Inspired by Professor, Investor Makes Big Gift for Black Studies

Just over 10 years ago, the private equity mogul Glenn Hutchins was on vacation in Martha’s Vineyard. With his 25th Harvard College reunion near, he was thinking about how to put some of his wealth to good use.

One afternoon, clad in a T-shirt and board shorts, he stopped at an old whaling chapel, where Henry Louis Gates Jr., the prominent professor of African and African-American studies at Harvard, was leading a symposium.

That encounter gave Mr. Hutchins his cause.

Since then, Mr. Hutchins has strengthened his connection to Mr. Gates and the Harvard program. Their bond will become stronger on Wednesday, when Mr. Hutchins is expected to announce a gift of more than $15 million to create the Hutchins Center for African and African-American Research, solidifying Harvard’s program as one of the top in its field.

“It creates an infrastructure for the department and a solid foundation on which they can thrive,” Mr. Hutchins said in an interview this month.

The gift â€" part of a previously announced $30 million donation to the university whose uses had not all been specified â€" also bespeaks a friendship between two men unlike each other in many respects. One is a wealthy white financier whose firm, Silver Lake, is on the verge of taking over the computer maker Dell with its founder, Michael S. Dell; the other is a celebrated black professor who helped popularize African-American studies as an academic field and social phenomenon.

But the two men also have close ties to Harvard â€" Mr. Hutchins graduated from the university’s college, business school and law school â€" as well as a penchant for schmoozing and ties to President Obama.

Mr. Hutchins said he had long admired the professor’s work from a distance, and Mr. Gates’s reputation had inspired him to seek out the symposium. Professor Gates said he remembered little about the encounter until two weeks later, when Harvard’s development office called asking how he had managed to collect $1 million in donations in one shot. That donation was the first by Mr. Hutchins to Harvard.

Since that encounter, the two have become friends, going out together on fishing trips and having lunch at the Four Seasons in Midtown Manhattan. At Silver Lakes’ offices in Manhattan, members of the staff refer to Professor Gates by his nickname, Skip, and, when he arrives, get him water and fruit. At the professor’s offices in Cambridge, Mass., Mr. Hutchins is regularly greeted with a cup of fresh cappuccino.

Together at Silver Lake’s offices this month, the two constantly joshed each other and spoke glowingly of the Harvard program’s accomplishments. At one point, Mr. Hutchins pointed out the view across Central Park, his arm draped over the professor’s shoulder.

The men took Mr. Hutchins’s nonagenarian mother to the 50th anniversary of the March on Washington last month. Afterward, Professor Gates took Mr. Hutchins’s younger son to a meeting with President Obama. The financier’s older son took a class with the professor last school year, though the son concluded that while Professor Gates was “entertaining,” the course’s other leader, Professor Lawrence D. Bobo, was “really smart.”

Perhaps most important, Professor Gates and Mr. Hutchins have consulted closely on the direction of the Harvard program, with the aim of simplifying what they described as a Russian nesting doll of institutes within institutes.

Now their work and Mr. Hutchins’s money will create the Hutchins Center, named at the insistence of Professor Gates. It will unite nine entities, including the W. E. B. Du Bois Institute for African and African-American Research, the Hiphop Archive and Research Institute and the Ethelbert Cooper Gallery of African and African American Art.

All will be housed in a building on Harvard Square with a street front facade designed by David Adjaye, the prominent Ghanian-British architect, chosen at Professor Gates’s urging.

“We both love ideas,” Professor Gates said. “We both love to build things.”

The new institute will hold a ceremony next month honoring individuals for their contributions to African and African-American studies, including Steven Spielberg, the director; Sonia Sotomayor, the Supreme Court justice; Representative John Lewis, the civil rights veteran; and David Stern, the departing commissioner of the National Basketball Association. (It helps that Mr. Hutchins is a part owner of the Boston Celtics.)

Mr. Hutchins said his initial donation was always meant as “hello money,” the start of what he called an intellectual partnership as well as a friendship. Mr. Hutchins and Professor Gates have collaborated on making the Harvard program “the unmatched juggernaut of African-American studies,” Mr. Hutchins said. Mr. Hutchins helped form an advisory board for the Du Bois Institute and introduced an array of potential donors to Professor Gates.

Harvard’s program is already among the most prominent in the country. And since coming to the university in 1991, Professor Gates has become one of the most recognizable academics around, one who regularly is the host of series on PBS and who has received dozens of honorary degrees.

He also gained some attention for his dust-up with a Cambridge police officer and arrest in 2009, culminating in a “beer summit” with the two men and President Obama.

As a scholar of African-American studies, his pre-eminence is rivaled only by two former colleagues â€" Cornel West, now at Union Theological Seminary, and Kwame Anthony Appiah, at Princeton. Now, the Harvard program will receive what Professor Gates and Mr. Hutchins estimate is the biggest donation to African- American studies.

“Skip is responsible for what I’ll call the quattrocento of African-American studies,” Mr. Hutchins said, referring to the period that led to the Renaissance from the Medieval period.

To Professor Gates, however, the formation of the Hutchins Center ensures that his work will carry on. After all, he has a patient financial backer who has attracted other donors, and he will soon have streetfront space.

“As long as there’s a Harvard, the study of people of African descent will have a place,” he said. “This is a perpetual part of Harvard. We have created something that has permanence.”

Yes, There’s a New iPhone. But That’s Not the Big News.

September 17, 2013, 9:01 pm

The big Apple news this week might seem to be the new iPhones. But truth be told, the bigger news is iOS 7.

This is the free software update for iPhones (iPhone 4 and later), iPads (iPad 2 and later) and iPod Touches (fifth generation). It’s a radical, huge redesign. Its master architect was Jonathan Ive, the Apple designer who has brought us astonishing hardware designs for many years; now, for the first time, he’s been put in charge of a whole software universe.

The look of iOS 7 is sparse, white â€" almost plain in spots. No more fake leather, fake woodgrain, fake green felt, fake yellow note paper. It’s all blue Helvetica Neue against white.

The complete absence of graphic embellishments makes it especially utilitarian â€" in both senses of the word. That’s good, because whatever button or function you need is easier to find; it’s bad, because, well, it can look a little boring.

Then again, the new look is primarily visible at the Home screen, where a jarringly different color palette greets you on the Apple app icons, and on the options screen. The rest of the time, you’ll be using your regular apps, many of which will look no different than before.

The look of iOS 7 may grab you or not. But once the fuss about the visuals dies down, something even more important comes into focus: the work that’s been done on making iOS better. The longer you spend with the new OS, the more you’re grateful for the fixing and de-annoyifying on display.

For example, you no longer have to burrow into infinitely nested Settings screens to adjust your control panels. Now you can just speak what you want, using Siri: “Open Wi-Fi settings,” for example, or “Open brightness settings.”

Or, when speaking to your phone isn’t socially appropriate, you can swipe upward from the bottom of the screen to open the Control Center: a compact, visual palette of controls for the settings and functions you’re most likely to need: brightness, volume, Bluetooth, WiFi, Airplane Mode, Play/Pause Music, calculator, camera, and â€" my favorite â€" Flashlight. This panel slides in over whatever app you’re using, so you don’t lose your place.

This idea â€" swiping in from the margins of the phone â€" also plays out in the new Back gesture. The iPhone doesn’t have a Back button, as Android phones do. But now you can swipe in from the left margin of the phone to go back one screen. It works in Mail, Settings, Notes, Messages, Safari, Facebook and some other apps. It’d be great if worked in every app.

The iPhone has never had a system-wide Search button, either, but here again, Apple has made some strides. The Search screen is no longer off to the left of the Home screens; now it’s above them â€" all of them. From any Home screen, you can swipe downward from the phone’s top margin to open the Spotlight search screen.

Reducing steps seems to be a running theme in this release.

To turn on Private Browsing in Safari, for example, you used to have to open the Settings app, burrow around, find the on-off switch, then return to the browser. Now the Private button is right in Safari, where it belongs.

The Camera app has gained a better design. Now you swipe across the preview screen to switch among modes: Video, Slow-motion video (on the iPhone 5s), still photos, Square photos with Instagram-type filters, and Panorama. It’s easy to learn and use, but it does mean that it’s harder to open a photo you’ve just taken for inspection. (Swiping to the right used to make it appear; now you have to tap the tiny thumbnail button in the corner.)

There was supposed to be a password- and credit-card memorizing feature that would make it much easier to buy stuff and fill in forms on the Web, like the LastPass, 1Password or Dashlane apps. And this information would sync across all your Apple gadgets. But it mysteriously disappeared in the release version; Apple says it will reappear in a few weeks, at about the same time as OS X “Mavericks.”

The new iTunes Radio is here, though, and it’s very good. The idea is exactly like Pandora; you choose a “seed” song, performer or musical genre, and it plays nonstop songs in that style. But it’s not as sophisticated as Pandora, and not nearly as powerful as Spotify; on iTunes Radio, you can’t explicitly request a certain song or album by name.

Still, having it built in is nice. For example, you can say, “Play Soft Guitar radio,” or whatever you’ve named your “seed”-based station, to start it up.

As with Pandora, the free version subjects you to a brief audio ad every now and then; also as with Pandora, you can pay for an ad-free version. It’s $25 a year â€" part of Apple’s existing iTunes Match service.

Siri, over all, is much better. The voice sounds more natural, and you have a choice of male or female. Apple did a lot of work “on the back end,” so that Siri responds much faster to commands. The Siri screens are redesigned to look nicer. And Siri can do more things.

More stuff:

- Internet phone calls. Now free, high-quality voice calls (to other Apple phones, tablets and Macs) are built right in. Apple calls it Audio-Only FaceTime.

