Battling a Bank to Collect a Judgment

It’s not exactly David v. Goliath, but it’s close.

Maury Rosenberg, a small-business owner from Philadelphia, has been waging a seemingly quixotic battle over the last six years against U.S. Bancorp after, he says, it forced him and his business into involuntary bankruptcy. Mr. Rosenberg, who ran a group of radiology screening centers, contends the bank violated federal law in using involuntary bankruptcy as a tool to collect debts. He says he has spent his every last penny â€" some $6 million so far â€" to fight a battalion of lawyers from U.S. Bancorp, which counters that Mr. Rosenberg is simply trying to evade his obligations.

Against tough odds, Mr. Rosenberg has won a series of rulings in at least four federal courts, which have found U.S. Bancorp’s actions to be improper. A federal jury in Florida, where Mr. Rosenberg has his primary residence, found the bank acted in “bad faith” and awarded $6.1 million to Mr. Rosenberg, including $5 million in punitive damages, though he had been seeking $450 million. The bank, not Mr. Rosenberg, had requested the case be heard by a jury. A judge in one of the many cases found that U.S. Bancorp improperly used a series of special-purpose entities “to artificially create six creditors for the improper purpose of attempting to satisfy the provisions of bankruptcy code that allow creditors to file involuntary bankruptcy petitions.”

And yet this battle continues because U.S. Bancorp refuses to give up, appealing at every turn. After the jury ruled against the bank last March, it not only appealed, but filed a new lawsuit against Mr. Rosenberg in Pennsylvania. Last month, a judge dismissed one of U.S. Bancorp’s motions, saying “the third time is not a charm,” though the case remains active and some of the bank’s other motions withstood the judge’s scrutiny.

Mr. Rosenberg, 67, said he was once worth more than $50 million from a career in real estate. A philanthropist, he was listed in a 2008 statement from Lincoln Center as a supporter on the same line with the financier Joseph R. Perella and his wife, Amy. Mr. Rosenberg nearly broke into tears when I spoke to him.

“If they can do this to me,” he said, “imagine what they do to people that can’t defend these actions. I’m truly learning that it doesn’t matter if I’m right or wrong because they keep filing more and more appeals and motions. It’s getting to the point that I can’t afford the legal fees and I can’t ask my attorneys to work for free.”

The bank, according to Mr. Rosenberg, even privately approached his lawyers and offered to pay their fees, which Mr. Rosenberg is in arrears on, if they would stop representing him. The bank has denied this.

At issue is a dispute that began in the depths of the financial crisis in 2008. Mr. Rosenberg’s company, National Medical Imaging, leased radiology machines. The leases were then bundled and sold as investment packages serviced by a unit of U.S. Bancorp, Lyon Financial Services. When the company started suffering under the strain of the economic downturn and new regulations that reduced the government’s insurance reimbursements, Mr. Rosenberg reached out to the bank in hopes of restructuring, or spreading out, his payments. But because he was on time with his payments, he said, the bank refused to negotiate a new arrangement. Hoping to press the bank into negotiations, he stopped making the payments, even though he says now that he could have afforded to do so. But instead of seeking to reach a new agreement with him, the bank filed an involuntary bankruptcy proceeding against him and his company.

Mr. Rosenberg draws parallels between his situation and the homeowners who lost their houses through foreclosure.

“When you compare it to the mortgage business, it’s exactly the same issue,” he said. “The little guy that owns a mortgage and has been assigned to a million different people and nobody knows who the debt is really due to, can’t afford to go fight it.”

To U.S. Bancorp, which is based in Minneapolis, Mr. Rosenberg is an overly litigious businessman seeking to shake it down. The bank is contesting the $6.1 million judgment against it.

“Mr. Rosenberg is a sophisticated businessman whose company borrowed $27 million in loans,” a spokesman for U.S. Bancorp said. “After his company defaulted the first time, the bank agreed to write that obligation down to $15 million, and Mr. Rosenberg signed a personal guaranty on that commitment in exchange for the write-down. His company then defaulted again after only 21 months â€" and he has not paid a penny on his guaranty.”

“In addition to writing off a significant portion of this loan,” the spokesman added, “we have attempted to resolve this matter repeatedly with Mr. Rosenberg outside the courts, to no avail. He and his family have two lawsuits pending against us. It is our right â€" on behalf of our shareholders and the millions of customers who pay their obligations â€" to pursue a just settlement.”

It’s true that Mr. Rosenberg has been involved in a lot of lawsuits. According to a document prepared by U.S. Bancorp and presented in court, Mr. Rosenberg has been involved in 165 cases since 1984. One of his own lawyers is suing him for fees. He also has not always been a model litigant. One judge called him out for being “childish.”

Mr. Rosenberg is unapologetic.

“When you’re in the real estate development business, you would find that over a 20-year span I probably have 100 to 120 nuisance lawsuits averaging $1,500 to $2,000.” He said, “You will never find a judgment against us because of a disagreement.”

“I’m not ashamed,” he said. “I was running a business.”

Mr. Rosenberg says he has sought repeatedly to settle the case, but that all the offers from U.S. Bancorp have been for less than the current judgment against the bank.

He says he is virtually ruined.

“It’s very, very upsetting to think that I worked for 40 years, 50 years and have it all taken away not because I made a bad business move, not because I stole something, but because of the arrogance of these institutions,” he said.

“We’re still borrowing money, pretty much living on the day-to-day basis,” he added, saying that he’s behind on mortgage payments for his homes. “I’m not the type to run away from obligations, so it’s very difficult. It’s been terrible.”

Carlyle Insiders to Sell Some of Their Stock

Executives of the Carlyle Group are preparing to sell shares in the private equity firm for the first time since it went public two years ago.

The executives, including William E. Conway Jr. and Daniel A. D’Aniello, two of Carlyle’s three founders, plan to sell 7.5 million common units of Carlyle, according to a filing on Monday. Carlyle itself is selling 4.5 million common units in the offering.

At a price of $36.27 a unit, the closing price on Friday, the offering of 12 million shares would raise $435.24 million before expenses, according to the filing. The underwriters have the option to sell an additional 1.8 million shares, the filing said.

For the executives, the offering is their first opportunity to cash out of some of their holdings since Carlyle went public in 2012. The insiders all refrained from selling shares in the initial public offering, trying to align their interests with the investors in their funds.

Mr. Conway, a co-chief executive, and Mr. D’Aniello, the chairman, are selling only a fraction of their holdings in the coming deal, and they, along with David M. Rubenstein, the co-founder and co-chief executive, will continue to be Carlyle’s largest shareholders, the filing said. Mr. Rubenstein, however, would now be Carlyle’s single largest shareholder by a small margin.

The filing did not specify how Mr. Conway and Mr. D’Aniello would use their proceeds from the deal, but one use could be to finance previous commitments they have made to invest in Carlyle’s funds. The filing said the two men had $474.5 million of unfunded commitments to Carlyle’s funds as of the end of 2013.

The insiders selling their shares are expected to raise a net of $264.3 million, the filing said. Mr. Conway and Mr. D’Aniello would each receive about $42.8 million, or $52.9 million if additional shares are sold.

That portion of the offering is structured through a two-step process. Carlyle plans to sell shares to public market investors, and then use the proceeds to buy an equivalent number of shares from Carlyle insiders.

As for the 4.5 million shares Carlyle itself is selling, the private equity firm plans to use the proceeds for corporate purposes, including acquisitions and investments in its funds.

Last week, Carlyle reported that its three founders together earned about $750 million in 2013, including dividends and investment profits, benefiting from a strong year for the private equity giant.

A spokesman for Carlyle declined to comment on Monday’s filing.

The underwriters of the offering include JPMorgan Chase, Citigroup and Goldman Sachs.

Buffett and Icahn: Birds of a Feather?

Warren E.  Buffett and Carl C. Icahn are inverse investors who correlate in more ways than one. In recently released letters to shareholders, the two billionaires talk up their returns and approaches to deploying capital. Their styles couldn’t be more different, but both beat the market by betting on America, playing hardball and trading on personal brands. Yet their greatest common bond is that neither can be easily replicated.

