Shopify Raises $100 Million in Third Round of Financing

Shopify may have begun seven years ago as an online store for three friends to sell snowboards. But as the company’s growth has exploded, so has its goal: becoming a giant of commerce, both on and off the web.

Now the start-up is receiving a substantial amount of help in that aim.

Shopify plans to announce on Thursday that it has raised $100 million in a Series C round of financing, led by the venture capital arm of the Canadian pension fund OMERS and the investment firm Insight Venture Partners. Also contributing to the round were Bessemer Venture Partners, FirstMark Capital, Georgian Partners and Felicis Ventures.

The latest financing is nearly five times the $22 million that the company raised in its previous two rounds, and values it at nearly $1 billion.

It comes as Shopify begins to substantially branch out from its main business, serving as the online retail platform for other companies. Though it began as a way to sell snowboards, it now claims to run more than 80,000 stores, mostly on behalf of small businesses.

And it is still growing. The company says that member stores sold over $100 million worth of products in the week surrounding this year’s Black Friday and Cyber Monday.

But Harley Finkelstein, Shopify’s chief platform officer, said the company now saw its future in offering customers offline solutions as well. It already offers software that lets clients effectively use iPads as cash registers, somewhat akin to Square’s payment offering.

The idea is that whether the cash register is a phone, a website or a tablet, inventory and other store management issues can be handled seamlessly across platforms.

“We want to go from being an e-commerce company to a commerce company,” he said. “That’s the vision. Sell anything, anywhere, anytime.”

The push to operate on several channels at once began as a battle cry from traditional brick-and-mortar retailers, who scrambled to get online to avoid losing customers to websites like Amazon. More recently, the tide began to flow in the other direction, as online retailers opened physical stores of their own. Piperlime, for example, has a store in Manhattan’s SoHo, which was designed to seem consistent with the language, fonts and color scheme of its website.

While online shopping has shown strong growth in recent years, the research firm ShopperTrak estimates that over 90 percent of actual commerce still takes place in physical stores, which makes that segment an important target for any company that hopes to serve retailers.

While Shopify does not want to open stores of its own, it has been experimenting with pop-up stores â€" events it calls “Popify” â€" bringing online retailers who use its platform into a physical space so it can study what shoppers do.

The company already knows a lot about what consumers do online, Mr. Finkelstein said. Now “we want to learn as much as we can about consumer interaction offline,” he said.

Shares in Chinese ‘Bad Bank’ Surge in Hong Kong Debut

HONG KONG-Shares in the state-run ‘‘bad bank’’ China Cinda Asset Management rose as much as 33 percent on their trading debut in Hong Kong on Thursday after it raised around $2.5 billion last week on huge demand for its initial public offering.

The stock rose as high as 4.79 Hong Kong dollars per share in morning trading, soaring a third above its offering price of 3.58 dollars per share amid heavy trading volumes and, on paper, adding around 43 billion dollars, or about $5.5 billion, to China Cinda’s market value.

The strong performance signals resurgent demand among investors in Chinese I.P.O.’s, and is likely to bode well for China Everbright Bank, which is scheduled to price its offering on Friday as it attempts to raise as much as $2.8 billion in what would be the biggest Hong Kong share sale this year.

On the face of it, Cinda and Everbright are perfect opposites. Everbright makes most of its money from interest margins on traditional lending, which account for around 77 percent of its operating income. Business is best when times are good, when companies and people are borrowing more and are flush with cash to repay their debts.

Cinda, on the other hand, is one of four asset managers set up by the government to bail out banks by taking bad loans off of their books. When borrowers fail to repay their loans to banks like Everbright, Cinda makes money by acquiring those deadbeat debts at a discount and recouping its outlay by extracting cash, shares or other assets from the borrowers. In effect, the Cinda I.P.O. represents a bet that a slowdown of the Chinese economy will create a new wave of bad debt.

So far, investors seem keen on both deals. Demand among individual local investors in Cinda’s offering was 160 times the amount of shares that had been set aside for them. Everbright’s I.P.O. is its third try for a Hong Kong listing. The bank aborted two previous attempts â€" most recently in August 2012 â€" because of market downturns.

Everbright Bank is the third Chinese bank since October to seek a Hong Kong listing. Chinese banks have seen generally healthy growth in profits, but need to raise money and secure new access to capital markets ahead of what analysts expect could be a rising tide of new bad debt in China. The banks also need to shore up their capital bases ahead of more stringent capital requirements being phased in by Chinese financial regulators between now and 2018.

Criminal Action Is Expected for JPMorgan in Madoff Case

JPMorgan Chase and federal authorities are nearing settlements over the bank’s ties to Bernard L. Madoff, striking tentative deals that would involve roughly $2 billion in penalties and a rare criminal action. The government will use a sizable portion of the money to compensate Mr. Madoff’s victims.

The settlements, which are coming together on the anniversary of Mr. Madoff’s arrest at his Manhattan penthouse five years ago on Wednesday, would fault the bank for turning a blind eye to his huge Ponzi scheme, according to people briefed on the case who were not authorized to speak publicly.

A settlement with federal prosecutors in Manhattan, the people said, would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case. The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank’s money-laundering safeguards.

The deferred-prosecution agreement would also list the bank’s criminal violations in a court filing but stop short of an indictment as long as JPMorgan pays the penalties and acknowledges the facts of the government’s case. In the negotiations, the prosecutors discussed the idea of extracting a guilty plea from JPMorgan, the people said, but ultimately chose the steep fine and deferred-prosecution agreement, which could come by the end of the year.

Until now, no big Wall Street bank has ever been subjected to such an agreement, which is typically deployed only when misconduct is severe. JPMorgan, the authorities suspect, continued to serve as Mr. Madoff’s primary bank even as questions mounted about his operation, with one bank executive acknowledging before the arrest that Mr. Madoff’s “Oz-like signals” were “too difficult to ignore,” according to a private lawsuit.

JPMorgan, which declined to comment for this article, has repeatedly said that “all personnel acted in good faith” in the Madoff matter. No one at JPMorgan has been accused of wrongdoing and the bank was not the only one to miss Mr. Madoff’s fraud, which duped regulators and clients for decades.

In recent months, the bank has emphasized that it is scaling back businesses that could be vulnerable to money laundering and cutting ties to certain clients.

Jamie Dimon, the bank’s chief executive, made a reference to the settlement talks at an industry conference on Wednesday, saying: “You read about Madoff in the paper the other day. We have to get some of these things behind us so we can do our job.”

The looming settlements would come on the heels of JPMorgan’s reaching a record $13 billion settlement over its sale of troubled mortgage securities before the financial crisis.

The scrutiny has taken a toll on JPMorgan, undercutting its leverage in negotiations and casting the bank as a symbol of Wall Street risk-taking. That stigma also sapped the influence that JPMorgan once used to shape policy in Washington, people briefed on the matter said, where regulators are increasingly skeptical of the bank’s lobbying.

Although JPMorgan still wields some sway in Washington â€" it held more meetings with regulators on the so-called Volcker Rule than any other bank, according to the Sunlight Foundation â€" the bank’s $6 billion trading loss in London last year became a flash point in the process and inspired regulators to strengthen the rule, a restriction on risky trading that was approved this week.

Facing the scrutiny, JPMorgan and its top executives directed billions of dollars to new compliance measures and vowed to adopt a conciliatory tack with federal authorities. The bank also embarked on a tour of contrition that featured Mr. Dimon holding town-hall-style meetings with regulators.

Of all its legal problems, the Madoff case appears to be among the biggest threats because of the criminal element. The deferred-prosecution agreement, the people said, is expected to fault JPMorgan for a “programmatic violation” of the Bank Secrecy Act, which requires banks to maintain internal controls against money laundering and to report suspicious transactions to the authorities.

The bank is also planning to settle with the federal Comptroller of the Currency and a unit of the Treasury Department, which are scrutinizing broader breakdowns in JPMorgan’s detection of suspicious transactions routed through the bank. In addition to focusing on JPMorgan’s ties to Mr. Madoff, regulators from the comptroller’s office have also examined the safeguards at JPMorgan’s private banking unit in Asia and within the so-called correspondent banking business, in which it relies on foreign institutions to process transactions overseas.

