Liberty Media Seeks Full Ownership of Sirius XM

Liberty Media already controls Sirius XM. Now, it wants to own the entire company.

On Friday, Liberty proposed to acquire the 48 percent of Sirius it does not already own in an all-stock deal valued at more than $10 billion, making the satellite radio provider a subsidiary of the media conglomerate.

The complex deal would be a capstone to what has already proved to be one of the savviest media deals in recent years, and is just the kind of financial engineering that has come to define Liberty and its chairman, John C. Malone.

In the depths of the financial crisis, Liberty made a multimillion-dollar loan to Sirius in exchange for a large equity stake. In recent years, Liberty has increased that position, and last year took full control of the company, forcing out its former chief executive, Mel Karmazin.

Along the way, the value of Sirius skyrocketed, making Liberty’s initial investment of less than $1 billion worth more than $10 billion today. With the proposal to take full control, Liberty could soon be the sole owner of a company valued at $21.5 billion.

Under the proposed deal, Sirius stock would be converted into new class C shares of Liberty stock. The class C shares would then be distributed to existing Liberty shareholders on a two to one basis. Once completed, Sirius’ public shareholders would own about 39 percent of outstanding common stock of Liberty Media.

“This is not a change of control,” Liberty’s chief executive Greg Maffei said in a call with analysts. “We already control Sirius XM.”

Mr. Maffei said the deal would simplify Liberty’s capital structure and clear up any questions about its commitment to Sirius XM. The deal would also increase the financial flexibility of both companies, freeing them to pursue other deals, he said.

“We think we’re offering them premium,” Mr. Maffei said in an interview. “And we think these C shares will be far more liquid than the Sirius shares.”

The Sirius board will have to form a special committee to evaluate the deal. That special committee could ask for a higher price.

But the transaction would be tax free for both Sirius and Liberty, as well as the shareholders of both companies, making it yet another tax-efficient deal that Mr. Maffei and Mr. Malone have been able to engineer.

This is not the only big transaction Liberty is working on. Charter Communications, a cable operator in which Liberty has a large stake, is plotting a multibillion-dollar bid for Time Warner Cable. In a call with analysts, Mr. Malone said any deal between Charter and Time Warner Cable would probably close much later than a potential deal for Liberty to buy Sirius.

But taking control of Sirius could, in fact, help Liberty get that deal done. Should Charter bid for Time Warner Cable, Liberty could be called on to provide additional capital for the deal, which could top $40 billion.

“This transaction would give us incremental capital to put into a deal,” Mr. Maffei said in an interview.

With full control of Sirius, Liberty Media would be in relatively uncharted territory: operating a big media company. For the most part, Liberty has opted to own stakes of companies rather than take full control.

But if the Sirius deal got done, it could set up another transaction sometime down the line. In the call with analysts, one questioner asked if Liberty was already thinking about spinning out Sirius as a new public company.

Mr. Maffei responded that it was an unusual time to be asking that question, but that nothing could be ruled out.

Should Liberty go that route, it would fit the pattern established over many years. Among the companies Liberty has spun out are Discovery Communications, Starz and DirecTV.

“The proposed transaction is an important step in the growth of both companies,” Mr. Malone said in a statement.

S.E.C.’s Co-Chief of Enforcement Is Leaving

The Wall Street regulator who oversaw and closed some of the most prominent investigations into the financial crisis announced his departure from the Securities and Exchange Commission on Friday, a move that could portend a subtle shift in the agency’s enforcement agenda.

George Canellos, who was co-chief of enforcement at the S.E.C., will leave after a tenure that covered one of the most significant periods in the agency’s 80-year history. Mr. Canellos joined in the wake of the 2008 crisis, after the agency’s failure to detect Bernard L. Madoff’s Ponzi scheme made it a symbol of regulatory incompetence.

Nearly five years later, as the agency has regained its footing, Mr. Canellos leaves behind a productive yet complicated legacy.

He presided over an onslaught of insider trading cases, a crackdown that ensnared some of Wall Street’s most vaunted hedge funds, including SAC Capital and the Galleon Group. Mr. Canellos, a former federal prosecutor in Manhattan who is now expected to join a private law firm, also helped reverse a policy at the agency that allowed defendants to “neither admit nor deny wrongdoing.”

But some critics â€" at the agency and elsewhere â€" questioned whether the S.E.C. could have done more after the crisis to hold Wall Street accountable. The decision by Mr. Canellos and others to close investigations into former executives of Lehman Brothers, the firm whose 2008 collapse came to epitomize excess on Wall Street, ignited a contentious debate at the S.E.C. And much to the dismay of certain S.E.C. investigators, he argued against a handful of cases at the center of the mortgage crisis.

Other S.E.C. officials, however, sided with Mr. Canellos, questioning whether those cases were winnable at trial. And on Friday, Mr. Canellos received a statement of praise from the agency’s chairwoman, Mary Jo White.

“Every day, he brought to work an intense enthusiasm for our mission, extraordinary intellect and experience, and a total commitment to fairness and the public interest,” Ms. White, a former United States attorney in Manhattan, said.

It is unclear whether Mr. Canellos’s co-chief, Andrew J. Ceresney, will strike a harder line with Wall Street now that he is the enforcement division’s sole leader. But some colleagues expect at least a subtle change. Although they are friends with similar pedigrees â€" both former defense lawyers who served as federal prosecutors in Manhattan under Ms. White â€" Mr. Ceresney and Mr. Canellos had their own agendas and priorities.

When Ms. White named the co-chairs in April, some S.E.C. employees were taken aback. It was rare, if not unprecedented, for the enforcement unit to be run jointly, and some colleagues privately predicted that Mr. Canellos would leave the agency by the end of 2013.

