Pioneer Tom Hicks says competition and higher interest rates may drive down returns—and smaller deals may end up being the most lucrative
BusinessWeek.com, December 12, 2006, 12:00AM EST
The last year has been notable for a string of massive leveraged buyouts that have extended the limits of what private equity firms can do. Kohlberg Kravis Roberts bought hospital company HCA for $33 billion, beating the record that KKR established in 1988 with the RJR Nabisco deal (see BusinessWeek.com, 11/10/06, "The Dark Side of the M&A Boom"). The record was broken again in November with The Blackstone Group's $36 billion acquisition of Sam Zell's Equity Office Properties Trust (see BusinessWeek.com, 12/08/06, "Private Equity: What's the Limit?").
But in a year of record deal volume (see BusinessWeek.com, 11/07/06, "The Money Behind the Private Equity Boom"), the vast majority of transactions are much smaller. Buyout pioneer Thomas Hicks specializes in those smaller deals, which he says can be at least as profitable as bigger LBOs that dominate the headlines. On Dec. 8, his Hicks Holdings teamed up with The Watermill Group, a private equity firm in Lexington, Mass., to acquire Latrobe Specialty Steel of Latrobe, Pa., for $215 million in cash and $35 million in assumed debt. The company sells steel to civilian and military aircraft makers.
Tuesday, December 12, 2006
Monday, December 11, 2006
Venture Bubble Redux?
The foreboding headline on a Financial Times story Monday is not sitting well with at least one venture investor. “VC rises to dotcom bubble levels,” the headline declares. The article goes onto explain that total venture-capital investment is estimated to reach $32 billion this year, which is the highest in the past four years and “closer to levels seen during the dot-com bubble.”
“It’s not even close,” writes Paul Kedrosky in his Infectious Greed blog:
Sure, it’s the highest it’s been in four years, but you might equally write that VC funding is still 36 percent off its dotcom peak, or that it is more or less flat year-over-year. Instead we have this irresponsible stuff.
Go to Article from The Financial Times via MSNBC.com »Go to Item from Infectious Greed »
“It’s not even close,” writes Paul Kedrosky in his Infectious Greed blog:
Sure, it’s the highest it’s been in four years, but you might equally write that VC funding is still 36 percent off its dotcom peak, or that it is more or less flat year-over-year. Instead we have this irresponsible stuff.
Go to Article from The Financial Times via MSNBC.com »Go to Item from Infectious Greed »
The Heisman Trophy, Archie Griffin & the Law
From today's WSJ Law Blog: The Law Blog just ran into Archie Griffin, the only two-time winner of the Heisman Trophy. The Ohio State legend walked by our desk after giving an interview to Dow Jones Video. We introduced ourselves, shook hands and asked, “Did you know John Heisman had a law degree?” “No,” he responded, bursting into a smile. “What do you think of that?” we asked. “I think that’s fantastic,” said Griffin. “Woody wanted me to be a lawyer. Actually, I think Woody really wanted to be a lawyer. He urged a bunch of us to become lawyers and his son became one.”
Woody, for all you non-athletic supporters, is Woody Hayes, the iconic coach for whom millions of Buckeye fans are grateful never became a lawyer. Woody’s son is Steven B. Hayes, a municipal judge in Columbus. Thanks for the tip, Archie!
Woody, for all you non-athletic supporters, is Woody Hayes, the iconic coach for whom millions of Buckeye fans are grateful never became a lawyer. Woody’s son is Steven B. Hayes, a municipal judge in Columbus. Thanks for the tip, Archie!
Soros fund denies insider info
NEW YORK (Reuters) -- An investment fund controlled by billionaire investor George Soros said Friday it did not have any inside information when it sold $24 million worth of Auxilium Pharmaceuticals Inc. shares a day before the company announced problems with a key clinical trial.
"We were not in possession of any material, non-public information at the time of the trade," the Perseus-Soros Biopharmaceutical Fund said in a statement.
"We were not in possession of any material, non-public information at the time of the trade," the Perseus-Soros Biopharmaceutical Fund said in a statement.
Deloitte and Banks to Pay $455 Million to Adelphia Investors
The auditor Deloitte & Touche, Bank of America and 38 other banks have agreed to pay a total of $455 million to settle a lawsuit with investors in Adelphia Communications, the bankrupt cable television company.