The comptroller’s office, the Treasury and the United States attorney’s office in Manhattan all declined to comment.

The Madoff case could have turned out worse for JPMorgan. In recent weeks, the federal prosecutors in Manhattan debated whether to demand that JPMorgan plead guilty to a criminal violation of the Bank Secrecy Act, the people briefed on the matter said.

The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron’s accounting firm, Arthur Andersen, which went out of businesses after its 2002 conviction, taking 28,000 jobs with it. Ever since, prosecutors have increasingly relied on deferred-prosecution agreements, which rebuke companies without threatening their health. Although a Wall Street bank has never faced a deferred-prosecution agreement, according to a University of Virginia Law School database, Wachovia and the banking arm of American Express have entered into such deals.

The agreements, however, have fueled concern that some banks, having grown so large and interconnected, are too big to indict.

Preet Bharara, the United States attorney in Manhattan whose office is handling the JPMorgan case, has raised similar concerns. “I don’t think anyone is too big to indict â€" no one is too big to jail,” he said in a recent speech.

In the case of JPMorgan, the nation’s biggest bank, his office discussed the potential ramifications of criminal charges with the comptroller’s office, which is required to monitor the bank’s stability, the people said. The comptroller’s office assured the prosecutors that it would not stand in the way of the charges. And Mr. Bharara’s office concluded that the bank could withstand a criminal charge.

But ultimately, prosecutors decided that a deferred-prosecution agreement was more fitting to a case that began as a civil investigation. Criminal authorities have a higher burden of proof than their civil regulatory counterparts, having to show a legal violation “beyond a reasonable doubt” rather than just a “preponderance of the evidence” standard in civil cases.

The government’s case against JPMorgan would most likely center on its failure to file a so-called suspicious activity report about Mr. Madoff. While the bank alerted the authorities in Britain to concern about Mr. Madoff, it did not sound the alarms with American regulators.

A statement of facts that would underpin the deferred-prosecution agreement will most likely cite a series of internal JPMorgan emails suggesting that employees had concerns that never made it to Washington. Some of the emails surfaced in a separate lawsuit that Irving H. Picard â€" the trustee trying to recoup money on behalf of Mr. Madoff’s victims â€" filed against JPMorgan in 2010. Mr. Picard, who has recovered $9.5 billion for victims, sued the bank for $6.4 billion, accusing it of “aiding and abetting” Mr. Madoff.

JPMorgan has denied Mr. Picard’s accusations. A federal appeals court tossed out his lawsuits against JPMorgan and other banks.

JPMorgan’s relationship with Mr. Madoff spanned more than two decades, from 1986 to the time of his arrest in 2008. JPMorgan served as his primary bank, Mr. Picard said, collecting fees from Mr. Madoff’s brokerage firm, which moved billions of dollars through an account at the bank.

By 2006, concerns began to mount within the bank. “I do have a few concerns and questions,” one JPMorgan employee wrote in February 2006 after studying some of Mr. Madoff’s trading records, according to an email cited in the lawsuit. “All trades are generated by Madoff’s black box.”

Mr. Madoff is serving a 150-year sentence after pleading guilty to operating the scheme.

JPMorgan Chase to Spend $250 Million on Jobs Skills Initiative

When Mayor Rahm Emanuel of Chicago received a call earlier this year asking if he would support a new jobs initiative from JPMorgan Chase, he replied with his typical bluntness.

“I said, ‘Of course, but I’m not looking for more work,’ ” Mr. Emanuel said in a phone interview. “I need resources.”

On Thursday, Mr. Emanuel and Jamie Dimon, JPMorgan’s chairman and chief executive, plan to announce “New Skills at Work,” a five-year, $250 million initiative focused on filling the skills gaps in some of the largest United States and European job markets, including New York, Chicago, Los Angeles and London.

The plan comes at a time when JPMorgan is facing unprecedented fines and regulatory scrutiny. It recently reached a $13 billion settlement over its questionable mortgage practices in the run-up to the financial crisis and is under investigation for its hiring practices in China.

Announcing a new philanthropy initiative after suffering a reputational blow is not uncommon on Wall Street. In 2009, Goldman Sachs announced its largest single charitable contribution, a $500 million small-business assistance program, after facing harsh criticism about how much it paid its executives in the wake of a government bailout.

Mr. Dimon dismissed a connection between the bank’s recent troubles and its jobs initiative.

“JPMorgan Chase, for 100 years, for 200 years, has always tried to be a great community citizen,” Mr. Dimon said.

In Chicago, Mr. Emanuel has already been dealing with a problem that has affected the whole country: Employers are struggling to find workers who meet their specific needs. The mayor started College to Careers, a program that pairs local schools with employers to better train students for the labor market. Mr. Emanuel even recalled receiving an email from Mr. Dimon, who hailed the program as a smart idea when it began in 2011.

That program would eventually serve as a model for “New Skills at Work,” according to Peter Scher, the head of JPMorgan’s corporate responsibility unit.

JPMorgan Chase plans to commit $50 million annually, beginning in 2014, to research and training programs across the country and in Europe. Like College to Careers, it also plans to arrange meetings between groups that train people for jobs and the employers who need specific skills. The bank has already teamed up with a number of organizations, including Year Up and the Aspen Institute’s Forum for Community Solutions, a national work force training group.

It plans to announce specific grants and partnerships early next year.

Mr. Dimon will be chairman of the bank’s Global Workforce Advisory Council, which will advise on the new initiative, and Melody C. Barnes, the former director of the White House’s Domestic Policy Council, will serve as co-chairwoman. Mr. Emanuel will have a “key role” in how the initiative unfolds in Chicago, one of the first cities the program will target, although his official position within the effort is not yet clear.

The initiative will include a heavy research component, drawing on the bank’s internal market data as well as data from outside analytics firms.

The program is part of the bank’s larger push to focus its charitable giving on areas that have more to do with its own businesses. In 2014, the first year of the program, it plans to donate $225 million, a figure that will likely include some cuts to the bank giving for the arts and culture. Last year, JPMorgan donated $183 million in total charitable giving.

“The biggest need of all is to grow the economy and grow the jobs,” Mr. Dimon said.

While 7 percent of the American labor force was unemployed as of November, employers are taking longer to fill open jobs.

“Usually when we have a slack labor market, employers fill their openings fairly quickly,” said Steven J. Davis, a professor at the University of Chicago’s Booth School of Business. “That’s not happening now.”

The average job vacancy so far this year has been 22.4 days, Mr. Davis said, compared with 20 days between 2004 and 2006, when the economy was stronger.

Mark Williams, a 22-year-old graduate of Year Up, said he could not find work and lived with his mother when he enrolled in the organization’s information technology program last year. He found a job in server management at a New Jersey hospital before graduation and now lives on his own in the Bronx.

“My whole goal was to make something better of myself,” Mr. Williams said. “It made me believe that I could do anything.”

Facebook to Join S.&P. 500

Facebook stock jumped close to 4 percent in after-hours trading on Wednesday on news that the social media giant would join the Standard & Poor’s 500-stock index at the end of next week.

The move will become official at the close of trading on Dec. 20. It move ends months of speculation that Facebook, based in Menlo Park, Calif., would join the index of 500 influential American firms.

Facebook raised $16 billion in May 2012 through its initial public offering, which valued the company at $104 billion. It sold 421 million shares at $38 each, a price that drew harsh criticism when the stock quickly began to slump, dropping more than 50 percent by early September 2012.

But the company’s stock has slowly climbed since then, closing at $49.38 on Wednesday. The company currently has a market capitalization of more than $120 billion.

Facebook will knock Teradyne, a testing equipment firm, out of the index. Teradyne, in turn, will replace the publisher Scholastic Corporation in the S&P MidCap 400, which lists companies with a market capitalization of $2 billion to $4.5 billion.

One of the most common benchmarks for the United States economy, the S.&P. 500 index chooses stocks based on a company’s market size, liquidity and industry grouping. Other technology giants listed include Yahoo, Google, eBay, Yahoo and Microsoft.