- Carpenter’s Level. The Compass app now has a three-dimensional level in it!

- Auto-app updates. You can opt to have new versions of your apps downloaded and installed automatically, in the background. The App Store app keeps a list of everything you’ve received.

- Today screen. As on Android, there’s a single screen that lists everything that’s happening today: your next appointment, today’s weather, reminders due, whose birthday it is and so on. (Right now, mine says: “It looks busy right now. There are 8 events scheduled, and the first one starts at 8:30 am.”)

- Smarter Wi-Fi network alerts. If you’re driving, iOS 7 on the new iPhone 5s no longer keeps announcing that it’s discovered new Wi-Fi networks. Obviously, you’re moving too fast to hop onto any of them, so this is a smart little tweak.

- Photos. The app that displays all your photos used to be a single endless scroll of tiny thumbnails. Navigationally speaking, it was really pretty useless. Now it self-assembles into clusters by year, by month and by occasion (based on time and location data). Sooooo much better.

- Maps. Apple still has work to do before its Maps app has anywhere near the quality of Google’s Maps app. Apple’s Maps still can’t give you directions using public transportation, but at least it now has walking directions. And when you’re driving at night, Maps automatically enters Night Mode, in which the map itself is dark gray instead of very bright.

- Global Type Size control. For the first time, there’s a slider that controls the font size in all your apps. Well, all of them that have been rewritten to hook into this feature, anyway. So far, it’s mostly just Apple’s built-in apps.

- Activation Lock. Brilliant, brilliant, brilliant. If some thug steals your phone, it’s worthless to him unless he enters your Apple password. Even if he tries to erase it, even if he jailbreaks it, even if he force-reinstalls the operating system. Thousands of iPhones will not be stolen now, because thieves will learn that they’ll be “bricked” without your password. (To make this work, you have to turn on the “Find My iPhone” feature. Which you should do anyway.)

There are a zillion other nips and tucks, many of which make you smack your forehead and say, “Yes! Why didn’t they think of this sooner?”

The software is available to download on your existing iPhone, iPad or iPod Touch tomorrow, Sept. 18.

If you decide to install iOS 7, as you learn your way around the new system you’ll stumble across all kinds of handy features and techniques. But without any further delay, at least make these two features part of your new routine: Control Center (swipe upward from below the screen) and Siri’s new settings-changing commands.

I think you should install it. The structure, layout and features represent some of Apple’s best work. The look of iOS 7 â€" well, that judgment is up to you.

Yes, There’s a New iPhone. But That’s Not the Big News.

September 17, 2013, 9:01 pm

The big Apple news this week might seem to be the new iPhones. But truth be told, the bigger news is iOS 7.

This is the free software update for iPhones (iPhone 4 and later), iPads (iPad 2 and later) and iPod Touches (fifth generation). It’s a radical, huge redesign. Its master architect was Jonathan Ive, the Apple designer who has brought us astonishing hardware designs for many years; now, for the first time, he’s been put in charge of a whole software universe.

The look of iOS 7 is sparse, white â€" almost plain in spots. No more fake leather, fake woodgrain, fake green felt, fake yellow note paper. It’s all blue Helvetica Neue against white.

The complete absence of graphic embellishments makes it especially utilitarian â€" in both senses of the word. That’s good, because whatever button or function you need is easier to find; it’s bad, because, well, it can look a little boring.

Then again, the new look is primarily visible at the Home screen, where a jarringly different color palette greets you on the Apple app icons, and on the options screen. The rest of the time, you’ll be using your regular apps, many of which will look no different than before.

The look of iOS 7 may grab you or not. But once the fuss about the visuals dies down, something even more important comes into focus: the work that’s been done on making iOS better. The longer you spend with the new OS, the more you’re grateful for the fixing and de-annoyifying on display.

For example, you no longer have to burrow into infinitely nested Settings screens to adjust your control panels. Now you can just speak what you want, using Siri: “Open Wi-Fi settings,” for example, or “Open brightness settings.”

Or, when speaking to your phone isn’t socially appropriate, you can swipe upward from the bottom of the screen to open the Control Center: a compact, visual palette of controls for the settings and functions you’re most likely to need: brightness, volume, Bluetooth, WiFi, Airplane Mode, Play/Pause Music, calculator, camera, and â€" my favorite â€" Flashlight. This panel slides in over whatever app you’re using, so you don’t lose your place.

This idea â€" swiping in from the margins of the phone â€" also plays out in the new Back gesture. The iPhone doesn’t have a Back button, as Android phones do. But now you can swipe in from the left margin of the phone to go back one screen. It works in Mail, Settings, Notes, Messages, Safari, Facebook and some other apps. It’d be great if worked in every app.

The iPhone has never had a system-wide Search button, either, but here again, Apple has made some strides. The Search screen is no longer off to the left of the Home screens; now it’s above them â€" all of them. From any Home screen, you can swipe downward from the phone’s top margin to open the Spotlight search screen.

Reducing steps seems to be a running theme in this release.

To turn on Private Browsing in Safari, for example, you used to have to open the Settings app, burrow around, find the on-off switch, then return to the browser. Now the Private button is right in Safari, where it belongs.

The Camera app has gained a better design. Now you swipe across the preview screen to switch among modes: Video, Slow-motion video (on the iPhone 5s), still photos, Square photos with Instagram-type filters, and Panorama. It’s easy to learn and use, but it does mean that it’s harder to open a photo you’ve just taken for inspection. (Swiping to the right used to make it appear; now you have to tap the tiny thumbnail button in the corner.)

There was supposed to be a password- and credit-card memorizing feature that would make it much easier to buy stuff and fill in forms on the Web, like the LastPass, 1Password or Dashlane apps. And this information would sync across all your Apple gadgets. But it mysteriously disappeared in the release version; Apple says it will reappear in a few weeks, at about the same time as OS X “Mavericks.”

The new iTunes Radio is here, though, and it’s very good. The idea is exactly like Pandora; you choose a “seed” song, performer or musical genre, and it plays nonstop songs in that style. But it’s not as sophisticated as Pandora, and not nearly as powerful as Spotify; on iTunes Radio, you can’t explicitly request a certain song or album by name.

Still, having it built in is nice. For example, you can say, “Play Soft Guitar radio,” or whatever you’ve named your “seed”-based station, to start it up.

As with Pandora, the free version subjects you to a brief audio ad every now and then; also as with Pandora, you can pay for an ad-free version. It’s $25 a year â€" part of Apple’s existing iTunes Match service.

Siri, over all, is much better. The voice sounds more natural, and you have a choice of male or female. Apple did a lot of work “on the back end,” so that Siri responds much faster to commands. The Siri screens are redesigned to look nicer. And Siri can do more things.

More stuff:

- Internet phone calls. Now free, high-quality voice calls (to other Apple phones, tablets and Macs) are built right in. Apple calls it Audio-Only FaceTime.

- Carpenter’s Level. The Compass app now has a three-dimensional level in it!

- Auto-app updates. You can opt to have new versions of your apps downloaded and installed automatically, in the background. The App Store app keeps a list of everything you’ve received.

- Today screen. As on Android, there’s a single screen that lists everything that’s happening today: your next appointment, today’s weather, reminders due, whose birthday it is and so on. (Right now, mine says: “It looks busy right now. There are 8 events scheduled, and the first one starts at 8:30 am.”)

- Smarter Wi-Fi network alerts. If you’re driving, iOS 7 on the new iPhone 5s no longer keeps announcing that it’s discovered new Wi-Fi networks. Obviously, you’re moving too fast to hop onto any of them, so this is a smart little tweak.

- Photos. The app that displays all your photos used to be a single endless scroll of tiny thumbnails. Navigationally speaking, it was really pretty useless. Now it self-assembles into clusters by year, by month and by occasion (based on time and location data). Sooooo much better.

- Maps. Apple still has work to do before its Maps app has anywhere near the quality of Google’s Maps app. Apple’s Maps still can’t give you directions using public transportation, but at least it now has walking directions. And when you’re driving at night, Maps automatically enters Night Mode, in which the map itself is dark gray instead of very bright.

- Global Type Size control. For the first time, there’s a slider that controls the font size in all your apps. Well, all of them that have been rewritten to hook into this feature, anyway. So far, it’s mostly just Apple’s built-in apps.

- Activation Lock. Brilliant, brilliant, brilliant. If some thug steals your phone, it’s worthless to him unless he enters your Apple password. Even if he tries to erase it, even if he jailbreaks it, even if he force-reinstalls the operating system. Thousands of iPhones will not be stolen now, because thieves will learn that they’ll be “bricked” without your password. (To make this work, you have to turn on the “Find My iPhone” feature. Which you should do anyway.)

There are a zillion other nips and tucks, many of which make you smack your forehead and say, “Yes! Why didn’t they think of this sooner?”

The software is available to download on your existing iPhone, iPad or iPod Touch tomorrow, Sept. 18.

If you decide to install iOS 7, as you learn your way around the new system you’ll stumble across all kinds of handy features and techniques. But without any further delay, at least make these two features part of your new routine: Control Center (swipe upward from below the screen) and Siri’s new settings-changing commands.

I think you should install it. The structure, layout and features represent some of Apple’s best work. The look of iOS 7 â€" well, that judgment is up to you.

S.&P. Bond Deals Are on the Rise Since It Relaxed Rating Criteria

During a meeting at Standard & Poor’s New York offices in the summer of 2012, analysts responsible for rating bonds tied to home loans were informed that their unit had sustained big losses in the previous quarter.

