FORMER SAC TRADER CONVICTED OF INSIDER TRADING Â |Â A federal jury in Manhattan found Mathew Martoma guilty on Thursday of insider trading , culminating a case that prosecutors had never thought would go to trial in the first place. The case may be the last criminal case to emerge from a decade-long investigation of Steven A. Cohen and his SAC Capital Advisors hedge fund, Alexandra Stevenson and Matthew Goldstein write in DealBook. Mr. Martoma, who is married and has three young children, is expected to face a prison sentence of seven to 10 years.
Mr. Martoma is the 79th person â€" and the eighth person who once worked for Mr. Cohen â€" to either be convicted at trial or plead guilty to insider trading since the current crackdown on insider trading in the hedge fund industry began in 2009. With this latest conviction, the United States attorney’s office in Manhattan extends an unbroken string of successes in prosecuting such cases.
Mr. Martoma’s case was notable because it was the first time that Mr. Cohen was linked to questionable trades at his firm. Throughout the course of the trial, prosecutors proved that Mr. Martoma was guilty of seeking out confidential information related to a clinical trial for an experimental Alzheimer’s drug. The inside information, largely provided by an aging doctor familiar with the results of the clinical trial who was the government’s star witness, helped SAC avoid losses and generate profits totaling $275 million in July 2008.
PAST FICTIONS, LACK OF TRUST AND NO DEAL  | After F.B.I. agents confronted Mathew Martoma in November 2011 at his home in Boca Raton, Fla., prosecutors spent the next years raising the possibility that Mr. Martoma could strike a cooperation deal. The insistence of Mr. Martoma’s lawyers that he would not make a potentially favorable deal for himself baffled many, especially as the case headed to trial. And now, with Mr. Martoma facing years in prison away from his family, the case’s fundamental mystery has only deepened, James B. Stewart writes in the Common Sense column.
The answer may lie in a confidential report from Mr. Martoma’s disciplinary hearing at Harvard Law School after the discovery that he had altered his transcript to improve his grades in his quest for a judicial clerkship. “How Mr. Martoma handled the Harvard affair, detailed in the confidential report by the law school’s administrative board after what appeared to have been lengthy proceedings, may well have proved devastating to his credibility, and thus to his ability to cut a favorable deal,†Mr. Stewart writes.
THE RISE AND FALL OF A BITCOIN LEADER  | When Charles Shrem was arrested and charged last month with conspiring to launder money by helping people who wanted to buy drugs exchange dollars into Bitcoin, it seemed as if the Bitcoin world had lost one of its most charismatic, if not most powerful, leaders. Indeed, this was the man who went through millions of dollars’ worth of Bitcoin over the years. But Mr. Shrem’s Bitcoin vision has collided with the real world, and now his own future is uncertain, Nathaniel Popper writes in DealBook.
And yet, in an interview on Thursday, Mr. Shrem’s exuberance was still on display. “Given the opportunity, I will get back on the speaking circuit and be an evangelizer for Bitcoin,†he said in the interview. “At the same time, the more high-profile you are, the more careful you have to be. It’s scary.â€
Mr. Popper writes on Mr. Shrem: “His recent reversal of fortune â€" and the meteoric ascent that led up to it â€" makes him a living symbol of the peaks and valleys that have so far defined the Bitcoin experience.â€
ON THE AGENDA  | The big one: January’s jobs report is out at 8:30 a.m. The debt ceiling deadline is today. Alan Greenspan, the former Federal Reserve chairman, is on CNBC at 7:30 a.m. Natalie Massenet, the founder of the online luxury retailer Net-a-Porter, is on Bloomberg TV at 4 p.m. The 2014 Winter Olympics opening ceremony is on NBC at 7:30 p.m.
HERE WE GO AGAIN  | On Friday, the United States Treasury loses its authority to issue bonds, setting off the fourth debt ceiling fight in three years. “This is the dying gasp of a dead-end strategy,†Representative Peter Welch, a Vermont Democrat, said in an article in The New York Times. “I think this fight is over.â€
APPLE BUYS $14 BILLION OF ITS OWN STOCK  | In the two weeks since Apple reported disappointing fourth-quarter results, the company has repurchased an unprecedented $14 billion of its own stock. Tim Cook, Apple’s chief executive said he was “surprised†by Apple’s decline in share price and wanted to be “aggressive†and “opportunistic,†The Wall Street Journal reports. “It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do,†Mr. Cook said.
Apple’s buyback coincides with calls by Carl C. Icahn, who owns about $4 billion in Apple shares, for the company to use its stockpile of cash to buy back shares. In a bit of a tease, Mr. Cook also said that, while Apple has not made big acquisitions in the past, history doesn’t preclude his company from making a large deal “for the right fit that’s in the best interest of Apple in the long term.â€
ICAHN 2.0  | In the 1980s, Carl C. Icahn was known as a “vulture capitalist†who got rich during the leveraged buyout boom. Now, he’s called an “activist investor,†but his tactics can be traced to his past. And today, says one trader, “A lot of times, even when he gets nothing he asks for, he wins.â€
IF YOU CARE ABOUT SPORTS Â |Â Kevin Durant knows all about being No. 2. He was selected second in the N.B.A. draft in 2007, was second in the M.V.P. voting three times and led his team, the Oklahoma City Thunder, to a second-place league finish in 2012. He was also the No. 2 shoe salesman last year.
