Softbank Shares Rise on Alibaba Profit Report

HONG KONG â€" Yahoo isn’t the only company tagging along for Alibaba’s magic carpet ride.

Shares in Softbank, the Japanese telecommunications company, rose as much as 8 percent in Tokyo on Wednesday morning due to strong profit and revenue growth at Alibaba.

Softbank owns about 37 percent of Alibaba, the Chinese e-commerce giant that is moving forward with plans for an initial public offering in the United States that is expected to be one of the world’s biggest since Facebook raised $16 billion two years ago.

Like Yahoo, which owns 24 percent of Alibaba, Softbank’s stock has partly served as a proxy for investors seeking to bet on the Chinese company’s rapid growth. The Japanese company, controlled by the billionaire investor Masayoshi Son, invested about $20 million in Alibaba nearly 15 years ago.

Alibaba reported $1.4 billion in profit for the October to December quarter, more than double the results in the period a year earlier, Yahoo said Tuesday in a United States stock exchange filing. Revenue jumped 66 percent, to nearly $3.1 billion.

Both Softbank and Yahoo have seen significant rallies in their shares, driven partly by Alibaba’s strong growth and anticipation that the Chinese company’s I.P.O. will be a blockbuster. Softbank’s stock has risen around 75 percent in the past year, while Yahoo’s is up 42 percent.

But despite its larger stake in Alibaba, Softbank may offer less direct exposure to the Chinese company’s performance. The Japanese company is much larger than Yahoo, with a market capitalization of 8.4 trillion yen, or about $82 billion, compared with Yahoo’s $34.5 billion.

In addition to its Japanese telecommunications business, Softbank controls Sprint, the American mobile carrier, and is the biggest single shareholder of Yahoo Japan. In recent months, Softbank has been reshuffling assets among its various units, including a $3.2 billion deal last month involving Yahoo Japan â€" the nation’s biggest Internet portal â€" and eAccess, a mobile Internet service provider.

For investors whose main focus is the Alibaba I.P.O., Softbank’s other businesses are more of a distraction than attraction. That is probably one reason Softbank’s shares are cheaper than Yahoo’s, trading at about 15 times trailing earnings compared with a multiple of 28 times at Yahoo.

In Corporate Monitor, a Well-Paying Job but Unknown Results

 

In the insider trading case against SAC Capital Advisors, federal prosecutors have given a particularly nice gift to a former federal prosecutor, Bart M. Schwartz. Mr. Schwartz, who is now the chairman of the consulting firm Guidepost Solutions, was appointed SAC’s independent compliance consultant and is charged with assessing the firm’s future trading practices.

The job is likely to earn Mr. Schwartz millions, but it will do little more than that. It’s all part of the corporate monitoring industry, a full employment act for former federal prosecutors that may have little effect on the way any company that is forced to hire a monitor conducts its business.

SAC Capital’s guilty plea was accepted by a federal judge last week. The firm will pay a record $1.2 billion penalty for insider trading â€" a $900 million fine and about $300 million in forfeited profits.

The hedge fund will survive â€" even after the guilty pleas to insider trading charges by six employees and the conviction of two others â€" but in diminished form. SAC Capital has already renamed itself Point72 Asset Management, making it sound strangely like a 1980s euro trash band. SAC has also left the investment advisory business, meaning it will only be managing about $9 billion, mostly the personal fortune of the firm’s founder, Steven A. Cohen.

Still, is this punishment sufficient? After all, it allows an enterprise that harbored extensive corruption to continue.

Enter Mr. Schwartz, who has a long history of serving as an independent monitor in government investigations. He is the ostensible key to ensuring that Point72 will remain on the straight and narrow.

A compliance monitor or consultant is a creation of the last decade. When a corporation accused of wrongdoing agrees to settle the charges or is sentenced to probation, it is often required to pay for a monitor to ensure that it does not break the law again. The corporate monitor is to supervise the compliance procedures of the company as well as beef them up.

Companies as diverse as Apple, BP, Deutsche Bank and JPMorgan Chase have all been subject to corporate monitors of late. The monitors are supervising areas like compliance with the foreign corrupt practices act and antitrust laws.

And after a violation, why not have a person come in and make sure things go right?

It turns out, there may be problems.

One of the main criticisms of these programs is that they perpetuate an “old boys’ network,” rewarding former federal prosecutors with a job that pays millions of dollars.

Mr. Schwartz, for example, the compliance consultant for Point72, worked in the United States attorney’s office under Rudolph Giuliani. He has made a career out of providing services related to the prosecution of crime, and runs a company that provides not only corporate investigation and monitoring services, but also surveillance systems and DNA analysis.

There are other examples, too. Paul J. McNulty, a former deputy attorney general who wrote the Justice Department’s guidelines on charging corporations with criminal wrongdoing, is a partner at the law firm Baker & McKenzie and leads its compliance and investigations committee.

The work is quite lucrative. The fees that Mr. Schwartz is charging have not been disclosed, but will probably run in the millions, if not tens of millions, of dollars. In 2008, questions were raised over the hiring of former Attorney General John Ashcroft to serve as corporate monitor of Zimmer Holdings, a medical supply company in Indiana accused of paying kickbacks to doctors. Mr. Ashcroft’s firm was selected by Chris Christie, then the United States attorney in New Jersey, to be the monitor, for which he received a fee of up to $52 million. Mr. Ashcroft, by the way, had been Mr. Christie’s boss; Mr. Christie reported to him when Mr. Ashcroft was attorney general. Mr. Christie had previously directed similar corporate monitoring contracts to two former Justice Department officials and a former Republican state attorney general in New Jersey.

The attorney general at the time, Michael B. Mukasey, who was concerned about the appearance of favoritism, opened an internal investigation into the appointment. No specific charges were brought, but in the wake of the Ashcroft deal, the Justice Department adopted the so-called Morford principles, named after the author, Craig S. Morford, the acting deputy attorney general at the time. The principles were intended to stem abuses in the naming of corporate counsel by requiring that monitors be picked for their “merit,” but did not offer specific guidelines or prevent giving out these plum jobs to old colleagues.

Not surprisingly, monitors are still picked in a rather murky way. In the case of SAC, for example, Mr. Schwartz was chosen by the firm, a selection backed by an anonymous committee in the United States attorney’s office. The work of these monitors is also secretive. The Justice Department does not regularly report the existence and names of these monitors. Beyond that, the monitors’ work is almost never disclosed. The monitors are supposed to prepare reports that are given to the government. Any follow-up action by the government is also seldom disclosed.

One estimate of how many monitors have been appointed in the last decade is about a hundred, but we are just not sure.

As part of its agreement with prosecutors, SAC Capital, for example, was required to a hire a “compliance consultant” to review its insider trading policies. Even though the term here is consultant, it is no different than a monitor, because Mr. Schwartz is there to look at the firm’s practices. Mr. Schwartz will file a report after 45 days identifying any “deficiencies” in Point72’s insider trading policies. There will be another report after six months on progress in correcting these deficiencies, if any exist. Asked about his work for SAC, Mr. Schwartz said he had no comment.