In a way, the news was not surprising. In the wake of the financial crisis, S.& P. was hesitant to rate most of the new bonds tied to residential mortgages, and for good reason. The agency and its rivals had been accused of helping to set off the crisis by giving their highest ratings to bonds backed by subprime mortgages that ended up suffering huge losses.

But as banks began reviving the market for the bonds in 2012, S.& P.’s tough stance was hurting the bottom line.

An employee at the summer meeting, who spoke on the condition of anonymity out of fear of retribution from the company, said that the analysts were not told explicitly to relax their standards to win back business. But he said that the numbers made it clear that if the division wanted to stay afloat, the analysts would have to make changes.

A few months later, they did exactly that, introducing modified standards that made it easier to give bonds higher ratings.

The changes seemed to work. More banks began choosing S.& P. to rate the new bonds backed by residential mortgages. S.& P., in turn, faced criticism from industry participants who worried that the changes were allowing lower-quality bonds to make it into the market.

“It kind of blindsided all of us,” said one banker involved in the deals at the time, who was not authorized to speak publicly. “It turns out you could water these down and have them rated by S.& P.”

An S.& P. spokesman, Ed Sweeney, said the changes were not made in response to “commercial considerations” but instead put in place a “method that had already been applied by S.& P. elsewhere.”

Mr. Sweeney said that the unit rating residential mortgage bonds was still losing money this year but that “S.& P. remains committed to serving this market.”

The changes, in November 2012, came just two months after analysts in a related part of S.& P. modified their standards for bonds backed by commercial real estate mortgages after that unit had also struggled to win business. An earlier analysis by The New York Times found that those changes allowed S.& P. to give higher ratings than its competitors and to capture more business.

The market for bonds backed by residential mortgages has been slower to bounce back than the one tied to commercial ones. But an analysis of industry data shows that S.& P. has followed a similar course in its efforts to win business in the residential bond market. Since S.& P. eased its standards last year, its market share has risen to 69 percent from the 18 percent it had in the first years after the crisis.

On nearly every deal since it changed its standards, S.& P. has been willing to make more optimistic predictions about the bonds it was rating than the other agencies rating the deals, according to analysis of data from company reports. Bankers want more optimistic predictions because they make the bonds easier to sell to investors.

Matt Birkbeck, who follows the industry for the publication Asset Backed Alert, said S.& P.’s increase in market share was “largely a function” of its “revised rating approach,” which allows banks, in the bonds they issue, to include smaller cushions to protect investors.

The changes that S.& P. has made to its standards for both commercial and residential real estate surprised industry participants because the agency was already under fire for its practices before the financial crisis. The government sued S.& P. in February, accusing it of inflating its ratings to get jobs grading subprime mortgage bonds in the run-up to the crisis.

Many critics of the system say that the problems were caused in part by conflicts of interest built into the ratings industry. The banks decide which agencies rate their bonds. Because the banks want higher ratings to make the bonds look more attractive to investors, the credit agencies have an incentive to comply.

S.& P. has said in its response to the government lawsuit that its ratings are “objective, independent, uninfluenced by any conflicts of interest.” It recently began an advertising campaign declaring that it “used the lessons learned from the financial crisis to improve the methodologies, procedures and rigor underlying our ratings.”

The company, though, has faced an unusual amount of criticism from competitors for its work on residential mortgage bonds since the crisis.

Fitch, the market leader in rating new mortgage bonds, has issued three reports since 2011 criticizing bonds that it believed were rated too kindly. All three of the deals had been rated by S.& P., the most recent in July.

Jim Nadler, president of the relatively new Kroll Bond Rating Agency, said that S.& P. had been more aggressive than the other big agencies in changing its standards to win business rating bonds backed by mortgages.

“They’ve been more singly focused on the wrong thing, and that is making sure they are getting deals,” Mr. Nadler said. “That’s really the only conclusion you can come to when you look at where they were on earlier deals and where they are today.”

Immediately after the crisis started, all of the agencies tightened their standards. S.& P. quickly gained a reputation for being particularly tough. In the first deal containing new mortgages after the crisis, in 2010, the banks did not choose S.& P. The company wrote an unusual public report criticizing Moody’s for rating the deal AAA.

After failing to get in on the next three deals, however, S.& P. replaced the head of its mortgage bond unit in February 2012.

S.& P. employees in the unit said they felt pressure to change their standards to win business, including in meetings where analysts were given information about revenues and profits of their division that was not publicly available.

Many ratings agency experts said that analysts are supposed to be walled off from commercial concerns, making it unusual for them to be told about the financial results of their units. Mr. Sweeney said that the company had a “longstanding practice of sharing business updates, including high-level information about the company’s past financial performance, with our staff on a quarterly basis.”

In the months after the mortgage bond unit leadership change, the company won the contract to rate two bonds. But industry participants say the real change came later in the year, when S.& P. officially altered its standards in a way that no longer penalized bonds that had a high concentration of mortgages from the same region. That was significant at a time when many of the mortgages going into new bonds came from California.

In one of the first deals after it modified its standards, S.& P. predicted much lower losses than it had on similar deals in the past, a signal that it was willing to give the AAA rating to a larger proportion of the underlying tranches of the deal. The deal also attracted criticism because S.& P. agreed to rate the bond even though it included a provision that shielded the bank from future lawsuits if the mortgages ended up going sour.

Fitch published a note criticizing the deal, and Moody’s later wrote a report saying it would not give AAA ratings to deals that gave the banks such protections. Competitors have also complained that S.& P.’s forecasts for the losses on bonds suddenly became more optimistic.

Mr. Sweeney said that S.& P. had been willing to give high ratings because the underlying mortgages were of such high quality and because of the “level of due diligence conducted on the loans.”

The new bonds generally contain only high-quality mortgages that are too large to be put into bonds by Freddie Mae and Fannie Mac. Many analysts have said they do not think these bonds are likely to sustain losses, making the ratings less important. But several investors said that the standards now being set could be a problem if mortgage credit quality declines.

“Once these historical precedents are there, they’re there to stay,” said Laurie Goodman, a mortgage bond analyst at Amherst Securities.

Charges Could Still Be Coming for Some Close to Madoff

With federal prosecutors in Manhattan facing a December deadline to bring additional charges connected to Bernard L. Madoff’s multibillion-dollar Ponzi scheme, they are weighing criminal charges against several people connected to the case, said people briefed on the investigation. Among those still under scrutiny are Shana Madoff Swanson, a senior executive at the firm, and Paul J. Konigsberg, a longtime accountant in Mr. Madoff’s inner circle.

Investigators have examined several dozen people related to the case. Including Mr. Madoff, who is serving a 150-year prison sentence, nine have pleaded guilty. When Mr. Madoff confessed in December 2008, that started the clock ticking on a five-year statute of limitations to bring securities fraud charges.

Any new charges would come just weeks before the first criminal trial related to the Madoff case. On Oct. 7, five former employees of Bernard L. Madoff Investment Securities are scheduled to stand trial in Federal District Court in Manhattan on charges they aided the fraud. Each of the five employees â€" Daniel Bonventre, Annette Bongiorno, Joann Crupi, Eric Lipkin and George Perez â€" worked at the firm for more than 15 years.

The trial is likely to last several months, and the defendants are expected to argue that they had no idea their boss was a crook.

“My client was manipulated and deceived by Mr. Madoff and has lost every penny she ever earned at Bernard L. Madoff Investment Securities, and as a result is as much a victim as anyone else in this case,” said Roland G. Riopelle, a lawyer for Ms. Bongiorno, a longtime secretary for Mr. Madoff.

None of the five defendants was as senior as Shana Madoff, the daughter of Peter Madoff, Bernard Madoff’s brother, who served as a senior lawyer and compliance official at the firm. In February, Peter Madoff began serving a 10-year sentence after admitting to falsifying documents and lying to securities regulators, among other crimes.

Ms. Madoff joined her family business after graduating from Fordham University School of Law. She handled many of the firm’s regulatory filings and, according to the trustee for Madoff victims, made false statements to securities regulators. In one instance, she signed a form that said the firm had 23 customer accounts when it actually had nearly 5,000, the trustee said in court papers.

In 2007, Shana Madoff married Eric Swanson, a former lawyer for the Securities and Exchange Commission who played a role in one of the failed Madoff examinations two years before the scheme unraveled. An internal investigation by the S.E.C. concluded that the relationship did not affect the agency’s handling of the Madoff case. Mr. Swanson now serves as general counsel of BATS Global Markets, the stock exchange operator.

A lawyer for Ms. Madoff Swanson, Mark W. Smith, did not return numerous telephone calls and e-mails seeking comment.

Another family member whose conduct has been examined by the government is Andrew Madoff, the younger son of Bernard Madoff and director of trading. He has not been charged with any criminal wrongdoing. His older brother, Mark Madoff, committed suicide on the second anniversary of their father’s confession.

Prosecutors are also investigating whether JPMorgan Chase failed to properly alert regulators to suspicions about Mr. Madoff’s business, said people with knowledge of the investigation.

A lawyer for Andrew Madoff and a spokesman for JPMorgan declined to comment.

Actual cash losses from the Madoff fraud are estimated at about $17 billion, but the paper wealth that was wiped out totaled more than $64 billion. Irving H. Picard, the Madoff trustee, has thus far recovered about $9.4 billion and continues to trace the lost funds. He has filed more than 1,000 lawsuits, and the process of recouping victims’ losses is expected to carry on for years.

A large number of Madoff victims were clients of Mr. Konigsberg, a founding partner of Konigsberg Wolf & Company, a midsize New York accounting firm that is now defunct. Though Mr. Konigsberg received little publicity in the aftermath of the Madoff fraud, few outside of Madoff Securities had such deep knowledge of the firm’s finances.