Canadian Utility Buys UNS Energy of Arizona for $2.5 Billion

Fortis, the biggest gas and electricity distribution utility in Canada, is making a move into the desert.

On Wednesday, it agreed to buy UNS Energy Corporation, a utility based in Arizona, for $2.5 billion in cash. The price of $60.25 a share represents a 31 percent premium over UNS’s closing share price of $45.84 on Wednesday. Fortis will also assume $1.8 billion of UNS’s debt, bringing the total value of the deal to $4.3 billion.

Though Fortis is based in St. John’s, Newfoundland, and primarily operates utilities in Canada, the company has experience in the United States as well. It owns both Central Hudson, a utility in upstate New York, as well as Griffith Energy Services, a non-utility provider of propane and heating oil to mid-Atlantic states.

Further afield, Fortis operates utilities in the Caribbean islands, and power generating assets in Belize. Altogether, Fortis serves more than 2.4 million customers, and had revenue of $3.7 billion last year.

In UNS, Fortis will acquire a big provider of electricity to the city of Tucson, and UniSource Energy Services, which provides natural gas and electricity a broader swath of southern Arizona. Taken together, the utilities have more than 650,000 customers.

Fortis plans to invest $200 million into UNS to bolster its balance sheet and help fund the planned acquisition of a natural gas-fired Gila River Power Plant. Completing that deal will reduce UNS’s reliance on coal, part of the company’s continuing push into renewable energy.

“Fortis has built a successful track record of investing in fundamentally strong utilities that remain deeply engaged with the communities they serve,” UNS’s chief operating officer, David Hutchens, said in a statement. “They proposed this partnership because they like the way we do business, not because they’re looking to change it.”

As with its other companies, Fortis plans to operate UNS independently. “UNS Energy will remain a standalone utility in the Fortis model,” Fortis’s chief executive, Stan Marshall, said in a statement. “Its headquarters and management team will remain in Tucson, Arizona and its customers will not pay for any costs related to the transaction.”

UNS shareholders will have a chance to vote on the transaction next year, and various regulators must also bless the deal before it can be completed.

Scotiabank advised Fortis, and White & Case, Davies Ward Phillips & Vineberg and Snell & Wilmer provided legal advice. Lazard advised UNS Energy, and Baker Botts provided legal advice.

Canadian Utility Buys UNS Energy of Arizona for $2.5 Billion

Fortis, the biggest gas and electricity distribution utility in Canada, is making a move into the desert.

On Wednesday, it agreed to buy UNS Energy Corporation, a utility based in Arizona, for $2.5 billion in cash. The price of $60.25 a share represents a 31 percent premium over UNS’s closing share price of $45.84 on Wednesday. Fortis will also assume $1.8 billion of UNS’s debt, bringing the total value of the deal to $4.3 billion.

Though Fortis is based in St. John’s, Newfoundland, and primarily operates utilities in Canada, the company has experience in the United States as well. It owns both Central Hudson, a utility in upstate New York, as well as Griffith Energy Services, a non-utility provider of propane and heating oil to mid-Atlantic states.

Further afield, Fortis operates utilities in the Caribbean islands, and power generating assets in Belize. Altogether, Fortis serves more than 2.4 million customers, and had revenue of $3.7 billion last year.

In UNS, Fortis will acquire a big provider of electricity to the city of Tucson, and UniSource Energy Services, which provides natural gas and electricity a broader swath of southern Arizona. Taken together, the utilities have more than 650,000 customers.

Fortis plans to invest $200 million into UNS to bolster its balance sheet and help fund the planned acquisition of a natural gas-fired Gila River Power Plant. Completing that deal will reduce UNS’s reliance on coal, part of the company’s continuing push into renewable energy.

“Fortis has built a successful track record of investing in fundamentally strong utilities that remain deeply engaged with the communities they serve,” UNS’s chief operating officer, David Hutchens, said in a statement. “They proposed this partnership because they like the way we do business, not because they’re looking to change it.”

As with its other companies, Fortis plans to operate UNS independently. “UNS Energy will remain a standalone utility in the Fortis model,” Fortis’s chief executive, Stan Marshall, said in a statement. “Its headquarters and management team will remain in Tucson, Arizona and its customers will not pay for any costs related to the transaction.”

UNS shareholders will have a chance to vote on the transaction next year, and various regulators must also bless the deal before it can be completed.

Scotiabank advised Fortis, and White & Case, Davies Ward Phillips & Vineberg and Snell & Wilmer provided legal advice. Lazard advised UNS Energy, and Baker Botts provided legal advice.

Aramark Prices Its I.P.O. at $20, Low End of Range

Aramark, the big food services company, priced its initial public offering on Wednesday at $20 a share, the low end of its expected range.

At that level, the company â€" which runs cafeterias and concession stands across the country â€" will have raised $725 million and will have an equity valuation of $4.6 billion.

Still, Aramark will become the latest company owned by private equity firms to return to the public markets. Aramark was acquired in 2007 by its chairman, Joseph Neubauer, and a group of investors that includes Warburg Pincus and the buyout arm of Goldman Sachs.

Unlike at Hilton Worldwide, another company owned by a private equity firm that priced its I.P.O. on Wednesday, Aramark’s current sponsors will sell a portion of their holdings.

The company is expected to start trading on the New York Stock Exchange on Thursday under the ticker symbol ARMK.

Hilton Prices Its I.P.O. at $20 a Share

Hilton Worldwide, the giant hotel operator, priced its eagerly awaited initial public offering at $20 a share as it prepares for a return to the public markets, a person briefed on the matter said on Wednesday.

At that price, the midpoint of its expected range, the company would have an equity value of about $19.7 billion.

By the time Hilton set its estimated price range last week, the company was set to claim one of the three biggest I.P.O.’s in a big year for initial stock sales.

Its current owner, the Blackstone Group, announced its deal for the hotel chain in the summer of 2007, at the height of the private equity boom. Soon after the deal closed, the company struggled amid the crashing debt market and the slowing travel economy. But Blackstone managed to turn the company around, including by striking a deal with creditors that cut its debt load.

The company plans to be listed on the New York Stock Exchange under the ticker symbol “HLT.”

The banks advising on the I.P.O. are led by Deutsche Bank, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, JPMorgan Chase and Wells Fargo.

Manchester United’s Struggles Attract a Bear

The British soccer team Manchester United has made a poor showing on the field this season.

Now the British hedge fund manager Crispin Odey is making a multimillion-dollar bet that the club’s New York-listed shares are destined for a similar trajectory.

Odey Asset Management, Mr. Odey’s fund, has taken a $22 million short position against Manchester United shares. Investors take short positions by borrowing a company’s stock and then selling it in anticipation of pocketing a profit by buying the stock back at a lower price.

Mr. Odey’s bet pits him against several hedge fund investors who remain strong supporters of the team. George Soros has a 5.3 percent stake, while GLG, a division of the world’s biggest hedge fund Man Group, has a 2.2 percent stake.

But Manchester United’s journey since its initial public offering on the New York Stock Exchange in August 2012 has been a tale of two teams.

On the field, the club has fallen from the top of the English Premiere League rankings last season to ninth this year. A series of management changes, including the retirement of the legendary manager Sir Alex Ferguson and its chief executive, David Gill, has caused upheaval at the 135-year-old club. During Mr. Ferguson’s 27-year tenure, Manchester United transformed itself from an underdog to a champion, winning 38 trophies along the way. David Moyes, its current manager, is under pressure to push the team back to the top of the league.

Off the field, in the stock market, the club has experienced steady growth. After its debut at $14 a share, the stock is now trading at $17 a share. With a strong brand and 659 million fans around the world â€" its fastest growing fan base is in Asia â€" the club reported record revenue in 2013. In its latest quarterly results, Manchester United said its sponsorship revenue had risen 63 percent compared with the figure in the period a year earlier.

But Mr. Odey, who is well known in London for his brief marriage to Rupert Murdoch’s eldest daughter and for having a sausage named after him in Ross-on-Wye, is not the only investor to turn bearish on the company. Five percent of Manchester United’s stocks are out on loan, a proxy indicator for how much of the stock is being shorted, according to data collected by Markit.