James M. Margolin, a spokesman for the United States attorney’s office in Manhattan, which handled the SAC case, said only that the consultant’s “reports are filed with our office; they will not be made public.” He added, “Beyond that, we have no further comment.”

Jonathan Gasthalter, a spokesman for Point72, declined to comment on Mr. Schwartz’s role at the firm or his compensation.

Mr. Schwartz’s reports are advisory, meaning that Point72 can ignore them. But does anyone really think that the monitor’s work will have any effect on how Point72 does business? Mr. Cohen has every incentive to keep on the straight and narrow after avoiding criminal charges. Not only that, but the adoption of insider trading protocols has no doubt been a priority for the company for some time.

Corporate monitors may actually do good work â€" ensuring that a company improves its compliance and does not break the law again. But companies often agree to them to avoid being prosecuted. Why should this compliance be outsourced for millions of dollars? Wouldn’t it be better for the government to take the money and make its own assessment or arrange its own investigation?

I’m not upset that Mr. Cohen is going to be paying the equivalent of the cost of one of his expensive paintings. But it would be nice to know that the public is getting something for this money.

Without seeing the monitors’ work, it’s hard not to think that this is all just part of one of the biggest growth industries around â€" the corporate investigation industry. It’s a nice profit center for former prosecutors, but it may not be much more.

Fed Weighing New Rules on Short-Term Borrowing, Yellen Says

A crucial part of Wall Street still keeps federal regulators up at night.

But Janet Yellen, the chairwoman of the Federal Reserve, said on Tuesday that her agency is actively considering measures to strengthen that potential weak spot in the nation’s securities markets.

Ms. Yellen said that despite an onslaught of new bank regulations, risks remained in the markets where Wall Street firms and other entities lend and borrow hundreds of billions of dollars for short periods. The 2008 financial crisis showed that these gigantic short-term debt markets were particularly susceptible to panic. With that in mind, Ms. Yellen suggested some measures on Tuesday that could restrain the use of short-term borrowing at the largest banks â€" including requiring them to hold more capital.

“There might be room for stronger capital and liquidity standards for large banks than have been adopted so far,” Ms. Yellen said, citing a 2010 study on the potential relationship between economic growth and further regulation. Capital is the financial cornerstone of a bank. A bank with more capital can, in theory, absorb more losses and may be less vulnerable to a bank run.

Daniel Tarullo, a Fed governor who oversees regulation, said nearly a year ago that the Fed was thinking of linking capital to short-term borrowing. The fact that the Fed has continued to press on this front could send a chill through Wall Street firms, like Goldman Sachs and JPMorgan Chase, that borrow billions of dollars a day in the short-term debt markets.

Banks may oppose the measures out of self-interest. Holding more capital can make it harder for banks to post the sort of returns that their shareholders expect. And these days, many bank executives receive much of their compensation in stock.

Bankers may also argue that the Fed is practicing overkill. Ms. Yellen’s speech follows the approval last week of a new rule â€" called the supplementary leverage ratio â€" that could prompt the largest banks to find as much as $68 billion in extra capital over the next few years.

If the Fed moves ahead with the new short-term debt market regulations, it will have to publish a proposed draft of the rules. This would give the banks a chance to criticize and lobby against what they do not like in the proposals.

The industry is likely to push back against the argument that the economy will be fine even if the banks have to hold more capital. Donald N. Lamson, a partner at the law firm Shearman & Sterling, said that when considering the new measures, regulators would have to consider whether reducing risks within the largest banks can undermine the creation of credit in the economy. “Those impulses are at odds,” Mr. Lamson said. “They need to achieve the correct balance.”

Bank lobbyists might also note that since the crisis, Wall Street firms make much less use of so-called repo lending market. In this market, banks lend and borrow money for short periods against financial collateral.

Although the market has shrunk, banks and brokers still tap the repo market for around $1.6 trillion in borrowings, according to the Fed. And in her speech, Ms. Yellen said that the existing overhaul might not address potential weaknesses in places like the repo market.

For instance, Wall Street firms say that they try to closely match the money they borrow in repo markets with the repo loans they make to their clients. On the surface, that matching practice looks safe and balanced.

But in panics, even the most carefully managed repo books can fall apart. That can happen when a Wall Street firm cannot raise money quickly enough to pay off its fleeing repo creditors.

When many banks faced this sort of cash crunch in 2008, the Fed stepped in and loaned the banks billions of dollars in replacement funds. To critics of Wall Street, the loans from the Fed were an enormous stealth bailout. The Fed has defended the loans, arguing that central banks are supposed to provide emergency loans to banks in stressed times to contain panic and protect the wider economy.

Still, Ms. Yellen’s remarks on the need to bolster short-term debt markets indicate that the Fed does not want to be put in a position where it would have to provide loans on that scale again. “Together, these runs were the primary engine of a financial crisis from which the United States and the global economy have yet to fully recover,” Ms. Yellen said in her speech, which she gave in a video feed to a conference at the Federal Reserve Bank of Atlanta.

Moelis & Co. Prices Its I.P.O. at $25 a Share, Below Expectations

Shares in publicly traded investment banks haven’t fared well so far this year. Investors are betting that Moelis & Company, a seven-year-old boutique founded by a veteran deal maker, will do better.

Moelis priced its initial public offering at $25 a share on Tuesday, a dollar below expectations. The firm reduced the number of shares that it planned to sell, raising $162.5 million.

At $25 a share, the firm was valued at about $1.3 billion.

The pricing of the offering below its expected range suggests that not even a strongly performing investment bank can escape the chill that has entered the I.P.O. market, which had flown high until recently. Many companies seeking to go public, particularly in the formerly highflying technology sector, have stumbled in their market debuts in the last few weeks.

And while boutique banks shone in 2013, they have suffered a bit more recently. Shares in Evercore Partners are down about 17 percent this year, valuing the firm at $1.6 billion; those in Greenhill & Company have fallen about the same percentage, giving that bank a market value of $1.36 billion.

Now Moelis & Company will test whether investors believe it is different when it begins trading on the Big Board on Wednesday, under the ticker symbol “MC.”

Founded and run by Kenneth D. Moelis, the investment bank has become one of the top advisers in mergers and corporate reorganizations. Its founders sought to expand quickly: after just over six years of operations, the firm employed 317 bankers, 86 of them managing directors.

It fulfills a long-held dream of Mr. Moelis, who climbed through the ranks of Drexel Burnham Lambert, Donaldson Lufkin & Jenrette and then UBS while assembling a gold-plated client list, including Hilton Hotels and Anheuser Busch.

But he left UBS after six years amid clashes with the Swiss bank’s management in Zurich, quickly forming his own shop with colleagues like Navid Mahmoodzadegan and Rick Leaman.

Last year, Moelis & Company was ranked 15th in Thomson Reuters‘ list of top deal advisers worldwide â€" its best-ever showing â€" having worked on 109 deals worth $101.4 billion. That was two spots higher than Evercore Partners, which was founded more than a decade earlier, and several higher than Greenhill & Company, which didn’t crack the top 25.

(It is off to a slower start this year. As of Tuesday, the firm is ranked 27th worldwide, trailing its older rivals.)