But ultimately, the shared role appeared to smooth the transition at the enforcement unit. In some cases, for example, Mr. Canellos filled in for Mr. Ceresney, who was recused from investigations involving JPMorgan Chase and other big banks that he represented in private practice.

Mr. Canellos’s next step is unclear. The S.E.C. statement announcing his departure said that Mr. Canellos, 49, “has not yet made future career plans.”

That said, he is all but certain to spin through the revolving door. Friends say Mr. Canellos has been weighing a return to private practice in New York, where his wife and baby reside. Mr. Canellos, who would commute weekly between New York and Washington while at the S.E.C., was previously a partner at the white-shoe law firm Milbank, Tweed, Hadley & McCloy.

At the S.E.C., Mr. Canellos started as the director of the agency’s New York office. He moved to Washington in 2012 to become deputy of enforcement under Robert Khuzami, another onetime protégé of Ms. White. When Mr. Khuzami left the agency early last year, Mr. Canellos, a graduate of Columbia Law School whose legal acumen was highly praised, became his successor.

In a statement on Friday, Mr. Canellos praised his colleagues and emphasized “the unparalleled skill, judgment, and sense of fairness” at the S.E.C.

Some S.E.C. investigators, however, felt he was too fair. When supporting the decision to forgo charges stemming from Lehman’s demise â€" arguably the agency’s biggest case after the crisis â€" Mr. Canellos clashed with Mary Schapiro, the agency’s chairwoman at the time who often challenged Mr. Canellos to explain how executives at the center of the biggest bankruptcy in United States history could avoid a single civil charge. A report by Lehman’s bankruptcy-court examiner, she noted, accused the executives of using an accounting gimmick to “manipulate” Lehman’s balance sheet.

In the last year or so, the S.E.C. also struggled with whether to charge the big banks that sold troubled mortgage securities to investors. Even after warning Goldman Sachs, Wells Fargo and Credit Suisse that enforcement actions were possible, the S.E.C. closed or shelved the cases.

Mr. Canellos, frequently with support from Mr. Khuzami and the agency’s litigators who would have had to try the cases in court, concluded that some of the banks did not cross a legal line. The banks’ statements to investors, they argued, were not “materially” misleading.

Despite the perceived caution, the agency under Mr. Khuzami and Mr. Canellos filed a record number of enforcement cases. All told, the S.E.C. filed 169 actions against companies and individuals tied to the crisis, including mortgage-related cases involving Goldman Sachs and JPMorgan.

Colleagues also credit Mr. Canellos with revamping the S.E.C.’s “admission of wrongdoing” practice and the policy for how companies use social media. And the enforcement division’s ties to other regulators, once somewhat strained, improved in recent years.

“In the regulatory community, George was extremely well thought of,” said David Meister, the former enforcement chief at the Commodity Futures Trading Commission.

S.E.C.’s Co-Chief of Enforcement Is Leaving

The Wall Street regulator who oversaw and closed some of the most prominent investigations into the financial crisis announced his departure from the Securities and Exchange Commission on Friday, a move that could portend a subtle shift in the agency’s enforcement agenda.

George Canellos, who was co-chief of enforcement at the S.E.C., will leave after a tenure that covered one of the most significant periods in the agency’s 80-year history. Mr. Canellos joined in the wake of the 2008 crisis, after the agency’s failure to detect Bernard L. Madoff’s Ponzi scheme made it a symbol of regulatory incompetence.

Nearly five years later, as the agency has regained its footing, Mr. Canellos leaves behind a productive yet complicated legacy.

He presided over an onslaught of insider trading cases, a crackdown that ensnared some of Wall Street’s most vaunted hedge funds, including SAC Capital and the Galleon Group. Mr. Canellos, a former federal prosecutor in Manhattan who is now expected to join a private law firm, also helped reverse a policy at the agency that allowed defendants to “neither admit nor deny wrongdoing.”

But some critics â€" at the agency and elsewhere â€" questioned whether the S.E.C. could have done more after the crisis to hold Wall Street accountable. The decision by Mr. Canellos and others to close investigations into former executives of Lehman Brothers, the firm whose 2008 collapse came to epitomize excess on Wall Street, ignited a contentious debate at the S.E.C. And much to the dismay of certain S.E.C. investigators, he argued against a handful of cases at the center of the mortgage crisis.

Other S.E.C. officials, however, sided with Mr. Canellos, questioning whether those cases were winnable at trial. And on Friday, Mr. Canellos received a statement of praise from the agency’s chairwoman, Mary Jo White.

“Every day, he brought to work an intense enthusiasm for our mission, extraordinary intellect and experience, and a total commitment to fairness and the public interest,” Ms. White, a former United States attorney in Manhattan, said.

It is unclear whether Mr. Canellos’s co-chief, Andrew J. Ceresney, will strike a harder line with Wall Street now that he is the enforcement division’s sole leader. But some colleagues expect at least a subtle change. Although they are friends with similar pedigrees â€" both former defense lawyers who served as federal prosecutors in Manhattan under Ms. White â€" Mr. Ceresney and Mr. Canellos had their own agendas and priorities.

When Ms. White named the co-chairs in April, some S.E.C. employees were taken aback. It was rare, if not unprecedented, for the enforcement unit to be run jointly, and some colleagues privately predicted that Mr. Canellos would leave the agency by the end of 2013.

But ultimately, the shared role appeared to smooth the transition at the enforcement unit. In some cases, for example, Mr. Canellos filled in for Mr. Ceresney, who was recused from investigations involving JPMorgan Chase and other big banks that he represented in private practice.

Mr. Canellos’s next step is unclear. The S.E.C. statement announcing his departure said that Mr. Canellos, 49, “has not yet made future career plans.”