Though the folksy Omaha native could never be confused with the combative Brooklynite, they have both proved more than capable of making money from the American stock market. Mr. Buffett missive on Saturday flaunts Berkshire Hathaway’s compounded annual return of 20 percent on its per-share book value over nearly a half-century, doubling the performance of the Standard & Poor’s 500-stock index, including dividends. Mr. Icahn, meanwhile, showcases his 1,662 percent return since 2000, an eightfold improvement on Berkshire’s stock over the same span, Mr. Icahn giddily notes, and 25 times the broader index.

Owning businesses like MidAmerican Energy is Mr. Buffett’s forte, but he also buys minority stakes in big companies like IBM. Mr. Icahn, on the other hand, specializes in acquiring slugs of stock in the likes of Apple, though his biggest returns are often generated on the rare occasions he takes control. For example, he has made some $1.7 billion from oil refiner CVR in less than two years.

both men, with a combined 161 years of existence between them, know how to get a laugh, but they also take their negotiations seriously. As his latest campaign against eBay demonstrates, Mr. Icahn doesn’t back down from a fight. Mr. Buffett’s entreaties are quieter but no less ruthless. His investment in Heinz, for one, includes a 9 percent coupon on $8 billion in preferred stock, whose other features, Mr. Buffett says, should increase the return to 12 percent. That’s $1 billion a year.

The Buffett brand enables that sort of deal, which probably wouldn’t be available to even the most ardent value investor. Similarly, an Icahn tweet alone these days can be worth billions to a company’s market value. Few if any activists wield that sort of clout.

Each investor also has enlisted reinforcements to his cause. The Sage of Omaha’s two handpicked portfolio managers outperformed him. One of Mr. Icahn’s most profitable trades, Netflix, originated from his son and his son’s investment partner. Those contributions may add to the abundant optimism in future returns expressed by the two investors, but the individualistic influence of Mr. Buffett and Mr. Icahn also means their enterprises share one big, and notable, vulnerability.

Jeffrey Goldfarb is an assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Buffett and Icahn: Birds of a Feather?

Warren E.  Buffett and Carl C. Icahn are inverse investors who correlate in more ways than one. In recently released letters to shareholders, the two billionaires talk up their returns and approaches to deploying capital. Their styles couldn’t be more different, but both beat the market by betting on America, playing hardball and trading on personal brands. Yet their greatest common bond is that neither can be easily replicated.

Though the folksy Omaha native could never be confused with the combative Brooklynite, they have both proved more than capable of making money from the American stock market. Mr. Buffett missive on Saturday flaunts Berkshire Hathaway’s compounded annual return of 20 percent on its per-share book value over nearly a half-century, doubling the performance of the Standard & Poor’s 500-stock index, including dividends. Mr. Icahn, meanwhile, showcases his 1,662 percent return since 2000, an eightfold improvement on Berkshire’s stock over the same span, Mr. Icahn giddily notes, and 25 times the broader index.

Owning businesses like MidAmerican Energy is Mr. Buffett’s forte, but he also buys minority stakes in big companies like IBM. Mr. Icahn, on the other hand, specializes in acquiring slugs of stock in the likes of Apple, though his biggest returns are often generated on the rare occasions he takes control. For example, he has made some $1.7 billion from oil refiner CVR in less than two years.

both men, with a combined 161 years of existence between them, know how to get a laugh, but they also take their negotiations seriously. As his latest campaign against eBay demonstrates, Mr. Icahn doesn’t back down from a fight. Mr. Buffett’s entreaties are quieter but no less ruthless. His investment in Heinz, for one, includes a 9 percent coupon on $8 billion in preferred stock, whose other features, Mr. Buffett says, should increase the return to 12 percent. That’s $1 billion a year.

The Buffett brand enables that sort of deal, which probably wouldn’t be available to even the most ardent value investor. Similarly, an Icahn tweet alone these days can be worth billions to a company’s market value. Few if any activists wield that sort of clout.

Each investor also has enlisted reinforcements to his cause. The Sage of Omaha’s two handpicked portfolio managers outperformed him. One of Mr. Icahn’s most profitable trades, Netflix, originated from his son and his son’s investment partner. Those contributions may add to the abundant optimism in future returns expressed by the two investors, but the individualistic influence of Mr. Buffett and Mr. Icahn also means their enterprises share one big, and notable, vulnerability.

Jeffrey Goldfarb is an assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

French Cable Operator May Make $20 Billion Bid for Vivendi Mobile Unit

LONDON â€" Deal makers are once again circling Europe’s telecommunications industry looking for big buys.

The French cable operator Numericable and its largest shareholder, Altice, a cable and cellphone provider, are preparing a bid of up to $20 billion for SFR, the mobile unit of the Paris-based conglomerate Vivendi, according to a person with direct knowledge of the matter.

The two companies have yet to submit a formal proposal, and may face competition from French rivals, namely Iliad and Bouygues Telecom, added the person, who asked to be anonymous because he was not authorized to speak publicly on the possible bid.

It remains unclear when a takeover offer, which would involve a combination of debt, asset sales and capital raising, might be formally made. But Altice has lined up a series of banks to provide debt financing for the deal, the person said.

The possible bid was reported earlier by the French newspaper Les Échos.

The news comes a few weeks after Vivendi, which already had announced plans to spin off SFR, said that Altice had approached it about a potential deal.

The European telecommunications sector has been rife with deals in the past 12 months. Some of the Continent’s largest players, like Vodafone of Britain and Telefónica of Spain, have positioned themselves to take advantage of consumers’ growing appetite for mobile data and cable services.

Earlier this year, Altice, which has cable and cellphone operations across Europe and in the Caribbean, raised 1.3 billion euros, or $1.8 billion, through an initial public offering.

The company’s founder, Patrick Drahi, had said that the listing in Amsterdam was intended to reduce Altice’s debt, and that he was looking at up to 10 potential acquisitions to expand the business into new markets. Altice already owns a 40 percent stake in Numericable.

While European telecommunications executives are eager to pursue deals, many remain aware that antitrust officials in the European Union will not approve takeovers if they result in major companies gaining more market share.

Last week, the European Commission sent a formal complaint to Telefónica over its proposed $11.7 billion takeover of the German unit of the Dutch telecommunications company KPN. The competition authorities may force Telefónica to offload some of its German operations to ensure that local consumers have sufficient choice among cellphone providers.

Many industry watchers say the severity of the commission’s terms for approving the Telefónica deal, which were not disclosed, could set the tone for future acquisitions in the sector. Analysts said that Numericable and Altice could gain regulatory approval for the SFR deal because the two companies do not have cellphone operations in France.

Vodafone is considering a potential bid for the Spanish cable operator Ono that could value the company at up to $14 billion. Both companies declined to comment on any potential offer.

International players like AT&T are also rumored to be looking for deals in Europe, and Liberty Global already has snapped up cable assets in Britain and Germany.

Bitcoin Heist Highlights Elusive Paths of Regulation

Can nearly $450 million go missing without a crime taking place? That is only one of the questions stemming from the collapse of the Bitcoin exchange Mt. Gox that present a host of challenges for governments worldwide that are struggling to regulate virtual currencies.

Mt. Gox filed for bankruptcy protection in Japan after the disappearance of more than 744,000 Bitcoins owned by customers, along with 100,000 of its own. Unlike an ordinary robbery, this appears to be the work of hackers who exploited a weakness in the system for tracking Bitcoin transactions that allowed the currency to be diverted, perhaps over a few of years.

The number taken amounts to about 6 percent of the total Bitcoins in circulation, raising serious questions about how any virtual currency can be made safe for consumers and investors.

For law enforcement, this is like any bank robbery that requires identifying the perpetrators. DealBook reported that the Justice Department had issued subpoenas to Mt. Gox and other firms to gather information about how virtual currencies are transferred and converted into dollars.