And the firm has racked up a number of high-profile assignments. It and Rothschild were the sole advisers on one of the biggest mergers of last year, the $35 billion union of Publicis and Omnicom, and it played roles in the sale of H.J. Heinz and NYSE Euronext.

That success has translated into profits. Moelis & Company reported $70.2 million in net income last year, almost doubling what it earned in 2012. By contrast, Evercore earned $53.3 million and Greenhill pulled in $46.7 million.

Going public has always been part of Mr. Moelis’s plan. Part of what lured many bankers to the firm was the lucrative stock compensation packages, giving them shares that they hoped to sell in an I.P.O. someday.

The offering will give them that long-awaited payday. The investment bank will pay out the vast majority of its expected proceeds, (about $141 million), to partners.

Even after going public, however, the firm will remain firmly under the control of Mr. Moelis. Under the terms of the offering, he will control the all-important Class B shares of Moelis & Company, giving him roughly 97 percent of the voting power.

That’s in addition to a number of perquisites he already enjoys: The firm covers the cost of his private jet for work trips and pays him what he would have spent on hotel costs in New York City â€" he is based in Los Angeles â€" even though he owns an apartment in the Plaza Hotel.

The offering was led by Goldman Sachs and Morgan Stanley, with Moelis & Company itself playing a smaller role.

New Crop of I.P.O.s Getting Back to Basics

From Ally Financial to Zoe’s Kitchen, initial public offerings may be getting back to basics.

Investors had an appetite for almost any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of eager sellers this week may encounter a more rational market than expected.

More companies went public on stock exchanges in the United States during the first three months of 2014 than in any quarter since 2000. So far this year, 81 firms have floated, according to Renaissance Capital, with even the riskiest finding buyers. About 40 percent were in biotechnology and almost a quarter in other areas of technology.

Quality has not kept up with quantity, though. Biotech companies lacking clinical data to support their products have received funding. Increasingly fanciful metrics like GrubHub’s “Daily Average Grubs” - a measure of revenue-generating orders - have been used to justify lofty valuations.

Yet none of that has made much of a dent in the I.P.O. pipeline. Eleven companies plan to go public this week, including the Chinese microblogging site Weibo and the boutique investment bank Moelis & Company. Two are holdovers from last week, but that’s still a big number.

The difference is that investors now seem to want companies they can understand. Everyone gets what restaurant chains do, for instance, and there’s plenty of demand for the next Chipotle. That may explain why shares in Zoe’s Kitchen popped more than 60 percent on its first day of trading on Friday.

Meanwhile, more speculative issues are hurting. Many of last year’s most sought-after offerings have dropped steadily in value over the past month or so. The Nasdaq biotech index is down 20 percent from its peak in late February, and formerly hot companies like the drug maker Pharmacyclics have fallen twice as far. Technology is also suffering, with Twitter plummeting almost 40 percent.

A traditional business model is no guarantee of success, of course. The hotel chain La Quinta and the bank Ally Financial are both trading below the amount at which they were first offered.

Companies still planning I.P.O.s can, however, anticipate a growing demand for conservative pricing, smaller issues and deliciously vanilla accounting.

Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

In Yahoo Earnings, a Peek at Alibaba’s Big Growth Ahead of Its I.P.O.

For some time, Yahoo earnings have been more than a report card for the company. They have also been a window into the earnings of its partner, the Chinese online commerce giant Alibaba Group.

And with Alibaba’s initial public offering drawing ever closer, investors will surely scrutinize the little peek into the company’s financials that Yahoo’s latest quarterly report affords.

What they found on Tuesday may cause some excitement. The Chinese company reported $1.4 billion in profit for its fourth quarter, more than double the results in the period a year earlier. Revenue jumped 66 percent, to nearly $3.1 billion. (The results are available on page 18 of this presentation.)

Such a big jump may help allay concerns that Alibaba’s enormous growth had begun to slow. Those worries began to arise when Alibaba reported only a 51 percent gain in third-quarter revenue compared with figures in the period a year earlier.

Helping earnings in the fourth quarter were a few big shopping days, particularly Nov. 11 â€" known as Singles Day, China’s twist on Valentine’s Day and one of the busiest days for online shopping. Alibaba disclosed last year that its two main e-commerce platforms, Taobao and Tmall, sold roughly $5.75 billion worth of merchandise on Singles Day last year, an 80 percent gain from 2012.

Alibaba has been considered the brightest spot in Yahoo’s array of assets for years, given its enormous growth. When Yahoo first agreed to buy a 40 percent stake nine years ago, the company was valued at just $2.5 billion. But its estimated worth has skyrocketed since then, with analysts estimating that the company could fetch a valuation of more than $130 billion in its coming I.P.O.

In 2012, the two sides struck an agreement in which Yahoo sold about half its stake, reaping $7.6 billion before taxes. That money gave Yahoo a valuable war chest that it has used to make a flurry of acquisitions, including the $1.1 billion purchase of Tumblr.

Yahoo now owns about 24 percent of Alibaba. Under the terms of its pact, it will sell 10 percent of its stake in the I.P.O., which is expected within the next few weeks. After that, it can dispose of its remaining shares at any time.

Not All Investigations Are Alike

Say a company finds out that it is under investigation for possible criminal violations. Its challenge is to figure out the chances that the investigation will result in charges and the possible impact of those charges on its business. Not all investigations are alike, and there are telltale signs about how serious a threat one may present.

Federal prosecutors have broad authority to initiate grand jury investigations, which often start with issuing subpoenas for documents. There is no requirement for prior judicial approval of a subpoena, unlike a search warrant, which can only be issued if there is probable cause a crime took place. As the Supreme Court pointed out in Branzburg v. Hayes, a case involving a demand for a reporter’s notes, “an investigation may be triggered by tips, rumors, evidence proffered by the prosecutor, or the personal knowledge of the grand jurors.”

The grand jury is shrouded in secrecy, its operations protected by a strict rule against disclosures by the government. Thus, information can be scarce about the status of a case. And figuring out whether the Justice Department will seek charges or quietly let the matter drop can devolve into a guessing game.

The secrecy rule does not apply to those who receive subpoenas, however, and they are free to reveal that they have been contacted by the grand jury or investigators looking into possible violations. Companies frequently disclose the receipt of a subpoena because it is better to let shareholders know that there is a potential for a criminal prosecution rather than letting it be a surprise.

But even the issuing of grand jury subpoenas does not necessarily mean charges are expected, even if they can be a good indication that prosecutors consider the underlying conduct to be worthy of further scrutiny. The absence of a demand for records, though, does not always mean there is no investigation. In fact, the absence of such a demand may indicate that an investigation has been opened as a type of placeholder in case information comes to light later about possible violations.

For instance, DealBook reported last week that the Justice Department has been scrutinizing Herbalife for the past few months, news that caused the company’s shares to drop nearly 14 percent. This comes on top of a recently announced investigation of the company’s marketing practices by the Federal Trade Commission after claims in 2012 by the hedge fund manager William A. Ackman that the company essentially operates a pyramid scheme.

Herbalife had not been accused by the government of any wrongdoing, and denies even knowing about the criminal investigation. It does not appear that grand jury subpoenas have been issued or that Federal Bureau of Investigation agents have started interviewing witnesses related to the company.