Deloitte & Touche will pay $210 million and the banks will pay $245 million under a settlement approved Nov. 10 by Judge Lawrence McKenna of Federal District Court in New York. The amount each bank owes is confidential. Adelphia filed for bankruptcy in 2002 after an accounting fraud that led to the criminal convictions of its founder, John J. Rigas, and his son Timothy.
Investors had claimed losses as high as $5.5 billion, saying that Deloitte & Touche and the banks contributed to the fraud. Adelphia sold its cable properties to Comcast and Time Warner for $16.7 billion in July.
Deloitte & Touche will pay $210 million and the banks will pay $245 million under a settlement approved Nov. 10 by Judge Lawrence McKenna of Federal District Court in New York. The amount each bank owes is confidential. Adelphia filed for bankruptcy in 2002 after an accounting fraud that led to the criminal convictions of its founder, John J. Rigas, and his son Timothy.
Investors had claimed losses as high as $5.5 billion, saying that Deloitte & Touche and the banks contributed to the fraud. Adelphia sold its cable properties to Comcast and Time Warner for $16.7 billion in July.
Friday, December 08, 2006
Paulson: Hedge Funds 'Positive' But Need to Be Monitored
In an exclusive interview on cnbc.com, Treasury Secretary Henry Paulson said hedge funds have had a positive impact on capital markets but need to be more closely monitored in an effort to protect investors.
"This is something we are giving a lot of thought and attention to," Paulson told CNBC's Maria Bartiromo. "There have been major changes in the capital markets over the past five to ten years, including big increases in private pools of capital."
Paulson said they are examining hedge funds in three areas, including: investor protection; systemic risk, or ensuring that there is enough liquidity in the system; and transparency between the hedge funds and those lending them money.
The Securities and Exchange Commission adopted a rule in 2004 ordering most hedge fund advisers to register with the investor protection agency. But a federal court threw out the rule in June.
Since the SEC's registration rule was struck down, the agency has been developing scaled-back rule proposals, including one to raise the minimum net worth an investor must possess to be allowed to invest in hedge funds. That proposal is expected to come before the SEC for a vote next week.
The average annualized performance of hedge funds 14.03%, according to the HFRI Fund Weighted Composite Index. The typical hedge fund charges investors a 2% management fee, along with a 20% share of profits.
"This is something we are giving a lot of thought and attention to," Paulson told CNBC's Maria Bartiromo. "There have been major changes in the capital markets over the past five to ten years, including big increases in private pools of capital."
Paulson said they are examining hedge funds in three areas, including: investor protection; systemic risk, or ensuring that there is enough liquidity in the system; and transparency between the hedge funds and those lending them money.
The Securities and Exchange Commission adopted a rule in 2004 ordering most hedge fund advisers to register with the investor protection agency. But a federal court threw out the rule in June.
Since the SEC's registration rule was struck down, the agency has been developing scaled-back rule proposals, including one to raise the minimum net worth an investor must possess to be allowed to invest in hedge funds. That proposal is expected to come before the SEC for a vote next week.
The average annualized performance of hedge funds 14.03%, according to the HFRI Fund Weighted Composite Index. The typical hedge fund charges investors a 2% management fee, along with a 20% share of profits.
Study Finds Value in Latest Wave of Deals
Seeking to answer one of Wall Street’s most controversial questions, Towers Perrin, an M&A consultancy, has taken a look at whether shareholders were helped or hurt in the recent flurry of corporate transactions. Its study, conducted with the Cass Business School, concludes that mergers and acquisitions “are now delivering shareholder value,” although it also found that medium-size deals performed better than big ones. The study compared deals completed in 2004 and 2005 with prior “waves” of deals in 1998 and 1988.
Go to News Release from Towers Perrin »
Go to News Release from Towers Perrin »
Tech Bankers See More Deals in the Pipeline
Technology investment bankers, already enjoying a banner year for mergers and acquisitions, expect to be even busier in 2007, a recent survey suggests. Of the more than 100 senior-level tech bankers who responded to The 451 Group’s second annual Technology Banking Survey, more than one-third said the number of their formal deal mandates is running 25 percent to 50 percent higher than at the same time last year. A year ago, only 23 percent of survey respondents reported growth in that bracket.
