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Jun 13, 2014

NYT | Opinion Today -June 13, 2014: Iraq in Peril.


Friday, June 13, 2014

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Iraq in Peril
It is up to Iraq to show leadership in the face of recent insurgent victories. The United States cannot be sucked into another round of war.
A Good Ruling on Privacy
Cellphone tracking cannot be allowed to trample the Fourth Amendment.
The Port Authority Is Fooled Again
A deal to save the struggling city of Bayonne, N.J., was a good deal for Gov. Chris Christie, but not for the bistate authority.
David Biskup
Save the Frick Collection
The new expansion plan isn't right for the small museum in a mansion.
Taking On Teacher Tenure Backfires
Firing bad educators won't close the achievement gap.
Under the Skin
The next fight for transgender insurance equality will happen in the states.

Today's Columnists
David Brooks
The Big Burn
After neglect from the United States, the Sunni-Shiite conflict explodes in Iraq.
Paul Krugman
The Fix Isn't In
The surprise primary defeat of Eric Cantor is the unraveling of an ideological movement.


"My 12-year-old Nancy Drew self and my 12-year-old Jane Austen self are the same person, the same aggressive reader."
Timothy Egan
Secrets of the Ordinary Dad
On Father's Day, I would try to give him something practical, like a drill or an electric carving knife. But a few weeks later, he'd give it back.
Julia Baird
Rape and the Warrior's Code
In the words of Australia's top general, "every soldier has a simple, terrible choice: to be a protector or a perpetrator."
Fathers' Rights and Women's Equality
Are father's rights a legitimate claim for equality, or a conflict with women's interests?
Cleaning Up the Vatican
Angelo Carconi/Associated Press
The pope is adamant that one of the church's most secretive institutions will become open and accountable.
Topos Graphics
Keeping Troubled Youths Out of Solitary
Experts in juvenile services respond to an editorial, "A Model for Juvenile Detention Reform"
Wrongness, OK and Not
When does a wrong prediction call for a major rethink/
A Reagan or a Blair?
What kind of leader does the G.O.P. need now?
Monitoring wells at the Indian Point nuclear power plant complex detected a spike in levels of radioactive tritium.
Indian Point's Tritium Problem and the N.R.C.'s Regulatory Problem
A spike in levels of tritium in groundwater near the Indian Point nuclear power plant raises questions about regulatory oversight.
A Wedding and a Funeral
The most uplifting moment in one woman's life collides with the most wrenching time in another family's history.

SEC | Enforcement Actions -June 13, 2014: Securities and Exchange Commission v. Saleem Khan, et al., Civil Action No. 3:14-cv-02743 (U.S. District Court for the Northern District of California).

SEC Seal


Litigation Release No. 23022 / June 13, 2014

Securities and Exchange Commission v. Saleem Khan, et al., Civil Action No. 3:14-cv-02743 (U.S. District Court for the Northern District of California)