Fears that the team’s relatively poor performance this year will seep into its balance sheet are not unfounded, according to some analysts. Among the risk factors listed in the team’s prospectus filed with the Securities and Exchange Commission, Manchester United said it was “highly dependent on members of our management, coaching staff and our players.”

The company is also saddled with £389.2 million in debt, and investors have little say in what management does. The shareholders have no voting rights. This reality was underscored in September, when the Glazer family, which owns Manchester United, filed documentation that would allow the company to undertake a $400 million share sale - a move that would dilute the value of current shareholdings.

Manchester United’s Struggles Attract a Bear

The British soccer team Manchester United has made a poor showing on the field this season.

Now the British hedge fund manager Crispin Odey is making a multimillion-dollar bet that the club’s New York-listed shares are destined for a similar trajectory.

Odey Asset Management, Mr. Odey’s fund, has taken a $22 million short position against Manchester United shares. Investors take short positions by borrowing a company’s stock and then selling it in anticipation of pocketing a profit by buying the stock back at a lower price.

Mr. Odey’s bet pits him against several hedge fund investors who remain strong supporters of the team. George Soros has a 5.3 percent stake, while GLG, a division of the world’s biggest hedge fund Man Group, has a 2.2 percent stake.

But Manchester United’s journey since its initial public offering on the New York Stock Exchange in August 2012 has been a tale of two teams.

On the field, the club has fallen from the top of the English Premiere League rankings last season to ninth this year. A series of management changes, including the retirement of the legendary manager Sir Alex Ferguson and its chief executive, David Gill, has caused upheaval at the 135-year-old club. During Mr. Ferguson’s 27-year tenure, Manchester United transformed itself from an underdog to a champion, winning 38 trophies along the way. David Moyes, its current manager, is under pressure to push the team back to the top of the league.

Off the field, in the stock market, the club has experienced steady growth. After its debut at $14 a share, the stock is now trading at $17 a share. With a strong brand and 659 million fans around the world â€" its fastest growing fan base is in Asia â€" the club reported record revenue in 2013. In its latest quarterly results, Manchester United said its sponsorship revenue had risen 63 percent compared with the figure in the period a year earlier.

But Mr. Odey, who is well known in London for his brief marriage to Rupert Murdoch’s eldest daughter and for having a sausage named after him in Ross-on-Wye, is not the only investor to turn bearish on the company. Five percent of Manchester United’s stocks are out on loan, a proxy indicator for how much of the stock is being shorted, according to data collected by Markit.

Fears that the team’s relatively poor performance this year will seep into its balance sheet are not unfounded, according to some analysts. Among the risk factors listed in the team’s prospectus filed with the Securities and Exchange Commission, Manchester United said it was “highly dependent on members of our management, coaching staff and our players.”

The company is also saddled with £389.2 million in debt, and investors have little say in what management does. The shareholders have no voting rights. This reality was underscored in September, when the Glazer family, which owns Manchester United, filed documentation that would allow the company to undertake a $400 million share sale - a move that would dilute the value of current shareholdings.

R.B.S. to Pay $100 Million to Settle Inquiries Into Violations of Sanctions

The Royal Bank of Scotland is paying $100 million in fines to New York and federal banking regulators to settle civil investigations into allegations that some of its former employees helped concealed transactions involving customers from Iran, Sudan and other nations subject to international sanctions for roughly a decade.

Bank regulators in New York contend the former R.B.S. employees used a variety of techniques to conceal about 3,500 transactions involving the transfer of $523 million through New York banks.

The joint action announced on Wednesday by the New York State Department of Financial Services, the Federal Reserve and the Treasury Department’s Office of Foreign Assets Control is part of a continuing crackdown on banks that violate American laws against money laundering, specifically banks that enable transactions with countries that are subject to international sanctions.

The bank regulators gave R.B.S. credit in the settlement for beginning its own internal investigation into the matter in 2010 and dismissing the employees involved in the unlawful money transfers.

“R.B.S. took an important step by terminating a number of individual employees who engaged in misconduct,” Benjamin M. Lawsky, New York Superintendent of Financial Services, said in a statement.

In the settlement, R.B.S. will pay a $50 million penalty to New York bank regulators and a $50 million penalty to the Federal Reserve, of which $33 million will go to the Treasury Department. The British bank has terminated four employees and clawed back bonuses from another eight employees. It also agreed to put in place measures to stiffen its compliance with anti-money laundering laws.

R.B.S., in a statement, said the bank “deeply regrets” its failings.

The bank also said related criminal investigations by the Justice Department and the Manhattan district attorney’s office were concluded without those agencies taking any further action against R.B.S.
The four employees dismissed by R.B.S. included the bank’s former head of global banking services for Asia, the Middle East and Africa and the head of the money laundering prevention unit for corporate markets.

The bank regulators found that the former employees helped customers and companies with ties to countries under sanctions strip out identifying data from payment messages.

The settlement with R.B.S. is considerably smaller than the $1.92 billion HSBC paid to settle money laundering allegations last year, and the $667 million in fines paid by Standard Chartered to settle investigations into whether the British bank violated international sanctions against Iran.

Bitcoin Believers See a Role for Wall Street

A venture capitalist, a former regulator, a lawyer and a pair of entrepreneurs â€" Bitcoin evangelists all â€" gathered on Tuesday in the private dining room of an upscale Manhattan restaurant to discuss their vision of a world in which the currency plays a role in mainstream finance.

It may be a far-fetched notion â€" Bitcoin, despite the attention it has received in recent months, is still largely a plaything for speculators online, with stomach-turning price swings â€" but it is one that these men have bet millions of dollars can be achieved.

“The rising value of Bitcoin is a put option, or a bet, that Bitcoin gets adopted as a medium of exchange,” said Jeremy Allaire, the founder of Circle Internet Financial, a start-up in Boston that seeks to be a payment-processing system for Bitcoin. Mr. Allaire, who sponsored the gathering, said he had a modest position in Bitcoin, which he did not disclose.

“Wall Street will find a way” to get involved in Bitcoin, said Barry Silbert, the founder of SecondMarket, which created a Bitcoin fund that has $62.9 million in net assets under management as of Tuesday afternoon. “It doesn’t take a lot of money to move the needle in the Bitcoin world.”

“We’re in inning one of a nine-inning game,” said Chris Daniel, a lawyer at Paul Hastings who represents Circle Internet Financial.

The event, held at A Voce in Time Warner Center, showcased the arguments that some of Bitcoin’s most influential advocates are using to promote the currency’s adoption. They insisted that Bitcoin, a digital asset without backing from any central bank or government, could one day become widely used in money transfers and payments large and small.

A prominent venture capitalist, Jim Breyer, has given his vote of confidence to that proposal, participating in a $9 million investment in Mr. Allaire’s company. Mr. Breyer mingled with others at the restaurant on Tuesday before the dinner began.

The Bitcoin advocates emphasized that the process of “mining” Bitcoin â€" essentially, using powerful computers to solve complex equations â€" contributes to the infrastructure of the decentralized currency. But they held out hope that Wall Street firms would get involved, lending Bitcoin a measure of stability.

Raj Date, a former official at the Consumer Financial Protection Bureau who recently joined the board of Circle, offered a hypothetical case to illustrate the currency’s promise. Suppose he was trying to call his parents in Turkey, he said. He could do that free over the Internet. But to send them $100? That would cost him.

Not if he used Bitcoin, however.

There are several serious obstacles in the way of this vision, including Bitcoin’s extreme volatility. But this could be ironed out if big financial firms entered the market, Mr. Date said.

“The path to lower volatility, absent significant market makers, is possible theoretically; I don’t think it’s ever happened,” he said.

Mr. Silbert, the entrepreneur behind the Bitcoin fund, said another large player was getting involved in a Bitcoin venture.

“There’s a very large fund family that’s launching one soon that’s not yet public,” he said.

