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Jul 27, 2016

DealBook Today's Top Headlines - July 27, 2016: Sex, Fear and Video Surveillance at World's Largest Hedge Fund



WEDNESDAY, JULY 27, 2016
TODAY'S TOP HEADLINES
BY AMIE TSANG
SEX, FEAR AND VIDEO SURVEILLANCE AT WORLD'S LARGEST HEDGE FUND Bridgewater Associates, the world's biggest hedge fund, has been described as a "cauldron of fear and intimidation" by an employee who has filed a complaint with the Connecticut Commission on Human Rights and Opportunities. The employee, Christopher Tarui, an adviser to large institutional investors in Bridgewater, said that his supervisor sexually harassed him and, when he complained, managers pressured him to rescind his claims. Mr. Tarui also described an atmosphere of constant surveillance by video and security guards to silence employees that do not fit the Bridgewater mold.

Mr. Tarui's assertions were echoed in interviews with seven other people who had worked with or for the company. The National Labor Relations Board also filed a separate complaint against Bridgewater saying that the company had "been interfering with, restraining and coercing" Mr. Tarui and other employees from exercising their rights through confidentiality agreements that all employees are required to sign when they are hired.

Ray Dalio, who founded Bridgewater, likes to say that one of his firm's operating principles is "radical transparency" when it comes to employee grievances and concerns. But the inner workings of the $154 billion company remain obscure. Secrecy at Bridgewater is so tight that in some units employees are required to lock up their personal cellphones each morning when they arrive at work. Mr. Tarui's harassment complaint and the labor board's filings were obtained by The New York Times through Freedom of Information Act requests.
DEUTSCHE BANK PROFITS TAKE A HIT A plunge in revenue and the expense of lawsuits, official investigations and job cuts meant that Deutsche Bank, Germany's largest bank, effectively broke even in the second quarter. The bank said it made a profit of 20 million euros, or about $22 million, in the quarter, compared with the €818 million profit it made for the same period in 2015. The bank blamed the uncertainty caused by Britain's referendum on its membership of the European Union for the drop in revenue.

Deutsche has been trying to defend its status as one of the last credible European challengers to big American investment banks. But its chief executive, John Cryan, has spent his first year grappling with regulations that have curtailed risky investment banking activity in competitors and trying to simplify the company and improve its returns.
ON THE AGENDA The Federal Reserve will release a statement on monetary policy after the latest meeting of the Federal Open Market Committee. Quarterly earnings will be coming from Comcast, Anthem, Boeing and Coca-Cola in the morning and Facebook after the market closes.
ANALOG DEVICES TO BUY LINEAR TECHNOLOGY Consolidation of the semiconductor sector continues apace with Analog Devices agreeing to buy Linear Technology for $14.8 billion.