SEC Charges Four California Residents in $12 Million Insider Trading Scheme

The Securities and Exchange Commission today charged four Northern California residents with insider trading in Ross Stores stock options based on nonpublic information about monthly sales results leaked by one of the retailer’s employees.
The SEC alleges that Saleem Khan was routinely tipped by his friend Roshanlal Chaganlal, who was a director in the finance department at Ross headquarters in Dublin, Calif. Khan used the confidential information to illegally trade on more than 40 occasions ahead of the company’s public release of financial results. Besides trading in his own brokerage account, Khan traded in his brother-in-law’s account as well as an account belonging to another acquaintance. Khan also tipped his work colleagues Ranjan Mendonsa and Ammar Akbari so they too could trade in Ross stock options based on the nonpublic information. The insider trading resulted in collective profits of more than $12 million.
The SEC further alleges that at the outset of the scheme, Chaganlal gave $17,000 to Khan for the purpose of insider trading in Ross securities using the brother-in-law’s account. They attempted to disguise the exchange by using two cashier’s checks for $8,500 purchased in the name of Chaganlal’s wife of a different surname. Khan later funneled $130,000 of the generated trading profits back to Chaganlal by using third-party intermediaries. For example, Khan wrote Akbari a check for $35,000, and Akbari in turn wrote two checks totaling $35,000 to Chaganlal’s wife. Another $75,000 was routed in a roundabout way to a title company so it could be credited at closing toward Chaganlal’s purchase of a newly-built home.
According to the SEC’s complaint filed in federal court in San Francisco, Khan separately made approximately $450,000 in illicit profits by insider trading in stock options of software company Taleo Corporation ahead of its 2012 acquisition by Oracle Corporation. Khan began purchasing large numbers of options in Taleo six days before the merger announcement based on nonpublic information he received from an insider he knew at Oracle. Khan had never previously traded in Taleo securities.
The SEC alleges that the serial insider trading involving Ross securities began in August 2009 and continued until December 2012, when Chaganlal was terminated by the company. He had access to confidential sales figures on an internal webpage limited to a relatively small group of Ross employees. Chaganlal regularly communicated the confidential details to Khan so he could trade ahead of impending monthly sales announcements by Ross. Khan generated $5.4 million in profits in his own account, and $6 million in profits in his brother-in-law’s account. Khan’s supervisor Mendonsa made approximately $800,000 in insider trading profits based on the nonpublic information that Khan in turn tipped to him. Akbari made approximately $2,000 by insider trading on Khan’s illegal tips.
The SEC’s complaint names two relief defendants - Khan’s acquaintance Michael Koza and Khan’s brother-in-law Shahid Khan - for the purposes of recovering insider trading profits in their brokerage accounts through trades conducted by Khan. They each have agreed to settle the matter by paying the court the entire amount of insider trading profits remaining in their accounts, which total $240,741 for Shadid Khan and $31,713 for Koza.
The SEC’s complaint charges Saleem Khan, Chaganlal, Mendonsa, and Akbari with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of illicit profits plus interest, and financial penalties. The complaint also seeks an officer-and-director bar against Chaganlal.
The SEC’s investigation, which is continuing, has been conducted by Victor Hong and Elena Ro. The case has been supervised by Steven Buchholz and Jina L. Choi of the Market Abuse Unit and San Francisco Regional Office as well as Joseph G. Sansone of the Market Abuse Unit. The SEC’s litigation will be led by Aaron Arnzen. The SEC appreciates the assistance of the Options Regulatory Surveillance Authority.

FTC | Competition Matters June 13, 2014: Generic drug firms deter entry by lowering price.

Competition Matters Banner

By Steven Tenn and Brett Wendling, Bureau of Economics
June 13, 2014.

In a recently published article, we discuss our finding that generic drug companies successfully use low-pricing strategies to discourage entry by new competitors in certain circumstances. We identify the effect of potential competition using a unique feature of a federal law that regulates drug competition, commonly referred to as the “Hatch-Waxman Act.” Under certain conditions, Hatch-Waxman awards 180 days of marketing exclusivity to the first generic firm filing for FDA approval, temporarily protecting the FDA-designated incumbent from entry by other generic competitors.
We compare generic drug prices in the exclusivity period to generic drug prices in the following period, when Hatch-Waxman no longer prohibits entry. The analysis controls for other factors that vary between the two periods, including the number of actual competitors. Because the remaining difference between the two periods is the ability of other generic firms to enter, lower prices outside of the exclusivity period are interpreted as a response to potential competition, or “entry threats.”
The results show that generic drug companies’ responses to potential competition vary by the market size of the drug. In drug markets with lower dollar sales, incumbents employ a strategy of reducing price in response to an increase in potential competition. This price reduction is an effective entry deterrent. In drug markets with higher dollar sales, however, the incumbent accommodates entry by lowering price only after competing manufacturers enter the market. This pricing strategy leads to a significant increase in the number of generic competitors after the Hatch-Waxman exclusivity period ends. Overall, the paper shows that price can be an effective entry deterrent in certain circumstances where the cost of deterring entry is not too high.

Weekend Reading: London Bankers May Be Slow Returning Your Calls: DealBook P.M. Edition -June 13, 2014-.