Last week, on the same day that the Chinese government threw cold water on Bitcoin, Bank of America Merrill Lynch became the first main Wall Street firm to release research about the currency. The report said that a “fair value analysis” of Bitcoin suggested a maximum value of $1,300. Currently, the price of one Bitcoin is about $928, according to the Mt. Gox exchange.

That report “woefully undervalued” Bitcoin, Mr. Allaire said.

“He positioned himself for lots of Bitcoin upgrades over the next six months,” Mr. Silbert said.

The Bitcoin supporters played down the significance of the decision by China, which moved to restrict banks from using Bitcoin in transactions. They pointed to a Senate hearing last month at which federal officials spoke optimistically about the benefits of digital money - a hearing at which Mr. Allaire testified.

Another obstacle for Bitcoin believers is the problem of fraud. Bitcoin transactions lack transparency and can be used to facilitate money laundering, Peter J. Henning wrote in DealBook’s White Collar Watch column.

Mr. Daniel, the lawyer in the room, said that such fears were behind the times.

“If you called me in January of this year, I would have told you that, through back channels, we were hearing that there was a real propriety issue with Bitcoin,” he said. But he said that governments are less focused now on shutting down Bitcoin operators than on “encouraging innovation.”

For Mr. Silbert, defending Bitcoin has become a regular occupation.

“I’m invited to do these dinners almost nightly,” he said.

A Happy Hour for Private Equity

Oriental Brewery may produce a happy hour for its private equity investors.

Anheuser-Busch InBev has started discussions over buying back the South Korean brewer, which it sold to Kohlberg Kravis Roberts in 2009 for $1.8 billion. A back-of-the-beer mat calculation suggests that would earn O.B.’s private equity backers a 34 percent annualized return.

K.K.R. originally bought the maker of Cass and OB Golden Lager with $750 million of its own equity. It drove a hard bargain. AB Inbev had to help finance the deal with a $300 million payment-in-kind loan - a type of borrowing whose interest payments compound over time - at an attractive interest rate of 8 percent. It also gave AB InBev a right to buy Oriental Brewery back from July 2014 for a multiple of 11 times the previous year’s earnings before interest, taxes, depreciation and amortization, or Ebitda, a person close to the situation told Reuters Breakingviews when the deal was first struck.

Its private equity owners have turned the company into South Korea’s leading brewer, lifting its share of volume and sales to over 50 percent of the market by rebranding products to appeal to younger customers and introducing new flavors. The brewer’s Ebitda grew from $200 million in 2008 to around $330 million at the start of 2013, sources told Reuters. If that growth rate has continued since then, Oriental Brewery will have Ebitda of $374 million by the start of 2014.

That suggests a payment from AB InBev of $4.1 billion. Deduct the value of the payment-in-kind note, worth $441 million by mid-2014, and assume the private equity groups have paid down around half of the remaining buyout debt, and the remaining equity would be worth $3.3 billion. That’s a 34 percent annualized return on the original investment.

AB InBev may not exercise its right to buy the business back. But even then, South Korea’s capital markets may allow K.K.R. to get a similar price in an initial public offering. Oriental Brewry has an operating profit margin twice as large as its nearest rival, Hite Brewery, according to Bernstein research. The latter’s parent, Hite Jinro, also trades on 11 times its trailing Ebitda. Either way, the private equity owners of Oriental Brewery should be able to call the investment a success.

Una Galani is the Asia corporate finance columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Soothing Words on ‘Too Big to Fail’ but With Little Meaning

Earlier this year, President Obama’s new Treasury secretary, Jacob J. Lew, offered a financial reform litmus test: By the end of 2013, could we say with a straight face that we have solved the “too big to fail” problem?

Last week, Mr. Lew gave a sweeping overview of the efforts to overhaul financial regulation. It was a talk of a man who has been practicing his straight face in the mirror.

To judge by his performance, one technique for remaining stoned-faced is to recite platitudes. Mr. Lew told the attendees: “Going forward, we cannot be afraid to ask tough questions, with an open mind and without preconceived judgments.” That requires that “we must remain vigilant as emerging threats appear on the horizon.” He reassured us that “we have made tough choices, and very significant progress toward reforming our financial system.”

This is not the stuff of persuasion. Simply asserting that the financial system becomes safer as regulators complete Dodd-Frank rules does not make it so. To those who don’t think those rules go far enough, the administration offers little. More important, the claim frames the issue in a discouragingly limited fashion.

In his speech, Mr. Lew claimed that his test had been passed. He said, more than once, that “Dodd-Frank ended ‘too big to fail’ as a matter of law.” That may sound soothing, but it is empty of meaning. “Too big to fail” was never literally the law of the land. Therefore, it wasn’t something that Dodd-Frank excised.

As long as there are gargantuan banks, Mr. Lew is left to make a faith-based argument that we can assume officials’ pre-battle boasts of courage will hold true as the fight is engaged.
“Too big to fail” is a generally held assumption that some entities are so central and vital to our markets that they will be backstopped by the government. For starters, it requires expecting that government officials will have the stomach to unwind a failing bank with a multitrillion-dollar balance sheet and impose losses on shareholders and, if required, bondholders and other creditors.

But that’s only a first step. The government must also have the ability to safely unwind the institution and all of its international operations. And that’s not even the most important aspect of “too big to fail.” The government won’t simply be able to unwind one failing giant financial institution and be done. Anything that is taking down JPMorgan Chase is highly likely to be also taking down Bank of America or Goldman Sachs â€" or both. What will the government do then? It’s at this point that the straight face beomes a look of terror.

Grant for a moment Mr. Lew’s argument that we’ve made progress on financial reform. I do. This week, the depressingly delayed Volcker Rule finally emerged from the regulatory cavern. And that rule is stronger than previous versions. But is it strong enough?

The process wasn’t encouraging. It was only in the last couple of weeks that the loopholes were closed. Now we are left to trust the enforcement efforts from regulators who only weeks ago were arguing about how many and how extensive the loopholes should be. Now we need them to uniformly become true-believers in muscular Volcker enforcement.

The way to really solve “too big to fail” is not by tinkering with the existing system, which leaves the great and fundamental problem still with us. The economy has become overly “financialized.”

Historically, finance’s share of the economy has been at about 4 percent. Today, it’s about twice that. And the peak occurred not in pre-bubble 2007, but in post-crash 2010, at just under 9 percent, according to research from Thomas Philippon of New York University. That represents a shift of more than $600 billion of wealth a year, as Wallace C. Turbeville, a former investment banker-turned-financial reformist, has pointed out.

Despite technological innovation, finance costs more than it used to, even though prices have fallen for things like trading stocks.

Research from Professor Philippon shows that financial activities have gone up in the deregulatory era, and now cost about the same as in 1900, the last Gilded Age. In other industries, like retail, technological innovation has led to lower prices and therefore decreased the size of the sector. In finance, the opposite happened.

Society isn’t benefiting. Research by Jennie Bai, Professor Philippon and Alexi Savov shows that even as the differential between buying and selling stocks and bonds has fallen, prices aren’t better. Prices have displayed the same ability to forecast corporate futures steadily for the last 50 years.

The regulator focus has been on reducing the chances and damage of financial crises, and that is certainly vital. But it’s insufficient. Are we on the right path to fix the pathologies of our obese financial sector?

The financial sector has become a self-sustaining perpetual motion machine that extracts money from the rest of the economy. Shouldn’t it be a goal of society â€" Mr. Lew’s focus â€" to restore the financial industry to its traditional role as an intermediary between companies that need capital and savers who have it?

There are some modest signs in the right direction. Large banks are not as profitable as they were before the crisis. They clearly have more capital and less leverage, which makes them safer.

Regulators have incrementally raised the costs of risky activities, which may work to slow down the growth of finance.

“The effect of financial regulation is serendipitous,” Mr. Turbeville notes. “They accidentally got partly the way there.”

But part of the way isn’t good enough.

Moncler Prices I.P.O. at Top of Range

LONDON â€" Moncler, the Italian designer of luxury winter jackets, is set to raise $938.8 million in its initial public offering, which was priced at the top end of the range late Wednesday.