Marjorie J. Peerce, a lawyer for Mr. Konigsberg, had no comment.

A friend of Mr. Madoff for more than 25 years, Mr. Konigsberg was the only nonfamily shareholder in Madoff’s London operation. He prepared tax returns for two Madoff family foundations and served as an accountant for dozens of families that invested with the firm. Mr. Madoff often referred his investors to Mr. Konigsberg for their tax services.

Trained as a lawyer, Mr. Konigsberg worked for some of Mr. Madoff’s major investors, including Carl Shapiro, a Boston businessman, and Norman F. Levy, a New York real estate executive. He and his wife live in Greenwich, Conn., and Palm Beach Gardens, Fla.

Another outside accountant has already been charged in the case. David G. Friehling, the longtime independent accountant for the Madoff firm, pleaded guilty in 2009 to producing audits that concealed the Ponzi scheme and has been assisting prosecutors. Mr. Friehling ran Friehling & Horowitz, a three-employee firm based in a Rockland County strip mall that provided auditing services for the firm.

Next month’s trial will feature testimony from several former Madoff employees who have pleaded guilty and are cooperating with the authorities. David Kugel, a former senior trader who worked for Mr. Madoff for nearly 40 years, said in court that he supplied Mrs. Bongiorno and Ms. Crupi with pricing information used to create false trades for Madoff customers.

Another significant witness will be Frank DiPascali, the chief aide to Bernard Madoff who pleaded guilty to participating in the fraud. Mr. DiPascali told investigators that Mr. Perez and Mr. O’Hara â€" computer specialists accused of generating the fake customer accounts â€" confronted Mr. Madoff about why the firm never traded stocks.

“You are not going to tell me how to run my business,” said Mr. Madoff during a tense meeting, according to notes of Mr. DiPascali’s interview with the F.B.I. “Trades occur overseas,” he told them.

In August, prosecutors made an unusual pretrial filing, asking the court to exclude evidence that four of the five defendants were at various times romantically involved with one another. And one, the government said, had an affair with Mr. Madoff.

“For example,” prosecutors said, “one of the defendants was in a love triangle with Bernard Madoff himself.”

Dole Food’s Buyout in 2013 Looks a Lot Like One in 2003

Once is apparently not enough for David H. Murdock, the chief executive of the Dole Food Company.

He has offered to acquire the fruit company for $13.50 a share in a buyout that has been approved by the board. The 90-year-old executive has done this before, and it’s a maneuver he knows well.

But a lawsuit brought by some shareholders in the Delaware Chancery Court is challenging the deal, contending that it is rife with conflicts as Mr. Murdock uses his previous experience at taking Dole private to his advantage.

Mr. Murdock, who dropped out of the ninth grade and is worth about $2.4 billion, according to Forbes, acquired a controlling interest in Dole in 1985. He first took part of Dole private in 2000, when he acquired real estate assets previously spun off by Dole. The real estate was mostly the Hawaiian island of Lanai, which he sold to Lawrence J. Ellison, the co-founder and chief executive of the software company Oracle, for a reported $300 million in 2012. Then in 2003, Mr. Murdock took Dole private in a $2.5 billion deal. Mr. Murdock didn’t keep the company private for long. Dole went public, raising $446 million.

It’s not just Mr. Murdock who has returned to the deal-making table.

The cast of characters seems to be a rerun of the 2003 buyout. For example, four of the directors on Dole’s seven-member board, including Mr. Murdock, were directors when the company was public the first time. Two of the directors are former or current executives of Dole, with more than a decade at the company.

And Mr. Murdock’s advisers â€" the law firm Paul, Hastings, Janofsky & Walker and Deutsche Bank â€" played the same roles in the first buyout. Even the lawyers for the special committee of independent directors, Sullivan & Cromwell, were counsel to the underwriters on Dole’s 2009 I.P.O.

The shareholder lawsuit contends that Mr. Murdock has used his connections to stack the deck in his favor, pushing the special committee of independent directors to approve a deal.

One of the special committee directors, E. Rolland Dickson, served on the special committee that approved the 2003 buyout. Not only that, but Dr. Dickson has been Mr. Murdock’s personal physician.

Other members of the four-person special committee are also thought to have outside ties to Mr. Murdock. One, Elaine L. Chao, the former secretary of labor under President George W. Bush, is married to Senator Mitch McConnell, the Senate Republican leader, and Mr. Murdock has been a big Republican donor. Ms. Chao was also on Dole’s board from 1993 to 2001, rejoining the board after Dole’s I.P.O. in 2009.

Dr. Andrew J. Conrad, the head of the committee, was appointed to the Dole board by Mr. Murdock in 2003, when the company went private the first time. He has also been an adviser to the North Carolina Research Campus, a research center for cancer, to which Mr. Murdock has donated $700 million.

While these connections and relationships might appear to present potential problems, the directors considered them and decided, according to a regulatory filing, that they “would act in an independent and disinterested manner.” So there you have it.

The plaintiffs contend that Mr. Murdock timed the buyout to come in a lull in Dole’s stock price, one caused by asset dispositions as the business rebuilds. With a $1.7 billion sale of its Asian fresh produce business and global packaged food business to Itochu Corporation of Japan in 2012, Dole is now debt-free. Back in the 2003 buyout, it was the 2001 sale of a Honduran beverage business for $537 million in cash and the sale of Spanish and French subsidiaries.

There are differences between the current buyout and the one in 2003. This time around, Mr. Murdock took the position that he would not sell his own 39.7 percent to anyone else, a stance he did not take in 2003. In fact, at least one bidder offered to pay $14 a share before the announcement of Mr. Murdock’s bid, but there is no record of follow-up by the Dole directors.

Dole did not return calls to comment for this column. But in a filing with the Delaware court, Dole argued that the directors were disinterested and that “a special committee of independent, disinterested directors â€" fully empowered to negotiate with Murdock and say no â€" recommended the merger” and that “the special committee’s financial adviser, Lazard Frères & Co. L.L.C., which plaintiffs do not contend is conflicted â€" determined the price is fair to Dole’s stockholders.”

Dole and its board also argued that the deal was fair since it “remains subject to a vote of disinterested stockholders.”

Still, there is a disturbing echo in this buyout process. Take the reason Mr. Murdock gave in 2002 for taking Dole private: “Operating Dole Food Company Inc. as a private enterprise is the best alternative given the public-market focus on short-term earnings and predictable quarterly results. This will give the company greater flexibility to make investment and operating decisions based on long-term strategic goals.”

Fast-forward to 2013. In his buyout offer to the Dole board, Mr. Murdock stated: “Operating Dole Food Company as a private enterprise is the best alternative given the public-market focus on short-term earnings and predictable quarterly results. This will give the company greater flexibility to make investment and operating decisions based on long-term strategic goals.”

Yes, it is the same language almost word for word. At least you would have thought that in the decade since he could come up with some reason he took Dole public in between. But then again, since it is all the same parties, why bother?

To be fair to Dole and Mr. Murdock, this is not the first company to go private, then public and then private again. HCA, the owner of hospitals, for example has gone private and public twice, earning the founding Frist family billions.

The idea behind a take-private by management is that there is some value inherent in the business being private rather than public. That is the idea at least, and we saw that argument being made with Dell Computer, where a huge revamping is taking place and perhaps justified.

But in Dole’s case it appears that Mr. Murdock is simply hitting the cut and paste key. In this case, it is hard to see why this company should be private rather than public, other than the same tired reasons that it is better for the long term.

Of course, the one reason is price â€" shareholders will receive a good one that justifies selling. But here the special committee appears not to have acted more strongly to look at competing bids, leaving a higher bid on the table.

And so we are left with shareholders deciding. The deal requires that a majority of all shareholders other than Mr. Murdock approve it in a vote. Shareholders are typically reluctant to take risk, so approval is likely. So the third time is likely to be a charm for Mr. Murdock. One wonders if there will be a fourth, after a seemingly inevitable I.P.O. a few years from now. If that happens, Mr. Murdock can save on legal and bankers’ fees, since the documents are already prepared.

Safeway Puts Up Defense After Hedge Fund Amasses Stake

The grocer Safeway has gone on the defense days after the activist hedge fund Jana Partners declared a 6.2 percent stake in the company.

Safeway, based in Pleasanton, Calif., said on Tuesday that it had put into place a “poison pill” to prevent investors from acquiring more than 10 percent of the company.

Its shares rose on Tuesday by 10.5 percent to $30.99, their highest level in more than a year.

The $6 billion hedge fund Jana Partners is known for taking a behind-the-scenes approach to its campaigns, amassing large stakes in companies and agitating for change through talks with management.

The fund has turned its focus to Safeway, where it recently encouraged the board to conduct a strategic review and consider selling some of its assets, said a person familiar with the firm, who was not authorized to speak about its actions.

Last week, Jana Partners disclosed it had a 6.2 percent stake in a filing with the Securities and Exchange Commission, making it one of Safeway’s biggest shareholders.

Jana said Safeway’s shares were undervalued and submitted a list of demands for the board. These include returning “a significant” amount of capital to shareholders, shutting down stores in regions where Safeway’s profit margins are lower, and transferring the company’s 73 percent stake in Blackhawk Network, its gift card business, to shareholders.

Safeway responded on Tuesday by highlighting recent “strategic initiatives” the board had undertaken, including agreeing to sell its Canadian stores and putting Blackhawk through an initial public offering.

It said a “poison pill” had been put in place to ensure it could continue to carry out its strategic plan.

Both Jana Partners and Safeway declined to comment further.

Jana’s focus on Safeway comes amid a spurt of corporate activism as investors try to change companies through their investments. Hedge funds have been among the biggest group to flex their muscles.