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FRIDAY, JUNE 13, 2014
Weekend Reading: London Bankers May Be Slow Returning Your Calls Who has time to advise a deal or underwrite an initial public offering when very important events are taking place in one of the BRIC countries?
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A look back on our reporting of the past week's highs and lows in finance.
OpenTable is an online restaurant reservation service.
Priceline to Buy OpenTable for $2.6 Billion The cash deal moves Priceline, which also owns Kayak and, into the business of restaurant reservations.
A deal is expected to pave the way for the PokerStars and Full Tilt brands to re-enter the United States.
Deal Would Make Amaya the World's Largest Online Gambling Company The Amaya Gaming Group will acquire the Oldford Group for $4.9 billion and pave the way for the brands Full Tilt Poker and PokerStars to re-enter the United States market.
OpenTable's revenue growth rate outside North America has been slow.
Reuters Breakingviews: Priceline Needs to Help OpenTable Expand Overseas The $2.6 billion in cash that Priceline is paying for its acquisition only makes sense if it can help improve OpenTable's slow international growth, Robert Cyran writes in Reuters Breakingviews.
More and more businesses are advertising that they accept Bitcoin as payment.
King's College in New York to Accept Bitcoin The four-year evangelical school based in Lower Manhattan said that it would become the first accredited college to allow students to pay their tuition in Bitcoin.
Martha Coakley, the attorney general of Massachusetts, filed suit against Fannie Mae and Freddie Mac over a foreclosure law.
Another View: A Second Chance to Help Families Save Their Homes Federal housing agencies have an opportunity to reconsider policies that prevent nonprofits from helping troubled borrowers keep their homes, writes Jennifer Taub, the author of "Other People's Houses."
Rajat K. Gupta, the former Goldman Sachs director, was sentenced in 2012 to two years in prison.
Ex-Goldman Director Gupta's Last Days of FreedomAs the former McKinsey chief is set to report next week to a minimum-security prison camp in Massachusetts - not far from his one-time friend Raj Rajaratnam - Rajat K. Gupta is preparing for life after prison.
Goldman Sachs, which did buyout deals through its private equity arm, agreed to pay $67 million to settle the claims.
2 Private Equity Settlements Followed Failure of Broader Talks on Collusion Lawsuit After collective settlement talks on collusion broke down, Bain Capital and Goldman Sachs broke ranks and struck their own deals, ratcheting up the pressure on the other firms.
Another View: British Regulator Osborne Takes a Step Forward for Foreign Exchange OversightRemarks by Britain's chancellor of the Exchequer, George Osborne, on addressing market manipulation in currency trading gives greater clarity to the banking sector, write two Nasdaq OMX executives.
Allergan is the maker of Botox.
Ackman's Hedge Fund Sues Botox Maker Allergan Over Poison Pill Trigger Pershing Square, the hedge fund run by William A. Ackman, contends that Allergan has not made it clear whether calling a special meeting of Allergan shareholders would set off its shareholder rights plan.
Robert E. Diamond Jr. helped form Atlas Mara Co-Nvest last year.
Company Backed by Robert Diamond Likely to Miss Fund-Raising Goal The shortfall isn't expected to change the strategy of Atlas Mara Co-Nvest or affect any of its pending acquisitions, according to a person briefed on the matter.
Univision is the biggest Spanish-language broadcaster in the United States.
Univision Owners Said to Weigh a Sale The owners of Univision have held early discussions with the likes of CBS, Time Warner and Viacom, though no sales process is underway yet, according to people briefed on the matter.
Unicredit Receives Approval for Online Banking Unit I.P.O. The initial public offering of the Italian lender's online banking arm, FinecoBank, could value the unit at up to $3.62 billion.
Justin M. Leverenz in Istanbul. Since 2009, the assets in his emerging market fund have soared to $41 billion.
In Emerging Markets, What Scares Most Investors Entices Oppenheimer Mr. Leverenz, who runs America's largest emerging markets mutual fund at Oppenheimer Fund, believes that nations like China, Brazil, Russia and India are experiencing economic and social change that won't be reversed.
Pfizer made an $119 billion hostile bid for AstraZeneca, a British rival, but abandoned the effort last month.
Hostile Takeover Bids for Big Firms Across Industries Make a Comeback With the general economic outlook relatively stable, stock prices riding high and growth in the United States steady, executives are more willing to pursue acquisitions they have long considered.
New York Attorney General Eric T. Schneiderman is backing a bill against payroll cards.
New York Attorney General Supports a Bill Regulating Payroll Cards Mr. Schneiderman, New York's attorney general, is supporting a bill that will regulate payroll cards, A.T.M.-style cards that some employers are using to pay employees.
George Osborne, center, Britain's chancellor of the Exchequer, put forward measures to limit risky lending.
Britain's Top Financial Authorities Focus on Perils of Debt Mark Carney, governor of the Bank of England, said that Britain's recovering economy might require higher interest rates sooner rather than later.
Georges Chodron de Courcel, chief operating officer of BNP Paribas, has announced he will retire June 30.
