Seven former employees of Dewey & LeBoeuf who pleaded guilty to participating in a scheme to manipulate the law firm’s finances came from very different backgrounds than many of the high-powered lawyers at the once-prominent New York firm, Matthew Goldstein writes in DealBook. The employees’ guilty pleas were unsealed on Thursday and Friday, revealing that none of the former employees was a lawyer and just one was a certified public accountant.
Cyrus R. Vance Jr., the Manhattan district attorney, is relying on the testimony and cooperation of the seven former back-office employees to support a 106-count indictment filed this month against the law firm’s three top executives, all of whom are lawyers. The seven former employees, four of whom pleaded guilty to misdemeanor charges, provided prosecutors with detailed statements outlining their role in the manipulation scheme.
The indictment, approved by a New York grand jury, charged Steven H. Davis, Dewey’s former chairman; Stephen DiCarmine, the firm’s onetime executive director; and Joel Sanders, the firm’s former chief financial officer, with orchestrating a four-year scheme to manipulate the firm’s finances to keep Dewey in business and persuade investors and banks to provide it with badly needed financing. A low-level employee was also indicted. The unsealed pleas from the former employees reveal that most are prepared to provide testimony directly linking Mr. Sanders to accusations that the firm made improper year-end adjustments to its revenue and expenses and lied about those adjustments to the firm’s auditor, Ernst & Young.
COMCAST LOOKS BEYOND CABLE  | Four years ago, Reed Hastings, chief executive of the then-fledgling Netflix, questioned why his company would want to make a deal with Comcast, which he called “a regional cable company.†If Comcast’s chief executive, Brian Roberts, has his way, his company will soon be neither regional nor cable, James B. Stewart writes in the Common Sense column.
Mr. Stewart writes: “With its aggressive push into broadband Internet and its bold acquisition of NBC Universal, Comcast already is no longer just a cable company. If its proposed $45 billion acquisition of Time Warner Cable is approved by regulators, it won’t be regional, either.†And, he notes, Netflix agreed last month to pay Comcast for faster and more reliable broadband delivery of its streaming service “in a potentially groundbreaking deal between a content provider and a broadband distributor.â€
This may be just the beginning. Mr. Roberts sees the new Comcast as a global technology company and its major competitors the media companies of the future, which include Google, Amazon and Facebook. But whether Comcast can become a force in New York now lies with regulators at the Justice Department, who are looking into antitrust issues related to the Time Warner Cable deal, and at the Federal Communications Commission, which is examining broader public policy issues.
TOO BIG TO CARE?  | Vindu Goel writes in the Bits blog: “Facebook’s chief executive, Mark Zuckerberg, has always followed his own instincts when making decisions about the company he founded 10 years ago. But several events over the last week make you wonder: Has the company gotten so successful that it doesn’t care what other people think about it?â€
The question was raised after Facebook’s announcement last week that it would pay more than $2 billion in cash and stock to buy Oculus VR, a start-up that makes virtual reality headsets. After the Oculus deal, Facebook’s stock fell more than 7 percent, but, Mr. Goel writes, “Mr. Zuckerberg has voting control over the company, so he can simply ignore Wall Street as he pursues his vision of the company’s future.†Facebook also reacted unsympathetically to an announcement on Thursday by Eat24, an online food ordering service, that it would shut down its Facebook page on Monday.
ON THE AGENDA  | Janet L. Yellen gives a speech at 9:55 a.m. to the community reinvestment conference in Chicago. “Risk and Reward with Deirdre Bolton†has its debut at 1 p.m. on the Fox Business Network. Neel Kashkari, who oversaw the Treasury Department’s Troubled Asset Relief Program and is running for governor of California, is on CNBC at 8 a.m. Monday is the enrollment deadline for the Affordable Care Act.
A LONE RANGER OF THE 401(K)‘S  | Hidden fees can make it hard for 401(k) holders to find out what they are paying for their plans. Of course, plan sponsors have a fiduciary duty to safeguard workers’ retirement accounts, but these sponsors do not always push providers like mutual funds to reduce fees or cut costs. Now this may be about to change, Gretchen Morgenson writes in the Fair Game column.
Jerome J. Schlichter, a partner at the law firm Schlichter Bogard & Denton in St. Louis, has had a string of cases that highlight a corporate responsibility to monitor the costs and fees in employees’ retirement plans. Since he began suing companies over fiduciary failures eight years ago, he has settled six 401(k) cases, generating $125 million in recoveries to 300,000 participants, minus legal fees, and secured major reductions in plan costs for the future. Five more cases filed by Mr. Schlichter are pending; one was dismissed.
Each case differs, but most involve high and often hidden fees levied on 401(k) participants. “The good news for all 401(k) holders is that Mr. Schlichter’s cases are gaining traction in the courts,†Ms. Morgenson writes, adding, “Battles against 401(k) plan sponsors that are somnambulant or worse are bringing a much-needed spotlight to questionable practices in these plans. But one small law firm can do only so much.â€
MICHAEL LEWIS TAKES AIM AT HIGH-SPEED TRADERS  | The author Michael Lewis, whose new book, “Flash Boys,†is scheduled to be released on Monday, argued on “60 Minutes†on Sunday evening that the United States stock market was “rigged†in favor of high-speed traders, William Alden writes in DealBook.