But unlike in “Butch Cassidy and the Sundance Kid,” none of the Mt. Gox thieves are looking back at the posse and asking “Who are those guys?” One of the appeals of Bitcoin is its anonymity, and trying to find those who stole something intended to be untraceable through computer hacking may well be impossible. So the losses from Mt. Gox are unlikely to be recovered.

The question becomes how governments will monitor transactions in virtual currencies to protect owners. Doing so may be even more difficult when one of the motivations for developing Bitcoin was to avoid any official involvement.

Senator Joe Manchin III offered one approach in a letter sent last week to financial regulators, urging them “to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.” This is the same strategy taken by China, which prohibited its banks from trading in virtual currencies.

Unfortunately, it is easier to call for a ban on virtual currencies than actually instituting one. Janet L. Yellen, the chairwoman of the Federal Reserve, responded to a question from Senator Manchin at a recent hearing that her agency “simply does not have authority to supervise or regulate Bitcoin in any way.” So if there is going to be a push to restrict, or even ban, the use of virtual currencies, it will have to come from Congress.

The history of laws created to impose onerous restrictions on popular goods is not positive. Prohibition failed in the 1920s, while the criminalization of marijuana and online gambling has started to crumble, so there is not much hope for blocking the use of virtual currencies.

Those who lost Bitcoins held by Mt. Gox have turned to the courts, but the likelihood of securing a recovery looks small. A class-action lawsuit was filed in the Federal District Court in Chicago against the exchange, claiming a number of violations of Illinois law, including consumer protection and fraud. The problem is that Mt. Gox does not appear to have any assets, so individuals are unlikely to have any legal recourse for their losses.

On the flip side, the approach taken by supporters of Bitcoin to the collapse of Mt. Gox reflects Friedrich Nietzsche’s famous comment, “That which does not kill us makes us stronger.” Barry Silbert, the chief executive of SecondMarket, plans to start a Bitcoin exchange that will be modeled after the New York Stock Exchange that can provide more reassurance to consumers.

That approach may signal how governments will go about regulating virtual currencies by adapting the structure used for trading securities and commodities. The Securities and Exchange Commission and the Commodity Futures Trading Commission already have in place extensive rules for how exchanges and dealers operate and, perhaps more important, record-keeping and capital requirements for those who will hold the property of others.

Another possible avenue for regulation would be to fit virtual currency firms into the rules for trading regular currencies. The C.F.T.C. used authority provided by the Dodd-Frank Act to create a regulated entity called a “retail foreign exchange dealer,” which is allowed to engage in retail transactions and could be expanded to cover Bitcoin trading.

The record-keeping requirements for securities and commodities exchanges would be of great help to the law enforcement authorities, which rely on a paper trail to build cases involving theft, embezzlement and misappropriation. The demise of Mt. Gox shows how difficult it is to find something that exists only in cyberspace when there are inadequate records about who actually owned the property.

To protect customers from a total loss, the government can also require an insurance program along the lines provided for bank and brokerage customers. Firms that hold virtual currency on behalf of customers could be required to pay into a fund to be used to reimburse at least part of the loss if another situation like the theft at Mt. Gox were to happen.

Needless to say, advocates of Bitcoin who cherish its anonymity and freedom from governmental oversight will not take kindly to increased regulation, along with the costs that come with it. Losing $450 million with no realistic chance of finding the thieves will inevitably spur changes in the structure of the market for virtual currency. Mt. Gox will not kill Bitcoin, but it is pushing governments to take a more active role in overseeing how it is traded.

Buffett’s ‘Three T’s’ Open Up on CNBC

Ted Weschler first met Warren E. Buffett over dinner. A very, very expensive dinner.

During a rare interview on CNBC on Monday, Mr. Weschler, now a top lieutenant to Mr. Buffett, recounted how he ended up joining Berkshire Hathaway, Mr. Buffett’s investment firm. Sitting with Mr. Buffett and two other top Berkshire executives known as “the three T’s,” Todd Combs and Tracy Britt Cool, Mr. Weschler talked about how meeting the famous investor had always been on his “bucket list.”

He finally got the chance through a charity auction organized by the Glide Foundation, a San Francisco charity. Mr. Weschler, then a hedge fund manager, made the winning bid for a meeting with Mr. Buffett, and flew down to Omaha, where Berkshire is based.

“I was expecting a stiff hour or so meeting, and it ended up being this long visit at the office and a terrific dinner,” Mr. Weschler said.

The following year, he did it again, bidding on a second meeting with Mr. Buffett. The two meals cost him more than $5 million. After Mr. Weschler got the chance to pepper Mr. Buffett with questions, he got one of his own: Would he be interested in coming to work for Berkshire?

“It was the last thing on my mind,” Mr. Weschler said. “I didn’t want to be dismissive, I mean this guy’s like a hero, you can’t just like say ‘no way.’”

Now, Mr. Weschler works as an investment manager for Berkshire, along with Mr. Combs. Mr. Buffett has publicly heaped praise on both men before, most recently in his annual letter to shareholders, which was released on Saturday.

“Todd and Ted have also created significant value for you in several matters unrelated to their portfolio activities,” Mr. Buffett’s said in his letter. “Their contributions are just beginning: Both men have Berkshire blood in their veins.”

Investors the world over comb Mr. Buffett’s letters for nuggets of advice, often given through homespun anecdotes that eschew complicated financial jargon. In the interview, Mr. Weschler said that he had been reading Mr. Buffett’s letters since he was in college in 1979.

Mr. Combs first met Mr. Buffett in Omaha, and spent the day “talking about everything from baseball to business and insurance.” He eventually moved his family to Omaha to begin working with Berkshire in 2011, and now manages $2 billion to $3 billion.

Ms. Cool came to Berkshire in 2009 when she was just 25 years old. She had already met Mr. Buffett during a trip with a student group, but decided to write him a letter asking to spend more time with him. To her surprise, Mr. Buffett agreed, and she was eventually assigned to work on a project that looked at the Lehman bankruptcy.

“I don’t think I ended up having too much value to add,” Ms. Cool said. “It allowed Warren and I to have an opportunity to have a variety of discussions about business, management, investing. And those were all great for me.”

Andreessen Defends His Behavior on eBay’s Board

After enduring a week of attacks by Carl C. Icahn about his tenure on the board of eBay, the technology investor Marc Andreessen has delivered his most direct response yet to the hedge fund manager’s criticisms.

In a post on the blog of his venture capital firm, Andreessen Horowitz, Mr. Andreessen defended his conduct as an eBay director. Though he never mentioned Mr. Icahn by name, Mr. Andreessen reiterated that he had behaved properly at all times, including by recusing himself in discussions where he might have a conflict of interest.

“I disclose any situation where I believe I may have a potential conflict and recuse myself from any eBay board deliberation when I believe I may have a potential conflict due to an investment in another company,” Mr. Andreessen wrote.

While Mr. Andreessen spoke to The Wall Street Journal last week, he offered the newspaper a more indirect defense of his time as an eBay director. This time, he confronted head on the matter of Skype. His firm was part of a group that bought majority control of the online video service from eBay in 2009, a move Mr. Icahn contends deprived shareholders of a potentially bigger payout.

In the post, Mr. Andreessen reiterated that he fully disclosed his conflicts and recused himself from all discussions within the board about what eBay should do with Skype.

Here are the two main points he made about the deal:

* EBay’s retained ownership in the Skype spinoff was 30% vs. Andreessen Horowitz’s approximately 3%. That much larger ownership gave eBay a far bigger role in decision making on Skype after the spinoff than Andreessen Horowitz, as well as a far bigger economic payoff on the sale to Microsoft.

* Subsequent to the Skype transaction, I was re-elected to the eBay board in 2012 with virtually unanimous support - 99.7% of votes - of eBay shareholders. The Skype transaction received a high degree of public scrutiny when it happened; all of the facts around my role in the Skype transaction were fully public at that time; eBay has a very sophisticated body of shareholders; and if any of them saw any problem with my conduct around the Skype transaction, I am confident that they would have brought it up by 2012.

