‘APOLOGY WATCH’: AOL EDITION  | Last week, Andrew Ross Sorkin and Dov Seidman started “Apology Watch†on DealBook to track apologies and follow up on what companies, institutions and individuals have done post-apology. And then, almost on cue, a highly publicized case study arrived courtesy of Tim Armstrong, the chief executive of AOL, Mr. Sorkin writes in this week’s DealBook column.
Here’s the background: On an internal call last Thursday, Mr. Armstrong described changes to his company’s 401(k), which he said would help save the company money amid rising health care costs. Then, as an example of these costs, Mr. Armstrong said AOL paid “a million dollars each†to two employees who had “distressed babies.†The move has also raised fears about how much bosses know about workers’ personal lives. On Saturday, Mr. Armstrong apologized. “I made a mistake,†he wrote in an email to his staff.
Mr. Sorkin writes: “I’m inclined to believe the apology was authentic. It wasn’t just words but was backed up by action â€" the reversal of the 401(k) match plan, which will most likely cost real money.†He adds, “But on his most recent foot-in-mouth, perhaps the most important issue in evaluating his sincerity was that his apology wasn’t just the public one we read about. He called some of the affected families personally.“
BITCOIN’S LATEST WOES  | Bitcoin has had some particularly tough challenges in the last week or so. On Monday, the world’s largest Bitcoin exchange, Mt. Gox, appeared near collapse, the result of a flaw in Bitcoin’s software, inciting a sell-off in virtual currency markets. But Mt. Gox’s stumble is only the latest in a string of troubles for the cryptocurrency, Nathaniel Popper writes in DealBook.
Last month, Charles Shrem, a founder of one of the most popular early Bitcoin websites, BitInstant, was arrested and accused of helping people make drug purchases with Bitcoin. And on Thursday, the Russian government announced that it would treat virtual currency transactions as illegal, the same day that officials in the United States charged two men in Florida with using Bitcoins to launder money. Given all this recent turmoil, it’s really no surprise that the virtual currency dropped significantly on Monday, trading at about $650 by evening, down from about $850 at the beginning of last week.
THE S.E.C. IS ON A LOSING STREAK  | The Securities and Exchange Commission has been on the wrong end of a number of verdicts in recent fraud cases, including the high-profile case against Mark Cuban, the owner of the Dallas Mavericks. In some cases, the S.E.C.’s failures may have been the result of the agency pushing too far in trying to prove fraud. But “now that the agency has said it would be more aggressive in seeking admission of wrongdoing in some cases, the agency will face pressure to figure out how to avoid wasting its resources on losing efforts,†Peter J. Henning writes in the White Collar Watch column.
“Proving fraud is always difficult. And thanks to the oft-mentioned revolving door between the S.E.C. and private law firms, defense lawyers know almost all the tricks for fighting the agency,†Mr. Henning writes, adding, “The S.E.C. will have to strike the right balance in pursuing cases that are worth its effort.â€
ON THE AGENDA  | Janet L. Yellen, the chairwoman of the Federal Reserve, delivers her first testimony on the economy and monetary policy before the House Financial Services Committee at 10 a.m. Ms. Yellen’s prepared remarks will be released at 8:30 a.m. The Job Openings and Labor Turnover Survey (JOLTS) report is released at 10 a.m. Three regional Fed presidents take the podium â€" Charles I. Plosser, the president of the Philadelphia Fed, speaks at 9 a.m., Jeffrey M. Lacker, the president of the Richmond Fed, goes on at 8 p.m. at Stanford University and Richard W. Fisher, the president of the Dallas Fed, takes the mic at 8:10 p.m. Carl C. Icahn is on Fox Business Network at 6 p.m.
YELLEN’S BIG WEEK  | Janet L. Yellen makes her first public remarks as chairwoman of the Federal Reserve this week. She goes in front of the House Financial Services Committee on Tuesday at 10 a.m. and the Senate Banking Committee on Thursday at 10:30 a.m. and is likely to face questions on tapering the Fed’s bond buying program, as well as the unemployment rate, which is currently at 6.5 percent, the threshold at which the Fed has said since December 2012 it would consider raising short-term interest rates.