Given the persistent criticism of Herbalife leveled by Mr. Ackman, it is not a surprise that the market was spooked by the report of a criminal investigation. But the federal inquiry does not show any signs of developing into a criminal case at this point.

I expect the Justice Department will defer to the F.T.C. to conduct its inquiry and then pass along any information that might indicate criminal conduct. Prosecutors frequently let the civil regulators gather and analyze the evidence before getting involved, and there are few restrictions on agencies sharing information with the Justice Department.

There is also a report that New York’s attorney general, Eric T. Schneiderman, is looking into Herbalife’s marketing. His office can pursue both criminal and civil charges, so it is not clear whether this will cause the company additional problems on top of the federal investigations.

Sometimes an investigation indicates a new direction for prosecutors, so what may not have been considered conduct subject to criminal prosecution a few years ago may now be developing into a case. The Justice Department’s investigation into how Citigroup’s Mexican subsidiary, Banamex, was defrauded of more than $400 million shows how the government may use not just a bank’s actions but its inactions as well to pursue corporate criminal liability.

In February, the bank disclosed that a Banamex employee regularly processed falsified documents to help an oil services company obtain loans and advances that it could not repay. That sounds like a routine embezzlement in which the bank is a victim. In the past, it would have been unlikely that the government would pursue a case against Citigroup for the acts of a rogue employee.

But as DealBook reported, federal prosecutors are looking at whether Citigroup had in place the proper internal controls to stop the scheme before it could start. This was the approach taken by the Justice Department in the deferred prosecution agreement it reached with JPMorgan Chase over how the bank handled the accounts of Bernard L. Madoff’s firm that were used to conduct his huge Ponzi scheme. The bank paid more than $2 billion to settle criminal and civil cases.

Citigroup has also disclosed that federal prosecutors in Massachusetts are looking more broadly at possible money laundering violations. Prosecutors there have issued grand jury subpoenas to determine whether the bank did enough to prevent customers from misusing the bank.

The effectiveness of the internal controls that banks have put in place to prevent money laundering and other types illegal activities has taken on greater urgency recently. The Justice Department appears to be taking a harder line after it was criticized for going easy on HSBC for money laundering violations in its Mexican subsidiary. So these investigations present a significant threat to Citigroup because prosecutors are more aggressive now in pursuing cases, which could force the bank to admit violations in exchange for a deferred prosecution agreement like the one JPMorgan received.

Sometimes it is not the government that leads the investigation, but the company. This is especially true in Foreign Corrupt Practices Act cases in which federal prosecutors are unable to look inside foreign operations as easily as a corporate counsel. That means the company bears the cost of the investigation, an amount that can grow quickly into the hundreds of millions of dollars.

Wal-Mart, for example, disclosed that it spent $439 million investigating overseas bribery after a New York Times article two years ago revealed that it had made suspicious payments in Mexico to win local approval to build stores. Those costs will only grow as the retailer looks at operations in a number of different countries for potential bribes.

The Justice Department and the Securities and Exchange Commission, which share authority for enforcement of the corruption law, will await the results of Wal-Mart’s internal review before deciding how much to demand as part of a settlement.

Just because the Justice Department has begun a criminal investigation of a company does not mean it will always end in the same way. Investigations can signal different things about the seriousness of the potential consequences, and it is up to the company to read the tea leaves.

Diageo Makes New Bid for Controlling Stake in United Spirits of India

LONDON - Diageo said on Tuesday that it had made an offer of 1.13 billion pounds, or about $1.9 billion, to take a controlling stake in United Spirits of India.

The London-based Diageo has offered to buy an additional 26 percent stake in United Spirits for 3,030 rupees, or about $50.30, a share, 20 percent above the 60-day volume-weighted average price. Through a subsidiary, Diageo already owns 28.78 percent of United Spirits. If the offer goes through, Diageo would have a 54.78 percent stake in the company. United Spirits shareholders have until June 24 to accept the offer.

Diageo, the world’s largest distiller, was unsuccessful last year in a bid to take a majority stake in United Spirits.

The new tender offer comes after Suntory, the privately held Japanese food and beverage maker, agreed in January to acquire the producer of Jim Beam and Maker’s Mark whiskeys for $13.6 billion. The deal made Suntory the world’s third-largest distiller, behind Diageo and Pernod Ricard.

United Spirits, the largest distiller in India, posted operating revenue of 105.9 billion rupees in the fiscal year ended March 31, 2013.

Diageo said on Tuesday that it had already received the necessary approvals from competition authorities in India to complete the transaction. Diageo will finance the purchase through cash and existing debt.

Barclays Picks Former Bain & Co. Executive to Lead Compensation Committee

LONDON - Barclays said on Tuesday that it had chosen a former Bain & Company managing director to serve as the head of its compensation committee.

Crawford Gillies, who was the managing director for Europe at Bain & Company from 2001 to 2005, will join the Barclays board of directors on May 1. He will eventually succeed John Sunderland as chairman of the remuneration committee at a later date.

The change comes after Barclays increased its bonus pool for last year despite a steep loss in the fourth quarter, leading to a public outcry.

Mr. Sunderland, who will have served on the Barclays board for nine years in June, is expected to step down as a director after the company’s 2015 annual meeting. He is overseeing the process of finding a successor for David Walker, the Barclays group chairman.

“I am delighted that Crawford has agreed to join the Barclays board,” Mr. Walker said in a statement. “He brings immense experience in a range of different industries, including the financial services sector, in addition to a background in strategy and the public sector.”

Barclays said in February that it had posted a fourth-quarter loss of 514 million pounds, or about $860 million, and that it would eliminate 12,000 jobs, or about 8 percent of its work force, as part of a restructuring.

Despite the loss, the bank increased its compensation pool to £2.4 billion in 2013 from £2.2 billion in 2012. Barclays noted at the time that its bonus pool remained £1.1 billion lower than it was in 2010.

Antony P. Jenkins, the Barclays chief executive, has declined to take a bonus since he took the top job in 2012, after the departure of Robert E. Diamond Jr.

Mr. Gillies led Bain & Company’s British business from 1996 to 2000. Mr. Gillies was a former chairman of the law firm Hammonds, now called Squire Sanders, and is chairman of the risk consultant Control Risks Group Holdings. He is a former chairman of the medical device company Touch Bionics and is a director of Standard Life.

Dreaming of Corporate Tax Breaks

A LOOK AT CORPORATE TAX LOOPHOLES  |  Individuals have long sought to take advantage of dozens of tax deductions and loopholes, but corporations have excelled at this game, Andrew Ross Sorkin writes in the DealBook column.

Companies paid an average effective federal tax rate of 12.6 percent in 2010, the last time the Government Accountability Office measured the rate. That compares with the nominal federal tax rate of 35 percent, so all those accountants appear to have done their jobs in exploiting the loopholes in our tax code, Mr. Sorkin writes. Read his full column for a list of some of the most egregious corporate tax loopholes and some unexpected beneficiaries.