Mr. Andreessen batted away notions that the technology sector was likely to run into conflicts because of its rapid reconfiguration, with companies constantly buying each other. But to him, the matter is no different than when conglomerates gobbled up smaller companies in the 1980s.

He ended his post with an oblique swipe at Mr. Icahn.

Some people have also floated a theory that venture capitalists are more prone to potential conflicts than other kinds of directors due to their investments in multiple companies at once. I also don’t think that’s true. For example, activist hedge fund managers also tend to hold equity stakes in many companies at the same time, creating the exact same kind of potential conflict.

Your move, Mr. Icahn.

Caesars Entertainment Sells Casinos to Affiliate

The Caesars Entertainment Corporation said on Monday that it would sell four casinos to its spinoff, Caesars Growth Partners, for $2.2 billion.

The casinos - Bally’s Las Vegas, the Cromwell, the Quad and Harrah’s New Orleans - will change hands in a deal intended to help Caesars Entertainment gain access to cash it needs to service its huge debt load.

Until recently, both Caesars Entertainment and Caesars Growth Partners made up Harrah’s, the casino giant that was taken private in 2008 by the private equity firms Apollo Global Management and TPG Capital.

The $30 billion leveraged buyout of Harrah’s was among the largest ever so-called club deals, involving two firms teaming up to buy a huge target, and came just before the financial crisis hit, depriving Las Vegas and casinos around the country of visitors.

Caesars Entertainment relisted in 2012, and last year it spun off Caesars Growth Partners in a bid to give the parent more financial flexibility. But Apollo and TPG are still working their way out of one of the largest private equity deals ever.

Caesars Entertainment still owns a majority of Caesars Growth Partners, and the deal was approved by special committees of both boards made up of independent directors.

“Since being taken private near the beginning of the global financial crisis, we have faced an incredibly challenging business environment and a highly leveraged capital structure,” said Gary W. Loveman, chief executive of Caesars Entertainment. “Despite these obstacles, we have invested significantly in the growth of our network and the enhancement of our assets while concurrently deploying a wide array of financial and operational tools to manage the company’s capital structure and create value.”

Britain Drops Plan to Tax Trading of Bitcoins

LONDON - British tax authorities said on Monday that they would not impose a tax on trading of the virtual currency Bitcoin.

The announcement came just days after a Bitcoin exchange, Mt. Gox, filed for bankruptcy protection in Tokyo.

HM Revenue and Customs, the British tax agency, said on Monday that it would not charge a 20 percent tax, known as a value added tax, or VAT, on trades of the virtual currency. But, it added, taxes still must be collected on any purchases made using Bitcoin.

“In all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for Bitcoin or other similar cryptocurrency,” the tax agency said.

VAT is charged on most business transactions in Britain and Europe, whether they are between businesses or companies selling to the public. VAT is similar to sales tax in the United States and is included in the price for products and services sold to the public, such as clothing or other merchandise.

Last year, Britain said it considered Bitcoin a tradable voucher and that VAT could be charged on the value of the currency. Entrepreneurs in Britain had argued that such treatment put them at a disadvantage to other countries.

Bitcoin and other virtual currencies “have a unique identity and cannot therefore be directly compared to any other form of investment activity or payment mechanism,” the tax agency said on Monday.

In December, China barred the nation’s banks from accepting Bitcoin as a currency over concerns about potential money laundering and possible threats to financial stability.

The European Banking Authority has also warned consumers about the potential risks of using Bitcoin and other virtual currencies, including losing money in the collapse of a Bitcoin exchange like Mt. Gox.

Apollo Global Chief Earned $546 Million in 2013

Leon D. Black earned more than half a billion dollars in 2013, amid flush times for the private equity firm he runs, Apollo Global Management.

Mr. Black, co-founder and chief executive of Apollo, earned $369.3 million in cash dividends and other compensation last year, a filing on Monday showed. Adding in his profit from investing in Apollo’s funds, the total earnings were $546.3 million.

That was the largest haul by a single executive of a publicly traded private equity firm last year. The Blackstone Group reported last week that its chief executive and co-founder, Stephen A. Schwarzman, earned $452.7 million for 2013, including the profit from his personal investments in Blackstone’s funds.

To employ a metaphor used by Mr. Black, Apollo successfully harvested big gains from its investments last year. Public markets were buoyant, allowing Apollo and its rivals to take large profits and return piles of cash to investors.

“It’s almost biblical. There is a time to reap and there’s a time to sow,” Mr. Black said last spring, in remarks that quickly became an unofficial motto for the private equity industry in 2013. “We’re selling everything that’s not nailed down.”

While Mr. Black’s base compensation was relatively small - $273,053, including costs of a car and driver - the bulk of his earnings came from dividends on the 92.7 million shares he owns in Apollo. The private equity firm paid dividends of $3.98 a share for 2013.

Apollo, which also operates credit and real estate businesses, makes private equity deals by raising funds from large investors. Employees of the firm contribute capital to these funds as well, and Mr. Black invested $8.4 million in 2013.

His distributions from the funds, including profits and return of capital, totaled $177 million last year. Mr. Black received no share of carried interest, the investment profits due to Apollo.

Not included in the compensation figure is Apollo’s payment of $763,120 to Mr. Black for the use of his private aircraft.

Apollo was the last of the big publicly traded private equity firms to file an annual report detailing executive compensation. Last week, the Carlyle Group reported that its three founders collectively made $750 million in 2013, while Kohlberg Kravis Roberts said its two co-founders each earned more than $160 million.

Citigroup Discloses Money-Laundering Subpoenas

Citigroup and its Mexican subsidiary have received grand jury subpoenas from federal prosecutors over issues of compliance with anti-money-laundering and bank secrecy laws, the bank disclosed on Monday.

The disclosure in the bank’s annual securities filing comes after Citigroup said its Mexican unit Banamex had been defrauded of as much as $400 million.

The grand jury subpoenas were issued by the United States attorney’s office in Massachusetts.

Banamex USA also received a subpoena from the Federal Deposit Insurance Corporation related to the Bank Secrecy Act and anti-money-laundering program, Citigroup said.

The purported fraud stems from a $585 million accounts receivable program Banamex had offered to an oil supply company, Oceanografia, in Mexico. Invoices for work Oceanografia was supposed to have completed were falsified, according to Citigroup. A person briefed on the matter said it was suspected that a Banamex employee was involved in the fraud.

Citigroup’s chief executive, Michael L. Corbat, said in a memo to employees that it was unclear how many people were involved.

The investigations indicate that the purported fraud in Mexico could have larger legal ramifications for the bank, which has been trying to put many of its problems related to the financial crisis behind it.

The Securities and Exchange Commission and the Federal Bureau of Investigation are also looking into the mater, people briefed on the matter said on Friday.

Citigroup said it was cooperating fully with all the inquiries.

Philadelphia to Sell Its Gas Works Utility for $1.9 Billion

Philadelphia agreed on Monday to sell its natural gas utility to the UIL Holdings Corporation, a publicly traded power company, for about $1.9 billion, in a deal that would put the country’s biggest city-owned gas works in private hands.

Under the terms of the deal, UIL will maintain its current base rates until 2017. After that, any changes must be approved by Pennsylvania’s Public Utility Commission.

The 178-year-old utility manages about 6,000 miles of gas mains and pipes for 500,000 customers in Philadelphia.

If the deal is approved by the Philadelphia City Council and the state utility commission, it will bolster UIL’s existing businesses, expanding its customer base to more than 1.2 million gas and electricity customers across three states.

UIL already operates in Connecticut and Massachusetts through subsidiaries like the United Illuminating Company and Berkshire Gas.

The company, which traces its history back to 1899, said the deal - the biggest in its history - will begin immediately adding to its operating and free cash flow.

“PGW Operations is an excellent operational and strategic fit for our company and a natural addition to our portfolio of fully regulated utilities,” James P. Torgerson, the chief executive of UIL Holdings, said in a statement. “We are committed to investing in PGW Operations to enhance its ability to deliver cost efficient, safe and reliable natural gas and high quality service to customers.”