BNP Paribas Executive Leaves as Trade Investigation Grows Georges Chodron de Courcel is stepping down in the face of an investigation into whether the bank did business with countries blacklisted by the United States.
Phil Mickelson practicing on Wednesday. The F.B.I. and Securities and Exchange Commission have found no evidence that he traded Clorox shares.
Phil Mickelson Is Said Not to Have Traded Clorox Stock Mr. Mickelson, the famed golfer, is still under investigation over trades in Dean Foods in 2012 just before the company's stock soared.
Alibaba's headquarters in Hangzhou, China. Goldman Sachs sold its stake in the company by 2004, missing a larger payoff.
Goldman Sachs Misses Out on Big Alibaba PayoffInvestors stand to make huge sums from the Chinese company's approaching I.P.O. - but Goldman, which sold its stake a decade ago, will not be one of them.
An investigation is focusing on stockpiles of metals at Qingdao Port in northeast China.
Banks Fear Missing Collateral in China The authorities are investigating loans based on collateral of metals at a Chinese port, with implications for Western banks and the Chinese credit market.
Goldman Sachs, which did buyout deals through its private equity arm, agreed to pay $67 million to settle the claims.
Goldman and Bain Settle Suit on Collusion Goldman Sachs and Bain Capital have agreed to pay a combined $121 million to settle a lawsuit that accused them and other firms of colluding to drive down the prices of takeovers before the financial crisis.
Alstom engineers work on a piece of a thermal reactor. Alstom is the leading maker of turbines for France's nuclear industry.
To Counter G.E., Japanese Company Mitsubishi May Join Siemens in Alstom Bid A combined offer from Siemens and Mitsubishi Heavy Industries could ease antitrust concerns, but it was unclear how it would allay French worries about the fate of a national champion.
Tony West, the United States acting associate attorney general, is leading the discussions over mortgage penalties with Bank of America.
Bank of America Mortgage Settlement Is Said to Be Deadlocked The bank made its final multibillion-dollar settlement offer Monday, but it was said to be short of what the Justice Department wants it to pay for its role in the mortgage crisis.
Norman Chan, chief executive of the Hong Kong Monetary Authority, is writing new bank rules.
Hong Kong Regulators Tense About China Loans A surge in lending to Chinese companies is leading Hong Kong regulators to impose strict financial rules four years before they are required under new global standards.
Peter D. Hancock, 55, left, will take over as chief executive of the insurer American International Group from Robert H. Benmosche, 70, who came out of retirement five years ago.
A.I.G. Names Successor to Benmosche, Who Nursed It Through Fiscal Crisis Peter D. Hancock's appointment signals the end of Robert H. Benmosche's tenure atop the insurer, a five-year rebuilding period.
Jane L. Mendillo is stepping down as president and chief executive of the Harvard Management Company, which oversees the university's endowment.
Endowment Chief to Exit at Harvard Jane L. Mendillo will exit from her role as manager of the $32.7 billion nest egg by the end of the year; its performance has fallen behind those of other Ivy leagues.
Deal Professor: In Tough Market, Investment Banks Seek Shelter or Get Out Stricter regulations and low volatility are transforming the banking industry, driving banks to find additional, more stable sources of revenue or even to shift away from the business entirely, Steven M. Davidoff writes in the Deal Professor column.
An Idenix research scientist at work. The market for hepatitis C drugs is expected to be lucrative.
Merck Bids $3.8 Billion for an Edge in HepatitisMerck will pay $24.50 a share in cash, or about $3.85 billion, for the biotechnology company Idenix in an effort to bolster its arsenal of potential drugs in the hotly competitive hepatitis C area.
Thorne Perkin, a wealth adviser, said the young tech group was not to be ignored.
Competition Is Stiff to Manage Tech Billions Wealthy entrepreneurs in Silicon Valley represent a potential gold mine for financial advisers.
The Uber smartphone app connects drivers with passengers.
DealBook Column: Why Uber Might Well Be Worth $18 Billion Though some call the taxi app's valuation of $18.2 billion "insane," it's worth doing the basic math and taking a closer look.
An array of products by Tyson Foods and Hillshire Brands.
After a Short, Furious Battle, a Rich Offer for Hillshire A bidding war for the maker of Jimmy Dean sausages ended in a $7.7 billion offer by Tyson Foods, reflecting a trend of consolidation among food producers.
TransferWise, which offers foreign exchange transfers without large bank fees, is one of the companies making up London's growing financial technology start-up scene.
A Lift for One of London's Financial Tech Start-UpsTransferWise, which uses peer-to-peer technology to swap currencies without large bank transfer fees, says it has raised $25 million from investors.
Tyson's bid would value Hillshire Brands at $7.7 billion.
Tyson Is Said to Win Battle for Hillshire BrandsHillshire Brands is expected to declare Tyson Foods the victor of a bidding war, people briefed on the matter said on Sunday.
Reed Hastings
Netflix Investors to Vote on C.E.O.-Chairman SplitShareholders of the media company are to vote Monday on whether to divide the roles of chief executive and chairman, now held by Reed Hastings.
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'Noble England' Rik Mayall's World Cup ode is rousing sports fans from London's Canary Wharf to Manaus, Brazil. The British alternative comic, who died this week, was best known for his role on "The Young Ones."