The apparel maker, which abandoned plans to go public in 2011 amid market turmoil, priced its stock at 10.2 euros a share, which means it is set to raise at least €681 million in the offering. Moncler is expected to float at least 27 percent of the company as part of the offering. As a result, the company’s implied equity value is expected to be €2.55 billion, or about $3.52 billion.

The offering was heavily oversubscribed and Moncler has the option to increase the size of the offer by 15 percent, which would value the share sale at €783.6 million.

Moncler’s shares are expected to begin trading on the Milan stock exchange on Monday morning.

The bulk of the proceeds from the initial public offering are expected to go to Eurazeo, the French investment company that owns 45 percent of the company, and the private equity firm Carlyle Group.

Remo Ruffini, who bought the company in 2003, is expected to keep his 32 percent stake in the firm.

Under Mr. Ruffini’s leadership, Moncler â€" a shortened version of the name of the mountain village, Monestier-de-Clermont in Grenoble, France, where the company was founded 60 years ago â€" grew from an outfitter for the French Olympic ski team into a global fashion brand.

The company, which has 122 stores and also sells its products through department stores and online, posted sales of €489.2 million last year.

Carlyle had planned to take Moncler public in 2011, but ended up selling a stake to Eurazeo in a deal valued at about €1.2 billion.

The Moncler sale is the latest in a series of luxury brands that have gone public amid growing consumer confidence and an improved economic outlook in Europe. Michael Kors and the Italian brands Prada and Bruno Cucinelli are among those that have undertaken I.P.O.’s.

Goldman Sachs, Bank of America Merrill Lynch and Mediobanca are coordinating the sale, with JPMorgan Chase, Nomura, Banca IMI and UBS as joint book runners. BNP Paribas, Equita SIM and HSBC are the lead managers.

Citigroup Names New Board Member

Citigroup announced on Wednesday that Duncan P. Hennes, a longtime financial executive, would join its board.

In 2006, Mr. Hennes co-founded Atrevida Partners, an investment advisory firm based in Rye, N.Y., that specializes in alternative assets. He will serve on the risk management and finance committees of the boards of both Citigroup and Citibank.

A former treasurer of Bankers Trust, Mr. Hennes, 56, also served as chief executive of George Soros’s hedge fund company, Soros Fund Management, from 1999 until 2001. After that, he, along with Eugene Ludwig, helped found the Promontory Financial Group, the bank consulting firm. He continues to serve on Promontory’s advisory board.

While at Bankers Trust, Mr. Hennes represented the bank in the consortium that rescued and took over Long-Term Capital Management in 1998, when the hedge fund nearly collapsed. He was elected chairman of the consortium’s board.

Mr. Hennes is a certified public accountant and has an M.B.A. from the Wharton School of the University of Pennsylvania.

“Mr. Hennes has broad experience in financial services with notable expertise in securities markets and risk management,” Citigroup’s chairman, Michael E. O’Neill, said in a statement. ” We look forward to the insight he will bring to the board.”

Judge Allows LightSquared Suit to Go Forward

Share us on: Twitter Facebook LinkedIn By Sindhu Sundar 0 Comments

Law360, New York (December 10, 2013, 9:29 PM ET) -- Bankrupt wireless firm LightSquared Inc. on Tuesday won the green light to proceed with most of its suit against Dish Network Corp. and its chairman Charlie Ergen, whom it is accusing of secretly buying $1 billion in LightSquared's debt in a tactical ploy for its valuable spectrum assets.

U.S. Bankruptcy Judge Shelley C. Chapman ruled in a hearing Tuesday that LightSquared could proceed with most of its claims â€" including a breach of contract claim â€" against Ergen’s firm SP Special Opportunities LLC, which he used...

Morning Agenda: Enforcing the Volcker Rule

Five federal regulators agreed on Tuesday on a final version of the Volcker Rule, which aims to prohibit regulated banks from using customer money to trade for their own gain. Now, the rule’s biggest test may be just around the corner, DealBook’s Peter Eavis writes.

Getting to this point was already an important effort in the authorities’ quest to overhaul the financial system. The Volcker Rule was particularly taxing to write, having to distinguish trading that banks are allowed to do â€" to serve their customers and offset their own risks â€" from the prohibited trading done solely for their own profit, Mr. Eavis writes. Regulators also had to contend with a spirited lobbying effort by the banks. In the end, Paul A. Volcker, a former Federal Reserve chairman for whom the rule is named, sounded somewhat satisfied with the finished product.

But a new challenge is beginning. “The rule has plenty of potential gray areas that banks may be able to exploit. As a result, regulators will have to remain extremely vigilant, and understand highly complex trading books, if they are to properly enforce the rule,” Mr. Eavis writes. Janet L. Yellen, who is poised to become the chairwoman of the Federal Reserve, recognized this challenge. “Supervisors are going to bear a very important responsibility to make sure the rule really works as intended,” she said on Tuesday at the Fed board meeting to approve the rule

The rule released on Tuesday came after behind-the-scenes pressure from the White House to finish a piece of regulation that had been mired in delays, Ben Protess and Mr. Eavis report in DealBook. Treasury Secretary Jacob J. Lew declared that the rule was too important to delay and that he wanted the deal done by the end of 2013, people briefed on the meeting recalled in recent interviews. President Obama, striking a similarly urgent tone, emphasized that “it’s really important to make the deadline,” the people said.

An account of the negotiations that led to the votes, based on interviews with the people briefed on the matter who were not authorized to speak publicly, “illuminates the hands-on approach that Mr. Lew â€" in contrast to the more low-key method of his predecessor, Timothy F. Geithner â€" adopted in the talks, as well as the behind-the-scenes role that Mr. Volcker and the president played,” Mr. Protess and Mr. Eavis write. “In addition to meeting with Mr. Lew, the 86-year-old Mr. Volcker met with President Obama in the Oval Office last week, the people said, one of four times they met to discuss the rule.”

BOIES SCHILLER RAISES THE BAR ON BONUSES  |  “In the year-end competition to see which major law firm can shower the biggest cash bonuses on its young lawyers, the firm founded by the well-known litigator David Boies again appears to be the winner by a wide margin,” Matthew Goldstein reports in DealBook.

“The law firm Boies, Schiller & Flexner is poised to pay out year-end bonuses of as much as $300,000 to some of its associates, with the average young lawyer taking home an additional $85,000, a firm spokeswoman confirmed. Last year, the top bonus handed out to some of the young lawyers at the firm, which specializes in trial and appellate litigation, was $250,000.”

ON THE AGENDA  | Men’s Wearhouse reports earnings after the market closes. The Senate Banking Committee holds a hearing at 3:30 p.m. on American manufacturing.

CAPITOL LEADERS REACH A BUDGET DEAL  | “House and Senate budget negotiators reached agreement Tuesday on a budget deal that would raise military and domestic spending over the next two years, shifting the pain of across-the-board cuts to other programs over the coming decade and raising fees on airline tickets to pay for airport security,” Jonathan Weisman reports in The New York Times. “The deal, while modest in scope, amounts to a cease-fire in the budget wars that have debilitated Washington since 2011 and gives lawmakers breathing room to try to address the real drivers of federal spending â€" health care and entitlement programs like Medicare and Social Security â€" and to reshape the tax code.”

