies to reimburse customers who were sold credit card insurance they did not need. The payments are to start early next year, the regulator said.

The settlement concerns credit card protection insurance that was sold inappropriately to seven million British customers with about 23 million credit card accounts since 2005. Consumers typically paid £30 a year for credit card protection and £80 a year for so-called identity protection. The insurance was either not needed or the benefits were exaggerated by the companies to persuade customers to buy it, the British regulator said.

The banks and credit card companies, which include Morgan Stanley, Santander and Capital One, must reimburse customers whom they referred to Card Protection Plan, a credit card insurance firm that sold policies to consumers.

Last year, Card Protection Plan agreed to a £10.5 million fine with British regulators for its role in the activities.

“A large number of firms have voluntarily come together to create a redress scheme that will provide a fair outcome for customers,” Martin Wheatley, head of the Financial Conduct Authority, said in a statement. “We believe this will be a good outcome for customers who may have been mis-sold the card and identity protection policies.”

Analysts said that Barclays and HSBC were likely to be among the firms most affected by the ruling because they have extensive credit card operations.

The settlement comes at an awkward time for Barclays and its chief executive, Antony Jenkins. The bank is preparing for a £5.8 billion rights issue next month.

Last month, Barclays said it had set aside an additional £2 billion in the second quarter related to what regulators have determined to be inappropriate sales of insurance and complex financial hedging products to some of its clients.

The bank also agreed to a $450 million settlement with American and British authorities last month after some of its traders tried to manipulate the London interbank offered rate, or Libor, for financial gain.

Other chief executives, including Stephen Hester of Royal Bank of Scotland and Stuart Gulliver of HSBC, have also outlined plans to improve their firms’ compliance and management structures in the wake of large financial penalties.



Morning Agenda: A Test of Courts’ Power on Financial Rules

A legal battle between financial firms and the retailing industry took a new turn on Wednesday when the Federal Reserve said it would appeal a decision involving debit card transactions fees, DealBook’s Peter Eavis reports.

The move came after a judge last month shocked banks and companies like Visa and MasterCard by striking down a Fed regulation governing how much retailers must pay to lenders and other companies when customers swipe debit cards. The retailers cheered the decision because it could require the Fed to rewrite the rule in such a way that retailers would pay less to the banks. But at a hearing on Wednesday, the Fed’s top lawyer, Scott G. Alvarez, told the judge the central bank would appeal his decision.

“The Fed’s move raises a spate of important issues five years after the financial crisis of 2008,” Mr. Eavis writes. “The appeal will be a crucial test of the courts’ power to overturn the financial regulations that stemmed from the sweeping banking overhaul after the crisis.”

BLOOMBERG L.P. TO INCREASE OVERSIGHT  |  Bloomberg L.P. said on Wednesday that it was making changes to its journalism operation after an investigation commissioned by the company showed problems with the use of client data in the past, Nathaniel Popper reports in DealBook. The results of the investigation were released a few months after banks and government officials expressed concern that Bloomberg’s journalists could see private information using their data terminals.

“Two separate but related reports found that the company’s journalists had access to information about clients through a number of channels that those clients did not know about,” Mr. Popper writes.

CYPRUS BANK BAILOUT MAKES RUSSIANS OWNERS  | The bailout deal in March for the Mediterranean nation of Cyprus was supposed to signal the end of an economic model fueled by cash from Russia, with wealthy Russians losing billions. “But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union,” Andrew Higgins reports in The New York Times.

“The exercise was meant to banish what Germany and other Northern European nations viewed as dirty Russian money from Cyprus’s bloated banks. Instead, it has pulled Russia even deeper into Europe’s financial system by giving its plutocrats majority ownership, at least on paper, of the Bank of Cyprus, the country’s oldest, biggest and most important financial institution.”

ON THE AGENDA  | Sears Holdings reports earnings before the market opens, while Gap reports results this evening. The Markit P.M.I. manufacturing index for August is out at 8:58 a.m. Sallie L. Krawcheck, a former big bank executive who owns the women’s network 85 Broads, is on Bloomberg TV at 7 a.m.

PAYING UP TO DIG DEEP  | A local government council in London has demanded a fee of £825,000 ($1.3 million) from a hedge fund manager looking to build an underground wing below two adjacent properties, The Financial Times reports. The investor, Reade Griffith, the founder of Polygon Investment Partners, and his wife envision a 900-square-meter basement with a swimming pool and spa. The fee, demanded by Kensington & Chelsea council, would go toward affordable housing elsewhere in the area. Still, such payments are typically reserved for commercial developments or housing estates, according to the newspaper. “Their extension to domestic homes could be seen as a new tax on wealthy homeowners.”