Last week, the auction house Sotheby’s announced that it would review its financial policies after three hedge funds, Third Point Capital, Trian Partners and Marcato Capital, acquired large stakes in the company.

Occupy Has Mellow 2nd Birthday, With Appearance From the Hipster Cop

A sea of police officers formed around Zuccotti Park in Lower Manhattan on Tuesday morning, prepared to keep the peace.

Around midday, officers massed at Washington Square Park and were bound for Times Square later in the afternoon. They kept a wary eye on the Occupy Wall Street protesters, who were holding a series of rallies to mark the second anniversary of the movement.

But the day went by without much drama â€" at least not on the scale of incidents in the past. One moment that set off outraged complaints came when several protesters were arrested downtown for violating a law that forbids groups of three or more people wearing masks in public.

The turnout for Tuesday’s protest was smaller than for the first anniversary events last year, which caused some private grumbling among protesters. And it was a far cry from the large crowds of the movement’s early days in the fall of 2011, which came to an abrupt end when the police cleared the camp in an overnight raid.

Still, the energy was high as the organizers of the event addressed a crowd of at least 100 at the morning gathering downtown.

“We’re still here! Still fighting! Still strong! Still Occupy!” shouted Sumumba Sobukwe, a leader of the group, wearing aviator sunglasses and a pork pie hat.

The rally doubled as a book release party to promote “Occupy Finance,” a new handbook produced by a subset of the movement known as the alternative banking group. The book, copies of which were available free, offers a guide to the financial system and the events surrounding the crisis, and it proposes a policy framework that it calls “popular regulation.”

Complex topics like synthetic collateralized debt obligations are discussed at length in the book, but the writers say they want the book to appeal to a general audience.

“If this seems immensely complicated and confusing, it’s because it is,” the book says, “and it was designed to be that way.”

At the end, the book advises readers how to combat “well-informed futility syndrome.”

A lead author of the book, Cathy O’Neil, has a background in finance, working at one point at the hedge fund D.E. Shaw. These days, however, she is deeply involved in the Occupy movement, running weekly discussions about finance in a room at Columbia University that are open to the public.

Even bankers have come to these sessions, people Ms. O’Neil described in an interview on Tuesday as “independent thinkers” from firms like BNP Paribas, JPMorgan Chase and Morgan Stanley.

“I have never met anyone in finance who is not sympathetic to Occupy,” she said.

While the crowd may have been smaller on Tuesday, the familiar features of Occupy Wall Street were on display. Protesters held signs with slogans like “Too big to fail is too big” and sang folk songs accompanied by acoustic guitar.

“Even though there aren’t as many people as last year, it still feels strong,” said Katrina Oaks, a 27-year-old protester from Daytona, Fla.

Within the last week, she estimated, the number of people sleeping in front of banks in lower Manhattan grew to about 50 from 30, as protesters arrived from other parts of the country.

Another protester, Fury Young, 24, said a recent study about income inequality showed that the issues of the movement remained as relevant as ever. Mr. Young, who grew up on the Lower East Side of Manhattan, said he had watched the area become an “emerald city for the wealthy.”

“Since Occupy started, activism has become my life’s vocation,” he said, though he added that he also works as a set builder.

One face stood out from the others on Tuesday: the hipster cop.

That would be Rick Lee, a detective in the First Precinct, who gained a measure of fame in 2011 after photographs circulated online showing his unusually fashionable attire. While the Occupy protesters generally have an adversarial stance toward the police, it’s more complicated with Mr. Lee â€" more of a love-hate relationship.

On Tuesday, Mr. Lee was outfitted in a light blue shirt and navy cardigan from Ralph Lauren, and a striped tie and grey trousers from Brooks Brothers. His wingtip shoes were from Ralph Lauren as well.

As for his jacket?

That was issued by the N.Y.P.D.

Ex-JPMorgan Trader Slams Government’s Case

Federal prosecutors have portrayed Julien Grout, the former JPMorgan Chase trader, as the quintessential Wall Street criminal, accusing him of “systematically and fraudulently” masking losses to protect his bonus.

His lawyer found another way to describe him: as a scapegoat.

In a statement on Tuesday, a day after the government formally indicted Mr. Grout and another trader in connection with their roles in a trading loss that cost JPMorgan more than $6 billion, Mr. Grout’s lawyer returned fire on the government’s case. Calling the indictment a “shocking development” and accusing prosecutors of bowing to political pressure, the lawyer, Edward Little, previewed what could become Mr. Grout’s defense at trial.

For one, Mr. Little indicated, the defense will depict Mr. Grout as a low-level employee who was simply following orders. Or, as Mr. Little put it, Mr. Grout was a “junior trading assistant acting under the direct instructions of his managers.” Although the government described him as a vice president, the bank has tens of thousands of employees of that rank.

Mr. Little also highlighted how traders have significant leeway to value their bets in the market for financial contracts known as derivatives, which led to the losses for JPMorgan. The derivatives market is known for its opacity, making it difficult to pinpoint an exact price in real time.

“As the facts in this case are revealed, it will become clear that our client is innocent of any wrongdoing, and we look forward to his vindication,” said Mr. Little, a partner at Hughes Hubbard & Reed.

The battle is playing out against the backdrop of JPMorgan’s attempt to settle with the government.

The bank, according to people briefed on the matter, is expected to pay about $800 million to government agencies in Washington â€" the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve - and the Financial Conduct Authority in London. The bank, the people said, also agreed to make a groundbreaking admission of wrongdoing, acknowledging that it should have caught the problem faster but instead had lax controls that allowed the traders to build the risky position and cover up their losses. The settlement, which comes at the urging of lawmakers and critics of Wall Street, is expected this week.

Given the looming deal, Mr. Little said, Mr. Grout was “unjustly played as a pawn in the government’s attempt to settle its highly politicized case against JPMorgan Chase.”

The United States attorney’s office in Manhattan, which announced the indictment, declined to comment on Mr. Little’s statement.

The office, along with the F.B.I. and the S.E.C., first announced charges against Mr. Grout in August. The authorities also charged his boss, Javier Martin-Artajo. While Mr. Martin-Artajo oversaw the trading strategy, Mr. Grout recorded the value of the trades on a daily basis. They both worked for the bank’s chief investment office in London.

For the traders, problems emerged in early 2012 when losses mounted on their so-called credit derivatives bet, which allowed them to wager on the perceived health of companies like American Airlines. When losses soared, the government said, the traders deliberately “manipulated and inflated the value” of their positions to hide hundreds of millions of dollars in losses.

The traders stopped recording the value of their bet in a “middle range,” as generally required by JPMorgan, to some of the most generous possible figures. Of the 132 trading positions, according to the charges, 107 were “marked more favorably” than the midpoint.

In its complaint against Mr. Grout, the government cited recordings of phone calls and instant messages that suggested Mr. Grout and Mr. Martin-Artajo knew they were on shaky ground. In an instant message, for example, Mr. Grout said: “I mean, I’m trying to keep a relatively realistic picture here.” Weeks later, he remarked: “I don’t want to show something that is too false.”

Mr. Martin-Artajo and Mr. Grout were charged with wire fraud, falsifying bank records and contributing to false regulatory filings. The government also charged them with conspiracy to commit those crimes.

But a third trader - Bruno Iksil, nicknamed the London Whale because of the huge size of his wagers - avoided charges. Instead, he reached a so-called nonprosecution deal with prosecutors who will spare him from charges as long as he cooperates against his two former colleagues. In the indictment of Mr. Martin-Artajo and Mr. Grout, Mr. Iksil is referred to as a “co-conspirator.”

The government reached the deal after reviewing internal JPMorgan documents suggesting that Mr. Iksil tried to sound the alarms about the questionable valuations. In an instant message with Mr. Grout, for example, Mr. Iksil declared that “that he did not know where Mr. Martin-Artajo “wants to stop, but it’s getting idiotic.”

Still, Mr. Little slammed the nonprosecution deal.

“It is astonishing that the prosecutors are relying on Iksil’s testimony when he is the one who taught Mr. Grout how the bank was marking the portfolio, gave specific instructions on where he should mark positions, and personally approved the marks on a daily basis,” Mr. Little said. “Mr. Grout was totally dependent on Iksil’s instructions and relied in good faith on his expertise.”

A lawyer for Mr. Iksil declined to comment.

The Sound of Consolidation

Pandora looks as if it’s spinning a new theme song: The Consolidator. The $4.3 billion Internet radio firm is still losing money and the industry’s growth is slowing. Yet the stock has been on a tear, up more than 150 percent since the start of the year. Selling shares prudently shores up the balance sheet. It also gives the new boss - who knows about M.&A. - a chance to buy smaller rivals nipping at Pandora’s heels.

Pandora has grown by stripping market share from terrestrial radio. Listening hours increased to 8.1 billion in the first six months of this year from 6.4 billion in the first half of 2012. It has about 8 percent of the total United States radio listening market. But royalties eat a huge chunk of the money the firm makes from selling ads. Content acquisition costs are almost 60 percent of revenue. Growth should help improve gross margins - but the firm warns business maturation and competition means it will be increasingly difficult to find.

Raising more than $200 million of new cash gives the arriving chief executive, Brian McAndrews, money to possibly buy smaller rivals like Slacker Radio, Rdio, Rhapsody, SoundCloud and a host of others - many of which are backed by venture capital looking for an exit. Consolidation wouldn’t only benefit Pandora’s revenue and margins through operating leverage. Size would also give the company greater sway with advertisers and, most important, heft in its fight in Congress to revamp royalty rates to its benefit.