That said, he is all but certain to spin through the revolving door. Friends say Mr. Canellos has been weighing a return to private practice in New York, where his wife and baby reside. Mr. Canellos, who would commute weekly between New York and Washington while at the S.E.C., was previously a partner at the white-shoe law firm Milbank, Tweed, Hadley & McCloy.

At the S.E.C., Mr. Canellos started as the director of the agency’s New York office. He moved to Washington in 2012 to become deputy of enforcement under Robert Khuzami, another onetime protégé of Ms. White. When Mr. Khuzami left the agency early last year, Mr. Canellos, a graduate of Columbia Law School whose legal acumen was highly praised, became his successor.

In a statement on Friday, Mr. Canellos praised his colleagues and emphasized “the unparalleled skill, judgment, and sense of fairness” at the S.E.C.

Some S.E.C. investigators, however, felt he was too fair. When supporting the decision to forgo charges stemming from Lehman’s demise â€" arguably the agency’s biggest case after the crisis â€" Mr. Canellos clashed with Mary Schapiro, the agency’s chairwoman at the time who often challenged Mr. Canellos to explain how executives at the center of the biggest bankruptcy in United States history could avoid a single civil charge. A report by Lehman’s bankruptcy-court examiner, she noted, accused the executives of using an accounting gimmick to “manipulate” Lehman’s balance sheet.

In the last year or so, the S.E.C. also struggled with whether to charge the big banks that sold troubled mortgage securities to investors. Even after warning Goldman Sachs, Wells Fargo and Credit Suisse that enforcement actions were possible, the S.E.C. closed or shelved the cases.

Mr. Canellos, frequently with support from Mr. Khuzami and the agency’s litigators who would have had to try the cases in court, concluded that some of the banks did not cross a legal line. The banks’ statements to investors, they argued, were not “materially” misleading.

Despite the perceived caution, the agency under Mr. Khuzami and Mr. Canellos filed a record number of enforcement cases. All told, the S.E.C. filed 169 actions against companies and individuals tied to the crisis, including mortgage-related cases involving Goldman Sachs and JPMorgan.

Colleagues also credit Mr. Canellos with revamping the S.E.C.’s “admission of wrongdoing” practice and the policy for how companies use social media. And the enforcement division’s ties to other regulators, once somewhat strained, improved in recent years.

“In the regulatory community, George was extremely well thought of,” said David Meister, the former enforcement chief at the Commodity Futures Trading Commission.

Cyberdeal Hits the Sweet Spot

At first glance, the latest cybersecurity deal looks like a breach of logic. FireEye’s market value shot up by a third on Friday, a move worth $1.6 billion, more than it said it had spent to buy Mandiant. The deal marries FireEye’s threat protection with its target’s capabilities to respond to cyberattacks after they happen. Even with the industrial fit, the welcome from investors was unusually warm.

The explanation may be a convergence of hot security and takeover trends. For starters, both FireEye and the privately held Mandiant are arguably the best in their businesses, showing how upstarts have gained the upper hand on larger, established companies in fighting the latest online threats.

FireEye, whose shares had already more than doubled since its September 2013 initial public offering, claims more than 100 of the Fortune 500 among its customers. Mandiant, meanwhile, aims to step in pretty much any time a prominent company’s cyberdefenses are cracked, as when The New York Times was hacked early last year. The security consultancy subsequently produced a widely cited report exposing a Chinese government-linked computer espionage unit.

Already a sizzling - if specialized - area, cyberprotection received a huge lift in attention after the security contractor Edward Snowden leaked information on the scale of United States government spying programs last year. Add news of a holiday attack that compromised the credit or debit cards of 40 million customers of the retailer Target, and it’s hardly surprising if investors become more excited about the sector in 2014.

There’s also a broader M.&A. phenomenon at work. A buyer’s shares typically fall when a deal is announced because paying a premium gives away value and integrating an acquisition brings risks. Last year, though, acquirers were rewarded more frequently than usual with a stock rise. That suggests investors are more than usually receptive, at least to manageably sized and sensible deals. FireEye’s purchase of Mandiant is smack in the middle of what should be a 2014 sweet spot.

Richard Beales is assistant editor for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Jos. A. Bank Amends Its Poison Pill

Jos. A. Bank Clothiers tightened its poison pill requirements on Friday, the latest move in its continuing takeover battle with Men’s Wearhouse.

The company announced it had reduced the ownership threshold of its shareholder rights plan to 10 percent from 20 percent, meaning that if Men’s Wearhouse or any other unsolicited buyer acquires 10 percent of Jos. A. Bank’s stock, the company will issue a large number of shares to existing shareholders.

The move will help fortify Jos. A. Bank against future takeover bids from its larger rival Men’s Wearhouse, which made a $1.5 billion bid in November.

The two companies have been fighting to take each other over for months. In October, Men’s Wearhouse rejected its smaller rival’s unsolicited $2.3 billion bid, putting its own 10 percent shareholder rights plan in place. In what’s known as a “Pac-Man” maneuver, the company then turned the tables and tried to acquire Jos. A. Bank.

In a statement announcing the change to its shareholder rights plan, Jos. A. Bank said that matching Men’s Wearhouse’s poison pill threshold protected investors by “leveling the playing field.” It also said that the “hostile” actions of Men’s Wearhouse were “not in the best interest of the company’s shareholders.”

The company declined to comment beyond a statement. A spokesman for Men’s Wearhouse declined to comment.

Both retailers share a number of overlapping owners, including BlackRock, one of both companies’ largest shareholders, with more than an 8 percent stake in each.

