DealBook Today's Top Headlines - January 26, 2016: Both Parties Want to Rein In Big Banks
TUESDAY, JULY 26, 2016
TODAY'S TOP HEADLINES
BY AMIE TSANG
BOTH PARTIES WANT TO REIN IN BIG BANKSThe Democratic convention has not started with quite the display of unity that Hillary Clinton would have hoped for to stand in contrast to the Republican convention last week, but that's not the only thing the two parties have in common. Both have inserted the Glass-Steagall rule into their platforms. The act has only a slim chance of returning and it would probably lead to a loss of jobs as lending slows, Andrew Ross Sorkin writes.
Plus, there are obstacles to bringing it back. For one, Mrs. Clinton has suggested that efforts to revive it are misguided - a position that has angered Democrats on the left who argue that she is too close to Wall Street banks. The tension within the party was in evidence at the Democratic convention, where Elizabeth Warren's backing of Mrs. Clinton prompted supporters of Senator Bernie Sanders to chant, "We trusted you!" - even as she said that Mrs. Clinton would fight big banks and those who profit from student debt.
But the appearance of Glass-Steagall on both the Democratic and Republican platforms indicates that there is plenty of enthusiasm for bank bashing.
According to, Elaine C. Kamarck, a senior fellow at the Brookings Institution and a Democratic superdelegate, "the one thing we can bet on seeing in 2017 is a tougher attitude toward the financial industry." If the establishment heard one thing in the 2016 primaries, Ms. Kamarck wrote in an analysis, "it was that millions of Americans think that they were the victims of Wall Street and that the next president had better pay attention."
$40 BILLION IN LEFTOVERS FOR YAHOONow that Yahoo has agreed to sell its core businesses to Verizon, it has to figure what it wants to do with what's left - stakes in Alibaba and Yahoo Japan, some cash and a collection of noncore patents, worth more than $40 billion.
Any deal involving the Alibaba stake would run up against the same tax issues as before. Thomas McInerney, the Yahoo board member who led the company's sales process, suggested that Alibaba itself could buy the company, keep it whole and not reabsorb the shares, though it is unclear whether either company would be interested in this. Yahoo Japan does not attract quite such a contentious tax bill and the rump company, or RemainCo as it is being called, is holding onto it for the moment.
The patents are being sold separately, while Mr. McInerney made sure to emphasize to investors and analysts on Monday after the Verizon deal was announced: "We're not intending to make new investments with the cash out of RemainCo. The intent is to return it."
But investor focus remains on the Alibaba and Yahoo Japan stakes. "The real question for investors now is what's next?" Robert Peck, an analyst with SunTrust Robinson Humphrey, said. "Will Yahoo have an efficient liquidation of the Asian securities?"
ON THE AGENDAA hearing on preliminary approval of a settlement for Volkswagen starts at 8 a.m. at the United States District Court for the Northern District of California. Verizon will hold a conference call on its latest earnings at 8:30 a.m., while McDonald's will start its presentation at10 a.m. Apple and Twitter hold conference calls on their results at 5 p.m.
FED PREPARES ACTION AGAINST GOLDMAN SACHSTwo years ago, one of the Federal Reserve's New York employees leaked confidential information to a banker at Goldman Sachs. Both men pleaded guilty to stealing government property, and Goldman paid a $50 million penalty to New York State regulators.
The case seemed closed, but the Fed is now preparing an enforcement action of its own against Goldman and the bank is expected to pay a financial penalty, according to people briefed on the matter. The penalty is expected to be less than the $50 million that the New York regulator imposed, but it might include agreements to enforce policies that would prevent another leak. The Fed is also considering action against the former Goldman executive who worked with the junior banker who received the leaked material, although the executive plans to fight the Fed on this case.
The Fed's move is surprising as it initially declined when the New York State Department of Financial Services invited it to announce its own action. It does, however, reflect a broader effort at the Fed to ramp up its enforcement efforts against individual bankers.
Post-'Brexit' Vote, Anheuser-Busch InBev Raises Offer for SABMillerThe sweetened bid for the rival brewer came in response to the sharp drop in the pound in the weeks since Britain voted to leave the European Union.
Owner of Redbox to Be Acquired for About $900 MillionApollo Global will buy Outerwall, known for its Redbox film rental kiosks and Coinstar coin-counting machines, for $52 a share and take the company private.
Group Led by Baidu Chief Abandons Buyout of Video UnitA consortium led by Robin Li, chief of Baidu, dropped its $2.3 billion bid to buy out the company's video-streaming operation after investors criticized it as a sweetheart deal for Mr. Li.
Deutsche Bank to Face Lawsuit Over Subprime Disclosures A judge said that Deutsche Bank must face part of a lawsuit claiming it deceived investors who bought more than $5.4 billion of preferred securities by concealing its exposure to the fast-deteriorating subprime mortgage market.
Former Deutsche Bank Executive to Join Health Care BoutiqueJim Ratigan, who left his job as head of mergers and acquisitions for Deutsche Bank in the Americas this month, will join Leerink Partners, the health care investment banking boutique.
This Company Will Give a Peek Inside How Much Private Start-Ups Are WorthThe lack of transparency around private companies has kept the market for start-up stocks small. Equidate, a San Francisco company, hopes to change that.
Lael Brainard, Donning a Global Lens, Champions Low Rates at FedThe Fed is expected to again pass on an opportunity to raise its interest rate, a move partly owing to the efforts of Ms. Brainard, a Fed governor.
F.B.I. Examining if Hackers Gained Access to Clinton Aides' EmailsFederal officials say the inquiry has been underway since the spring, when the agency was first notified of the Democratic National Committee's's suspicions about hacking.
British Officials Demand Break Up of Financial Watchdog Senior members of Parliament said there was a case for separating the Financial Conduct Authority's enforcement division into an independent body because there was evidence of "highly problematic" relations with other parts of the regulator.