Mergers & Acquisitions »

Yahoo’s Internet Traffic Achieves a Milestone  |  In July, the Web giant Yahoo attracted more visitors in the United States than Google, for the first time since May 2011, according to comScore, Bloomberg News reports. BLOOMBERG NEWS

Bidders Line Up for Hong Kong Grocery Chain  |  Eight firms, including the private equity firm TPG and Hong Kong supermarket companies, submitted bids for ParknShop, a grocery store chain in Hong Kong that could sell for up to $4 billion, The Wall Street Journal reports. WALL STREET JOURNAL

Slump in PC Demand Takes a Toll on H.P.  |  Hewlett-Packard reported on Wednesday that revenue in its third fiscal quarter fell 8 percent, to $27.2 billion, from $29.7 billion in the period a year earlier. NEW YORK TIMES

Why R.B.S. Should Consider I.P.O. for Branches  |  By pursuing a market listing, the Royal Bank of Scotland would be able eventually to fetch a better price for the 315 branches it needs to shed, George Hays of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS

INVESTMENT BANKING »

Goldman Trading Mishap Said to Draw Scrutiny  |  The Securities and Exchange Commission is looking into a malfunction at Goldman Sachs that sent errant orders into the stock options market, according to The Financial Times. FINANCIAL TIMES

Wells Fargo Is Said to Be Cutting Mortgage Jobs  |  Wells Fargo, the largest home mortgage lender in the United States, plans to eliminate 2,300 jobs in its mortgage business as demand for refinancings has slowed, Bloomberg News reports. BLOOMBERG NEWS

JPMorgan Chase Not Akin to Nazis, Report Finds  |  An outside review of Bloomberg L.P.’s practices found that a controversial report that compared the damage in an Italian town after a bad deal with JPMorgan to the fallout from the Nazis’ occupation in World War II went “too far.” DealBook »

Drawing Lessons From an Intern’s Death  |  The death of a 21-year-old intern at Bank of America Merrill Lynch in London “could â€" and should â€" spark changes in the work policies for young investment bankers,” Kevin Roose writes in New York magazine. NEW YORK

Public Relations Firm Announces Leadership Changes  |  The public relations firm Joele Frank, Wilkinson Brimmer Katcher said on Wednesday that Matthew Sherman, a partner, had been named president, and that Andrew Brimmer and Daniel Katcher, two of the founding partners, had been appointed vice chairmen. Joele Frank, the founder and managing partner, is continuing in her role. NEWS RELEASE

PRIVATE EQUITY »

Hillary Clinton to Address Carlyle Group Investors  |  Hillary Rodham Clinton is scheduled to be featured at the Carlyle Group’s investor conference on Sept. 9, according to Politico. She previously spoke at a conference for another private equity firm, K.K.R. POLITICO

In Sweden, a Tax Crackdown on Private Equity  |  Reuters reports: “Sweden is demanding that private equity firm EQT Partners and some of its employees pay 647 million Swedish crowns ($100 million) in tax on past profits as it cracks down on buyout firms.” REUTERS

HEDGE FUNDS »

Ackman Acknowledges ‘Mistakes’ in a Letter to Investors  |  William A. Ackman sounded a note of contrition in a letter to shareholders, saying that his firm’s investment in J.C. Penney has been a “failure.” DealBook »

A $1.4 Billion Start-Up Hedge Fund in Asia  |  Two executives of the hedge fund Millennium Management are “preparing to start a $1.4 billion hedge fund in Asia,” Reuters reports, citing unidentified people familiar with the matter, “in what would be the region’s largest such fund launch.” REUTERS

I.P.O./OFFERINGS »

For Twitter, ‘Low Profile’ I.P.O. Seems Unlikely  |  A report in The New York Post that Twitter wanted its initial public offering to be “low profile” led to a round of commentary online. Fortune’s Dan Primack had a blunt response: “It. Will. Be. High. Profile.” NEW YORK POST  |  FORTUNE

VENTURE CAPITAL »

Shifts in Silicon Valley Unsettle the Big Players  |  “The bad earnings news from older, big technology companies does not â€" so far â€" appear to be spreading to more youthful Internet companies like Google or Salesforce.com, which provide their software as a service over the Internet,” The New York Times writes. NEW YORK TIMES

LEGAL/REGULATORY »

No Clarity From Fed on Plans for Stimulus  |  “The confusion over exactly when the Federal Reserve will begin scaling back its huge economic stimulus efforts only deepened Wednesday, with the release of a summary of the deliberations at the central bank’s last meeting in late July,” Nelson D. Schwartz writes in The New York Times. NEW YORK TIMES

In Trial of Fallen China Boss, Focus on Business Ally  |  Xu Ming, once a little-known entrepreneur from northeastern China who worked his way into the good graces of China’s elite families, is now in custody, and one of his relationships has become a piece of evidence in the trial of the former Politburo member Bo Xilai, David Barboza reports in The New York Times. NEW YORK TIMES

Clues to How Spitzer Would Invest City’s Funds  |  How would Eliot Spitzer, a fierce critic of Wall Street, approach investing New York City’s $140 billion in pension funds if he were elected comptroller? “There may be clues within the $40 million charitable family trust that Mr. Spitzer has played a major role in as a founder and trustee for the last 12 years,” Michael Barbaro writes in The New York Times. NEW YORK TIMES

Indian Tribes Fight for Their Ability to Make Online Loans  |  Two Indian tribes sued Benjamin M. Lawsky, New York’s superintendent of financial services, after he ordered online and tribal lenders to stop offering “illegal payday loans” in New York, The Wall Street Journal reports. WALL STREET JOURNAL



Subscribe to: Posts (Atom)