Other overlapping shareholders include the mutual fund company Vanguard and the hedge fund Eminence Capital. If investors saw cost-saving and synergies between both companies, they could potentially help push a deal through.

Football, War and the Workplace

I spend my days trying to make workplaces more humane, but recently I’ve been thinking a lot about why people would voluntarily choose to work in one that is dangerous, debilitating and often lethal. Actually, I have two in mind.

The first one is the National Football League. On the face of it, I understand why someone with sufficient athletic skills might want to play at the highest level of a sport, be lionized and revered and earn a great deal of money along the way. It’s pretty seductive.

What doesn’t make sense to me is risking severe and permanent brain damage, and even early death, in return for a short window of glory.

The parallels to cigarette smoking may not seem obvious at first, but they’re striking. Tobacco companies knew for decades that nicotine was addictive and that cigarettes were lethal. To preserve their businesses, they made vast efforts first to cover up the truth, and then to obfuscate and minimize the evidence once it began to get out.

The N.F.L. did much the same thing over the past couple of decades, denying and playing down health risks to their players, even as the evidence mounted that concussions were a fact of life in football and often led to brain damage. Now, as it becomes painfully clear that many retired players are suffering from severe symptoms, including dementia, the N.F.L. has shifted into obfuscating and minimizing, and the game goes on. For all the gruesome details, I refer you to Steve Fainaru and Mark Fainaru-Wada’s meticulously documented and endlessly chilling book “League of Denial: The NFL, Concussions and the Battle for Truth.”

Like boxing, football is at heart a primitive, violent game that speaks to our baser instincts. We can rationalize that it features extraordinary athleticism and it’s highly entertaining, but we can’t escape the fact that it’s ultimately about very large people running into each other at high speeds, often seeking to inflict maximum damage. “If you got hit just one time the way I get hit countless times every game,” an N.F.L. player once told me, “you’d be in the hospital for two weeks.”

My argument is a simple one: Our fascination with football, and our acceptance of its costs, is a measure of the limits of our imagination and our infinite capacity for denial. And it’s scarcely just about what happens to a couple hundred professional football players. The damage begins far earlier. Pop Warner, a youth league, actually boasts on its website that the number of injuries to its players is only 11 percent that of the N.F.L.’s. How comforting is that?

The other workplace I’ve been thinking about is the military, in this case because I’ve just finished two heartbreaking books by David Finkel: “The Good Soldiers,” about the year he spent embedded with a battalion in Iraq, and “Thank You for Your Service,” about a group of those soldiers returning home, crippled by post-traumatic stress disorder and fruitlessly seeking to readjust.

The cost-benefit analysis for military service is more complex than it is for football. There is some percentage of young recruits who sign up because they want to serve their country, in Iraq or Afghanistan, and believe they are fighting for a just cause and a higher purpose. Far more often, Mr. Finkel makes clear, they simply needed a job.

The painful parallel with football is that few of these recruits were truly warned about the level of risk they were taking. Unlike in football, they obviously knew there was a chance of dying, but it seems fair to assume that few believed they would meet that fate. What almost none of them knew was how horrific a toll combat was likely to take even if they survived.

Nearly 300,000 veterans of combat in Iraq and Afghanistan have been diagnosed with traumatic brain injuries, and many more have lost limbs and suffered severe burns. Beyond that, the Department of Veterans Affairs has estimated that 30 percent of injured soldiers returned home suffering from PTSD.

Mr. Finkel brings this array of disabling psychological symptoms vividly and horrifyingly to life, and he describes in painful detail the ways that PTSD takes its severe toll not just on the veterans, but also on their spouses, children and extended families.

Here’s a quote from a soldier in “Thank You for Your Service” that has most stuck with me: “How can anybody kill and function normally afterward? Or see someone get killed and functional normally afterward. It’s not the human response.” The more human response is to be disabled and undone by a job that is built around trying to kill people every day and avoid being killed yourself.

We’re not going to end wars anytime soon, and we’re not going to ban football either. What I am suggesting is that we go at least as far as we have with cigarettes. Let’s get real about the risks and build truth into the advertising about these workplaces.

Football, as it’s played now and at all levels, is brutal to the body, and especially to the brain. Serving as a soldier in a war obviously carries the risk of death, but also, for all of those who survive, the high likelihood of a difficult and painful life.

The truth is a starting place.

About the Author

Tony Schwartz is the chief executive of the Energy Project and the author, most recently, of “Be Excellent at Anything: The Four Keys to Transforming the Way We Work and Live.” Twitter: @tonyschwartz

Gensler Bids Farewell to Trading Commission

GENSLER BIDS FAREWELL TO TRADING COMMISSION  |  Gary Gensler, who steps down on Friday as chairman of the Commodity Futures Trading Commission, leaves his agency at an inflection point, Ben Protess reports in DealBook. His aggressive streak thrust the once-obscure agency into the front lines of reform, but it also maddened colleagues and complicated his legacy. Now, Wall Street is hoping for a friendlier regulator.

Mr. Gensler and his successor, the Treasury department official Timothy G. Massad, might bear little resemblance (apart from their slender frames and retreating hairlines). Mr. Massad could take a more conciliatory stance than Mr. Gensler, who had his finger on every button and has been called “a force of nature,” according to Mark Wetjen, a commissioner at the agency who occasionally sparred with him. Mr. Massad, who oversaw the winding down of the bank bailouts, will face renewed pressure from Wall Street lobbyists and congressional Republicans.

“There’s no question Wall Street sees an opening to roll back reform,” said Dennis M. Kelleher, the head of Better Markets, an advocacy group. “But Massad is no fool; he knows he’s going to be judged by the very high standards set by Gary Gensler.” At the time of Mr. Massad’s appointment, Treasury Secretary Jacob J. Lew praised him as “determined to pursue reform that safeguards and advances the interests of hard-working Americans.” President Obama added, “I have every confidence that he is the right man to lead an agency designed to prevent future crises.”