MOTOROLA SOLUTIONS’ ENTERPRISE UNIT SOLD FOR $3.5 BILLION  |  The Zebra Technologies Corporation agreed on Tuesday to buy Motorola Solutions’ enterprise business for $3.5 billion in a deal that will allow Zebra to expand its global presence, Mark Scott writes in DealBook. Zebra, whose technology helps companies to track products in the supply chain, will buy Motorola Solutions’ unit that manufacturers everything from bar code scanners to two-way radios.

COURTS ILLUSTRATED  |  If not for Elizabeth Williams, scenes from the trials of some of the most notorious Wall Street criminals might be lost to memory. But when the mighty stumble, Ms. Williams, a court illustrator, captures it forever, Alexandra Stevenson writes in DealBook. Ms. Williams has covered the trials of terrorists and murderers, but she finds white-collar criminals the most fascinating. “I think it’s the greatest soap opera there ever was,” she said.

Ms. Williams, who started her career as a fashion illustrator, was in the courtroom when Bernard L. Madoff was handcuffed and whisked away to a cell after he admitted to running a $65 billion Ponzi scheme. She was there when Michael R. Milken, head in palm, wept. She drew Ivan F. Boesky, one of the world’s most powerful financiers in the 1980s, who was convicted of masterminding Wall Street’s biggest insider trading scandal at the time, and Raj Rajaratnam, the hedge fund manager and Sri Lanka’s richest man, who was at the heart of a network of insider traders in the 2000s.

Ms. Williams’s drawings “are often the only recorded images from these trials,” Ms. Stevenson writes, adding, “Flipping through the three decades of courtroom drawings by Ms. Williams, one gets the sense that history repeats itself. The actors change, but the characters stay the same.”

HEDGE FUND MANAGER BETS ON G.M.  |  General Motors has come up against a tide of criticism, but there is at least one person outside the company who is willing to defend it: Kyle Bass, the hedge fund manager who made a name for himself betting against subprime mortgages, Alexandra Stevenson writes in DealBook. Mr. Bass is now betting on G.M., which is under political scrutiny for a decade-long delay in dealing with a defect that has led to 13 deaths.

Mr. Bass’s $2 billion hedge fund, Hayman Capital, owns eight million shares of G.M., a stake that is small relative to the size of the $51 billion company, but it is the fund’s single biggest holding. In the months since the automaker said it would recall millions of cars because of a defective ignition switch that could shut off the engine and disable air bags in certain models, the company has lost $17 billion of market value â€" representing a steep loss for Mr. Bass.

But Mr. Bass is undeterred in his conviction. Part of his thesis is based on a provision in the company’s 2009 bankruptcy and $49.5 billion bailout by the government. That provision, in his view, eliminated any future liability claims. And going back to the numbers, Mr. Bass argues that the company will be hugely profitable despite the liabilities it faces.

ON THE AGENDA  |  The Consumer Price Index for March is out at 8:30 a.m. The Empire State manufacturing index for April is also out at 8:30 a.m. The National Association of Home Builders housing market index for April is out at 10 a.m. Janet L. Yellen, chairwoman of the Federal Reserve, delivers remarks via videoconference at 8:45 a.m. to an Atlanta Fed conference on financial markets. Yahoo reports first-quarter earnings after the market closes. Google Glass is available for sale through the Google Glass website for one day only, starting at 9 a.m. Happy Tax Day â€" don’t forget to submit or postmark your individual tax returns by the midnight deadline.

GOOGLE GETS INTO DRONES, TOO  |  Google said on Monday that it had purchased Titan Aerospace, a maker of high-altitude drone satellites, which the company says will be used to take photos of the earth and to connect people to the Internet, Nick Bilton writes in the Bits blog. The terms of the deal were not disclosed

It seems as if a lot of top tech firms want flying objects at their disposal. Facebook recently bought Ascenta, a British company that makes a similar type of drone, and earlier reports said Facebook had been in talks to buy Titan Aerospace.

 

Mergers & Acquisitions »

TIAA-CREF to Buy Nuveen Investments for $6.25 Billion  |  The acquisition of Nuveen will bring the retirement giant TIAA-CREF’s assets under management to about $800 billion and bolster its mutual fund offerings. DealBook »

Endurance Bids $3.2 Billion for Aspen Insurance  |  Endurance Specialty Holdings, a provider of casualty and property insurance, made an unsolicited $3.2 billion takeover bid for Aspen Insurance Holdings. DealBook »

Maker Studios Rejects Relativity Media Bid  |  Relativity Media, a film and entertainment company, offered a counterbid on Sunday in a last-minute attempt to spoil a deal between the Walt Disney Company and Maker Studios, an online video company, The Wall Street Journal writes. But Maker Studios said on Monday that its deal with Disney had been approved by its board and a majority of its shareholders and would close in the next few weeks. WALL STREET JOURNAL

Juniper Networks Said to Be Exploring Sale of Mobile Security Unit  |  Juniper Networks, a networking equipment company that is under pressure from the hedge fund Elliott Management, is said to be considering a sale of its mobile security unit Junos Pulse, Reuters reports, citing unidentified people familiar with the situation. REUTERS

INVESTMENT BANKING »

In Annual Letter, BlackRock Chief Says Firm Will Keep Speaking Out  |  In BlackRock’s latest annual letter, the firm’s chairman, Laurence D. Fink, wrote that he planned to continue to use the firm’s financial might in speaking out for investors on matters like corporate governance. DealBook »

Citi Profit Exceeds Forecasts  |  Along with its generally positive earnings report, Citigroup said it had uncovered a second instance of fraud in its Mexican operations. DealBook »

Citi’s Stock Seems Priced for More Mediocrity  |  Despite Citi’s strong earnings, the bank is trading at just 83 percent of its tangible book value, the only major financial firm currently stuck at less than its net worth, Antony Currie writes in Reuters Breakingviews. DealBook »

Barclays Finance Chief Faces Question of What to Do With Investment Bank  |  In recent private meetings with analysts and investors, Tushar Morzaria, Barclays’ chief financial officer, is said to have admitted that the bank did not have a credible plan for what do with its sprawling investment bank, according to participants at the meeting, The Wall Street Journal reports. WALL STREET JOURNAL

PRIVATE EQUITY »

Blackstone and Goldman to Buy Ipreo, a Financial Information Provider  |  The deal with Kohlberg Kravis Roberts is the latest instance of private equity firms buying holdings from one another. DealBook »

Blackstone to Slow Down Home Purchases  |  The private equity firm Blackstone Group will continue to slow down its purchasing of properties this year, MarketWatch reports, according to an official at the firm. In July, Blackstone’s Invitation Homes unit reached its peak purchase pace of about $125 million worth of homes a week. Since then, its weekly pace has dropped to about $30 million to $40 million and will likely fall further this year. MARKETWATCH

Canada’s Onex and Cineplex in Lead to Buy Dave & Buster’s  |  A team of the Canadian private equity firm Onex and the entertainment company Cineplex has emerged as the leading contender to buy the restaurant and arcade chain Dave & Buster’s, The Wall Street Journal writes, citing unidentified people familiar with the situation. WALL STREET JOURNAL

HEDGE FUNDS »