“We’re hoping to hear Yellen strike a balance where she recognizes that the recovery is fragile, but not so much that the Fed changes its mind, which would be too premature of a signal to send,†Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, told The New York Times.
Indeed, the question on everyone’s mind is whether recent disappointing economic data will persuade the Fed to slow down or suspend its unwinding of monetary support. “Those expecting Yellen to signal that recent weak economic data could lead the Fed to slow down â€" or even stop â€" its tapering of asset purchases are likely to be disappointed,†writes Politico’s Ben White in a CNBC column.
DON’T WORRY, YOU CAN STILL PLAY FLAPPY BIRD  | For the price of a Porsche, or even an annual subscription to Capital New York’s daily product suite, Flappy Bird, the impossible mobile game, could still be yours. The game was pulled from mobile app stores on Sunday by its creator, but those willing to shell out thousands of dollars need not fret. As of Tuesday morning, a search for the game on eBay turned up thousands of results for phones with the game preinstalled, some with opening bids over $90,000.
WINTER’S TROUBLES RETURN  | The winter weather headaches are back this week, with ice forecast for Atlanta and delays wreaking havoc on air travel.
L’Oréal Says It Will Buy Back 8% of Its Shares From Nestlé  | L’Oréal, the world’s largest maker of cosmetics, will pay about $8.2 billion to buy back 8 percent of its shares from Nestlé, the companies said Tuesday, The New York Times writes.
NEW YORK TIMES
Continental to Acquire Veyance for $1.9 Billion  | Continental, a German car parts maker, announced on Monday that it would buy Veyance Technologies, a United States company that provides industrial hoses and belting, from the private equity firm Carlyle Group for $1.9 billion, Reuters reports.
REUTERS
Charter C.E.O. Is Pressing All the Right Buttons on Time Warner Cable  | Thomas M. Rutledge’s company may propose a full slate of replacement directors and may have enlisted a powerful ally for a bid, says Jeffrey Goldfarb of Reuters Breakingviews.
DealBook »
Former Barclays Chief Looks to Africa  | Robert E. Diamond Jr., the former chief executive of Barclays, said his investment firm, Atlas Mara Co-Nvest, is looking to acquire African financial services companies that can aid in the management of currency and commodity risks on the continent, Bloomberg News writes.
BLOOMBERG NEWS
Vodafone Bids for Ono  | Vodafone has offered to purchase the Spanish cable operator Ono from its private equity owners for $9.5 billion, Reuters writes, citing unidentified people familiar with the situation.
REUTERS
Barclays Announces Up to 12,000 Job Cuts  | The British lender said it would cut up to 12,000 jobs over the course of 2014 as part of a continued restructuring. The bank posted a fourth-quarter loss of £514 million, or about $843.9 million.
DealBook »
An Investment in the Cellar, With a Nice Bouquet  | The Bottled Asset Fund, led by an investment banker and a few friends, is part of a new generation of alternative investment vehicles, funds specifically intended for investing in high-end wines â€" not for imbibing but for profit, David Gelles writes in The New York Times.
NEW YORK TIMES
R.B.S. Names New Head of British Retail Bank  | Les Matheson had been running the business on an interim basis since September and will serve as a member of the bank’s group executive committee.
DealBook »
DealBook »
Goldman Sachs Partners Exercise 2008 Options  | Sixty-four Goldman Sachs partners exercised options awarded in 2008, yielding them $77 million in shares last month, Bloomberg News writes.
BLOOMBERG NEWS
UBS Suspends 2 Bankers in China Hiring Investigation  | UBS has placed two bankers on leave as it investigates its hiring the daughter of the chairman of a Chinese chemicals company that is considering a share sale the bank has sought a role in.
DealBook »
European Banks Are Announcing Earnings Early  | The Financial Time Lex blog’s Robert Armstrong and Joseph Cotterill discuss why European banks like Barclays and Deutsche Bank are releasing earnings ahead of schedule.
FINANCIAL TIMES
K.K.R. to Close 2 Mutual Funds  | The move is a setback for Kohlberg Kravis Roberts, which is trying to attract smaller investors.