Mr. Protess writes: “But further underscoring the uncertainty surrounding the agency, Mr. Gensler’s exit will be followed within weeks by the departure of Bart Chilton, a fellow Democratic commissioner who is an even harsher critic of Wall Street. Sharon Bowen, a corporate lawyer who represents private equity firms and other financial institutions, is poised to take Mr. Chilton’s spot. Still, a Wall Street résumé does not necessarily translate into deregulation. By most measures, Mr. Gensler would have been an unlikely reformer.”

CYBERSECURITY FIRM FIREYE BUYS MANDIANT  |  FireEye, a security software provider, has acquired the cyberforensics firm Mandiant in a deal worth more than $1 billion, Nicole Perlroth and David E. Sanger report in The New York Times. The acquisition, the largest security deal of 2013, has broad implications for digital security and comes at a time when corporate America has become increasingly dissatisfied with relying on the federal government to monitor the Internet for incoming attacks.

“After the Snowden events, in the current political climate, no one can say to the government, ‘Please, come on in and monitor our networks,’” said Kevin Mandia, the founder of Mandiant who will become chief operating officer of the combined company.

Mandiant is known for sending in emergency teams to respond to computer network breaches, including an infiltration of The New York Times’ computer systems by Chinese hackers. FireEye uses novel technology to isolate incoming traffic in virtual containers and look for suspicious activity before letting traffic through. The merger, which unites detection and response, could form a formidable competitor to existing antivirus giants like Symantec and Intel’s McAfee.

OPTIMISM FOR I.P.O.’S IN 2014  |  The coming year may not prove as rich for initial public offerings as 2013, but bankers still see an abundance of opportunity in the next 12 months, DealBook’s Michael J. de la Merced writes. That could include the market debut of Alibaba, the Chinese Internet behemoth, which may be one of the biggest I.P.O.’s in years.

The business of taking companies public soared last year, even as global merger activity had a lackluster showing. The amount raised in I.P.O.’s in the United States jumped 40 percent from 2012, to $59.3 billion, according to data from Thomson Reuters. Overall activity in equity capital markets banking totaled nearly $797 billion for the year, up 27 percent and one of the best years in recent memory. Fees for bankers in the field rose 34 percent from the previous year, to $17.9 billion.

Mr. de la Merced writes: “Advisers are quick to caution that such a run â€" one with a number of big stock market debuts, like those of Hilton Worldwide, the animal health company Zoetis and, of course, Twitter â€" will be hard to duplicate. But as long as the economy holds up, so will the stock markets, prompting private companies to look to share sales to raise money.”

ON THE AGENDA  |  Ben S. Bernanke, the outgoing Federal Reserve chairman, speaks to the American Economic Association in Philadelphia at 2:30 p.m. Dave DeWalt, the chief executive of FireEye, is on CNBC at 6:50 a.m. New York City public schools are closed and all subway trains are running local, not express, through this snowy morning.

SNOW DAY  |  A storm pummeled the New York region overnight, blanketing the city with snow and delivering howling winds and frigid temperatures. The storm, which had already dumped more than a foot of snow in some parts of the Midwest, brought the first test for the new mayor, Bill de Blasio. On Thursday, Mr. de Blasio said the city was “ready for whatever hits us,” James Barron and Steven Yaccino report in The New York Times. As the city’s public advocate, Mr. de Blasio had criticized his predecessor Michael R. Bloomberg’s response after a storm in late 2010 â€" nicknamed the “snowpocalypse” â€" when plows were slow to reach some neighborhoods, including those outside Manhattan. But Mr. de Blasio emphasized on Thursday, “We have literally all hands on deck.”

On Thursday evening, sanitation trucks roamed the city’s streets and pedestrians crunched through the salt that had been sprinkled on the sidewalks and subway platforms. Gov. Andrew M. Cuomo of New York declared a state of emergency and ordered several major highways, including the Long Island Expressway and the New York State Thruway south of Albany, to shut down from midnight to 5 a.m. on Friday. Similar restrictions were in effect for Interstate 84, where trucks and other commercial vehicles were barred at 5 p.m. on Thursday. Meanwhile, more than 2,000 canceled flights across the country stranded thousands of airline passengers, leaving many wondering how they would get home after their holiday travels.

Mergers & Acquisitions »

Demand Heats Up for Ally Financial Shares  |  Investors are paying increasingly high prices for the privately traded shares of Ally Financial, signaling that the United States government could be able to sell its remaining stake in the auto lender this year, Reuters reports, citing unidentified people familiar with the situation.
REUTERS

Shares of Fiat Surge on Chrysler Deal  |  Shares of Fiat rose as much as 16 percent in trading in Milan on Thursday, reaching their highest levels since August 2011, after the Italian automaker said it had reached a deal to buy out the rest of Chrysler, Reuters reports.
DealBook »

Chrysler Deal Puts Fiat Chief in the Fast Lane  |  The price of $3.65 billion for the almost 41.5 percent of Chrysler looks to be a fair one, writes Antony Currie of Reuters Breakingviews. And the deal with the union trust fund ends a dispute that had been festering almost 18 months.
REUTERS BREAKINGVIEWS

Repsol Completes Sale of Natural Gas Assets to Shell  |  Shell, which beat out more than a dozen bidders, will pay $3.8 billion in cash to the Spanish energy company and assume about $1.6 billion in leases related to ship charters.
DealBook »