The spread of computing power and the need for chips should be good for the industry, but it has been hobbled by high costs and pricing pressure. The expense of putting ever more transistors on ever smaller chips and competition, particularly from Asia, have been driving down profit margins, leading companies to consolidate in the search for new markets, new combinations and advantages of scale. This deal follows close on the heels of Softbank's deal to buy the British semiconductor designer ARM Holdings and a year of frenzied deal making in the chip making sector.
MERGERS & ACQUISITIONS »
$1 Billion for Dollar Shave Club: Why Every Company Should Worry The internet, mass transportation and globalization allow decentralized companies to be smaller and leaner and have fewer employees, Steven Davidoff Solomon writes in Deal Professor.
Marissa Mayer, chief executive of Yahoo, and Adam Cahan, a senior vice president, at a mobile developer conference in February 2015 in San Francisco.
Marissa Mayer's Media Problem at Yahoo Is Now Verizon's to Solve Before she led Yahoo, while still at Google, Ms. Mayer spoke of the difficulties for media companies of capitalizing on their own content.
Yahoo Is a Case Study in Poor Timing The company's $4.8 billion sale to Verizon caps two decades of deals and non-deals that shaped internet history, Robert Cyran writes in Breakingviews.
Yahoo, a Web Pioneer, Cleared the Way for Many Innovations A fond send-off for a company that brought order to the fast-growing internet forest.
Chinese Tech Firm to Buy TV Maker for $2 Billion The Chinese video streaming company LeEco is breaking into the United States TV market by buying Vizio, a manufacturer of budget-priced sets. The combination promises a marriage of hardware and content as tightly linked as your smartphone is to your monthly voice and data plan.
Deutsche Börse approved a merger with the London Stock Exchange Group, but Britain's vote to leave the European Union may shadow the viability of the deal.
Deutsche Börse Shareholders Approve London Stock Exchange Merger At least 60 percent of the German stock exchange operator's outstanding shares were pledged in support of the transaction.
Vivendi Seeks to Revise Deal for Mediaset's Pay-TV Arm The French giant has proposed buying 20 percent of the pay-TV business and then buying another 15 percent of Mediaset in three years.
INVESTMENT BANKING »
Banco Santander's Financial City, near Madrid. The Spanish bank's profit declined by nearly half in the second quarter.
Santander Profit Down on Restructuring and Bank Fund Charges The Spanish lender took a €120 million second-quarter write-down for its contribution to a fund intended to share the burden of bad loans with investors.
Malaysia's Prime Minister Najib Razak. Primus Pacific Partners said Goldman Sachs provided bad advice to one of its clients in order to help the financial fortunes of Mr. Razak.
Goldman Sachs Is Sued Over Ties to Malaysia's Prime Minister A private equity firm asserts that Goldman Sachs provided bad advice to one of its clients to help the scandal-plagued administration of Najib Razak.
Italy Races to Bail Out Its Oldest Bank Italy was trying to secure a privately backed bailout of Monte dei Paschi di Siena, the most exposed of the country's troubled lenders, before European banking stress test results are published on Friday, The Financial Times reports, citing bankers and European officials.
UniCredit of Italy Said to Consider $5.5 Billion Stock SaleUniCredit is considering tapping shareholders for as much as $5.5 billion and selling its stake in Bank Pekao of Poland to raise capital, Bloomberg reports, citing people with knowledge of the matter.
For the latest updates, go to NYTimes.com/DealBook
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HEDGE FUNDS »
Hedge Funds Suffered $20.7 Billion Net Outflows in June After inflows in April and May, the withdrawals took total aggregate net redemptions for the second quarter to $10.7 billion, according to data from eVestment.
LEGAL/REGULATORY »
The main square of Quebradillas, one of Puerto Rico's 78 municipios, or municipalities.
How Many Mayors Can Puerto Rico Afford? Tradition and Budgets Collide As the island struggles under debt and a federal control board prepares to take charge of its finances, some see its 78 municipalities as ripe for consolidation.
Secretary of State John Kerry, left, and the Russian foreign minister, Sergey V. Lavrov, on Tuesday in Vientiane, Laos.
Spy Agency Consensus Grows That Russia Hacked D.N.C. American intelligence agencies cautioned that they were uncertain whether the breach was an effort to manipulate the 2016 presidential election.
A rally against the Trans-Pacific Partnership in Santiago, Chile, in May.
Why Dropping the Trans-Pacific Partnership May Be a Bad Idea The pact has few friends left in Washington, but America's Asian allies may see backing off as a betrayal of Washington's commitment to the region, Eduardo Porter writes in the Economic Scene.
A Fiat Chrysler dealership in Hawthorne, Calif. The carmaker is being investigated by the S.E.C.
Fiat Chrysler Revises Sales Data Lower After Doubts Raised The carmaker, suspected of inflating reports, said its 75 consecutive months of sales growth actually ended three years ago.
$15 Billion Volkswagen Emissions Deal Clears 1st Hurdle A nearly $15 billion settlement over Volkswagen's emissions cheating scandal cleared a key hurdle Tuesday, with a federal judge giving preliminary approval to the deal that includes an option for owners to have the carmaker buy back their vehicles.