AND ABOUT THAT VENTURE CAPITALIST WHO THOUGHT HE COULD BE AN OLYMPIAN Â |Â Paul Bragiel, the venture capitalist, may have tried, and failed, to qualify for the 2014 Winter Olympics by joining the Colombian cross-country ski team, but he is still making his presence known in Sochi, Russia. On Friday, he plans to release an Olympic-themed mobile game called Team Paul Skiing.
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Amazon Acquires Video Gaming Studio  | Amazon has purchased the video gaming studio Double Helix Games, TechCrunch reports. The acquisition announcement had been planned for later this month, but news of the deal was leaked in an invitation to a joint recruiting event from Amazon and Double Helix Games. The financial terms of the deal have not been disclosed.
TECHCRUNCH
I.B.M. Considers Sale of Chip Manufacturing Operations  | I.B.M. is looking to sell its semiconductor manufacturing operations, The Wall Street Journal reports, citing an unidentified person.
WALL STREET JOURNAL
Jos. A. Bank’s Resistance to Merger Wears Down Traders  | Jos. A. Bank’s stock price has fallen 7 percent below the bid by Men’s Wearhouse of $57.50 a share, which could indicate that investors do not expect the companies to agree on a deal, Bloomberg News reports.
BLOOMBERG NEWS
Senator Warren Questions Dimon’s Pay Raise  | Senator Elizabeth Warren called out regulators at a Senate banking committee hearing on Thursday, questioning the effectiveness of regulatory enforcement given the hefty 2013 bonus that Jamie Dimon, JPMorgan Chase’s chairman and chief executive, received, The Financial Times writes.
FINANCIAL TIMES
Swiss Firm Mercuria in Talks to Buy JPMorgan’s Commodities Unit  | JPMorgan Chase has been exploring strategic alternatives, including a possible sale or spinoff, for the business, which deals in physical commodities like metals and oil.
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Barclays Names Junior Trader as Chief of Foreign Exchange Desk  | Barclays has appointed Daniel Ryan, a junior trader, as the interim chief of the bank’s London spot foreign exchange desk, The Financial Times writes. The move underscores the thinning out of ranks at the bank because of a global inquiry into allegations of currency market manipulation.
FINANCIAL TIMES
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Italian Banks Discuss Fund for Bad Loans With K.K.R.  | Intesa Sanpaolo and UniCredit, Italy’s two top banks, are discussing setting up a bad loans vehicle with the private equity firm Kohlberg Kravis Roberts & Company, Reuters writes, citing unidentified people. The vehicle would help the Italian banks take troubled assets off of their balance sheets.
REUTERS
AEA Considering Purchase of Gypsum Management and Supply  | The private equity firm AEA Investors is nearing a deal valued at over $700 million to buy Gypsum Management and Supply, a company that makes specialty building materials like drywall, Reuters reports, citing unidentified people familiar with the situation.
REUTERS
Hedge Funds Bet on U.S. Gas Shortage  | Hedge funds are betting that the United States will face a natural gas shortage before the spring because of the below-average temperatures that have been sweeping the country this winter, The Financial Times writes.
FINANCIAL TIMES
Traders Overhauling Foreign Exchange Positions  | Hedge fund traders are shuffling their currency holdings after turmoil in the emerging markets that led to the roughest start to the year for currency funds since 2004, Bloomberg News reports.
BLOOMBERG NEWS
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Chinese Drug Company Plans $750 Million I.P.O. Â |Â Luye Pharma Group, a drug company controlled by Chinese private equity firms, is aiming to raise about $750 million in an initial public offering in Hong Kong, The Wall Street Journal reports.
WALL STREET JOURNAL
Sanborns I.P.O. Proves Too Expensive  | One year after Grupo Sanborns, a large chain of restaurants and retail stores, filed for an initial public offering, many investors think the the I.P.O. was too expensive, Bloomberg News writes.
BLOOMBERG NEWS
Venture Capital’s Woman Problem  | Only 4 percent of senior venture capitalists are women, Fortune reports.
FORTUNE
Vungle Raises $17 million  | Vungle, a start-up that sells video ads that run within mobile applications, said it had collected $17 million in Series B funding led by Thomvest Ventures, ReCode reports.
RECODE
Truecaller Receives $19 Million in Funding  | Truecaller, a Swedish company that makes a phone number identification application, said on Thursday that it had raised $19 million from venture capital firms led by Sequoia Capital, The Wall Street Journal reports.
WALL STREET JOURNAL
Technology Companies May Be Overvalued  | The precipitous drop in Twitter’s share price on Thursday, along with similar declines for other technology companies, has led some to question whether there is a new technology bubble, Bloomberg News writes.
BLOOMBERG NEWS
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Ex-Brokerage Executives Charged With Fraud  | The owner and two executives of the WJB Capital Group were arrested on Thursday and accused of defrauding at least 15 investors out of more than $11 million during the waning days of their now-defunct brokerage company.
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Fischer to Sell Shares in Financial Companies to Join Fed  | Stanley Fischer, the former governor of the Bank of Israel nominated to become the vice chairman of the Federal Reserve, said he would sell his shares in financial companies if he were to be confirmed, Bloomberg News reports. Mr. Fischer amassed most of his fortune, which could total as much as $56.3 million, when he was serving as vice chairman of Citigroup from 2002 to 2005.
BLOOMBERG NEWS