Go to Report from The 451 Group’s TechDealmaker »
Go to Report from The 451 Group’s TechDealmaker »
Antitrust Ambiguity to Be on Justices’ Docket
WASHINGTON, Dec. 7 — The Supreme Court added two important antitrust cases on Thursday to its calendar for the current term. Both cases, granted at the request of defendants in private antitrust suits, are likely to lead to clarification of areas of antitrust law that have increasingly become unsettled.
One case has been closely watched on Wall Street. It is a class-action lawsuit against more than a dozen leading investment banks and institutional investors that took part in syndicates to underwrite the initial public offerings of hundreds of technology companies in the 1990s.
The suit, brought by purchasers of the stocks, charges that the sharing of information among the underwriters and the way in which they allocated shares to their customers amounted to an antitrust conspiracy.
While the eventual outcome of the case is uncertain, there is little uncertainty about the second antitrust case the court accepted. The question in that case, Leegin Creative Leather Products v. PSKS, No. 06-480, is how antitrust law should treat the minimum prices that manufacturers require retailers to charge for their products.
In a 1911 case known as the Dr. Miles precedent, this practice of “resale price maintenance” was deemed always illegal under the Sherman Act. The case asks the justices to re-evaluate the precedent in light of modern economic theory, and instead to make these arrangements subject to case-by-case analysis under what is known as the rule of reason.
In other areas of antitrust law, the court has steadily backed away from a categorical view of antitrust liability and is highly likely to use this case as a vehicle for doing the same for resale price maintenance.
One case has been closely watched on Wall Street. It is a class-action lawsuit against more than a dozen leading investment banks and institutional investors that took part in syndicates to underwrite the initial public offerings of hundreds of technology companies in the 1990s.
The suit, brought by purchasers of the stocks, charges that the sharing of information among the underwriters and the way in which they allocated shares to their customers amounted to an antitrust conspiracy.
While the eventual outcome of the case is uncertain, there is little uncertainty about the second antitrust case the court accepted. The question in that case, Leegin Creative Leather Products v. PSKS, No. 06-480, is how antitrust law should treat the minimum prices that manufacturers require retailers to charge for their products.
In a 1911 case known as the Dr. Miles precedent, this practice of “resale price maintenance” was deemed always illegal under the Sherman Act. The case asks the justices to re-evaluate the precedent in light of modern economic theory, and instead to make these arrangements subject to case-by-case analysis under what is known as the rule of reason.
In other areas of antitrust law, the court has steadily backed away from a categorical view of antitrust liability and is highly likely to use this case as a vehicle for doing the same for resale price maintenance.
Specter Bill Seeks to Alter DOJ Corporate Fraud Investigations
In an attempt to pressure the Justice Department to alter the way it investigates corporate fraud, a key member of the Senate Judiciary Committee on Thursday formally introduced legislation aimed at preventing prosecutors from forcing companies to waive the attorney-client privilege in order to avoid indictment. Sen. Arlen Specter, R-Pa., the outgoing chairman of the committee, said on the Senate floor that the DOJ had not moved quickly enough to change policies that he said encroached on corporate defendants' constitutional right to counsel.
Specter was joined by former Attorney General Richard Thornburgh and lobbyists from a number of business and legal groups, who said that forcing a change in the DOJ's policy could lead the Securities and Exchange Commission, the Internal Revenue Service and other government agencies to review their policies on privilege waivers.
Specter's move comes as Deputy Attorney General Paul McNulty is leading an internal review of the government's corporate-fraud prosecution policies in the wake of a concerted lobbying effort by business groups and a court decision in New York that found one of the policies to be unconstitutional.
At issue is the way federal prosecutors have interpreted provisions of the so-called Thompson memo, issued in 2003 by then-Deputy Attorney General Larry Thompson. In the memo, Thompson lists a number of factors prosecutors should consider when deciding whether to indict a company for corporate fraud. Among them: whether the company has waived the attorney-client or work-product privilege and granted prosecutors access to internal investigations prepared by the company's lawyers. (Thompson is now general counsel of PepsiCo.) Given that companies under criminal indictment are often driven to bankruptcy -- most notably exemplified in the case of accounting firm Arthur Andersen -- the DOJ's critics say corporate defendants are left with little choice but to waive their privilege and turn over documents relating to internal investigations. Those documents often become public through court proceedings and provide fodder for shareholder class actions.