In his new book, Mr. Lewis â€" the author of popular books like “Liar’s Poker,†“The Big Short†and “The Blind Side†â€" follows the story of Brad Katsuyama, a former trader at the Royal Bank of Canada who helped create a system to slow down customers’ orders to thwart high-frequency traders, Nathaniel Popper wrote in DealBook last year. Mr. Katsuyama now runs a new trading platform called IEX, which is designed to be inhospitable to “predatory†high-frequency traders. An excerpt of the book is available in The New York Times Magazine.
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Alibaba to Invest $692 Million in Chinese Department Store Operator  | The Alibaba Group, China’s online commerce giant, agreed to invest $692 million in Intime Retail Group, a Chinese department store operator. The companies will form a joint venture to develop online-to-offline business. REUTERS
Time Warner Cable Committed to Comcast Deal  | Time Warner Cable said on Friday that it was committed to a deal reached with Comcast in response to calls by Charter Communications that shareholders reject the $45 billion merger, Reuters reports. REUTERS
Blucora Plans Bid for Brookstone  | The Internet search provider Blucora, which owns the Internet retailer Monoprice, is preparing an all-cash bid for Brookstone that would challenge an offer made by Spencer Spirit Holdings, Reuters writes, citing unidentified people familiar with the situation. REUTERS
Credit Markets Open to Argentina for First Time in Years  | Argentina has been approached by financial institutions offering it loans at favorable rates, the economy ministry said on Sunday, indicating a tentative reopening of international credit markets for the first time in over a decade. REUTERS
Deutsche Bank Said to Weigh Forgoing Chinese I.P.O.  | Deutsche Bank is said to be considering whether to refrain from working on China General Nuclear Power Group’s initial public offering amid an investigation into hiring practices in Asia, Bloomberg News reports, citing unidentified people familiar with the situation. BLOOMBERG NEWS
Investment Bankers May Ride Hot Streaks, Too  | Hot streaks like those seen in sports may have “implications for a raging debate in finance about the rationality, or lack of it, in markets,†Edmund Andrews writes in Quartz. QUARTZ
Private Equity Transactions Fall  | The volume of private equity transactions decreased 11 percent, to $82 billion, in the first quarter, compared with the period a year earlier, The Financial Times writes. FINANCIAL TIMES
Legal Hurdles for Activist Hedge Fund Managers  | “Some very high powered judicial figures and institutional investor giants are coming down hard on insatiable promotional shareholder hedge fund activists,†including William A. Ackman, Daniel S. Loeb and Carl C. Icahn, Robert Lenzner writes in Forbes. FORBES
SAC Capital Increases Stake in Zynga  | Steven A. Cohen’s hedge fund, SAC Capital Advisors, has increased its stake in the game maker Zynga to more than 5 percent, SF Gate writes, citing a company filing. SF GATE
In Some Ways, It’s Looking Like 1999 in the Stock Market  | A surge in Internet and biotech stock values recalls an earlier bubble. But prices of other stocks seem more tethered to reality, Jeff Sommer writes in the Strategies column. NEW YORK TIMES
Shares of CBS Outdoor Rise on Debut  | Shares of the large billboard advertising company CBS Outdoor rose on their first day of trading on the New York Stock Exchange. DEALBOOK
China’s I.P.O.’s Bolstered by Regulators  | China’s initial public offerings have been outperforming those in the United States and Europe so far this year. The performance owes much to efforts by Chinese securities regulators to protect small investors in the I.P.O. process, Bloomberg News reports. BLOOMBERG NEWS
A Tax Break to Anchor Tech Growth in San Francisco  | Some companies housed in specific low-income areas of San Francisco receive breaks on taxes if they perform tasks that help improve their neighborhoods, Nick Bilton writes in the Bits blog. NEW YORK TIMES BITS
Start-Up Ozy Media Adds Axel Springer as a Backer  | Axel Springer of Germany is poised to announce an investment in Ozy Media, an online news site whose target audience is what it calls “the change generation,†The New York Times writes. NEW YORK TIMES
Swiss Regulator Opens Currency Inquiry  | The Competition Commission said it was investigating possible collusion by eight leading financial institutions, including Swiss, American and British banks. DealBook »
What Lending Rules Should Look Like  | The Consumer Financial Protection Bureau is formulating rules to rein in the payday lending industry, which lures too many vulnerable people into debt traps, according to a New York Times editorial. NEW YORK TIMES
European Lawmakers Prepare to Vote on ‘Net Neutrality’  | The legislation, the focus of intense lobbying from all sides, is aimed at ensuring equitable Internet access for 500 million Europeans, The New York Times writes. NEW YORK TIMES
Costs, Benefits and Masterpieces in Detroit  | In deciding the fate of its famous artworks, Detroit is facing a classic question of economic tradeoffs, Robert H. Frank writes in the Economic View column. NEW YORK TIMES
S.E.C. Fraud Trial Over Texas Tycoons to Start  | The Securities and Exchange Commission faces off against the wealthy Texas investor Samuel Wyly and the estate of his brother, Charles, this week in a trial over long-standing accusations that they engaged in a $550 million fraud. REUTERS