DealBook »
DealBook »
New Heinz Owners Make Deep Cuts  | When Warren E. Buffett’s Berkshire Hathaway and 3G Capital purchased H.J. Heinz last year for $23 billion, its workers were told to expect expansion. Instead, the company’s new owners intend to make significant cuts, The Wall Street Journal reports.
WALL STREET JOURNAL
Private Equity Firm Founder Indicted  | Lawrence Penn III, the founder of the private equity firm Camelot Acquisitions, was accused by Manhattan prosecutors on Monday of stealing $9.3 million from investors and spending it on jewelry, a luxury car, credit card payments, luxury office space and rent, The New York Post writes. Prosecutors claim Mr. Penn was helped by his friend Michael Ewers, who was arrested on Sunday in San Francisco.
NEW YORK POST
Aeropostale Considers Tapping Private Equity  | The teen clothing retailer Aeropostale is said to be exploring raising capital from private equity firms, among other options, Reuters reports, citing unidentified people familiar with the situation.
REUTERS
Icahn Ends Call for Apple Stock Buyback  | The activist investor Carl C. Icahn backed away from his proposal that Apple increase its stock buybacks to $50 billion after running into increasing opposition.
DEALBOOK
As Investor Calls for a Sale, Helen of Troy Unveils a Big Stock Buyback  | Helen of Troy said on Monday that it plans to buy back nearly 29 percent of its outstanding stock for $550 million. But it isn’t clear whether Sachem Head Capital Management, the hedge fund looking to shake up the consumer products maker, will find it enough.
DealBook »
World’s Most Successful Hedge Isn’t One  | George Soros’s Quantum Endowment Fund was last year’s most successful hedge fund by dollar gains, but here’s the catch: Mr. Soros closed Quantum to outside investors at the end of 2011 to avoid regulatory scrutiny. The fund tops the list because it used to be a hedge fund, The Financial Times Alphaville writes, but there are other ways to determine the year’s top funds.
FINANCIAL TIMES ALPHAVILLE
Chinese Companies Drawn to U.S. I.P.O. Market  | Despite a clash over accounting practices between Washington and Beijing, Chinese companies are heading to the United States initial public offering market in their biggest numbers since 2010, Reuters reports.
REUTERS
Virgin America Said to Move Toward an I.P.O. Â |Â Virgin America, the upstart American airline cofounded by Richard Branson, has selected at least two underwriters in preparation for a potential initial public offering, The Financial Times reports.
FINANCIAL TIMES
Gilt Groupe Likely to Go Public This Year  | Gilt Groupe, which has considered an initial public offering in the past, is expected to go public this year, likely in the third quarter, ReCode reports. Goldman Sachs will manage the offering.
RECODE
Chinese Pork Producer Enlists Banks for Help With I.P.O. Â |Â WH Group, the Chinese pork producer that acquired Smithfield Foods last year, has designated roles for 17 banks in its upcoming share sale, which aims to raise more than $6 billion, The Financial Times reports. The deal would be the biggest in Hong Kong since 2010.
FINANCIAL TIMES
DealBook »
Recent Acquisitions Bolster Britain’s Technology Start-Ups  | Google’s purchase of the artificial intelligence company DeepMind last month for 400 million pounds followed by Zynga’s acquisition of NaturalMotion for $500 million has set Britain’s technology start-up industry abuzz, The Financial Times reports.
FINANCIAL TIMES
Shazam Expected to Raise $20 Million  | Shazam, the music discover app, is close to raising $20 million in new funding at a $500 million valuation, ReCode reports, citing unidentified people familiar with the situation.
RECODE
London’s Venture Capital Scene on the Rise  | Outside of the United States, London is now the largest source of venture capital funding, The Financial Times writes.
FINANCIAL TIMES
DealBook » |Â
Court Rejects Apple Appeal in E-Book Case  | Apple appealed the placement of a monitor to ensure compliance with federal antitrust laws.
DEALBOOK
Regulator Plans to Overhaul Wall Street Arbitration  | The Financial Industry Regulatory Authority, the United States brokerage industry self-regulator, is expected to introduce a proposal that would prevent Wall Street veterans from acting as arbitrators in many legal disputes between investors and their brokerage firms, Reuters reports, citing an unidentified person familiar with the situation.
REUTERS