Despite the dilution that accompanies the stock sale, not to mention a warning that growth could slow, the stock barely moved. Investors are clearly open to the idea of cramming rivals into Pandora’s Box.

Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

23 Hedge Funds Settle S.E.C. Market Manipulation Charges

D.E. Shaw and Deerfield Management are among a group of hedge funds that have agreed to pay a total of $14.4 million to settle market manipulation charges by the Securities and Exchange Commission.

The regulator accused 23 firms of obtaining “illicit profits” by improperly buying and selling shares, in what is the commission’s biggest crackdown since it strengthened a ban on certain short selling in 2007.

Twenty two of the firms have agreed to settle the claims, though they did not admit or deny wrongdoing. G-2 Trading is fighting the claims, the S.E.C. said. The charges relate to Rule 105, which prohibits investment funds from short selling a company’s stock within the five days prior to a company’s public offering and then buying new shares in the public offering.

Short sellers sell stock they have borrowed, betting that they will be able to buy those shares back at a later date for a lower price. The S.E.C. contends that short selling ahead of a company public offering artificially depresses the value of the shares.

The S.E.C. accused the firms of buying shares from a broker, dealer or underwriter in a public offering days after short selling the same securities.

It also issued a warning to “highlight risks to firms” that have not complied with Rule 105. The S.E.C. has said the rule applies to firms regardless of the intent of a trader.

D.E. Shaw agreed to pay $667,000 to cover its gains on the trades, prejudgment interest and penalties. The fund had $22.9 billion in assets under management as of July 2013. A spokesman at D.E. Shaw declined to comment.

Deerfield Management, the health care hedge fund founded by the former Tiger Management director Arnold H. Snider, agreed to pay more than $1.8 million to settle the claims.

Other funds that agreed to settle the charges included Ontario Teachers’ Pension Plan Board, Hudson Bay Capital Management, Blackthorn Investment Group, Claritas Investments, Credentia Group, JGP Global Gestão de Recursos, M.S. Junior Swiss Capital Holdings and Michael A. Stango, Manikay Partners, Meru Capital Group, Merus Capital Partners, Pan Capital AB, PEAK6 Capital Management, Philadelphia Financial Management of San Francisco, Polo Capital International Gestão de Recursos, Soundpost Partners, Southpoint Capital Advisors, Talkot Capital, Vollero Beach Capital Partners, War Chest Capital Partners, and Western Standard.

Dimon Vows to Fix JPMorgan’s Compliance Problems

As the price tag swells for JPMorgan Chase’s multibillion-dollar trading loss, Jamie Dimon, the bank’s chief executive, offered an unvarnished message to employees on Tuesday.

JPMorgan, which is poised to pay roughly $800 million to a host of government agencies, is working to “face our issues, roll our sleeves, and fix” the compliance and control problems throughout the bank, Mr. Dimon said in a companywide memo on Tuesday.

The brewing regulatory problems and the ensuing fallout were on display on Monday when JPMorgan agreed to settle investigations from government agencies in Washington and London into the bank’s $6 billion blunder by traders in London. As part of the settlement, it will make a sweeping admission of wrongdoing.

The settlements, according to people briefed on the matter, will help the bank resolve investigations by the Securities and Exchange Commission, the Federal Reserve and the Office of the Comptroller of the Currency, which are focused on a breakdown in controls at the bank that allowed the trading losses to occur. The resolution extends across the Atlantic, too; JPMorgan will pay fines to wrap up the Financial Conduct Authority’s investigation into the soured trades.

Even as JPMorgan, the nation’s largest bank, works to close a painful chapter in its history that included Congressional hearings, the departure of senior executives and criminal charges against the traders at the heart of the losses, the bank has more work to do and should brace for more regulatory challenges, Mr. Dimon cautioned.

As he works to shore up lax controls and root out lingering problems, Mr. Dimon explained how “we are aggressively tackling these challenges.” Mr. Dimon explained the contours of that strategy in his memo, including how the bank “deployed massive new resources and refocused critical managerial time” on the effort.

A critical component of that effort, Mr. Dimon said, is refocusing the bank on core areas and exiting those units like student-loan origination and most of the physical commodities sales and trading business.

JPMorgan has ratcheted up its spending on controls, Mr. Dimon noted, increasing the “total spend on controls” to roughly $1 billion this year. Spending on technology that helps bolster controls has increased by 27 percent since 2011, Mr. Dimon said.

To proactively thwart any regulatory missteps, Mr. Dimon said the firm is “conducting an in-depth review” of its foreign correspondent banking business â€" an area that could pose regulatory headaches going forward.

Also critical to JPMorgan’s redoubled efforts, Mr. Dimon said, is a “more open and transparent relationship with regulators.” Within Washington, JPMorgan developed a reputation as something of a bully. As the bank works to mend its frayed relationships with regulators, Mr. Dimon said he personally meets with bank examiners from the comptroller’s office and the Fed.

Despite the cautiously optimistic tone from Mr. Dimon, JPMorgan is contending with a range of regulatory and legal problems. Some investigations into the trading losses are plodding forward. For example, the Commodity Futures Trading Commission, a regulator that oversees the market in which the losses occurred, has resisted signing on to the broader settlement, opting instead to strike out on its own, the people briefed on the matter said. Meanwhile, federal prosecutors and the F.B.I. in Manhattan are also still investigating the losses.

Aside from the trading losses, JPMorgan faces inquiries from at least seven federal agencies and two European countries. Those inquiries have a vast scope, from the bank’s hiring practices in China to mortgage loans sold to investors during the depths of the financial crisis.

JPMorgan is also on the brink of paying an $80 million fine to the comptroller’s office and the Consumer Financial Protection Bureau to resolve an investigation into its credit card practices. In his memo, Mr. Dimon noted that JPMorgan no longer sells identity theft and credit insurance to its credit-card customersâ€"two products that regulators seized upon as problematic.

The memo, combining notes of contrition with vows to improve, echoed his letter to shareholders, which apologized for letting “our regulators down” and pledged to “do all the work necessary to complete the needed improvements.”

Together the efforts, Mr. Dimon said in the Tuesday memo, “represent an unprecedented” initiative for JPMorgan and one that ensures the bank will “get this right.”

J. Crew Chief to Join Warby Parker’s Board

As Warby Parker continues its big push into retail, it is adding a top merchant mogul to its board.

Warby Parker, the three-year-old start-up that is the purveyor of hipster spectacles, plans to announce on Tuesday that it has named Millard S. Drexler, the chief executive of J. Crew, as a director. He will become Warby Parker’s seventh board member, joining the company’s four founders and representatives from the investment firms Tiger Global Management and General Catalyst Partners.

The addition of Mr. Drexler formalizes what Warby Parker executives have described as a burgeoning mentor role, as the company moves well beyond its origins as an online retailer. The J. Crew chief has already invested in the company as part of a $41.5 million financing round that closed earlier this year.

Warby Parker is Mr. Drexler’s third directorship; he already belongs to the boards of J. Crew and Apple Inc.

“I am excited to join the Warby Parker board,” he said in a statement. Referring to company co-chief executives Neil Blumenthal and Dave Gilboa, he added, “I like and respect Neil and Dave and love what they have created with Warby Parker â€" they have completely reinvented the eyewear business.”

Though Mr. Drexler already had been having regular lunches with Warby Parker management, the company’s executives sought in recent weeks to bring him deeper into the business. In particular, they sought his advice as they continue to open new stores and showrooms across the country.

“We’re growing really rapidly and developing a major retail strategy,” Mr. Blumenthal said in a telephone interview. “We thought, ‘Wouldn’t it be great to have him in the boardroom for these major decisions?’”

Mr. Drexler, whose successes at Gap and then J. Crew have made him a guru of retailing, has increasingly lent his insights and infamous attention to detail to Warby Parker’s development. At his first meeting with the company’s executives two years ago, he emphatically told Mr. Blumenthal and Mr. Gilboa that they needed a physical store to complement their Web site. (There are now five stores and 10 showrooms across the country.)

During one visit to Warby Parker’s flagship store in Manhattan’s SoHo neighborhood, Mr. Drexler looked up at an electronic sign â€" patterned after an old-fashioned train station fixture â€" meant to display upcoming eye exam appointments. The offering has been a success, with a three-week waiting list.

But at the end of the day, the sign began growing blank as the day’s bookings were completed. According to Mr. Blumenthal, the J. Crew chief said that the board could suggest that business was slow. Were Warby Parker a publicly traded company, Mr. Drexler argued, an analyst might use that to suggest that the store wasn’t nearly full.

The next day, the board was rejiggered so that at day’s end, it began showing the next day’s appointment and never appeared blank.

“He’s shown that details matter,” Mr. Blumenthal said. “He’s aware of all those little details that at first may seem insignificant but have drastic impact on customers’ perceptions.”

Mr. Drexler has also contributed to management’s thinking about its wares â€" the company has rolled out more than a dozen collections of eyewear, when most optical designers do one a year â€" and bolsters its presence through a burgeoning TV presence. (Last month, Warby Parker has rolled out its second TV commercial, an ode to the company’s determinedly quirky vibe.)

One thing that Warby Parker isn’t considering yet is putting its wares in other shops, like J. Crew’s. Having its own stores means that the company can better control its customer experience, while reaping higher sales margins, according to Mr. Blumenthal.

While the start-up is adding boldfaced names to its board, the company is far from considering even bigger steps, like an initial public offering or a sale, Mr. Blumenthal said. The company still has a large cash position and enormous growth, with no plans to raise additional capital at the moment.

“We’re only three years old,” he said. “We’re not really even thinking about going public.”

There is one other milestone that Warby Parker has yet to reach: getting Mr. Drexler to switch from his well-known plastic spectacles for a pair of the company’s glasses.