Third Point Defends Its Fight Against Sotheby’s  |  In a 30-page document, Daniel S. Loeb’s Third Point hedge fund laid out its case to shareholders about why it should win three seats on Sotheby’s board â€" and defended Mr. Loeb’s art world credentials. DealBook »

GrafTech Drama Headed for Proxy Fight  |  After being ousted from the board of GrafTech International, Nathan Milikowsky is expected to wage a proxy fight to elect himself and five proposed directors to the board. DealBook »

Fed Paper Says Hedge Funds Helped Spur Global Financial Crisis  |  Hedge funds helped spur the global financial crisis just like banks and insurance firms, according to new research published by the Federal Reserve Bank of San Francisco, The Wall Street Journal writes. WALL STREET JOURNAL

I.P.O./OFFERINGS »

Twitter’s Biggest Shareholders Say They Won’t Sell Stock  |  Top officers and directors of the social network, as well as its largest outside shareholder, say they will hang on to their shares when they get their first chance to sell in May, the Bits blog writes. NEW YORK TIMES BITS

Hong Kong I.P.O. Structure Is Fine as Is, Investor Survey Finds  |  After Hong Kong lost Alibaba’s initial public offering, a survey shows that more than 90 percent of respondents oppose allowing partnership control structures like Alibaba’s in Hong Kong. DealBook »

VENTURE CAPITAL »

Storefront, an Airbnb for Retail Spaces, Raises $7.3 Million  |  Enough sellers have used Storefront, the equivalent of an Airbnb for retail locations, that on Monday, the company announced that it had secured $7.3 million in a Series A round of venture funding, the Bits blog reports. The money will be used to help the company expand and entice more brands to use the service to set up temporary quarters. NEW YORK TIMES BITS

Mozilla Names Interim Chief  |  Mozilla, the maker of the popular Firefox web browser, announced on Monday that it had appointed Chris Beard as interim chief executive of the company, the Bits blog reports. In July, 2013, Mr. Beard became an executive-in-residence at Greylock Parners, the venture firm that is home to a current Mozilla board member, Reid Hoffman, and a former Mozilla chief executive, John Lilly. NEW YORK TIMES BITS

Amazon Will Not Accept Bitcoin Anytime Soon  |  Tom Taylor, a vice president at Amazon who oversees its payment initiatives, said in a recent interview with ReCode that Amazon would not be accepting Bitcoin anytime soon. “We’re not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage Bitcoin,” he said. RECODE

U.S. Venture Firms Raised $8.9 Billion in First Quarter  |  Venture firms in the United States raised $8.9 billion in the first quarter, the most in six years and almost double the amount raised in the same period last year, Reuters reports, according to a report. REUTERS

LEGAL/REGULATORY »

Lawsuit Contends CME Gave High-Speed Traders Special Access  |  A group of traders has sued the CME Group, which operates the world’s biggest derivatives exchange, contending that the exchange sold market data to high-frequency traders, Reuters reports. REUTERS

2 Executives Leave G.M. After Wide-Ranging Recall  |  The departures are the first major executive changes under Mary T. Barra, who took over as chief executive in January, The New York Times writes. NEW YORK TIMES

Tax Preparers’ New Role: Health-Coverage Advisers  |  As tax professionals help with tax returns, they are also offering advice on costs of premiums and potential fines under the Affordable Care Act, The New York Times reports. NEW YORK TIMES

Rising Retail Figures Revive Market  |  Solid earnings by Citigroup and strong improvement in retail sales as winter weather eased led investors to regain some ground lost in the previous week. ASSOCIATED PRESS

In Many Cities, Rent Is Rising Out of Reach of Middle Class  |  More households are being priced out of more areas. An analysis found 90 cities where the median rent is more than 30 percent of the median gross income, The New York Times writes. NEW YORK TIMES

Dreaming of Corporate Tax Breaks

A LOOK AT CORPORATE TAX LOOPHOLES  |  Individuals have long sought to take advantage of dozens of tax deductions and loopholes, but corporations have excelled at this game, Andrew Ross Sorkin writes in the DealBook column.

Companies paid an average effective federal tax rate of 12.6 percent in 2010, the last time the Government Accountability Office measured the rate. That compares with the nominal federal tax rate of 35 percent, so all those accountants appear to have done their jobs in exploiting the loopholes in our tax code, Mr. Sorkin writes. Read his full column for a list of some of the most egregious corporate tax loopholes and some unexpected beneficiaries.

MOTOROLA SOLUTIONS’ ENTERPRISE UNIT SOLD FOR $3.5 BILLION  |  The Zebra Technologies Corporation agreed on Tuesday to buy Motorola Solutions’ enterprise business for $3.5 billion in a deal that will allow Zebra to expand its global presence, Mark Scott writes in DealBook. Zebra, whose technology helps companies to track products in the supply chain, will buy Motorola Solutions’ unit that manufacturers everything from bar code scanners to two-way radios.

COURTS ILLUSTRATED  |  If not for Elizabeth Williams, scenes from the trials of some of the most notorious Wall Street criminals might be lost to memory. But when the mighty stumble, Ms. Williams, a court illustrator, captures it forever, Alexandra Stevenson writes in DealBook. Ms. Williams has covered the trials of terrorists and murderers, but she finds white-collar criminals the most fascinating. “I think it’s the greatest soap opera there ever was,” she said.

Ms. Williams, who started her career as a fashion illustrator, was in the courtroom when Bernard L. Madoff was handcuffed and whisked away to a cell after he admitted to running a $65 billion Ponzi scheme. She was there when Michael R. Milken, head in palm, wept. She drew Ivan F. Boesky, one of the world’s most powerful financiers in the 1980s, who was convicted of masterminding Wall Street’s biggest insider trading scandal at the time, and Raj Rajaratnam, the hedge fund manager and Sri Lanka’s richest man, who was at the heart of a network of insider traders in the 2000s.

Ms. Williams’s drawings “are often the only recorded images from these trials,” Ms. Stevenson writes, adding, “Flipping through the three decades of courtroom drawings by Ms. Williams, one gets the sense that history repeats itself. The actors change, but the characters stay the same.”

HEDGE FUND MANAGER BETS ON G.M.  |  General Motors has come up against a tide of criticism, but there is at least one person outside the company who is willing to defend it: Kyle Bass, the hedge fund manager who made a name for himself betting against subprime mortgages, Alexandra Stevenson writes in DealBook. Mr. Bass is now betting on G.M., which is under political scrutiny for a decade-long delay in dealing with a defect that has led to 13 deaths.

Mr. Bass’s $2 billion hedge fund, Hayman Capital, owns eight million shares of G.M., a stake that is small relative to the size of the $51 billion company, but it is the fund’s single biggest holding. In the months since the automaker said it would recall millions of cars because of a defective ignition switch that could shut off the engine and disable air bags in certain models, the company has lost $17 billion of market value â€" representing a steep loss for Mr. Bass.

But Mr. Bass is undeterred in his conviction. Part of his thesis is based on a provision in the company’s 2009 bankruptcy and $49.5 billion bailout by the government. That provision, in his view, eliminated any future liability claims. And going back to the numbers, Mr. Bass argues that the company will be hugely profitable despite the liabilities it faces.

