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 FUNDBridgewater 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 HITA 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 AGENDAThe 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 TECHNOLOGYConsolidation 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.
$1 Billion for Dollar Shave Club: Why Every Company Should WorryThe 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's Media Problem at Yahoo Is Now Verizon's to SolveBefore she led Yahoo, while still at Google, Ms. Mayer spoke of the difficulties for media companies of capitalizing on their own content.
Chinese Tech Firm to Buy TV Maker for $2 BillionThe 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.
Santander Profit Down on Restructuring and Bank Fund ChargesThe 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.
Goldman Sachs Is Sued Over Ties to Malaysia's Prime MinisterA 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.
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.
How Many Mayors Can Puerto Rico Afford? Tradition and Budgets CollideAs 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.
Why Dropping the Trans-Pacific Partnership May Be a Bad IdeaThe 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.
$15 Billion Volkswagen Emissions Deal Clears 1st HurdleA 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.