Nov 30, 2012

DealBook | P.M. Edition -November 30, 2012-.: Week in Review: Portraits of a Hedge Fund Titan

Friday, November 30, 2012
Week in Review: Portraits of a Hedge Fund Titan Even before Steven A. Cohen's very bad week, the media narrative surrounding the hedge fund billionaire was well known: an intimidating temper that has mellowed with age, a bad back enflamed by the same, a hedge fund with a track record better than the Yankees and partial ownership of a baseball team whose standing is decidedly less stellar. This week, we review the highlights.

Like many billionaires Mr. Cohen, who has not been accused of any wrongdoing, shuns the media spotlight, but that hasn't stopped journalists and colleagues from painting colorful portraits that compare him to characters from Henry Melville and Miguel de Cervantes.
"It's a Darwinian and pressure-packed culture with ridiculous amounts of money at stake," a former employee of SAC Capital told DealBook last year.
The closest Mr. Cohen has gotten to a media grilling recently was a sit-down with Paul Tudor Jones, another hedge fund manager, at a Wall Street-sponsored conference. Mr. Cohen is "almost as secretive as Howard Hughes," one source told Businessweek in 2003. The comparison has stuck with the money manager despite his prominent forays into worlds of art, sports and politics.
In 2006, his hedge fund was focus of a widely criticized "60 Minutes" report on short sellers. His ex-wife, Patricia Cohen, told New York magazine that the television report was the impetus for her lawsuit over money involved in their 1990 divorce. The suit was later dismissed.
As the charges against former traders at his $14 billion hedge fund mounted, Mr. Cohen gave a rare interview in 2010 to Vanity Fair, saying that "in some respects I feel like Don Quixote fighting windmills."
Or perhaps Mr. Cohen is, as Reuters described last year, the Feds' Moby Dick, an allegory that would make Robert S. Mueller, director of the Federal Bureau of Investigation, a modern-day empty-handed Captain Ahab.
In the end, the high-minded literary references may not capture Mr. Cohen's story as well as a man who inspired Bruce Springsteen, New Jersey's true poet laureate. It could be that Preet Bharara, the United States attorney in Manhattan, could write the hedge fund titan's final chapter.
A look back on our reporting of the past week's highs and lows in finance.
Mergers & Acquisitions
Two Firms Make Offers for Knight Getco and Virtu Capital are said to be keenly interested in Knight's market-making trading operations, though they may sell less desirable parts of the company, Michael J. de la Merced and Nathaniel Popper reported.
ConAgra to Buy Ralcorp, Solidifying Market Share ConAgra is betting that private-label goods - made for bakeries, grocery chains and other customers - will be a higher source of growth worldwide, Mr. de la Merced and Stephanie Strom reported.
Lehman Sells Property Firm in a Deal Worth $6.5 Billion The deal that helped sink Lehman Brothers will play an important role in paying off the failed investment bank's creditors, Mr. de la Merced reported.
MegaFon Shares Fall After I.P.O. "The new listing, which is the largest Russian I.P.O. since the aluminum maker Rusal raised $2.2 billion in 2010, comes at a difficult time for European financial markets," Andrew E. Kramer and Mark Scott reported.
Venture Capital
The venture capitalist Vinod Khosla at the TechCrunch Disrupt conference in San Francisco in September.
Despite Setbacks, Investor Is Bullish on Clean Tech His stakes, once worth as much as $1.3 billion, are now valued at roughly $378 million, but Vinod Khosla seems unwavering in his commitment to the clean energy industry, Randall Smith reported.
Steven A. Cohen, founder of SAC Capital Advisors. Several former SAC workers have been accused of breaking the law.
S.E.C. Weighs Suing SAC Capital Steven A. Cohen is defending his $14 billion hedge fund against an intensifying government investigation into insider trading, Peter Lattman reported.
SAC Capital to Try to Reassure Investors Only 40 percent of the money managed by the hedge fund comes from outside clients.
Former SAC Analyst Freed on Bail in Insider Case Mathew Martoma appeared in Federal District Court in Manhattan to face the charges against him.
DealBook Column: Knowledge Is Money, but the Peril Is Obvious Andrew Ross Sorkin says that so-called expert network firms link hedge fund investors with experts in various fields, but another insider trading case has brought scrutiny on a business model that some say is tailor-made to foster insider trading on Wall Street.
New Breed of SAC Capital Hire Is at Center of Insider Trading Case Former employees of Mr. Cohen said that the case against Mr. Martoma highlighted SAC's high-stress, pressure-packed culture.
As Official Drops Outs, Race Shifts for S.E.C. With Mary J. Miller, a senior Treasury Department official, withdrawing, Sallie L. Krawcheck, a longtime Wall Street executive, has emerged as a potential front-runner, Ben Protess and Susanne Craig reported.
Outgoing S.E.C. Leader Fortified Wall St. Watchdog Mary L. Schapiro "leaves behind a stronger S.E.C., an overhaul characterized by her attention to detail and meticulous preparation."
The Trade: Fledgling Monitor for Wall St. Risks an Early Compromise Jesse Eisinger of ProPublica says that the Office of Financial Research "is looking as if it will be a tool of the financial services industry, instead of a check on it."
Deal Professor: In Battle With Hedge Funds, a Small Victory for Argentina Steven M. Davidoff says that a stay of a federal judge's order on debt payment may provide an opportunity for Argentina's lawyers to raise questions that an appeals court may not have fully considered before.
Autonomy's Ex-Chief Calls on H.P. to Defend Claims
Autonomy's Ex-Chief Calls on H.P. to Defend Claims "In the fight between Hewlett-Packard and the founder of its Autonomy unit, the gloves are well and truly off," Mr. de la Merced reported.
News Analysis: A Tax Break Once Sacred Is Now Seen as Vulnerable "As President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion," Peter Eavis reported.
Cravath Sets the Tone for Law Firm Bonuses "Cravath kicked off bonus season by announcing year-end bonuses that were substantially higher than they had been the previous two years," Mr. Lattman reported.
Intrade Bars U.S. Bettors After Regulatory Action The Commodity Futures Trading Commission took aim at the Dublin company and an affiliate in a civil complaint filed in federal court in Washington, Mr. Protess reported.
UBS Fined $47.5 Million in Rogue Trading Scandal Britain's Financial Services Authority fined UBS £29.7 million for failing to prevent a $2.3 billion loss caused by a former trader, Mark Scott reported.