Mergers & Acquisitions »

Vice Media Buys a Tech Company  |  The New York Times reports: “Advertising, journalism and technology continue to converge. The latest example: Vice Media’s acquisition of Carrot Creative, a digital agency that creates apps, websites and games for media companies and brands.” NEW YORK TIMES

Scripps Buys a Digital Video News Start-Up  |  The E.W. Scripps Company said it had acquired Newsy, a five-year-old video start-up based in Columbia, Mo. SCRIPPS

Discovery Is Said to Consider a Bid for Scripps Networks  |  Variety reports: “Discovery Communications is mulling a bid for Scripps Networks Interactive, parent company of Food Network, HGTV, Travel Channel and other lifestyle-oriented cablers.” VARIETY

Shake-Up at Lululemon  |  Two days before it was to report its third-quarter earnings, Lululemon Athletica announced on Tuesday that Dennis J. Wilson, the founder, would step down from his position as chairman of the board of directors, although he remains on the board. NEW YORK TIMES

How Time Warner Could Benefit by Turning the Tables  |  Rumors have suggested that Time Warner Cable could be acquired by a smaller rival like Charter Communications. Jeffrey Goldfarb of Reuters Breakingviews examines how the cable company would fare in a so-called Pac-Man defense. REUTERS BREAKINGVIEWS

INVESTMENT BANKING »

JPMorgan Files Patent for Online Payment System  |  The Financial Times reports: “JPMorgan Chase has filed a U.S. patent application for a computerized payment system that resembles some aspects of Bitcoin, the controversial virtual currency.” FINANCIAL TIMES

Santander to Buy Stake in Bank of Shanghai for $647 Million  |  Banco Santander, the Spanish lender, has agreed to buy an 8 percent stake, held by HSBC, in Bank of Shanghai to increase Santander’s presence in Asia. DealBook »

Finance Chief of R.B.S. Resigns After 3 Months in Post  |  The Royal Bank of Scotland said on Tuesday that Nathan Bostock had resigned as chief financial officer to join Banco Santander’s British unit as deputy chief executive and chief risk officer. DealBook »

PRIVATE EQUITY »

Bain Capital Offers to Buy Macromill of Japan  |  The private equity firm Bain Capital offered to buy Macromill, a Japanese market research firm, for about $501 million. The biggest shareholder of Macromill is Yahoo Japan, Bloomberg News writes. BLOOMBERG NEWS

Canada Goose Sells Majority Stake to Bain Capital  |  The deal is the latest Canadian investment for Bain and comes amid strong investor interest in high-end apparel companies. DealBook »

Lucky Brand Apparel Sold to Leonard Green for $225 Million  |  The private equity firm Leonard Green & Partners agreed to buy Lucky Brand Jeans from Fifth & Pacific Companies, formerly known as Liz Claiborne, for about $225 million. DealBook »

Blackstone Expects More Real Estate Deals in Asia  |  “As the competition has receded, the investment landscape has become more interesting,” Chris Heady, the Blackstone Group’s regional head of real estate investing in Hong Kong, told Bloomberg News. BLOOMBERG NEWS

HEDGE FUNDS »

Hedge Fund Seeks Higher Bid in Pharmaceutical Merger  |  Elliott Management, which has an interest of more than 25 percent in Celesio, says that McKesson’s $8.3 billion offer undervalues the company. DealBook »

I.P.O./OFFERINGS »

Twitter Shares Surge Again  |  Shares of Twitter rose to a new intraday high on Tuesday, a day after the stock logged its biggest one-day gain ever, Reuters reports. REUTERS

VENTURE CAPITAL »

Rethinking Online Courses  |  The New York Times reports: “Two years after a Stanford professor drew 160,000 students from around the globe to a free online course on artificial intelligence, starting what was widely viewed as a revolution in higher education, early results for such large-scale courses are disappointing, forcing a rethinking of how college instruction can best use the Internet.” NEW YORK TIMES

Palantir Increases Size of Financing Round  |  After previously saying it would raise $57 million in a financing round, Palantir Technologies filed on Tuesday to increase the amount of money being raised to $107.5 million, TechCrunch reports. TECHCRUNCH

LEGAL/REGULATORY »

New G.M. Chief Is Company Woman  |  On Tuesday, Mary T. Barra “completed a remarkable personal odyssey when she was named as the next chief executive of G.M. â€" and the first woman to ascend to the top job at a major auto company,” The New York Times reports. NEW YORK TIMES

Good Governance at G.M.  |  The automaker’s new chief executive, Mary Barra, is an engineer by training who has a reputation for both good design and keeping a firm handle on costs, writes Antony Currie of Reuters Breakingviews. REUTERS BREAKINGVIEWS

British Regulator Fines Lloyds Banking $46 Million Over Sales Program  |  Britain’s Financial Conduct Authority says that systems at the bank were “inadequate” and “seriously flawed” to manage its incentive program, which rewarded financial advisers for reaching sales goals. DealBook »

War of Words Over the Volcker Rule: A History  |  The Volcker Rule has stirred passionate responses form both its supporters and opponents. DealBook »

A Dive Into the Volcker Rule’s Details  |  “You could do a lot worse than a rule that requires you to think about what you’re doing,” Matt Levine writes for Bloomberg View. BLOOMBERG VIEW

Walmart Names New Head of Foreign Operations  |  The New York Times reports: “Two weeks after naming a new chief executive, Walmart announced on Tuesday that David Cheesewright, president of several overseas divisions, would soon take on all of the company’s international operations.” NEW YORK TIMES

Swiss Bank Becomes First to Participate in U.S. Tax Deal  |  Valiant Bank, a small Swiss bank, became the first in the country to say that it would sign a deal with the United States aimed at ending a three-year tax evasion dispute with Switzerland. DealBook »

Barclays to End Sponsorship of London Bike Program

LONDON - The British bank Barclays is ending its sponsorship in 2015 of a bike-rental program in London that inspired a similar bike-sharing program in New York.

Barclays is currently evaluating all of its sponsorship commitments. The bank continues to reel from revelations last year that its traders manipulated the London interbank offered rate, a benchmark interest rate known as Libor.

The current sponsorship deal for Barclays Cycle Hire, which was signed in 2010, is set to end in 2015.

The agreement could have been extended to 2018, but Transport for London, the London transit agency, is looking for a new sponsor to help underwrite its efforts to greatly expand the program in the next few years. The program is preparing to expand into southwest London this week.

In a joint statement with the London transit agency, Barclays said it was declining to extend the deal for commercial reasons. Despite having the bank’s name on the bikes, they are better known in London as “Boris bikes,” after its cycling-enthusiast mayor, Boris Johnson.

“In recognition of the growing demand for cycling expenditure, TFL is to seek new commercial partners to add significant sponsorship income to the £913 million already devoted to cycling,” said Graeme Craig, the TFL’s director of commercial development.

The Guardian  reported the decision on Tuesday.

In New York, the bike-sharing program, Citi Bike, has had Citigroup as its partner.

Similar to New York, cyclists in London purchase a membership key that allows them to check out a bike for rides of up to 30 minutes at a time. Any time after that is charged to their credit cards. Cyclists can buy a key valid for a single 24-hour period, for seven days or for a year.

In November, bikes were checked out 514,146 times in London and more than 26 million rides have been made since the program officially kicked off in December 2010.

London transit authorities want to extend the bike program in the next few years as part of a broader effort to encourage cycling in the city, including creating new segregated bike routes through the heart of London and increasing training programs for cyclists.

Ex-Goldman Secretary Who Stole Now Consults

Joyti Waswani, Steve Dagworthy: the two former prisoners are now advising white-collar criminals how to cope if they get sent to prison. Photograph: David Levene

The former Goldman Sachs secretary who was jailed in 2004 for stealing more than £4m from her banker bosses has landed a job coaching white-collar criminals in how to cope with a prison term.

Joyti Waswani, who served half of her seven-year sentence in three closed prisons under her then married name of Joyti De-Laurey, is said to be Britain's biggest female fraudster after stealing vast sums from her bosses, Scott Mead, Jennifer Moses and Moses's husband, Ron Beller, all of whom were directors of the investment bank.

The trio were so wealthy they did not notice their savings being plundered - despite, the court was told, Waswani buying more than £300,000 worth of Cartier jewellery, flying lessons for her husband and a £150,000 speedboat.

Released in 2007, she has been working as drector of fundraising for the Royal London Society, the prisoner charity, before taking up her new role as a consultant at a start-up business called Prison Consultants, which says it advises its clients on "how to prepare and deal with the unfamiliar surroundings of serving time at Her Majesty's establishments".

The business has launched just as many high-profile white-collar cases are coming to court, from the prosecution of bankers allegedly involved in rigging benchmark interest rates, to the phone hacking trial currently at the Old Bailey.

"I didn't feel safe at all when I first went in," recalls Waswani. "I felt really scared. Every five minutes there was a kick-off [a scuffle]. You don't need to know how to make friends; you just need to know how not to make enemies."

