DealBook Today's Top Headlines - June 10, 2016: Thomas J. Perkins, Pioneering Venture Capitalist, Dies at 84 | Viacom Rumblings | Tighter Rules on Remittances Squeeze Businesses
Friday, June 10, 2016
TODAY'S TOP HEADLINES
By AMIE TSANG
THOMAS J. PERKINS, PIONEERING VENTURE CAPITALIST, DIES AT 84Thomas J.
Perkins, who nurtured Silicon Valley's venture capital industry into a
force that helped foster companies like Google and Amazon, died on Tuesday at his home in Marin County, Calif.,
Pui-Wing Tam reports in The New York Times.
His longtime assistant, Kathy Daly, said he died after a prolonged illness, which she did not specify.
Mr. Perkins helped found Kleiner Perkins Caufield & Byers in 1972
and pioneered a model of investment that involved putting small amounts
of money into promising young start-ups and giving them advice in
return for a stake in the companies. Mr. Perkins helped recruit venture
capitalists like John Doerr and led investments into companies like
Netscape, AOL, Amazon and Google.
The firm's success transformed Silicon Valley, leading to a
proliferation of venture firms in the region.
Mr. Perkins's decades-long career at the firm made him synonymous with the venture capital industry, Michael J. de la Merced reports in DealBook. Genentech, which he described as one of his favorite investments, went on to become a pioneer in the biotechnology industry. Tandem, which makes the computers used in banks and A.T.M.s, was incubated at Kleiner Perkins and sold to Compaq in 1997.
Mr. Perkins later became embroiled in several controversies. In
1996, he was convicted in France of involuntary manslaughter from a
yacht collision. He stepped down from the board of Hewlett-Packard in
2006 after he said the company had used illegal methods to obtain his
phone records. The allegations led to the resignation of H.P.'s
chairwoman and an overhaul of the board.
He also publicly broke with Kleiner Perkins in 2014 after writing
an opinion piece in The Wall Street Journal in which he compared the
"progressive war on the 1 percent" to the persecution of Jews in Nazi
Germany. Mr. Perkins later apologized for his language.
In a statement, two other co-founders of Kleiner Perkins, Brook Byers
and Frank Caufield, said Mr. Perkins had helped define entrepreneurial
Mr. Perkins was also known for his flamboyant, wealthy lifestyle. He wrote a novel titled "Sex and the Single Zillionaire," for which he had guidance from the romance novelist Danielle Steel. He married her in 1998. The marriage ended in divorce.
Before that he had been married to Gerd Thune-Ellefsen, a Norwegian whom
he had met while skiing. He is survived by two children from that
marriage, a son, Tor, and a daughter, Elizabeth.
VIACOM RUMBLINGS National
Amusements, the theater chain through which Sumner M. Redstone controls
his $40 billion empire, is preparing to replace directors on the Viacom
board in a move that is expected to lead to the ouster of the company's
embattled chief executive,
Emily Steel reports in The New York Times.
Kenneth Lerer, the venture capitalist who helped found The Huffington
Post and is the chairman at BuzzFeed, and Nicole Seligman, a former Sony
executive and lawyer who represented President Bill Clinton during his
impeachment trial, are being considered, according to people briefed on
Also on the list are Judith McHale, the former Discovery Communications
chief, and Thomas J. May, the chairman of Eversource Energy utility
company, these people said.
It is unclear whether these people have formally accepted the positions.
One possibility that has been discussed is having the new Viacom board serve a short term before National Amusements pushes to merge Viacom with CBS, the other entertainment company it controls. Viacom and CBS were split into two companies in 2006.
At the same time, given the latest move by National Amusements, Viacom
is still presumably trying to decide whether to amend its bylaws, a move
that would prevent a sale of the Paramount movie studio. It had four
business days after Monday's announcement to file the new amendments, but has not yet done so, Steven Davidoff Solomon writes in DealBook.
The problem for Viacom is that its directors other than Mr. Redstone
have decided to oppose a leadership change and support Philippe P.
Dauman, the chief executive. Mr. Dauman's opposition is based on claims
that Mr. Redstone is not competent, which somehow translate to the
actions of National Amusements' board being illegitimate.
If Viacom accepts the changes, it will be admitting that National
Amusements can act appropriately with regard to Viacom and thus, that
Mr. Redstone and National Amusements can remove the board.
Viacom could try to kick the can down the road, by filing the
changes, saying vaguely that they were illegal. Or it could challenge
the changes in court. A bylaw requiring 100 percent board approval
is unusual, but there is precedent for the validity of this type of
bylaw under Delaware law, Mr. Davidoff Solomon writes. Viacom would most
likely argue that the controlling shareholder is overreaching.
There is also the option of claiming that National Amusements'
amendments are void because of claims of Mr. Redstone's incompetency.
But this would be hard to establish as National Amusements has its own
board and is a functioning company. And if Mr. Redstone is indeed
incompetent, then his interest goes to the trust from which Mr. Dauman
and George Abrams have been removed.
