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Aug 3, 2016

DealBooK - August 3, 2016: Profit at HSBC Plummets

The New York Times

By Amie Tsang
Profit at HSBC Plummets The turmoil surrounding the vote by Britain to leave the European Union has left one of its banks reeling. HSBC said that its profitdropped 40 percent in the second quarter and announced that it would follow up the sale of its Brazilian business last month with a share buyback of $2.5 billion.
The quarterly results — which included a gain on the sale of its holdings in Visa Europe, charges related to the overhaul of its business and provisions for legal matters — showed a profit of $2.61 billion, compared with $4.36 billion the year before.
Douglas Flint, the bank’s chairman, said that the need to reposition HSBC’s European business—after there is a decision on whether banks will be able to continue serving clients in the European Union from London— would “add to the very heavy workload already in place to address the regulatory and technological changes that are reshaping our industry.”
Bitcoin Plunges After Exchange Is Hacked Another theft of Bitcoin has raised questions about the security of the digital currency and sent the money plummeting about 20 percent early on Wednesday morning in Hong Kong, where the exchange, Bitfinex, is based.
About 120,000 Bitcoins were stolen, worth about $65 million even after the value of the currency dropped. The episode comes shortly after a hacker stole more than $50 million of Ether, another digital currency.
Viacom and Pandora’s Box The trust that controls Viacom and CBS had been shrouded in mystery for years, but now legal proceedings promise years of wrangling over the estate. It is hard to see a path to victory for Philippe P. Dauman, once a longtime confidant of Sumner M. Redstone, Steven Davidoff Solomon writes. The litigation should be settled with some face-saving measures for Mr. Dauman and George Abrams, another director.
Mr. Dauman has already held talks about leaving Viacom and settling litigation with National Amusements, according to Bloomberg, which cites a person with knowledge of the matter. The report also says that Mr. Abrams does not want to settle.
In the meantime, Mr. Redstone’s grandaughter, Keryn Redstone, has also jumped into the legal fray. She claims that she has been disinherited of $6 million and potentially $1 billion more and has joined the lawsuit challenging Mr. Redstone’s legal competence.
Contact amie.tsang@nytimes.com
Mergers and Acquisitions
BREAKINGVIEWS
Online Upstarts Pose a Threat to Procter & Gamble
By KEVIN ALLISON
Internet-adept rivals like Dollar Shave Club, which Unilever just bought for $1 billion, threaten to steal customers and cut into P.&G.’s margins.
Sony and Michael Jackson formed Sony/ATV Music Publishing more than 20 years ago.
Sony Is Allowed to Close Deal With Michael Jackson’s Estate
By BEN SISARIO
The European Commission approved a merger that would give Sony full control of the songwriting rights to a catalog that includes about 250 Beatles songs.
Anthem Asks for A Separate Trial Over Cigna Deal
By REUTERS
The health insurer Anthem asked a judge to decide on its deal for Cigna by the end of the year and to split its case from the government’s challenge of Aetna’s planned acquisition of Humana.
 
Banking
Big Banks Make a Pitch for Hearts and Minds
By MICHAEL CORKERY
Citigroup’s ad campaign for the Olympics showcases the benefits of large global banks, and other big banks are trying to soften their image.
ON MONEY
Has Wall Street Been Tamed?
By NATHANIEL POPPER
Critics say nothing has changed, but the truth is that American banks really are taking on less risk.
Regulators Ask Big Banks to Give More Details About Trading Activity
By THE WALL STREET JOURNAL
Regulators are asking big banks to provide investors with more detailed disclosures about their trading businesses, a push that could peel back the curtain on a huge and volatile source of Wall Street revenue, according to people familiar with the matter.
JPMorgan Sued Over Prisoner Debit Cards
By THE FINANCIAL TIMES
When JPMorgan Chase supplied the inmates of federal prisons with prepaid debit cards that they could use to gain access to money they had earned or received while in prison, the users were stung with a string of unusual and exorbitant charges, according to a class-action lawsuit against the bank.
Santander Said to Make Offer for RBS Consumer Bank
By BLOOMBERG
Banco Santander offered to buy Williams & Glyn, the Royal Bank of Scotland’s consumer bank, in a deal that would add $32.2 billion of assets and two million customers to its British operations, according to two people familiar with the matter.
The New Thorn in the Sides of Big Banks
By THE WALL STREET JOURNAL
Joel Liberson, 52, a lawyer who has devoted his career to defending apartment dwellers from eviction, is suing Bank of America and Wells Fargo on behalf of the city of Miami, which blames the banks for declines in property values and tax revenue.
 
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Venture Capital
A cellphone user in Shenzhen, China. China’s tech industry has popularized some technologies that are just getting started in the United States.
China, Not Silicon Valley, Is Cutting Edge in Mobile Tech
By PAUL MOZUR
American tech companies study Chinese users and apps as a smartphone revolution changes how people interact, buy products and manage their money.
 
Legal/Regulatory
Massachusetts Gov. Charlie Baker with State Treasurer Deborah Goldberg after he signed the salary bill into law on Monday.
Illegal in Massachusetts: Asking Your Salary in a Job Interview
By STACY COWLEY
A law taking effect in 2018 requires employers to offer a compensation figure upfront in an effort to end the wage gap between men and women.
Reza Zarrab in 2013. Mr. Zarrab’s legal fees are not known, but if his case goes to trial, they could run in the tens of millions of dollars.
Turkish Gold Trader Builds a Dream Team of Defense Lawyers
By BENJAMIN WEISER
Reza Zarrab, who is charged with conspiracy to violate the United States sanctions on Iran, has hired more than a dozen lawyers, many of them among the most accomplished in their field.