Hence the role with Prison Consultants, a business conceived by Steve Dagworthy, another former whi! te collar criminal who served half of his six-year sentence for what was described in court as a £3m Ponzi scheme. Dagworthy took his idea to a longstanding business contact called Steve Hamer, a former chairman of Swansea City FC, who formed the company and employs Dagworthy as a consultant.

Dagworthy says: "If you go inside for fraud, the first question [from inmates] is 'how much?'. The second is 'what did you do with it?'. If they think you've got money, they'll start working you. You will get one person asking 'anything you need?'. Then you'll get someone else who gives you a hard time. So you go to the person that's been friendly to ask for help, but it costs you. And often you find that those two people have been working together."

Both Waswani and Dagworthy warn of other traps that white collar prisoners fall into, such as taking jobs in the prison kitchen, where inmates are frequently left with the choice of breaking unwritten prison rules or taking the risk of smuggling food to the wig. "If you don't do it, that's when the bullying starts," says Dagworthy. Such problems can escalate, he says.

If you end up needing official protection, he adds, "you've got to put yourself on the 'numbers', which means you're in with all the sex offenders. So when you move prison, someone will say: 'I remember you. You got moved to the VPs [vulnerable prisoners]. You're a paedophile.' It will follow you wherever you go."

The pair have numerous other horror stories - which also sound like effective sales pitches to prospective clients.

"Just before lock-up you get a little flask filled with hot water, for a hot drink at night," says Waswani. "The girls would fill that with sugar and throw it on [someone they had fallen out with]. So it burns and sticks to the skin."

Dagworthy says that "sugaring" is a common score-settler in men's prisons, too, along with inmates creating a knife by using a cigarette lighter to melt the handle of a toothbrush and then mount a razor blade. The! less inv! entive "pool balls into a sock" is popular, too.

The risk of bullying does not appear to decrease markedly for females. "If you are a woman and you've hurt a child, it is probably better to do yourself in than go to women's prison," says Waswani. "Women's prisons are the most bitchy arena. Why? Mainly because women are like that. Women can harbour grudges, whereas men drop them quicker. Also, women go inside with a lot more pressure [around their home lives]. When there is tension like that, you are probably not the nicest person to be around."

Even now that she is out, Waswani does not appear particularly concerned with ingratiating herself with other well-known women. Of Vicky Pryce, the economist who wrote a book on serving two months for taking her husband's motoring penalty points, Waswani says: "I don't think that having served the time that she did [Pryce spent four days in Holloway before moving to an open prison] she is an authority about prison time."

And of Meera Syal, the actorwho played Waswani in the 2005 BBC docudrama, The Secretary Who Stole £4m, she says: "I couldn't believe they picked Meera Syal. That sense of indignation. It's horrible. She's horrible."

When the programme was broadcast, Waswani says "the whole prison erupted", although media interest in her case meant that she was already one of the highest-profile female prisoners held in Britain.

So how does fame affect your time inside? There is dealing with the complete loss of status: "I had the shittiest jobs. I had to pick and measure cucumbers," she says. And it is essential not to portray yourself as being superior to other prisoners: "I saw a high-powered businesswoman get beaten up by a girl who had murdered someone."

There are also unknowns, such as prisoners' perception of white-collar crimes. Both former inmates predict some white-collar defendants who might yet end up in prison could find sentences tough.

Ex-Goldman Secretary Who Stole Now Consults

Joyti Waswani, Steve Dagworthy: the two former prisoners are now advising white-collar criminals how to cope if they get sent to prison. Photograph: David Levene

The former Goldman Sachs secretary who was jailed in 2004 for stealing more than £4m from her banker bosses has landed a job coaching white-collar criminals in how to cope with a prison term.

Joyti Waswani, who served half of her seven-year sentence in three closed prisons under her then married name of Joyti De-Laurey, is said to be Britain's biggest female fraudster after stealing vast sums from her bosses, Scott Mead, Jennifer Moses and Moses's husband, Ron Beller, all of whom were directors of the investment bank.

The trio were so wealthy they did not notice their savings being plundered - despite, the court was told, Waswani buying more than £300,000 worth of Cartier jewellery, flying lessons for her husband and a £150,000 speedboat.

Released in 2007, she has been working as drector of fundraising for the Royal London Society, the prisoner charity, before taking up her new role as a consultant at a start-up business called Prison Consultants, which says it advises its clients on "how to prepare and deal with the unfamiliar surroundings of serving time at Her Majesty's establishments".

The business has launched just as many high-profile white-collar cases are coming to court, from the prosecution of bankers allegedly involved in rigging benchmark interest rates, to the phone hacking trial currently at the Old Bailey.

"I didn't feel safe at all when I first went in," recalls Waswani. "I felt really scared. Every five minutes there was a kick-off [a scuffle]. You don't need to know how to make friends; you just need to know how not to make enemies."

Hence the role with Prison Consultants, a business conceived by Steve Dagworthy, another former whi! te collar criminal who served half of his six-year sentence for what was described in court as a £3m Ponzi scheme. Dagworthy took his idea to a longstanding business contact called Steve Hamer, a former chairman of Swansea City FC, who formed the company and employs Dagworthy as a consultant.

Dagworthy says: "If you go inside for fraud, the first question [from inmates] is 'how much?'. The second is 'what did you do with it?'. If they think you've got money, they'll start working you. You will get one person asking 'anything you need?'. Then you'll get someone else who gives you a hard time. So you go to the person that's been friendly to ask for help, but it costs you. And often you find that those two people have been working together."

Both Waswani and Dagworthy warn of other traps that white collar prisoners fall into, such as taking jobs in the prison kitchen, where inmates are frequently left with the choice of breaking unwritten prison rules or taking the risk of smuggling food to the wig. "If you don't do it, that's when the bullying starts," says Dagworthy. Such problems can escalate, he says.

If you end up needing official protection, he adds, "you've got to put yourself on the 'numbers', which means you're in with all the sex offenders. So when you move prison, someone will say: 'I remember you. You got moved to the VPs [vulnerable prisoners]. You're a paedophile.' It will follow you wherever you go."

The pair have numerous other horror stories - which also sound like effective sales pitches to prospective clients.

"Just before lock-up you get a little flask filled with hot water, for a hot drink at night," says Waswani. "The girls would fill that with sugar and throw it on [someone they had fallen out with]. So it burns and sticks to the skin."

Dagworthy says that "sugaring" is a common score-settler in men's prisons, too, along with inmates creating a knife by using a cigarette lighter to melt the handle of a toothbrush and then mount a razor blade. The! less inv! entive "pool balls into a sock" is popular, too.

The risk of bullying does not appear to decrease markedly for females. "If you are a woman and you've hurt a child, it is probably better to do yourself in than go to women's prison," says Waswani. "Women's prisons are the most bitchy arena. Why? Mainly because women are like that. Women can harbour grudges, whereas men drop them quicker. Also, women go inside with a lot more pressure [around their home lives]. When there is tension like that, you are probably not the nicest person to be around."

Even now that she is out, Waswani does not appear particularly concerned with ingratiating herself with other well-known women. Of Vicky Pryce, the economist who wrote a book on serving two months for taking her husband's motoring penalty points, Waswani says: "I don't think that having served the time that she did [Pryce spent four days in Holloway before moving to an open prison] she is an authority about prison time."

And of Meera Syal, the actorwho played Waswani in the 2005 BBC docudrama, The Secretary Who Stole £4m, she says: "I couldn't believe they picked Meera Syal. That sense of indignation. It's horrible. She's horrible."

When the programme was broadcast, Waswani says "the whole prison erupted", although media interest in her case meant that she was already one of the highest-profile female prisoners held in Britain.

So how does fame affect your time inside? There is dealing with the complete loss of status: "I had the shittiest jobs. I had to pick and measure cucumbers," she says. And it is essential not to portray yourself as being superior to other prisoners: "I saw a high-powered businesswoman get beaten up by a girl who had murdered someone."

There are also unknowns, such as prisoners' perception of white-collar crimes. Both former inmates predict some white-collar defendants who might yet end up in prison could find sentences tough.