ON THE AGENDA  |  The Consumer Price Index for March is out at 8:30 a.m. The Empire State manufacturing index for April is also out at 8:30 a.m. The National Association of Home Builders housing market index for April is out at 10 a.m. Janet L. Yellen, chairwoman of the Federal Reserve, delivers remarks via videoconference at 8:45 a.m. to an Atlanta Fed conference on financial markets. Yahoo reports first-quarter earnings after the market closes. Google Glass is available for sale through the Google Glass website for one day only, starting at 9 a.m. Happy Tax Day â€" don’t forget to submit or postmark your individual tax returns by the midnight deadline.

GOOGLE GETS INTO DRONES, TOO  |  Google said on Monday that it had purchased Titan Aerospace, a maker of high-altitude drone satellites, which the company says will be used to take photos of the earth and to connect people to the Internet, Nick Bilton writes in the Bits blog. The terms of the deal were not disclosed

It seems as if a lot of top tech firms want flying objects at their disposal. Facebook recently bought Ascenta, a British company that makes a similar type of drone, and earlier reports said Facebook had been in talks to buy Titan Aerospace.

 

Mergers & Acquisitions »

TIAA-CREF to Buy Nuveen Investments for $6.25 Billion  |  The acquisition of Nuveen will bring the retirement giant TIAA-CREF’s assets under management to about $800 billion and bolster its mutual fund offerings. DealBook »

Endurance Bids $3.2 Billion for Aspen Insurance  |  Endurance Specialty Holdings, a provider of casualty and property insurance, made an unsolicited $3.2 billion takeover bid for Aspen Insurance Holdings. DealBook »

Maker Studios Rejects Relativity Media Bid  |  Relativity Media, a film and entertainment company, offered a counterbid on Sunday in a last-minute attempt to spoil a deal between the Walt Disney Company and Maker Studios, an online video company, The Wall Street Journal writes. But Maker Studios said on Monday that its deal with Disney had been approved by its board and a majority of its shareholders and would close in the next few weeks. WALL STREET JOURNAL

Juniper Networks Said to Be Exploring Sale of Mobile Security Unit  |  Juniper Networks, a networking equipment company that is under pressure from the hedge fund Elliott Management, is said to be considering a sale of its mobile security unit Junos Pulse, Reuters reports, citing unidentified people familiar with the situation. REUTERS

INVESTMENT BANKING »

In Annual Letter, BlackRock Chief Says Firm Will Keep Speaking Out  |  In BlackRock’s latest annual letter, the firm’s chairman, Laurence D. Fink, wrote that he planned to continue to use the firm’s financial might in speaking out for investors on matters like corporate governance. DealBook »

Citi Profit Exceeds Forecasts  |  Along with its generally positive earnings report, Citigroup said it had uncovered a second instance of fraud in its Mexican operations. DealBook »

Citi’s Stock Seems Priced for More Mediocrity  |  Despite Citi’s strong earnings, the bank is trading at just 83 percent of its tangible book value, the only major financial firm currently stuck at less than its net worth, Antony Currie writes in Reuters Breakingviews. DealBook »

Barclays Finance Chief Faces Question of What to Do With Investment Bank  |  In recent private meetings with analysts and investors, Tushar Morzaria, Barclays’ chief financial officer, is said to have admitted that the bank did not have a credible plan for what do with its sprawling investment bank, according to participants at the meeting, The Wall Street Journal reports. WALL STREET JOURNAL

PRIVATE EQUITY »

Blackstone and Goldman to Buy Ipreo, a Financial Information Provider  |  The deal with Kohlberg Kravis Roberts is the latest instance of private equity firms buying holdings from one another. DealBook »

Blackstone to Slow Down Home Purchases  |  The private equity firm Blackstone Group will continue to slow down its purchasing of properties this year, MarketWatch reports, according to an official at the firm. In July, Blackstone’s Invitation Homes unit reached its peak purchase pace of about $125 million worth of homes a week. Since then, its weekly pace has dropped to about $30 million to $40 million and will likely fall further this year. MARKETWATCH

Canada’s Onex and Cineplex in Lead to Buy Dave & Buster’s  |  A team of the Canadian private equity firm Onex and the entertainment company Cineplex has emerged as the leading contender to buy the restaurant and arcade chain Dave & Buster’s, The Wall Street Journal writes, citing unidentified people familiar with the situation. WALL STREET JOURNAL

HEDGE FUNDS »

Third Point Defends Its Fight Against Sotheby’s  |  In a 30-page document, Daniel S. Loeb’s Third Point hedge fund laid out its case to shareholders about why it should win three seats on Sotheby’s board â€" and defended Mr. Loeb’s art world credentials. DealBook »

GrafTech Drama Headed for Proxy Fight  |  After being ousted from the board of GrafTech International, Nathan Milikowsky is expected to wage a proxy fight to elect himself and five proposed directors to the board. DealBook »

Fed Paper Says Hedge Funds Helped Spur Global Financial Crisis  |  Hedge funds helped spur the global financial crisis just like banks and insurance firms, according to new research published by the Federal Reserve Bank of San Francisco, The Wall Street Journal writes. WALL STREET JOURNAL

I.P.O./OFFERINGS »

Twitter’s Biggest Shareholders Say They Won’t Sell Stock  |  Top officers and directors of the social network, as well as its largest outside shareholder, say they will hang on to their shares when they get their first chance to sell in May, the Bits blog writes. NEW YORK TIMES BITS

Hong Kong I.P.O. Structure Is Fine as Is, Investor Survey Finds  |  After Hong Kong lost Alibaba’s initial public offering, a survey shows that more than 90 percent of respondents oppose allowing partnership control structures like Alibaba’s in Hong Kong. DealBook »

VENTURE CAPITAL »

Storefront, an Airbnb for Retail Spaces, Raises $7.3 Million  |  Enough sellers have used Storefront, the equivalent of an Airbnb for retail locations, that on Monday, the company announced that it had secured $7.3 million in a Series A round of venture funding, the Bits blog reports. The money will be used to help the company expand and entice more brands to use the service to set up temporary quarters. NEW YORK TIMES BITS

Mozilla Names Interim Chief  |  Mozilla, the maker of the popular Firefox web browser, announced on Monday that it had appointed Chris Beard as interim chief executive of the company, the Bits blog reports. In July, 2013, Mr. Beard became an executive-in-residence at Greylock Parners, the venture firm that is home to a current Mozilla board member, Reid Hoffman, and a former Mozilla chief executive, John Lilly. NEW YORK TIMES BITS

Amazon Will Not Accept Bitcoin Anytime Soon  |  Tom Taylor, a vice president at Amazon who oversees its payment initiatives, said in a recent interview with ReCode that Amazon would not be accepting Bitcoin anytime soon. “We’re not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage Bitcoin,” he said. RECODE

U.S. Venture Firms Raised $8.9 Billion in First Quarter  |  Venture firms in the United States raised $8.9 billion in the first quarter, the most in six years and almost double the amount raised in the same period last year, Reuters reports, according to a report. REUTERS

LEGAL/REGULATORY »