Chinese Firm Acquires 9 Regional Mining Companies  |  Reuters reports: “China’s biggest producer of rare earths, the Inner Mongolia Baotou Steel Rare Earth Group, has acquired nine regional mining companies as part of a government master plan to consolidate the sector.”
REUTERS

INVESTMENT BANKING »

Year-End Surge for Manhattan Real Estate  |  “The Manhattan real estate market continued a yearlong trend, ending the final quarter of 2013 with a scarcity of listings and surging sales, while prices remained relatively flat,” Michelle Higgins reports in The New York Times.
NEW YORK TIMES

Goldman’s British Bankers Got a Raise  |  Goldman Sachs raised its pay by 77 percent for top bankers in Britain in 2012, according to numbers released by the firm, Bloomberg News writes. The largest banks in the United States disclosed their 2012 figures as recently as this week under European disclosure rules.
BLOOMBERG NEWS

In Europe, a Decline in Private Sector Lending  |  The Wall Street Journal reports: “Lending to the private sector in the euro zone plunged in November at the sharpest annual rate since records began over 20 years ago, data from the European Central Bank showed Friday, suggesting that the region will struggle to get its anticipated economic recovery in full gear.”
WALL STREET JOURNAL

PRIVATE EQUITY »

Media Conglomerate Buys Back Stake in AutoTrader  |  The media company Cox Enterprises has bought back a $1.8 billion stake in the AutoTrader Group from Providence Equity Partners, to which it sold a 25 percent stake in the company in 2010, The Wall Street Journal reports.
WALL STREET JOURNAL

Joseph Lieberman Joins Private Equity Firm  |  The former senator from Connecticut and onetime vice presidential candidate is expected to help Victory Park Capital with his regulatory expertise.
DealBook »

HEDGE FUNDS »

How a Hedge Fund Boss Avoided a Harsher Fate  |  Steven A. Cohen, the head of SAC Capital Advisors, was “clever â€" or lucky â€" enough to avoid the harshest penalties levied against some of his own employees. The reasons why may trace back to his actions during a few pivotal weeks in the summer of 2008,” Sheelah Kolhatkar reports in Bloomberg Businessweek.
BLOOMBERG BUSINESSWEEK

I.P.O./OFFERINGS »

Facebook Faces Suit Over Data Allegations  |  The class-action lawsuit contends the social network scans users’ private messages to glean data it then shares with marketers. Facebook responded, “We believe the allegations are without merit and we will defend ourselves vigorously,” The Financial Times writes.
FINANCIAL TIMES

IMS Health Files for I.P.O.  |  The health care data company, which was taken private in 2010 by a consortium led by TPG Capital, filed for an I.P.O. of its common stock to raise up to $100 million, Reuters reports.
REUTERS

VENTURE CAPITAL »

Ezra Klein Said to Plan to Depart The Post  |  The analyst and columnist Ezra Klein, who runs The Washington Post’s Wonkblog, is making plans to leave the paper after failing to gain support for a new website venture, Ravi Somaiya reports in The New York Times.
NEW YORK TIMES

Snapchat Security Weakness Exposed  |  A group of security researchers exploited a weakness in Snapchat’s systems, snagging and posting usernames and telephone numbers for 4.6 million Snapchat users, the Bits blog reports.
NEW YORK TIMES BITS

Weak Year for Venture Capital-Backed M.&A.  |  Venture capitalists sold only 388 companies through mergers or acquisitions in 2013, according to data released by National Venture Capital Association and Thomson Reuters, which is the lowest total since 2009, Fortune’s Dan Primack reports. “Sounds pretty bad. But it probably isn’t,” Mr. Primack writes, given the year’s strong I.P.O. market.
FORTUNE

LEGAL/REGULATORY »

Regulator Plans to Increase Visibility of Its BrokerCheck Website  |  Financial industry regulators are hoping to enact a rule this year that would make it easier for investors to find out if a broker pushing to sell them a stock, bond or other investment product has a clean record.
DealBook »

Martha Stewart Living and Macy’s Settle Contract Dispute  |  Macy’s and Martha Stewart Living Omnimedia have ended their legal battle over whether J.C. Penney had the right to sell certain Martha Stewart branded housewares, The New York Times writes.
NEW YORK TIMES

BlackRock Enters Detroit Bond Fight  |  BlackRock, the world’s largest asset manager, is preparing to join a legal battle over Detroit’s financial future, claiming tax revenues should be used to pay general obligation bonds first, The Financial Times reports. Detroit’s bankruptcy has rankled the investor community by calling into question the legal protection for holders of general obligation bonds when a United States municipality defaults on its debt payments.
FINANCIAL TIMES

Weil Gotshal Partner Joins Paul Weiss Law Firm  |  Scott M. Sontag, a lawyer formerly of Weil Gotshal & Manges, has joined the law firm Paul, Weiss, Rifkind, Wharton & Garrison as a partner in the tax practice, Bloomberg News reports.
BLOOMBERG NEWS

Codere of Spain Is Said to Be in Talks to Avoid Insolvency  |  The Spanish gambling company Codere said it was seeking protection from creditors in an effort to avoid insolvency, after struggling with debt payments, Reuters reports.
REUTERS

Gensler Bids Farewell to Trading Commission

GENSLER BIDS FAREWELL TO TRADING COMMISSION  |  Gary Gensler, who steps down on Friday as chairman of the Commodity Futures Trading Commission, leaves his agency at an inflection point, Ben Protess reports in DealBook. His aggressive streak thrust the once-obscure agency into the front lines of reform, but it also maddened colleagues and complicated his legacy. Now, Wall Street is hoping for a friendlier regulator.