“We haven’t converted him yet,” Mr. Blumenthal said. “We’ll see if we can.”

Wielding Broader Powers, S.E.C. Visits Hedge Funds in London

The Securities and Exchange Commission, which has actively pursued actions by American banks and other financial institutions overseas, is broadening its reach by asserting its purview to foreign hedge fund managers.

Agency employees are set to fan out across upscale Mayfair, home to some of London’s biggest hedge funds, this week, paying visits to more than a dozen hedge fund managers registered with the S.E.C. to determine whether they are in compliance with American regulations.

The move reflects the S.E.C.’s new powers since the financial crisis, particularly under the Dodd-Frank Act of 2010, which was aimed at ferreting out wrongdoing and more tightly regulating private asset managers like hedge funds.

“The reason you are seeing these examinations happening now is that we are a few years past the Dodd-Frank Act, which in certain circumstances required overseas managers to register with the S.E.C.,” said Robert Mirsky, partner and global head of hedge funds at KPMG in London. “With registration comes inspection by the S.E.C.”

Since taking the helm this year, the agency’s chairwoman, Mary Jo White, has sought to remake the S.E.C., which had been criticized for missing major scandals like the Ponzi scheme orchestrated by Bernard L. Madoff. In recent years, some of the S.E.C.’s most prominent cases have involved overseas operations of institutions based in the United States. For instance, S.E.C. enforcers investigated JPMorgan Chase over $6 billion in trading losses at its London operations, and its antibribery unit examined the bank’s hiring in Asia of children of Chinese officials.

The new scrutiny of hedge funds in London, however, is causing consternation among local money managers. Several managers privately expressed concerns that the visits would lead to the importation of American-style regulation to British hedge funds that have American clients.

One British hedge fund manager is said to be considering closing his firm’s so-called European event-driven trading business â€" when a fund seeks to capitalize on a market-moving piece of news like an announced merger â€" in a bid to avoid being caught up in a stepped-up regulatory sweep.

Legal experts say the new inspections could pave the way for more oversight of the lightly regulated hedge fund industry.

“We are putting in place a structure for regulators around the world to reach across borders and get information,” said Leonard Ng, a partner at the law firm Sidley Austin in London. “I think the end result will be that regulators will be in possession of much more information than before, which will then give them an incentive to put the information to use either by drafting new regulations or taking enforcement actions to correct the deficiencies.”

Britain, which has 59 hedge funds with at least $500 million in assets, is the biggest hub of hedge funds after the United States, which has 735 such funds, according to an S.E.C. report presented to Congress this year.

The S.E.C. has also teamed up with the Financial Conduct Authority, Britain’s chief financial regulator, to cooperate in overseeing the cross-border operations and activities of managers of alternative investment funds, like hedge funds.

Until a few years ago, hedge fund managers gave little thought to what were routine inspections. Before Dodd-Frank, most hedge funds were loosely regulated, and their managers were not even required to provide a name, address or size of their fund to regulators. Aimed at sophisticated investors, hedge funds for the most part were left alone to manage money at their own discretion provided that they operated within the law.

That attitude changed in October 2009 when Raj Rajaratnam, the manager of the New York-based Galleon Group hedge fund, was arrested on charges of insider trading.

It emerged that the enforcement case involving the Galleon Group came about as a result of examinations that the S.E.C. conducted in 2006 and 2007 at Sedna Capital, a hedge fund run by Mr. Rajaratnam’s younger brother, Rengan, and at Galleon.

During their inspections, S.E.C. examiners spotted some curious instant messages and e-mail exchanges between Rengan and Raj related to the semiconductor company Advanced Micro Devices. The examiners passed on the suspicious documents to lawyers in the S.E.C.’s enforcement division, which began a full-blown investigation of Galleon that culminated in criminal charges against its founder three years later. (Raj Rajaratnam was eventually convicted and is serving an 11-year sentence. Rengan Rajaratnam pleaded not guilty to insider trading charges in late March, but prosecutors have signaled that they are in plea discussions with him.)

In recent months, in advance of the S.E.C.’s visit, a number of London-based hedge funds managers have received letters requesting voluminous information. The letters seek documents like personal trading records as well as e-mails and instant messages. Many of the funds receiving such letters are newly registered investment advisers.

A spokeswoman for the S.E.C. declined to comment on the examinations.

While there is no suggestion that the hedge fund advisers are suspected of any wrongdoing, the inspections are not entirely random. With its limited resources, the S.E.C. is flagging hedge fund advisers that have a high concentration of retail investors or ones that it deems are at risk of not complying with United States regulations for a variety of reasons.

Some of the firms receiving requests include ones where the manager previously worked for a fund that had compliance issues with the S.E.C., or the investment adviser is pursuing a strategy that could make it vulnerable to missteps like insider trading.

The S.E.C. also appears to be examining so-called event-driven trading, related to major corporate news like merger deals. For much of this year, there has been a drought in European mergers; announced deals fell 42 percent, to $232.7 billion in the first six months, according to the data provider Thomson Reuters. But this month, the European merger scene came back to life: Verizon Communications agreed to buy Vodafone’s stake in Verizon Wireless for $130 billion and Microsoft said it would pay $7.2 billion for Nokia’s phone business.

Regulators in the United States in recent years have started crackdowns on insider trading at hedge funds, including actions against SAC Capital Advisors, founded by the billionaire Steven A. Cohen. But Britain has not seen a similar kind of regulatory cleanup even though stocks of target companies routinely trade higher in advance of an announced merger.

It remains to be seen just how aggressive the S.E.C. will be after it completes the exams. But the agency has promised that it will send the hedge fund managers a follow-up letter, saying either that no further action is necessary or specifying areas in which the hedge fund falls short and remedies are needed.

And overhanging the industry is always the worry that the examiners will stumble across the next Galleon, if they refer a case to S.E.C. enforcers.

Anita Raghavan is the author of “The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund,” published by Business Plus.

China Internet Giant Buys Stake in Search Engine

TOKYO â€" Another big investment has deepened a struggle for primacy among China’s online giants.

Tencent Holdings, the biggest Internet company in China, said Monday that it had invested $448 million for a 36.5 percent stake in Sogou, a search engine. The move helps Tencent, which provides popular online games, social networking and Internet messaging services, keep pace with its main rivals, Alibaba and Baidu, which have been moving to challenge Tencent with deals of their own.

As the Chinese Internet continues to boom, the stakes are growing. This week, the stock market capitalization of Tencent climbed above $100 billion, only a few billion short of the value of Facebook. Like its main rivals, Tencent has mostly focused on the Chinese market, though it has been trying to expand its international presence.

Sogou, which is owned by a company called Sohu.com, is only the third-largest search engine in China, with a 10 percent share of searches in August, according to CNZZ, a research firm. Baidu led the way, with 63 percent, followed by Qihoo 360, with 18 percent.

Still, Sogou was courted by Tencent, Qihoo and Alibaba. The rivalry between Alibaba and Tencent has been fierce, with each company moving in recent months to expand its range of Internet services in an effort to outflank the other.

Tencent, with fast-growing messaging services like QQ and WeChat, is strong on mobile devices, but until recently it lacked strength in areas like e-commerce. Alibaba, on the other hand, is the Chinese leader in e-commerce, but weaker in search and mobile services.

In August, Alibaba moved to block online retailers on its sites from using WeChat, which has emerged as a powerful marketing tool. Tencent then added online payment features to WeChat.

By forging a partnership with Sogou, Tencent may have sought to defend its own turf rather than letting Alibaba open up a new front, analysts said.

“Tencent could not let Alibaba get a search engine,” said Bryan Wang, an analyst at Forrester Research. “It’s really about buying something that could potentially have been very beneficial to its rival.”

Last spring, Alibaba threw down the gauntlet, agreeing to pay $586 million for an 18 percent stake in Sina Weibo, a microblogging service that resembles Twitter. That moved Alibaba into more direct competition with Tencent, as WeChat and Weibo compete for users. Alibaba followed up that deal with a $294 million investment in AutoNavi, an online mapping company.

Not to be outdone, Baidu followed up with the biggest Internet deal to date in China, a $1.9 billion agreement to acquire 91 Wireless, which operates mobile application stores.

Although mobile and e-commerce business has been booming, search is still growing, too. Revenue from search in China grew 35 percent from a year earlier, according to iResearch, a consulting firm. Baidu accounted for 81 percent of the 9.28 billion renminbi, or about $1.5 billion, in quarterly total revenue, the firm said. At only 3.3 percent, according to iResearch, Sogou’s slice of the revenue pie was considerably smaller than its share of searches.

“This partnership will immediately expand Sogou’s market presence and significantly elevate its position in the highly competitive PC search market, and even more so in the rapidly evolving mobile search market,” said Charles Zhang, the chief executive of Sohu.

Before the announcement Monday, Qihoo 360 had been seen as the front-runner to acquire part or all of Sogou. Executives of the two companies had acknowledged holding talks.

Tencent said that under the agreement with Sohu.com, it had the option of increasing its stake in Sogou to “approximately 40 percent.”

Tencent plans to combine its search engine, called Soso, with Sogou, and the two companies said they would cooperate on the development of new services.

“We are confident that Sogou, after combination with Soso, will deliver superior search experiences to users on our social, browser and content platforms, especially on the mobile front,” Ma Huateng, chief executive of Tencent, said in a news release.