UIL has lined up $1.9 billion in loans from Morgan Stanley to support the deal, and plans to issue new debt and stock to help finance the deal while keeping an investment-grade credit rating.

UIL was advised by Tudor, Pickering, Holt & Company, Morgan Stanley and the law firm Sullivan & Cromwell.

Carlyle Agrees to Buy Tyco’s South Korean Security Business

The private equity firm Carlyle Group said on Monday that it had agreed to acquire Tyco International’s South Korean security business for about $1.9 billion in cash.

The deal to acquire the Tyco Fire and Security Services Korea Company and its subsidiaries, including ADT Korea, is the largest private equity buyout deal in South Korea since 2008, Carlyle said.

“We believe the Korean security services industry is underpenetrated, and growing awareness and needs for safety will anchor significant growth in the future,” said Sanghyun Lee, a Carlyle managing director.

The transaction is subject to regulatory approval and is expected to close in the second quarter of 2014, Carlyle said.

ADT Korea provides security services to 475,000 business and residential customers, 82 percent of which are small or midsize businesses. It has about 7,500 employees and posted revenue of about $560 million in its 2013 fiscal year.

“ADT Korea is a healthy and profitable business and a leader in the South Korean market, with a strong management team and highly dedicated employees,” said George R. Oliver, Tyco’s chief executive. “We are grateful to them for their contributions to Tyco and know they will continue to thrive within the Carlyle Group.”

In 2012, Tyco spun off the ADT Corporation, its home security monitoring business in the United States and Canada.

Korea Exchange Bank, Kookmin Bank, Industrial Bank of Korea, Korea Investment and Securities and UBS have agreed to provide financing to Carlyle for the deal, while Morgan Stanley acted as Tyco’s financial adviser.

Clifford Chance and Lee & Ko are serving as legal advisers to Carlyle, while Simpson Thacher & Bartlett and Kim & Chang were Tyco’s legal advisers.

Men’s Wearhouse and Jos. A. Bank Reach Nondisclosure Accord

Men’s Wearhouse said on Monday that it had reached a nondisclosure agreement with Jos. A. Bank Clothiers, setting up talks that could lead to a merger of the two menswear retailers and end a monthslong merger standoff.

As part of the accord, Jos. A. Bank submitted a draft of a merger agreement to Men’s Wearhouse.

The confidentiality agreement will finally allow the two to begin sharing sensitive business information, after Jos. A. Bank said last week that it was willing to entertain discussions with its unwanted rival if they could lead to a higher takeover bid.

Men’s Wearhouse is currently offering $63.50 a share, or about $1.8 billion, a level that Jos. A. Bank has called too low. But Men’s Wearhouse has left open the possibility of raising that bid to $65 a share.

The move is the latest turn in a drama that began with an unsolicited - and ultimately failed - bid by Jos. A. Bank to buy Men’s Wearhouse, its larger rival. Men’s Wearhouse then turned the tables, going hostile with its own takeover offer.

As a defensive measure, Jos. A. Bank agreed last month to buy the outdoor goods retailer Eddie Bauer for $825 million. But that deal was intended in part as a move to elicit a higher takeover bid from Men’s Wearhouse, a person briefed on the matter said previously.

Morning Agenda: A Record Profit for Berkshire

Berkshire Hathaway, run by Warren E. Buffett, released its annual report on Saturday, disclosing a record profit in 2013 of $19.5 billion, a 32 percent increase from $14.8 billion in 2012. Berkshire’s book value per share â€" the measure Mr. Buffett uses to assess the company’s performance â€" rose 18.2 percent in 2013, much less than the 32.4 percent rise in the Standard & Poor’s 500-stock index. But even as Berkshire posts handsome results, it remains to be seen whether it can continue to make large acquisitions that will help it sustain its reputation as the nation’s savviest investor, Peter Eavis and Rachel Abrams write in DealBook.

For his part, Mr. Buffett seems unconcerned. In the annual report, he highlighted the large deals Berkshire made last year, including the acquisition of H. J. Heinz, saying it allowed the company to create a “partnership template that may be used by Berkshire in future acquisitions of size.” But it wasn’t all rosy. Mr. Buffett said Berkshire had taken an $873 million loss on $2 billion of debt in Energy Future Holdings, a Texas energy company, and said he expected the energy company to go bankrupt this year unless natural gas prices rose substantially.

From Quartz: “Should difficulty beating the market over the last five years be worrying? Probably not. There’ve been other periods when Berkshire has underperformed. Mr. Buffett famously sat out the technology stock boom of the late 1990s, resulting in Berkshire’s worst-ever relative performance in 1999.”

“Berkshire typically tends to hold up exceptionally well when the broader stock market tanks suddenly, wiping out tons of shareholder wealth. Indeed, the conglomerate has only suffered two episodes of outright declines in book-value-per share in 2001 and 2008.”

TURMOIL IN UKRAINE SPOOKS MARKETS  |  Tensions in Ukraine continued to rise over the weekend, with Russia deploying troops across the Crimean Peninsula. In response, President Obama embarked on a strategy intended to isolate Moscow and prevent it from seizing even more Ukrainian territory. Meanwhile, as the situation became more dire, the new government in Ukraine’s capital began to recruit the country’s wealthy businessmen, known as oligarchs, to serve as governors of the eastern provinces, Andrew E. Kramer writes in The New York Times.

The escalating crisis is rocking global financial markets, prompting a flight to the perceived safety of commodities and gold and away from equities. Oil prices were up significantly, and the Bank of Russia raised interest rates on Monday after the Russian ruble hit a record low against the dollar and euro, The Wall Street Journal writes. The Nikkei 225 in Japan fell 1.3 percent, the Hang Seng index in Hong Kong dropped 1.47 percent and Standard & Poor’s 500-stock index futures were down 1 percent, The Financial Times reports.

CITIGROUP UNCOVERS FRAUD IN MEXICO  |  Citigroup said on Friday that its Mexican banking unit, Banamex, was defrauded of as much as $400 million, leading the bank to restate its 2013 earnings, Michael Corkery and Elisabeth Malkin write in DealBook. The activity centered on the oil services company Oceanografía. At least one Banamex employee is said to be suspected of enabling the fraud.

Getting to the bottom of how the fraud occurred is Citigroup’s focus at the moment, but a larger question looms over the bank: Why was it doing business with Oceanografía in the first place. Oceanografía, which supplies marine engineering services and derives nearly all of its business from Mexico’s government-owned oil monopoly Pemex, is well known among Mexican investors as being politically connected but financially shaky. Indeed, one investor described the company as “toxic.”

Here’s a brief overview on the mess: Citigroup, through Banamex, provided credit to Oceanografía in several ways. One involved Banamex extending $585 million of short-term credit to Oceanografía to provide services to Pemex, which would then pay back Banamex and verify invoices provided by Oceanografía to confirm that the work was completed. But a review found that invoices from Oceanografía were falsified to represent that Pemex had approved them. The Banamex employee who processed them is suspected of being involved in the fraud.

TOO BIG TO VOTE ON A BREAKUP?  |  A JPMorgan Chase shareholder has introduced a proposal to be put to a vote at the bank’s annual shareholder meeting that recommends separating the bank’s commercial bank operations from its investment banking and asset management units, bringing to the fore once again the problem of financial institutions that may be too big to fail. The threat was supposed to have been eliminated by the Dodd-Frank Act of 2010, but, alas, it was not, Gretchen Morgenson writes in the Fair Game column.

Not surprisingly, JPMorgan does not want the proposal to appear on the company’s proxy, arguing that the proposal involves “ordinary business” or “routine matters,” which under the Securities and Exchange Commission’s rule can be exempted from a shareholder vote. Now, the S.E.C. must decide whether to allow the proposal to be put to a shareholder vote.

Ms. Morgenson writes: “Given some of the management missteps at JPMorgan in recent years â€" most notably the London Whale mess â€" and its regulatory run-ins, it certainly seems appropriate to ask shareholders whether they think the institution is too big to manage. Even as simply a point of information, such a vote could be revealing.”