Berkshire Moves Into Spain With CaixaBank Reinsurance Deal Warren Buffett and his sizable insurance team are betting that at least one Spanish firm is in good financial shape, even as its home country remains on shakier economic ground.
Duke Energy's Latest C.E.O. Drama Duke Energy's chairman and chief executive, James E. Rogers, will retire at the end of 2013 as part of a wide-ranging settlement with regulators in North Carolina.
U.P.S. Offers Concessions to Secure TNT Express Takeover United Parcel Service has submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed $6.8 billion takeover of the Dutch shipping company TNT Express.
China Insurer Raises $3.1 Billion in I.P.O. The deal ranks as Hong Kong's biggest of the year, but more than half of the shares sold by the People's Insurance Company (Group) of China went to 18 so-called cornerstone investors, many of them state-owned companies.
Muddy Waters Offers to Pay for Olam Debt Rating The short-seller introduced an unusual twist in its battle against the Singapore commodity company: an offer to pay for the company to get its debt rated by Standard & Poor's.
Buzz Tracker
H.P.'s Blunder for the Record Books Until now, it seemed likely that a deal like AOL's acquisition of Time Warner would never be repeated, rivaled or surpassed, reports James B. Stewart, the Common Sense columnist for The New York Times.
DealBook Video
Week in Verse: 'I Don't Know, Krawcheck, It Sounded a Little Pitchy, Dawg.' DealBook commenters are tough judges. They've reacted to the candidates to lead the S.E.C. as if they were watching a bad audition on American Idol.

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