Mr. Gensler and his successor, the Treasury department official Timothy G. Massad, might bear little resemblance (apart from their slender frames and retreating hairlines). Mr. Massad could take a more conciliatory stance than Mr. Gensler, who had his finger on every button and has been called “a force of nature,” according to Mark Wetjen, a commissioner at the agency who occasionally sparred with him. Mr. Massad, who oversaw the winding down of the bank bailouts, will face renewed pressure from Wall Street lobbyists and congressional Republicans.

“There’s no question Wall Street sees an opening to roll back reform,” said Dennis M. Kelleher, the head of Better Markets, an advocacy group. “But Massad is no fool; he knows he’s going to be judged by the very high standards set by Gary Gensler.” At the time of Mr. Massad’s appointment, Treasury Secretary Jacob J. Lew praised him as “determined to pursue reform that safeguards and advances the interests of hard-working Americans.” President Obama added, “I have every confidence that he is the right man to lead an agency designed to prevent future crises.”

Mr. Protess writes: “But further underscoring the uncertainty surrounding the agency, Mr. Gensler’s exit will be followed within weeks by the departure of Bart Chilton, a fellow Democratic commissioner who is an even harsher critic of Wall Street. Sharon Bowen, a corporate lawyer who represents private equity firms and other financial institutions, is poised to take Mr. Chilton’s spot. Still, a Wall Street résumé does not necessarily translate into deregulation. By most measures, Mr. Gensler would have been an unlikely reformer.”

CYBERSECURITY FIRM FIREYE BUYS MANDIANT  |  FireEye, a security software provider, has acquired the cyberforensics firm Mandiant in a deal worth more than $1 billion, Nicole Perlroth and David E. Sanger report in The New York Times. The acquisition, the largest security deal of 2013, has broad implications for digital security and comes at a time when corporate America has become increasingly dissatisfied with relying on the federal government to monitor the Internet for incoming attacks.

“After the Snowden events, in the current political climate, no one can say to the government, ‘Please, come on in and monitor our networks,’” said Kevin Mandia, the founder of Mandiant who will become chief operating officer of the combined company.

Mandiant is known for sending in emergency teams to respond to computer network breaches, including an infiltration of The New York Times’ computer systems by Chinese hackers. FireEye uses novel technology to isolate incoming traffic in virtual containers and look for suspicious activity before letting traffic through. The merger, which unites detection and response, could form a formidable competitor to existing antivirus giants like Symantec and Intel’s McAfee.

OPTIMISM FOR I.P.O.’S IN 2014  |  The coming year may not prove as rich for initial public offerings as 2013, but bankers still see an abundance of opportunity in the next 12 months, DealBook’s Michael J. de la Merced writes. That could include the market debut of Alibaba, the Chinese Internet behemoth, which may be one of the biggest I.P.O.’s in years.

The business of taking companies public soared last year, even as global merger activity had a lackluster showing. The amount raised in I.P.O.’s in the United States jumped 40 percent from 2012, to $59.3 billion, according to data from Thomson Reuters. Overall activity in equity capital markets banking totaled nearly $797 billion for the year, up 27 percent and one of the best years in recent memory. Fees for bankers in the field rose 34 percent from the previous year, to $17.9 billion.

Mr. de la Merced writes: “Advisers are quick to caution that such a run â€" one with a number of big stock market debuts, like those of Hilton Worldwide, the animal health company Zoetis and, of course, Twitter â€" will be hard to duplicate. But as long as the economy holds up, so will the stock markets, prompting private companies to look to share sales to raise money.”

ON THE AGENDA  |  Ben S. Bernanke, the outgoing Federal Reserve chairman, speaks to the American Economic Association in Philadelphia at 2:30 p.m. Dave DeWalt, the chief executive of FireEye, is on CNBC at 6:50 a.m. New York City public schools are closed and all subway trains are running local, not express, through this snowy morning.

SNOW DAY  |  A storm pummeled the New York region overnight, blanketing the city with snow and delivering howling winds and frigid temperatures. The storm, which had already dumped more than a foot of snow in some parts of the Midwest, brought the first test for the new mayor, Bill de Blasio. On Thursday, Mr. de Blasio said the city was “ready for whatever hits us,” James Barron and Steven Yaccino report in The New York Times. As the city’s public advocate, Mr. de Blasio had criticized his predecessor Michael R. Bloomberg’s response after a storm in late 2010 â€" nicknamed the “snowpocalypse” â€" when plows were slow to reach some neighborhoods, including those outside Manhattan. But Mr. de Blasio emphasized on Thursday, “We have literally all hands on deck.”

On Thursday evening, sanitation trucks roamed the city’s streets and pedestrians crunched through the salt that had been sprinkled on the sidewalks and subway platforms. Gov. Andrew M. Cuomo of New York declared a state of emergency and ordered several major highways, including the Long Island Expressway and the New York State Thruway south of Albany, to shut down from midnight to 5 a.m. on Friday. Similar restrictions were in effect for Interstate 84, where trucks and other commercial vehicles were barred at 5 p.m. on Thursday. Meanwhile, more than 2,000 canceled flights across the country stranded thousands of airline passengers, leaving many wondering how they would get home after their holiday travels.