THE NIGHT AT THE OSCARS  |  “12 Years a Slave” took home the top prize at the 86th Academy Awards Sunday night, beating out the likes of “Gravity” and “American Hustle” for best picture. The award was the first time Hollywood bestowed its top honor to the work of a black director. Meanwhile, despite going into the night with five nominations, including for best picture, “The Wolf of Wall Street” came home empty-handed. Here is a full list of the Oscar winners.

Also of note, Ellen DeGeneres, the night’s host, may have broken Twitter after she tweeted a “selfie” that included Meryl Streep, Kevin Spacey and Jennifer Lawrence. Twitter’s website went down soon after she posted the picture, with early reports indicating that it failed to handle the explosion in traffic. As of Monday morning, the “selfie” had been retweeted more than two million times, breaking Twitter’s previous record, which was set by President Obama after his re-election.

MT. GOX POST-MORTEM  |  A steady erosion of faith in the Bitcoin community “ultimately served as the death knell for Mt. Gox,” the prominent Bitcoin exchange that filed for bankruptcy on Friday, Rachel Abrams, Matthew Goldstein and Hiroko Tabuchi write in DealBook. As the exchange hurdled toward collapse, even the virtual currency’s advocates were losing confidence in the exchange because it was becoming increasingly associated with criminal activity. And now, any lingering trust in the exchange has almost certainly evaporated, disappearing alongside the more than $450 million worth of Bitcoin holdings that the exchange lost (according to its bankruptcy filing).

From Wolfgang Münchau in The Financial Times: “If global instability persists it will produce more crises. Whether the next Bitcoin or its successors can succeed is impossible to forecast. But the environment is one in which an alternative decentralized system could flourish.

“For those running such a system and especially those who advocate its development into a global monetary unit, it would be a good idea to develop at least a cursory interest in monetary economics. I suspect the challenge for the economics profession would be incomparably larger.”

 

Mergers & Acquisitions »

Foreign Buyers Pursuing Forbes Magazine  |  All good things come to an end, even for the rich, and sometime this month, Forbes will probably pass out of family control and into the hands of a foreign owner, David Carr writes in the Media Equation column. NEW YORK TIMES

Uniqlo’s Parent Said to Seek Deal for J. Crew  |  Talks between Fast Retailing and J. Crew’s owners, the private equity firms TPG Capital and Leonard Green & Partners, are in early stages and could still fall apart. DealBook »

Comcast Nears $320 Million Deal for FreeWheel  |  Comcast is said to have agreed to a deal to acquire the video advertisement company FreeWheel for about $320 million, TechCrunch reports, citing unidentified people familiar with the situation. TECHCRUNCH

A Scorecard on Jos. A. Bank’s Latest Moves  |  Jos. A. Bank’s rejection of the new bid from Men’s Wearhouse was expected. But what was surprising was that Jos. A. Bank laid out parameters for future talks over a deal, Steven M. Davidoff writes in the Deal Professor column. DealBook »

China’s Geely Acquires British Electric Car Start-Up  |  The Zhejiang Geely Holding Group, a Chinese automaker, said on Saturday that it had acquired the British electric vehicle start-up Emerald Automotive for an undisclosed amount, The Wall Street Journal writes. Emerald said Geely had committed to investing at least $200 million over the next five years to help develop Emerald’s electric vehicles. WALL STREET JOURNAL

Britain’s ITV Looks to Expand  |  The British media company ITV said that its production arm was looking to expand, as higher revenue bolstered profit last year, The Wall Street Journal writes. WALL STREET JOURNAL

INVESTMENT BANKING »

R.B.S. to Cut U.S. Assets to Meet Regulations  |  The Royal Bank of Scotland is planning to reduce assets in its broker-dealer operation in New York to meet the $50 billion threshold set by the Federal Reserve for foreign lenders, The Financial Times reports. FINANCIAL TIMES

An Over-the-Top Wall Street Blog Returns  |  Leveraged Sell-Out, a blog that parodied the musings of young Wall Street bankers, is back with new postings, five years after the financial crisis. DealBook »

Fed to Release Annual Stress Test Results  |  With the Federal Reserve’s publication this month of the results of its annual stress tests, it will for the first time describe how rising interest rates could affect the health of the nation’s biggest banks, Bloomberg News writes. BLOOMBERG NEWS

PRIVATE EQUITY »

Schwarzman of Blackstone Made $375 Million in 2013  |  Stephen A. Schwarzman, the co-founder and chief executive of Blackstone, made a total of $374.5 million in 2013, mostly from the cash dividends he received on his partnership units. DealBook »

Apollo Chief Questions Effort to Limit Banks’ Exposure to Buyout Deals  |  Leon D. Black, the head of Apollo Global Management, said on Friday that regulators instructing banks to avoid providing financing above a certain level of debt were “micromanaging.” DealBook »

The Best of Last Week’s eBay Barbs  |  “The C.E.O. seems to be completely asleep,” “Mr. Icahn’s attacks are false and misleading” and other highlights from the war of words between Carl C. Icahn and eBay. DealBook »

HEDGE FUNDS »

Riverbed Rejects Updated Elliott Takeover Bid  |  Riverbed Technology rejected the latest takeover proposal from the hedge fund Elliott Management on Friday, calling the $3.3 billion offer too low. The move was disclosed just three days after Elliott raised its takeover bid to $21 a share from $19. DealBook »

Winton Capital Plans Expansion  |  Winton Capital, the fourth-largest hedge fund in Europe, is planning to hire 100 employees this year as part of an expansion that includes starting five funds and opening new offices in New York, Tokyo and Sydney, The Wall Street Journal reports. WALL STREET JOURNAL

Fortress Discloses a Paper Loss on Bitcoin  |  The Fortress Investment Group is the first large public company to disclose a stake in Bitcoin. It had an unrealized loss of $3.7 million at the end of the year. DealBook »

I.P.O./OFFERINGS »

GrubHub Files for an I.P.O.  |  The company published a prospectus for its initial public offering on Friday, outlining the financial performance of divisions like Seamless and its namesake delivery service. DealBook »

Square I.P.O. Postponed  |  Square, the mobile payments start-up created by the Twitter co-founder Jack Dorsey, has postponed its initial public offering indefinitely, Fox Business reports, citing unidentified people familiar with the situation. The company had been discussing a 2014 I.P.O. as recently as the fourth quarter of 2013. FOX BUSINESS

Corporate Software Tops List of I.P.O.’s  |  Six companies that lead a list of the top-performing initial public offerings since Jan. 1, 2013, sell software used in corporations, which could encourage corporate boards and bankers to take more of these types of companies public, The Wall Street Journal reports. WALL STREET JOURNAL

Pabst Brewing Owner Exploring Exit Options  |  C. Dean Metropoulos, the veteran food investor, is looking to sell the Pabst Brewing Company, one of the oldest breweries in the United States, Reuters writes. Pabst is also exploring a potential initial public offering. REUTERS

VENTURE CAPITAL »

NJOY, an E-Cigarette Maker, Attracts New Funding  |  The electronic cigarette maker NJOY received a $70 million capital injection from a group of investors, the latest vote of confidence for a fast-growing industry. DealBook »

The Housing Market With Nowhere to Go (but Up)  |  An influx of tech-sector money in San Francisco, where new construction is difficult, is driving up prices and making options scarce for those not earning Silicon Valley salaries, Nick Bilton writes in the Economix blog. NEW YORK TIMES ECONOMIX

Watson Head’s Departure Raises Questions  |  Manoj Saxena, who oversaw IBM’s Watson initiative, left his team at IBM to join The Entrepreneurs’ Fund, a venture capital fund in Silicon Valley, raising questions about Watson’s future, The Wall Street Journal writes. WALL STREET JOURNAL

Mashable Raises Funding From Tribune  |  Mashable, the technology news website, said on Sunday that it had raised $700,000 from the Tribune Company as part of its latest round of funding, ReCode writes. The move comes as Tribune is planning to spin off its newspaper group, which includes The Los Angeles Times and The Chicago Tribune. RECODE

LEGAL/REGULATORY »