Morning Agenda: JPMorgan’s Settlement Over Trading Loss

JPMORGAN CHASE IS SAID TO ADMIT FAULT IN SETTLEMENT  |  JPMorgan Chase has agreed to pay about $800 million to government agencies in Washington and London, and to make a groundbreaking admission of wrongdoing, to resolve allegations stemming from its London Whale trading loss last year, Ben Protess and Jessica Silver-Greenberg report in DealBook. The settlements, expected this week, will help the bank move beyond the $6 billion loss and mend frayed relationships with regulators. In a victory for the bank, senior JPMorgan executives avoided charges in the case.

An admission of wrongdoing would be a rare stain on JPMorgan’s reputation and could expose the bank to private litigation. The bank will acknowledge that it should have caught the problem faster, people briefed on the matter tell DealBook. The deal, reflecting a somewhat tougher line taken by the Securities and Exchange Commission, will also require the bank to admit that its lax controls allowed traders in a unit in London to build the risky position and cover up their losses, DealBook writes.

But at least one regulator is not on board. The Commodity Futures Trading Commission, which oversees the market in which the losses occurred, has balked at joining the settlement and plans to fine the bank later this year, the people briefed on the matter said. Splitting from fellow regulators, the agency has examined whether JPMorgan amassed a position so large that it “manipulated” the market for derivatives.

PERELMAN’S DAUGHTER IN LEGAL BRAWL  |  Samantha Perelman, a 23-year-old student at Columbia University who will be at the center of a nasty family battle in a New Jersey courtroom this week, is a legal novice. But her father, Ronald O. Perelman, the 70-year-old financier and chairman of the cosmetics company Revlon, has never shied away from a court fight, having sued companies, ex-wives and a former business partner, DealBook’s Susanne Craig reports.

In this case, Mr. Perelman is picking up the tab for his daughter’s legal fight with her uncle, James Cohen, the head of Hudson Media. Mr. Cohen is a longtime legal opponent of Mr. Perelman, who has previously contended that Mr. Cohen siphoned hundreds of millions of dollars out of Samantha’s inheritance from her mother. Now, Ms. Perelman’s legal brawl with her uncle has conservatively cost at least $60 million in legal bills so far, according to lawyers on both sides.

“What he did was greedy and not nice,” said Ms. Perelman in a videoconference interview from her father’s yacht off the shore of Greece. She added that despite her father’s wealth her mother always wanted her to be provided for separately and she would be “incredibly heartbroken and angry to know her brother deceived her.”

GUESSING CONTINUES IN FED RACE  |  An intriguing question was swirling around Washington on Monday only hours after Lawrence H. Summers withdrew his name from consideration to succeed Ben S. Bernanke as chairman of the Federal Reserve when he steps down at the end of January, Andrew Ross Sorkin writes in the DealBook column. “What if Janet L. Yellen doesn’t get the job?”

“While the conventional wisdom is that the vice chairwoman, Ms. Yellen, is now almost assured the job, some White House and Fed watchers are not-so-privately speculating that President Obama may still choose another candidate,” Mr. Sorkin writes. “His name is Donald L. Kohn, a former Fed vice chairman. He has a big fan whispering in the ear of President Obama: Timothy F. Geithner, the former Treasury secretary, who has been informally consulted by the White House on the selection.”

Still, Mr. Kohn, who has long worried about the Fed’s independence and has sometimes pushed back against Mr. Bernanke’s efforts to be more public, ultimately may not get the job. “Just can’t see Obama going for anyone other than Yellen â€" the pushback within his own party would be intense and it would revive all sorts of gender issues,” said Greg Valliere, chief political strategist at the Potomac Research Group, where, coincidentally, Mr. Kohn serves as a senior economic strategist.

ON THE AGENDA  |  Occupy Wall Street is holding a rally to celebrate its second anniversary. Jacob J. Lew, the Treasury secretary, speaks at the Economic Club of Washington at 7:45 a.m. James Chanos, the president of Kynikos Associates, is on Bloomberg TV at 11 a.m. Jack Dorsey, the Twitter co-founder, is on Bloomberg TV at 6 p.m.

COMPLYING WITH TAX EVASION LAW IS VEXING FOREIGN BANKS  | 
“A sweeping new federal law has a seemingly simple goal â€" curbing offshore tax evasion by Americans through foreign banks, trusts and shell companies. But behind the scenes, foreign banks and financial firms are increasingly finding that complying with the law is a major headache,” Lynnley Browning reports in DealBook.

“Treasury Department officials say they are moving apace in getting the world’s banks on board with the law, the Foreign Account Tax Compliance Act,” Ms. Browning writes. “But some financial institutions, trade groups, scholars and members of Congress have raised an array of concerns, starting with the cost of creating the complex computer systems needed to track Americans’ accounts.”

Mergers & Acquisitions »

Huntsman to Buy Rockwood Units for $1.1 Billion  |  The chemical company Huntsman said it would buy the paint pigments and performance additives businesses of Rockwood Holdings for $1.1 billion in cash.
REUTERS

Tencent of China Buys Stake in Search Company  |  The Asian Internet giant Tencent Holdings paid $448 million for a 36.5 percent stake in the Sogou search unit of Sohu.com, with an option to increase it to 40 percent, Bloomberg News reports.
BLOOMBERG NEWS

KPN Books Loss on Sale of German Unit  |  The Dutch cellphone operator KPN announced on Monday that it would book a $4.9 billion loss on the sale of its German unit E-Plus to the Spanish giant Telefónica, possibly making KPN more valuable to América Móvil, which is seeking to acquire it.
DealBook »

Boise Inc. Is Sold for $1.28 Billion  |  The Packaging Corporation of America agreed on Monday to buy a rival, Boise Inc., for $1.28 billion.
PRESS RELEASE

INVESTMENT BANKING »

The Financial Crisis, Five Years Later  |  Andrew Ross Sorkin remembers the day the economic collapse began and offers answers to three tough, lingering questions.
DealBook »

Since Lehman’s Collapse, Companies More Forthcoming on Compliance  |  Since the collapse of Lehman Brothers, companies are committing a lot more time, money and resources to comply with a host of regulatory requirements, Peter J. Henning writes in the White Collar Watch column.
DealBook »

By Their Own Measures, Banks Claim to Be Safer  |  “The results of internal stress tests released on Monday may have been helped by the banks having built capital levels in recent months as the economy showed some signs of improvement and they earned more money,” Reuters writes.
REUTERS

Goldman Names New Chief Information Officer  |  Goldman Sachs named R. Martin Chavez to become chief information officer when Steven Scopellite retires at the end of the year, Reuters reports, citing internal memos on Monday.
REUTERS

Banks’ Pitch to Expatriate Indians: Loans for Dollar Deposits  |  Reuters reports: “Foreign banks are pushing to raise billions of dollars from expatriate Indians in response to New Delhi’s drive to defend its weak currency, which could mean the government can avoid the need for a sovereign bond or state-backed deposit scheme to attract inflows.”
REUTERS

PRIVATE EQUITY »

In Britain, a Tax Crackdown on Private Equity  |  Danny Alexander, chief secretary to the Treasury in Britain, plans to announce “a crackdown on tax loopholes being used by the ‘vast majority’ of partners in private equity and accountancy firms to shelter their earnings from the taxman,” The Financial Times reports.
FINANCIAL TIMES

HEDGE FUNDS »

Morgan Creek Starts Mutual Fund  |  The new fund will allow average stock and bond investors to get a taste of the exclusive world of hedge funds, traditionally reserved for pension funds, charities, big institutions and the ultra wealthy.
DealBook »

I.P.O./OFFERINGS »

For Twitter, Key to Revenue Is No Longer Ad Simplicity  |  Virtually all of Twitter’s revenue, estimated to be $583 million this year, currently comes from three basic ad formats, reports Vindu Goel for The New York Times.
DealBook »

Twitter’s Plans May Run Into China’s Attitudes Toward the Internet  |  Twitter has opportunities to sell advertising to Chinese enterprises, but it may do well to pay attention to the government’s approach there to managing the Internet, Bill Bishop writes in the China Insider column.
DealBook » | DealBook: Looking to Twitter to Reignite Tech I.P.O.’s

With Its Stock Rising, Pandora Plans to Sell Shares  |  Pandora Media and one of its investors plan to offer 14 million shares by the end of the week.
WALL STREET JOURNAL

Marchionne Still Low-Balling Chrysler  |  A Chrysler initial public offering would cost Fiat time and money better spent on integrating the companies. It’s time for the chief executive, Sergio Marchionne, to increase his offer for the remaining stake, Olaf Storbeck of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

VENTURE CAPITAL »

Facebook and Twitter Blocked Again in Iran  |  The New York Times reports: “Internet users in Iran lost access Tuesday to Facebook and Twitter, a day after they were surprised to find that they could get on the sites without having to evade a government’s firewall that had blocked direct access to the Web sites for years.”
NEW YORK TIMES

LEGAL/REGULATORY »

Push for Yellen to Lead the Fed Gains Momentum  |  Janet L. Yellen, who had told friends she did not expect to be nominated as the next chairman of the Federal Reserve, has now “became the front-runner by elimination, officials close to the White House said,” The New York Times reports.
NEW YORK TIMES

Storm Brewing as the Fed Plans to End Its Stimulus  |  Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corporation, writes in an essay in The Financial Times that “gale-force winds are possible” when the Federal Reserve “tapers” its bond-buying program.
FINANCIAL TIMES

Barclays Faces Fine in Qatar Deal  |  Barclays said on Monday that Britain’s financial regulator had concluded the bank acted “recklessly” when it raised emergency money from Qatari investors during the financial crisis and could be fined $79 million.
DealBook »

Britain Sells Stake in Lloyds for $5.1 Billion  |  Britain has sold a 6 percent stake of Lloyds Banking Group stock for $5.1 billion, which reduces the government holding in the firm to 33 percent.
DealBook »