WEEK IN VERSE The Clash knew what happened when you fought big law.
Bank of America agreed to a $2.43 billion settlement. | A British trade group gave up its Libor power. | Andrew Ross Sorkin questioned the flexible ethics of bankers’ new lobbyist. | A special section explored the intense competitive pressures confronting law firms.
A look back on our reporting of the past week’s highs and lows in finance.
As Time Wanes, Glencore-Xstrata Deal Hinges on Leadership | The $90 billion merger is on shaky ground and William MacNamara reports that ânegotiating time is growing short. After getting an extension on the initial deadline, Xstrata has until Monday to decide whether to accept Glencore’s sweetened bid.â DealBook ‘
Standard Chartered’s Next Worry Is a $1 Billion Loan in Indonesia |
The British bank may be at risk of losing money on a loan to a mining company to make an investment that has sinc e soured, Peter Eavis and Mark Scott reported. DealBook ‘
The exposure highlights Standard Chartered’s reliance on often unstable emerging markets for the majority of its income. The bank, based in London, earned around 90 percent of its $2.86 billion net profit from developing countries like China and India in the first half of the year.
DealBook Column: About-Face for Bankers’ New Lobbyist | Andrew Ross Sorkin said that calling the choice of Tim Pawlenty to represent the banking industry is odd would be an understatement, but his appointment is the clearest sign yet of the flexible ethic that makes the revolving door in Washington spin faster. DealBook ‘
âI went to Wall Street and told them to get their snout out of the trough because they are some of the worst offenders when it comes to bailouts and carve-outs and special deals.â
That was Tim Pawlenty, the former Republican governor of Minnesota, just over a year ago while running for president, railing against big banks.
This new lobbyist gives the banks Paw-lenty of opportunity to stall regulation nyti.ms/UD0Otocc: @andrewrsorkin
- Downtown Josh Brown (@ReformedBroker) September 25, 2012
Deal Professor: A Hedge Fund’s Complex Scheme May Cost It Millions | Steven M. Davidoff says that Mason Capital, a New York and London hedge fund with about $8 billion in assets under management, has made a complex bet in Telus, a large Canadian telecommunications company, that looked shrewd at first, but that may now lose tens of millions of dollars. DealBook ‘
Lost in all of this maneuvering are the economic merits of Telus’s share collapse and the fact that nonvoting shares do appear to be getting a significant benefit that may be inappropriate.
Santander’s Mexican Unit Sells U.S. Shares at $12.18 in Dual Listing | The number was within Grupo Financiero Santander MÃ©xico’s expected price range, Michael J. de la Merced reported. âThe offering was largely seen as a way to tap into Mexico’s growth prospects as investors hunt for ways to gain greater exposure to international markets.â DealBook ‘
Bank of America to Pay $2.43 Billion to Settle Suit Over Merrill Deal | In 2009, shareholders accused Bank of America of making false and misleading statements about the health of the two companies. In part, the plaintiffs accused Bank of America of hiding a major loss at Merrill Lynch just shortly before shareholders were set to vote on the deal. DealBook ‘
British Authorities Unveil Changes in Libor Oversight | The Financial Services Authority aims to improve the accuracy and reliability of the benchmark, Mark Scott reported. Regulators are stripping a British banking group of its power and making rate manipulation a criminal offense. DealBook ‘
Goldman to Settle Pay-to-Play Charges | The Wall Street bank struck a $12 million settlement with the Securities and Exchange Commission to resolve allegations that Neil M. M. Morrison, who was a vice president at the firm, curried favor with a public official to win lucrative government contracts in Massachusetts, Susanne Craig and Ben Protess reported. DealBook ‘
Geithner Calls for Action on Tougher Rules for Money Market Funds | In a letter to the Financial Stability Oversight Council, the Treasury secretary said the changes to money market funds, which manage $2.6 trillion, were âessential for financial stability,â Mr. Eavis reported. DealBook ‘
An Electric Carmaker Struggles as Its Production Lags | Tesla Motors is turning to investors and taxpayers for extra financial help. Mr. Eavis reported that the moves raised questions about the long-term viability of the company. DealBook ‘
Former Programmer Demands That Goldman Cover His Legal Fees | Sergey Aleynikov, charged a second time with stealing valuable computer code from the investment bank, wants his former employer to pay for the nearly $2.4 million in costs he has racked up defending himself, Mr. de la Merced and Peter Lattman reported. DealBook ‘
Ex-Regulator Has Harsh Words for Bankers and Geithner | Adding to a growing collection of financial crisis histories, Sheila Bair, former head of the Federal Deposit Insurance Corporation, takes aim at some regulatory colleagues, Mr. Protess and Mr. Eavis reported. DealBook ‘
Insider Trading Witness Given Probation for Testifying Against Hedge Fund Titan | Rajiv Goel was one of three crucial government witnesses against Raj Rajaratnam, Mr. Lattman reported. DealBook ‘
DealBook Column: Big Law Steps Into Uncertain Times Mr. Sorkin says that the importance of lawyers has never been greater, yet the legal industry has come under great pressure. One result may be a change in the business model. | DealBook ‘
With Smartphone Deals, Patents Become a New Asset Class | Amid rapid changes in technology, several boutique law firms have emerged that are like investment banks in valuing and selling patents as well as giving strategic advice, reports Steve Lohr. DealBook ‘
As Wall Street Fights Regulation, It Has Backup on the Bench | When Wall Street challenges the Dodd-Frank regulatory overhaul in court, it is finding that it has an ally in the United States Court for Appeals for the District of Columbia, reports Mr. Protess. DealBook ‘
Graphic: White-Collar World | A small group of âbig troubleâ lawyers repeatedly show up on the dockets of major corporate scandals across the decades, both as government prosecutors and as defense counsel, reports Mr. Lattman. DealBook ‘
Wall Street Scandals Fill Lawyers’ Pockets | The white-collar bar is thriving with cases like the collapse of MF Global and the manipulation of the London interbank offered rate, reports Azam Ahmed. DealBook ‘
Evolving Global Strategy Gives Law Firm an Edge | By focusing on global deal-making, Freshfields Bruckhaus Deringer, based in London, says it has been able to better compete with the major American firms, reports Mr. Scott. DealBook ‘
Graphic: Mergers and Acquisitions, Top Financial and Legal Advisers | In the third quarter of 2012, mergers and acquisition activity was $455 billion worldwide. The U.S. share was $195 billion. Goldman Sachs and Freshfields Bruckhaus Deringer were the top financial and legal advisers. DealBook ‘
Essay: A Law Firm Where Money Seemed Secondary | James B. Stewart says that at Cravath, Swaine & Moore, associates were paid based on seniority, with no bonuses and no resentments. DealBook ‘
Deal Professor: The Economics of Law School | Mr. Davidoff says that the trend away from law schools has prompted much discussion about what structural changes may be needed. DealBook ‘
Culture Keeps Firms Together in Trying Times | Faced with risk-taking peers and an uncertain economy, a handful of prestigious law firms like Cravath, Swaine & Moore stick with partnership-driven philosophies that emphasize teamwork, reports Mr. Lattman. DealBook ‘
White Collar Watch: Under Investigation, and Doing the Investigation | Peter J. Henning says that in dealing with corporate misconduct, the government may be leaning too much on the law firms hired by the companies under investigation. DealBook ‘