High-Interest Web Banks Are on the Rise in China  |  The growth of high-interest web banks is intensifying competition for deposits and putting pressure on the country’s state-run banks, which are struggling with a severe cash squeeze, The New York Times writes. NEW YORK TIMES

Fed Searches for a New Method of Offering Guidance  |  The rapid decline of measured unemployment has outpaced improvement in other economic indicators, leaving the Fed looking for a new yardstick, Binyamin Appelbaum writes in the Economix blog. NEW YORK TIMES ECONOMIX

Mt. Gox Bitcoin Exchange Sued for Fraud  |  Mt. Gox, a prominent Bitcoin exchange that filed for bankruptcy protection on Friday, was sued for fraud by a United States customer within hours of its bankruptcy filing, Bloomberg News writes. BLOOMBERG NEWS

U.S. Growth at End of 2013 Revised Downward  |  The Commerce Department announced revised growth estimates on Friday, saying that the economy grew at a weaker pace of 2.4 percent, not the 3.2 percent first announced, The New York Times reports. NEW YORK TIMES

Concern Grows as Investors Exit Bond Holdings in Emerging Markets  |  Four influential economists with roots in Wall Street, academia and the Federal Reserve will warn that regulators have to date done little to prepare for a possible system-rattling “bond market tantrum.” DealBook »

Why the Bank Leverage Ratio Is Important  |  The Federal Deposit Insurance Corporation has proposed the ratio at 5 percent for bank holding companies and 6 percent for insured bank depositories. The time has come to put this into effect, writes Mayra Rodríguez Valladares in the Another View column. DealBook »

Morning Agenda: A Record Profit for Berkshire

Berkshire Hathaway, run by Warren E. Buffett, released its annual report on Saturday, disclosing a record profit in 2013 of $19.5 billion, a 32 percent increase from $14.8 billion in 2012. Berkshire’s book value per share â€" the measure Mr. Buffett uses to assess the company’s performance â€" rose 18.2 percent in 2013, much less than the 32.4 percent rise in the Standard & Poor’s 500-stock index. But even as Berkshire posts handsome results, it remains to be seen whether it can continue to make large acquisitions that will help it sustain its reputation as the nation’s savviest investor, Peter Eavis and Rachel Abrams write in DealBook.

For his part, Mr. Buffett seems unconcerned. In the annual report, he highlighted the large deals Berkshire made last year, including the acquisition of H. J. Heinz, saying it allowed the company to create a “partnership template that may be used by Berkshire in future acquisitions of size.” But it wasn’t all rosy. Mr. Buffett said Berkshire had taken an $873 million loss on $2 billion of debt in Energy Future Holdings, a Texas energy company, and said he expected the energy company to go bankrupt this year unless natural gas prices rose substantially.

From Quartz: “Should difficulty beating the market over the last five years be worrying? Probably not. There’ve been other periods when Berkshire has underperformed. Mr. Buffett famously sat out the technology stock boom of the late 1990s, resulting in Berkshire’s worst-ever relative performance in 1999.”

“Berkshire typically tends to hold up exceptionally well when the broader stock market tanks suddenly, wiping out tons of shareholder wealth. Indeed, the conglomerate has only suffered two episodes of outright declines in book-value-per share in 2001 and 2008.”

TURMOIL IN UKRAINE SPOOKS MARKETS  |  Tensions in Ukraine continued to rise over the weekend, with Russia deploying troops across the Crimean Peninsula. In response, President Obama embarked on a strategy intended to isolate Moscow and prevent it from seizing even more Ukrainian territory. Meanwhile, as the situation became more dire, the new government in Ukraine’s capital began to recruit the country’s wealthy businessmen, known as oligarchs, to serve as governors of the eastern provinces, Andrew E. Kramer writes in The New York Times.

The escalating crisis is rocking global financial markets, prompting a flight to the perceived safety of commodities and gold and away from equities. Oil prices were up significantly, and the Bank of Russia raised interest rates on Monday after the Russian ruble hit a record low against the dollar and euro, The Wall Street Journal writes. The Nikkei 225 in Japan fell 1.3 percent, the Hang Seng index in Hong Kong dropped 1.47 percent and Standard & Poor’s 500-stock index futures were down 1 percent, The Financial Times reports.

CITIGROUP UNCOVERS FRAUD IN MEXICO  |  Citigroup said on Friday that its Mexican banking unit, Banamex, was defrauded of as much as $400 million, leading the bank to restate its 2013 earnings, Michael Corkery and Elisabeth Malkin write in DealBook. The activity centered on the oil services company Oceanografía. At least one Banamex employee is said to be suspected of enabling the fraud.

Getting to the bottom of how the fraud occurred is Citigroup’s focus at the moment, but a larger question looms over the bank: Why was it doing business with Oceanografía in the first place. Oceanografía, which supplies marine engineering services and derives nearly all of its business from Mexico’s government-owned oil monopoly Pemex, is well known among Mexican investors as being politically connected but financially shaky. Indeed, one investor described the company as “toxic.”

Here’s a brief overview on the mess: Citigroup, through Banamex, provided credit to Oceanografía in several ways. One involved Banamex extending $585 million of short-term credit to Oceanografía to provide services to Pemex, which would then pay back Banamex and verify invoices provided by Oceanografía to confirm that the work was completed. But a review found that invoices from Oceanografía were falsified to represent that Pemex had approved them. The Banamex employee who processed them is suspected of being involved in the fraud.

TOO BIG TO VOTE ON A BREAKUP?  |  A JPMorgan Chase shareholder has introduced a proposal to be put to a vote at the bank’s annual shareholder meeting that recommends separating the bank’s commercial bank operations from its investment banking and asset management units, bringing to the fore once again the problem of financial institutions that may be too big to fail. The threat was supposed to have been eliminated by the Dodd-Frank Act of 2010, but, alas, it was not, Gretchen Morgenson writes in the Fair Game column.

Not surprisingly, JPMorgan does not want the proposal to appear on the company’s proxy, arguing that the proposal involves “ordinary business” or “routine matters,” which under the Securities and Exchange Commission’s rule can be exempted from a shareholder vote. Now, the S.E.C. must decide whether to allow the proposal to be put to a shareholder vote.

Ms. Morgenson writes: “Given some of the management missteps at JPMorgan in recent years â€" most notably the London Whale mess â€" and its regulatory run-ins, it certainly seems appropriate to ask shareholders whether they think the institution is too big to manage. Even as simply a point of information, such a vote could be revealing.”

THE NIGHT AT THE OSCARS  |  “12 Years a Slave” took home the top prize at the 86th Academy Awards Sunday night, beating out the likes of “Gravity” and “American Hustle” for best picture. The award was the first time Hollywood bestowed its top honor to the work of a black director. Meanwhile, despite going into the night with five nominations, including for best picture, “The Wolf of Wall Street” came home empty-handed. Here is a full list of the Oscar winners.

Also of note, Ellen DeGeneres, the night’s host, may have broken Twitter after she tweeted a “selfie” that included Meryl Streep, Kevin Spacey and Jennifer Lawrence. Twitter’s website went down soon after she posted the picture, with early reports indicating that it failed to handle the explosion in traffic. As of Monday morning, the “selfie” had been retweeted more than two million times, breaking Twitter’s previous record, which was set by President Obama after his re-election.

MT. GOX POST-MORTEM  |  A steady erosion of faith in the Bitcoin community “ultimately served as the death knell for Mt. Gox,” the prominent Bitcoin exchange that filed for bankruptcy on Friday, Rachel Abrams, Matthew Goldstein and Hiroko Tabuchi write in DealBook. As the exchange hurdled toward collapse, even the virtual currency’s advocates were losing confidence in the exchange because it was becoming increasingly associated with criminal activity. And now, any lingering trust in the exchange has almost certainly evaporated, disappearing alongside the more than $450 million worth of Bitcoin holdings that the exchange lost (according to its bankruptcy filing).

From Wolfgang Münchau in The Financial Times: “If global instability persists it will produce more crises. Whether the next Bitcoin or its successors can succeed is impossible to forecast. But the environment is one in which an alternative decentralized system could flourish.

