BARE KNUCKLES AT SOTHEBY’S  | The battle between Sotheby’s and Daniel S. Loeb, the outspoken hedge fund mogul and the auction house’s biggest shareholder, is heading to its final stages, Alexandra Stevenson and Michael J. de la Merced write in DealBook. On Thursday, Mr. Loeb gained an advantage in the standoff as the proxy advisory firm Institutional Shareholder Services recommended that shareholders vote for two of the three board nominees he has proposed.
Mr. Loeb is no stranger to no-holds-barred corporate battles, but this one is a bit different. For one, Ms. Stevenson and Mr. de la Merced write, “It is almost as much a test of his reputation as an art aficionado as it is of his skills as an investor.†The battle is not only making waves among investors but also in the art world, where some are wondering whether Mr. Loeb is doing what is best for the business of art.
Sotheby’s, hard hit in the financial crisis, has been a target of activist investors, who anticipate a shake-up of the art market. To Mr. Loeb, Sotheby’s has not adapted quickly enough, making it a prime target for the sort of corporate agitation that has made billions for himself and his hedge fund, Third Point. Ms. Stevenson and Mr. de la Merced write: “To some outsiders, Sotheby’s seems to be receptive to some of its critics’ recommendations. The question is whether its executives are making certain changes fast enough.â€
JUSTICE DEPT. TO BANK OF AMERICA: LET’S MAKE A DEAL  | Bolstered by its multibillion-dollar mortgage settlement with JPMorgan Chase last year, the Justice Department has now set its sights on a deal with Bank of America, Ben Protess and Jessica Silver-Greenberg write in DealBook. The Justice Department is said to have made Bank of America an opening settlement offer of roughly $20 billion several weeks ago, a move that raised the stakes for the government’s crackdown on banks that sold the troubled mortgage investments during the financial crisis.
But that amount is a somewhat inflated starting point for negotiations, they write. What’s more, Bank of America has not yet made a counteroffer. By one measure, Bank of America will ultimately pay about $16 billion to settle every investigation into its sale of mortgage securities before the 2008 financial crisis, they add. The settlement negotiations with Bank of America come as the government is under pressure to extract enormous penalties from Wall Street for its role in the financial crisis.
LOOSENING INSIDER TRADING RULES  | Insider trading laws used to be for amateurs. Then prosecutors changed the rules, putting wiretaps on traders’ phones. But now, an appellate court â€" which heard arguments this week on whether to reverse the convictions of two hedge fund managers, Todd Newman and Anthony Chiasson â€" appears inclined to change the rules again, Floyd Norris writes in the High & Low Finance column. If the court does so, it will make it easier for professional traders to escape liability.
The managers, in the words of one of their lawyers, were “remote tippees,†having heard the information on which they used to trade from analysts rather than from the original sources themselves, or even from the first people tipped by those insiders. This was enough for a conviction in the managers’ first trial, but they received a sympathetic hearing from at least two of the three judges on the appellate panel, who focused on Supreme Court rulings that have said that trading on inside information is legal unless it is obtained from someone who violates a duty to keep it secret and receives something of value.
“If the defendants prevail, hedge fund managers will be given a road map to evading the insider trading law. It won’t matter whether the government can prove the information came from an insider who was paid off and that the trader knew an insider was the source as long as there is no evidence the trader knew about the payoff,†Mr. Norris writes. “Hedge fund managers will be careful not to ask about such things. After all, there is no reason for them to want to know. What they want to know is whether the information is reliable.â€
ON THE AGENDA Â |Â The Thomson Reuters/University of Michigan consumer sentiment index for April is out at 9:55 a.m. Howard Schultz, the chief executive of Starbucks, is on CNBC at 9 a.m. Happy birthday, Richard S. Fuld Jr., the former chief executive of Lehman Brothers, who turns 68 on Saturday.
ZIMMER JUMPS INTO DEAL FRAY Â |Â The merger spree in the pharmaceutical and medical technology sectors continued on Thursday, as Zimmer Holdings agreed to acquire Biomet Inc. in a cash-and-stock deal valued at $13.35 billion, including debt, David Gelles and William Alden write in DealBook. The deal will bring together two big providers of orthopedic, surgical and dental products.
The deal is the latest health care industry megadeal announced this week. Already, Novartis and GlaxoSmithKline announced $20 billion in asset-swapping deals between the two firms, and Valeant Pharmaceuticals made a $45 billion hostile takeover bid for Allergan. Because Zimmer’s deal for Biomet essentially eliminates a top five competitor, Zimmer and its remaining rivals may all have the opportunity to raise prices. The deal could also put pressure on the remaining companies to grow, leading to more mergers.
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Digital Mapping May Be Nokia’s Hidden Jewel  | Though a laggard in smartphone location apps, Nokia’s Here mapping system is a leader in car navigation and might be a tantalizing takeover target, The New York Times writes.
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Michael Dell May Sell Gardening Firm  | Michael Dell, the chief executive of Dell, is likely to sell ValleyCrest, his corporate gardening company, to Brickman, a rival backed by the private equity firm Kohlberg Kravis Roberts, The Financial Times writes.
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Bank of America Names New Risk Officer  | Bank of America appointed Geoffrey Greener its new chief risk officer, Reuters writes.
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Warburg Pincus to Invest in PayScale, a Compensation Data Firm  | Warburg Pincus said on Thursday that it would invest up to $100 million for a majority stake in PayScale, a cloud-based software company that collects compensation data and offers the information to businesses.
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Alibaba’s I.P.O. Could Set Record  | Alibaba is said to be considering adding new shares to its initial public offering, which could help make the I.P.O. the largest on record, The Wall Street Journal writes.
WALL STREET JOURNAL
Canada’s Kinaxis Plans I.P.O.  | Kinaxis, a Canadian software company, is said to be preparing an initial public offering that could raise more than $90 million, The Wall Street Journal writes, citing unidentified people familiar with the situation. The move could signal a resurgence in Canada’s I.P.O. market.
WALL STREET JOURNAL
For Women in Tech, Pay Gap Is Unusually Small  | Female computer scientists make 89 percent of what men in the same occupation make, a significantly better percentage than in other professions, Claire Cain Miller writes in The Upshot.
NEW YORK TIMES UPSHOT
Square to Open New Office in New York City  | Square, the digital payments company, announced on Thursday that its employees in New York City will move into a new 40,000-square-foot office this summer in Manhattan’s SoHo neighborhood, ReCode writes.
RECODE
Investors Bet on Virtual Reality Treadmill  | Virtuix, a start-up based in Houston, closed $3 million from venture investors for its multidirectional treadmill, The Wall Street Journal writes.
WALL STREET JOURNAL
Technology Giants Settle Hiring Suit  | Apple, Google, Intel and Adobe reached an agreement with plaintiffs over accusations that the companies conspired not to hire one another’s employees, The New York Times writes.
NEW YORK TIMES
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Lobbying Efforts Intensify After F.C.C. Tries Third Time on Net Neutrality  | The sparring will be closely watched by every company that depends, even peripherally, on the Internet â€" which is to say, just about every company, The New York Times reports.
NEW YORK TIMES
The Cloud Industry Needs Aereo to Win. But Consumers Need Something Better. Â |Â The Supreme Court battle over Aereo could cast a pall over the cloud computing industry. For consumers, though, Aereo is too inefficient to become a useful service, Farhad Manjoo writes on the Bits blog.
NEW YORK TIMES BITS