Lawsuit Contends CME Gave High-Speed Traders Special Access  |  A group of traders has sued the CME Group, which operates the world’s biggest derivatives exchange, contending that the exchange sold market data to high-frequency traders, Reuters reports. REUTERS

2 Executives Leave G.M. After Wide-Ranging Recall  |  The departures are the first major executive changes under Mary T. Barra, who took over as chief executive in January, The New York Times writes. NEW YORK TIMES

Tax Preparers’ New Role: Health-Coverage Advisers  |  As tax professionals help with tax returns, they are also offering advice on costs of premiums and potential fines under the Affordable Care Act, The New York Times reports. NEW YORK TIMES

Rising Retail Figures Revive Market  |  Solid earnings by Citigroup and strong improvement in retail sales as winter weather eased led investors to regain some ground lost in the previous week. ASSOCIATED PRESS

In Many Cities, Rent Is Rising Out of Reach of Middle Class  |  More households are being priced out of more areas. An analysis found 90 cities where the median rent is more than 30 percent of the median gross income, The New York Times writes. NEW YORK TIMES

3 Former ICAP Brokers Appear in British Court in Libor Manipulation Case

LONDON - Three former brokers at the British financial firm ICAP appeared in court on Tuesday on charges that they conspired to manipulate a global benchmark interest rate.

Danny Martin Wilkinson, Darrell Paul Read and Colin John Goodman are the latest individuals to be charged in a wide-ranging investigation into potential manipulation of the London interbank offered rate, or Libor.

At a brief hearing in Westminster Magistrates’ Court, the men only spoke to confirm their identities.

Mr. Wilkinson, who lives in New Zealand, will be required to post bail of 40,000 pounds, or about $66,776, and will be allowed to travel between Britain and New Zealand. The other two were not required to post a security, but were ordered to surrender their passports.

According to the Serious Fraud Office, which brought the charges, the conspiracy to defraud took place from August 2006 to September 2010.

Libor is one of the main rates used to determine the borrowing costs for trillions of dollars in loans, including many adjustable-rate mortgages in the United States.

Some of the world’s largest banks, including Barclays, the Royal Bank of Scotland and UBS, have been caught up in the scandal, and have agreed to pay billions of dollars to settle accusations with regulators in Britain, the United States and elsewhere.

Nine people in total are facing criminal charges in Britain, including three former employees of Barclays who were charged in February.

Tom Hayes, a former derivatives trader at UBS and Citigroup, was the first person to be charged criminally in Britain in the scandal last year. He has pleaded not guilty and also faces criminal charges in the United States.

Prosecutors said they were considering whether to link the case against Mr. Hayes with the cases against Mr. Wilkinson, Mr. Reed and two former traders at the brokerage firm RP Martin.

The earliest trial date would be late next year.

Defendants in all three cases are expected back in court on April 30.

British prosecutors have said they have identified 22 people as potential co-conspirators in the investigation.

To set Libor and other rates, banks submit the rates at which they would be prepared to lend money to one another, on an unsecured basis and in various currencies and varying maturities. Investigations in the last two years have found evidence that traders at the various banks benefited from falsely reported rates.

Barclays, R.B.S., UBS, the Dutch lender Rabobank and ICAP have combined to pay more than $3 billion in fines to British and American authorities in the Libor investigation.

In December, antitrust regulators in the European Union also agreed to settle with eight financial institutions over claims of collusion to manipulate Libor related to the Japanese yen and the euro interbank offered rate, or Euribor. Six of the institutions, including Deutsche Bank, agreed to pay a combined 1.7 billion euros, or about $2.35 billion.

3 Former ICAP Brokers Appear in British Court in Libor Manipulation Case

LONDON - Three former brokers at the British financial firm ICAP appeared in court on Tuesday on charges that they conspired to manipulate a global benchmark interest rate.

Danny Martin Wilkinson, Darrell Paul Read and Colin John Goodman are the latest individuals to be charged in a wide-ranging investigation into potential manipulation of the London interbank offered rate, or Libor.

At a brief hearing in Westminster Magistrates’ Court, the men only spoke to confirm their identities.

Mr. Wilkinson, who lives in New Zealand, will be required to post bail of 40,000 pounds, or about $66,776, and will be allowed to travel between Britain and New Zealand. The other two were not required to post a security, but were ordered to surrender their passports.

According to the Serious Fraud Office, which brought the charges, the conspiracy to defraud took place from August 2006 to September 2010.

Libor is one of the main rates used to determine the borrowing costs for trillions of dollars in loans, including many adjustable-rate mortgages in the United States.

Some of the world’s largest banks, including Barclays, the Royal Bank of Scotland and UBS, have been caught up in the scandal, and have agreed to pay billions of dollars to settle accusations with regulators in Britain, the United States and elsewhere.

Nine people in total are facing criminal charges in Britain, including three former employees of Barclays who were charged in February.

Tom Hayes, a former derivatives trader at UBS and Citigroup, was the first person to be charged criminally in Britain in the scandal last year. He has pleaded not guilty and also faces criminal charges in the United States.

Prosecutors said they were considering whether to link the case against Mr. Hayes with the cases against Mr. Wilkinson, Mr. Reed and two former traders at the brokerage firm RP Martin.

The earliest trial date would be late next year.

Defendants in all three cases are expected back in court on April 30.

British prosecutors have said they have identified 22 people as potential co-conspirators in the investigation.

To set Libor and other rates, banks submit the rates at which they would be prepared to lend money to one another, on an unsecured basis and in various currencies and varying maturities. Investigations in the last two years have found evidence that traders at the various banks benefited from falsely reported rates.

Barclays, R.B.S., UBS, the Dutch lender Rabobank and ICAP have combined to pay more than $3 billion in fines to British and American authorities in the Libor investigation.

In December, antitrust regulators in the European Union also agreed to settle with eight financial institutions over claims of collusion to manipulate Libor related to the Japanese yen and the euro interbank offered rate, or Euribor. Six of the institutions, including Deutsche Bank, agreed to pay a combined 1.7 billion euros, or about $2.35 billion.

Motorola Solutions’ Enterprise Business Is Sold for $3.5 Billion

Updated, 7:12 a.m. |
The Zebra Technologies Corporation agreed on Tuesday to buy Motorola Solutions’ enterprise business for $3.5 billion.

Under the terms of the deal, Zebra, whose technology helps companies to track products in the supply chain, will buy the Motorola Solutions unit that manufacturers everything from bar code scanners to two-way radios.

The deal will allow Zebra to expand its global presence, as more companies - from Amazon to General Electric - look to gain greater real-time information about how their products are shipped and bought around the world.

“This acquisition will transform Zebra into a leading provider of solutions that deliver greater intelligence and insights into our customers’ enterprises and extended value chains,” Anders Gustafsson, Zebra’s chief executive, said in a statement on Tuesday.

The Zebra Technologies and Motorola Solutions enterprise business combined would have had revenue of about $3.5 billion in 2013. About 4,500 employees are expected to join Zebra after the deal is completed. Motorola Solutions said it would keep its iDEN product line, which was part of its enterprise business, and would continue its government business.

Morgan Stanley advised Zebra on the deal, while Goldman Sachs and JPMorgan Chase advised Motorola Solutions.