If Viacom does pursue litigation, it may be a cue for National
Amusements and Mr. Redstone to finally unseat the Viacom board. National
Amusements could also invoke the seldom-used summary procedures in the
Delaware code for contested elections of directors and procedures to
confirm the validity of its appointments. This would allow National
Amusements to raise the ante if Viacom does litigate over the amended
Viacom has difficult decisions to make and very little time to make them in.
ON THE AGENDA The University of Michigan will release its latest consumer confidence survey at 10 a.m.
TIGHTER RULES ON REMITTANCES SQUEEZE BUSINESSES Banks are refusing to do business with money transmitters, closing or freezing their accounts over concerns about money laundering and extra regulatory scrutiny,
Elinor Comlay reports in DealBook.
Convenience stores that handle remittances need an account to deposit
the cash, but because it is so hard for banks to know the identity of
the final customer, remittances companies and their agents are being
categorized as high risk for money laundering.
This has affected mom-and-pop convenience stores, potentially
limiting options for the millions of people living in the United States
who want to send money home. Over a quarter of American households rely
on nonbank financial institutions, including money transmitters, for
everyday banking needs, according to the Conference of State Bank
Mexico is the biggest destination for money transfers from the United
States, according to estimates by the World Bank. About $24.3 billion
was remitted to there from the United States last year, practically all
the cross-border money that flowed to Mexico and one-fifth of all
remittances sense from the United States. But while it was once viewed as a big consumer business opportunity, American banks now see it as a liability.
Bank of America and JPMorgan Chase scrapped their low-cost remittance
services two years ago. Last year, Citigroup agreed to pay $140 million
to regulators for failing to safeguard against money laundering and shut
down its Banamex USA Unit.
AmeriMex Communications, a company that sells cellphone minutes to
people in the United States to give to family or friends in Mexico, has
started to work with convenience store owners on a prepay basis because
many are also money-transfer agents and their bank accounts have been
frozen, said Don Aldridge, AmeriMex's chief executive.
Regulators are aware of these problems - they say there is a wider trend of banks closing potentially risky accounts because of the costs of monitoring and compliance.
"The fact that, over the same time period, the overall level of
U.S.-to-Mexico remittances appears to be healthy and growing may
indicate that some of the weaker institutions are losing access and the
market may be consolidating under stronger participants - which would
not be a bad thing," said Daniel L. Glaser, assistant Treasury secretary
for terrorist financing.
However critics say that the dollar amount of transfers has been rising
steadily since the financial crisis so the data reflects the health of
the economy, rather than the health of the money-transfer market. And regulators
are concerned that people will resort to sending cash across the
border, a method that is riskier and harder to track.
Cracks Appear in Merger of Williams and Energy Transfer EquitySlumping oil
prices have spurred questions about the deal, and Williams now says it
expects to cut its dividend if the sale goes through, Kevin Allison
writes in Breakingviews.
How a 143-Year-Old Swiss Bank Took a Quick Road to Ruin in AsiaWhen a
rainmaker left RBS Coutts with 70 colleagues for BSI, a small Swiss bank
looking to get big in a hurry, it set off a chain of events that thrust
the bank into the center of the financial scandal involving 1MDB.
Whistle-Blower Said to Help S.E.C. in Deutsche Bank Investigation The Securities
and Exchange Commission received a whistle-blower complaint accusing
the bank of inflating the value of mortgage bonds on its books and
masked losses around 2013, Bloomberg reports, citing people with
knowledge of the situation.
Demand for Digital Services Leaves Banks Open to More Risk The majority of
top bankers said they were open to more risks than they could manage as
a result of digital developments, according to a global survey of
managers by the consultancy Accenture.
Apollo and TPG May Pitch In With Caesars Settlement Executives at
Apollo Global Management and TPG, the owners of Caesars Entertainment,
may contribute to a broader settlement offer by Caesars to resolve
accusations that the casino operator and its owners looted the operating
unit of valuable assets for their benefit.
Japanese Messaging Service Plans I.P.O. at $5.5 Billion ValuationThe service,
Line Corporation, is preparing to list in Japan and the United States at
a valuation of $5.5 billion, putting it on track to deliver the biggest
market debut for a technology company this year.
Dutch Insurer Raises $1.2 Billion The insurer,
ASR Nederland, raised $1.2 billion in an initial public offering that
allowed the Dutch government to recoup some of the money it spent
bailing out its parent company Fortis.
How Keeping Up Appearances Ruined a Former Dallas BankerS.E.C. and
criminal complaints paint the former banker, Thomas C. Davis, considered
a pillar of the business community, as a man in "desperate" financial
straits, James B. Stewart writes in Common Sense.
Tesla Model S Suspension Failures Face Scrutiny by Safety AgencyThe agency, the
National Highway Traffic Safety Administration, also warned Tesla
Motors to refrain from encouraging Model S drivers not to report safety
Taking a Hard Look at a Campaign Critical of a Fiduciary RuleA United States
Chamber of Commerce webpage cites small-business owners supposedly
opposed to the new regulation. But the report isn't all it's said to be,
Daniel Dudis and Bartlett Naylor write in Another View.