“For those running such a system and especially those who advocate its development into a global monetary unit, it would be a good idea to develop at least a cursory interest in monetary economics. I suspect the challenge for the economics profession would be incomparably larger.”

 

Mergers & Acquisitions »

Foreign Buyers Pursuing Forbes Magazine  |  All good things come to an end, even for the rich, and sometime this month, Forbes will probably pass out of family control and into the hands of a foreign owner, David Carr writes in the Media Equation column. NEW YORK TIMES

Uniqlo’s Parent Said to Seek Deal for J. Crew  |  Talks between Fast Retailing and J. Crew’s owners, the private equity firms TPG Capital and Leonard Green & Partners, are in early stages and could still fall apart. DealBook »

Comcast Nears $320 Million Deal for FreeWheel  |  Comcast is said to have agreed to a deal to acquire the video advertisement company FreeWheel for about $320 million, TechCrunch reports, citing unidentified people familiar with the situation. TECHCRUNCH

A Scorecard on Jos. A. Bank’s Latest Moves  |  Jos. A. Bank’s rejection of the new bid from Men’s Wearhouse was expected. But what was surprising was that Jos. A. Bank laid out parameters for future talks over a deal, Steven M. Davidoff writes in the Deal Professor column. DealBook »

China’s Geely Acquires British Electric Car Start-Up  |  The Zhejiang Geely Holding Group, a Chinese automaker, said on Saturday that it had acquired the British electric vehicle start-up Emerald Automotive for an undisclosed amount, The Wall Street Journal writes. Emerald said Geely had committed to investing at least $200 million over the next five years to help develop Emerald’s electric vehicles. WALL STREET JOURNAL

Britain’s ITV Looks to Expand  |  The British media company ITV said that its production arm was looking to expand, as higher revenue bolstered profit last year, The Wall Street Journal writes. WALL STREET JOURNAL

INVESTMENT BANKING »

R.B.S. to Cut U.S. Assets to Meet Regulations  |  The Royal Bank of Scotland is planning to reduce assets in its broker-dealer operation in New York to meet the $50 billion threshold set by the Federal Reserve for foreign lenders, The Financial Times reports. FINANCIAL TIMES

An Over-the-Top Wall Street Blog Returns  |  Leveraged Sell-Out, a blog that parodied the musings of young Wall Street bankers, is back with new postings, five years after the financial crisis. DealBook »

Fed to Release Annual Stress Test Results  |  With the Federal Reserve’s publication this month of the results of its annual stress tests, it will for the first time describe how rising interest rates could affect the health of the nation’s biggest banks, Bloomberg News writes. BLOOMBERG NEWS

PRIVATE EQUITY »

Schwarzman of Blackstone Made $375 Million in 2013  |  Stephen A. Schwarzman, the co-founder and chief executive of Blackstone, made a total of $374.5 million in 2013, mostly from the cash dividends he received on his partnership units. DealBook »

Apollo Chief Questions Effort to Limit Banks’ Exposure to Buyout Deals  |  Leon D. Black, the head of Apollo Global Management, said on Friday that regulators instructing banks to avoid providing financing above a certain level of debt were “micromanaging.” DealBook »

The Best of Last Week’s eBay Barbs  |  “The C.E.O. seems to be completely asleep,” “Mr. Icahn’s attacks are false and misleading” and other highlights from the war of words between Carl C. Icahn and eBay. DealBook »

HEDGE FUNDS »

Riverbed Rejects Updated Elliott Takeover Bid  |  Riverbed Technology rejected the latest takeover proposal from the hedge fund Elliott Management on Friday, calling the $3.3 billion offer too low. The move was disclosed just three days after Elliott raised its takeover bid to $21 a share from $19. DealBook »

Winton Capital Plans Expansion  |  Winton Capital, the fourth-largest hedge fund in Europe, is planning to hire 100 employees this year as part of an expansion that includes starting five funds and opening new offices in New York, Tokyo and Sydney, The Wall Street Journal reports. WALL STREET JOURNAL

Fortress Discloses a Paper Loss on Bitcoin  |  The Fortress Investment Group is the first large public company to disclose a stake in Bitcoin. It had an unrealized loss of $3.7 million at the end of the year. DealBook »

I.P.O./OFFERINGS »

GrubHub Files for an I.P.O.  |  The company published a prospectus for its initial public offering on Friday, outlining the financial performance of divisions like Seamless and its namesake delivery service. DealBook »

Square I.P.O. Postponed  |  Square, the mobile payments start-up created by the Twitter co-founder Jack Dorsey, has postponed its initial public offering indefinitely, Fox Business reports, citing unidentified people familiar with the situation. The company had been discussing a 2014 I.P.O. as recently as the fourth quarter of 2013. FOX BUSINESS

Corporate Software Tops List of I.P.O.’s  |  Six companies that lead a list of the top-performing initial public offerings since Jan. 1, 2013, sell software used in corporations, which could encourage corporate boards and bankers to take more of these types of companies public, The Wall Street Journal reports. WALL STREET JOURNAL

Pabst Brewing Owner Exploring Exit Options  |  C. Dean Metropoulos, the veteran food investor, is looking to sell the Pabst Brewing Company, one of the oldest breweries in the United States, Reuters writes. Pabst is also exploring a potential initial public offering. REUTERS

VENTURE CAPITAL »

NJOY, an E-Cigarette Maker, Attracts New Funding  |  The electronic cigarette maker NJOY received a $70 million capital injection from a group of investors, the latest vote of confidence for a fast-growing industry. DealBook »

The Housing Market With Nowhere to Go (but Up)  |  An influx of tech-sector money in San Francisco, where new construction is difficult, is driving up prices and making options scarce for those not earning Silicon Valley salaries, Nick Bilton writes in the Economix blog. NEW YORK TIMES ECONOMIX

Watson Head’s Departure Raises Questions  |  Manoj Saxena, who oversaw IBM’s Watson initiative, left his team at IBM to join The Entrepreneurs’ Fund, a venture capital fund in Silicon Valley, raising questions about Watson’s future, The Wall Street Journal writes. WALL STREET JOURNAL

Mashable Raises Funding From Tribune  |  Mashable, the technology news website, said on Sunday that it had raised $700,000 from the Tribune Company as part of its latest round of funding, ReCode writes. The move comes as Tribune is planning to spin off its newspaper group, which includes The Los Angeles Times and The Chicago Tribune. RECODE

LEGAL/REGULATORY »

High-Interest Web Banks Are on the Rise in China  |  The growth of high-interest web banks is intensifying competition for deposits and putting pressure on the country’s state-run banks, which are struggling with a severe cash squeeze, The New York Times writes. NEW YORK TIMES

Fed Searches for a New Method of Offering Guidance  |  The rapid decline of measured unemployment has outpaced improvement in other economic indicators, leaving the Fed looking for a new yardstick, Binyamin Appelbaum writes in the Economix blog. NEW YORK TIMES ECONOMIX

Mt. Gox Bitcoin Exchange Sued for Fraud  |  Mt. Gox, a prominent Bitcoin exchange that filed for bankruptcy protection on Friday, was sued for fraud by a United States customer within hours of its bankruptcy filing, Bloomberg News writes. BLOOMBERG NEWS

U.S. Growth at End of 2013 Revised Downward  |  The Commerce Department announced revised growth estimates on Friday, saying that the economy grew at a weaker pace of 2.4 percent, not the 3.2 percent first announced, The New York Times reports. NEW YORK TIMES

Concern Grows as Investors Exit Bond Holdings in Emerging Markets  |  Four influential economists with roots in Wall Street, academia and the Federal Reserve will warn that regulators have to date done little to prepare for a possible system-rattling “bond market tantrum.” DealBook »

Why the Bank Leverage Ratio Is Important  |  The Federal Deposit Insurance Corporation has proposed the ratio at 5 percent for bank holding companies and 6 percent for insured bank depositories. The time has come to put this into effect, writes Mayra Rodríguez Valladares in the Another View column. DealBook »