Mergers & Acquisitions »

Demand Heats Up for Ally Financial Shares  |  Investors are paying increasingly high prices for the privately traded shares of Ally Financial, signaling that the United States government could be able to sell its remaining stake in the auto lender this year, Reuters reports, citing unidentified people familiar with the situation.
REUTERS

Shares of Fiat Surge on Chrysler Deal  |  Shares of Fiat rose as much as 16 percent in trading in Milan on Thursday, reaching their highest levels since August 2011, after the Italian automaker said it had reached a deal to buy out the rest of Chrysler, Reuters reports.
DealBook »

Chrysler Deal Puts Fiat Chief in the Fast Lane  |  The price of $3.65 billion for the almost 41.5 percent of Chrysler looks to be a fair one, writes Antony Currie of Reuters Breakingviews. And the deal with the union trust fund ends a dispute that had been festering almost 18 months.
REUTERS BREAKINGVIEWS

Repsol Completes Sale of Natural Gas Assets to Shell  |  Shell, which beat out more than a dozen bidders, will pay $3.8 billion in cash to the Spanish energy company and assume about $1.6 billion in leases related to ship charters.
DealBook »

Chinese Firm Acquires 9 Regional Mining Companies  |  Reuters reports: “China’s biggest producer of rare earths, the Inner Mongolia Baotou Steel Rare Earth Group, has acquired nine regional mining companies as part of a government master plan to consolidate the sector.”
REUTERS

INVESTMENT BANKING »

Year-End Surge for Manhattan Real Estate  |  “The Manhattan real estate market continued a yearlong trend, ending the final quarter of 2013 with a scarcity of listings and surging sales, while prices remained relatively flat,” Michelle Higgins reports in The New York Times.
NEW YORK TIMES

Goldman’s British Bankers Got a Raise  |  Goldman Sachs raised its pay by 77 percent for top bankers in Britain in 2012, according to numbers released by the firm, Bloomberg News writes. The largest banks in the United States disclosed their 2012 figures as recently as this week under European disclosure rules.
BLOOMBERG NEWS

In Europe, a Decline in Private Sector Lending  |  The Wall Street Journal reports: “Lending to the private sector in the euro zone plunged in November at the sharpest annual rate since records began over 20 years ago, data from the European Central Bank showed Friday, suggesting that the region will struggle to get its anticipated economic recovery in full gear.”
WALL STREET JOURNAL

PRIVATE EQUITY »

Media Conglomerate Buys Back Stake in AutoTrader  |  The media company Cox Enterprises has bought back a $1.8 billion stake in the AutoTrader Group from Providence Equity Partners, to which it sold a 25 percent stake in the company in 2010, The Wall Street Journal reports.
WALL STREET JOURNAL

Joseph Lieberman Joins Private Equity Firm  |  The former senator from Connecticut and onetime vice presidential candidate is expected to help Victory Park Capital with his regulatory expertise.
DealBook »

HEDGE FUNDS »

How a Hedge Fund Boss Avoided a Harsher Fate  |  Steven A. Cohen, the head of SAC Capital Advisors, was “clever â€" or lucky â€" enough to avoid the harshest penalties levied against some of his own employees. The reasons why may trace back to his actions during a few pivotal weeks in the summer of 2008,” Sheelah Kolhatkar reports in Bloomberg Businessweek.
BLOOMBERG BUSINESSWEEK

I.P.O./OFFERINGS »

Facebook Faces Suit Over Data Allegations  |  The class-action lawsuit contends the social network scans users’ private messages to glean data it then shares with marketers. Facebook responded, “We believe the allegations are without merit and we will defend ourselves vigorously,” The Financial Times writes.
FINANCIAL TIMES

IMS Health Files for I.P.O.  |  The health care data company, which was taken private in 2010 by a consortium led by TPG Capital, filed for an I.P.O. of its common stock to raise up to $100 million, Reuters reports.
REUTERS

VENTURE CAPITAL »

Ezra Klein Said to Plan to Depart The Post  |  The analyst and columnist Ezra Klein, who runs The Washington Post’s Wonkblog, is making plans to leave the paper after failing to gain support for a new website venture, Ravi Somaiya reports in The New York Times.
NEW YORK TIMES

Snapchat Security Weakness Exposed  |  A group of security researchers exploited a weakness in Snapchat’s systems, snagging and posting usernames and telephone numbers for 4.6 million Snapchat users, the Bits blog reports.
NEW YORK TIMES BITS

Weak Year for Venture Capital-Backed M.&A.  |  Venture capitalists sold only 388 companies through mergers or acquisitions in 2013, according to data released by National Venture Capital Association and Thomson Reuters, which is the lowest total since 2009, Fortune’s Dan Primack reports. “Sounds pretty bad. But it probably isn’t,” Mr. Primack writes, given the year’s strong I.P.O. market.
FORTUNE

LEGAL/REGULATORY »

Regulator Plans to Increase Visibility of Its BrokerCheck Website  |  Financial industry regulators are hoping to enact a rule this year that would make it easier for investors to find out if a broker pushing to sell them a stock, bond or other investment product has a clean record.
DealBook »

Martha Stewart Living and Macy’s Settle Contract Dispute  |  Macy’s and Martha Stewart Living Omnimedia have ended their legal battle over whether J.C. Penney had the right to sell certain Martha Stewart branded housewares, The New York Times writes.
NEW YORK TIMES

BlackRock Enters Detroit Bond Fight  |  BlackRock, the world’s largest asset manager, is preparing to join a legal battle over Detroit’s financial future, claiming tax revenues should be used to pay general obligation bonds first, The Financial Times reports. Detroit’s bankruptcy has rankled the investor community by calling into question the legal protection for holders of general obligation bonds when a United States municipality defaults on its debt payments.
FINANCIAL TIMES

Weil Gotshal Partner Joins Paul Weiss Law Firm  |  Scott M. Sontag, a lawyer formerly of Weil Gotshal & Manges, has joined the law firm Paul, Weiss, Rifkind, Wharton & Garrison as a partner in the tax practice, Bloomberg News reports.
BLOOMBERG NEWS

Codere of Spain Is Said to Be in Talks to Avoid Insolvency  |  The Spanish gambling company Codere said it was seeking protection from creditors in an effort to avoid insolvency, after struggling with debt payments, Reuters reports.
REUTERS