Specter was joined by former Attorney General Richard Thornburgh and lobbyists from a number of business and legal groups, who said that forcing a change in the DOJ's policy could lead the Securities and Exchange Commission, the Internal Revenue Service and other government agencies to review their policies on privilege waivers.
Specter's move comes as Deputy Attorney General Paul McNulty is leading an internal review of the government's corporate-fraud prosecution policies in the wake of a concerted lobbying effort by business groups and a court decision in New York that found one of the policies to be unconstitutional.
At issue is the way federal prosecutors have interpreted provisions of the so-called Thompson memo, issued in 2003 by then-Deputy Attorney General Larry Thompson. In the memo, Thompson lists a number of factors prosecutors should consider when deciding whether to indict a company for corporate fraud. Among them: whether the company has waived the attorney-client or work-product privilege and granted prosecutors access to internal investigations prepared by the company's lawyers. (Thompson is now general counsel of PepsiCo.) Given that companies under criminal indictment are often driven to bankruptcy -- most notably exemplified in the case of accounting firm Arthur Andersen -- the DOJ's critics say corporate defendants are left with little choice but to waive their privilege and turn over documents relating to internal investigations. Those documents often become public through court proceedings and provide fodder for shareholder class actions.
Thursday, December 07, 2006
South Korea Calls Deal With U.S. Buyout Firm Illegal
As private equity firms in the United States increasingly look overseas for takeover targets, they might want to consider the plight of Lone Star Funds. The Dallas-based firm, whose 2003 acquisition of Korea Exchange Bank has prompted an investigation by South Korea’s government, faced a new setback on Thursday when a senior prosecutor claimed to have discovered illegal aspects of the transaction. The finding could lead to the $1.3 billion sale being voided, Reuters said. The controversy comes amid concern that stepped-up investments from foreign firms could prompt a backlash, not just in South Korea but in other nations as well.
The months-long inquiry in South Korea has already led Lone Star to cancel a deal to sell its stake in Korea Exchange Bank to Kookmin Bank for $7.3 billion, which would have allowed the firm a highly profitable exit. In deciding to scrap the deal last month, Lone Star cited the uncertainty created by the open-ended investigations conducted by what it called “politically motivated'’ prosecutors.
Lone Star defended its acquisition of the Korean bank on Thursday, calling the prosecutors’ latest findings “the same old broad conspiracy theory that never made any sense and still is not supported by any hard evidence.” The notion that Korea Exchange Bank was sold for a bargain price is “absurd,” Lone Star said.
Go to Article from Reuters via The New York Times »Go to The Financial Times’s FT Video »Go to Press Release from Lone Star Funds via PRNewswire »
The months-long inquiry in South Korea has already led Lone Star to cancel a deal to sell its stake in Korea Exchange Bank to Kookmin Bank for $7.3 billion, which would have allowed the firm a highly profitable exit. In deciding to scrap the deal last month, Lone Star cited the uncertainty created by the open-ended investigations conducted by what it called “politically motivated'’ prosecutors.
Lone Star defended its acquisition of the Korean bank on Thursday, calling the prosecutors’ latest findings “the same old broad conspiracy theory that never made any sense and still is not supported by any hard evidence.” The notion that Korea Exchange Bank was sold for a bargain price is “absurd,” Lone Star said.
Go to Article from Reuters via The New York Times »Go to The Financial Times’s FT Video »Go to Press Release from Lone Star Funds via PRNewswire »
Whirlpool to Sell Hoover to Hong Kong Company
Appliance maker Whirlpool has found a buyer for Hoover, the vacuum-cleaner company it picked up through its acquisition of rival Maytag in March. Whirlpool said Thursday it would sell the Hoover unit for $107 million in cash to Techtronic Industries, a Hong Kong-based company whose brands include Ryobi power tools and the Dirt Devil vacuum cleaner. Whirpool acquired Maytag in March for $1.9 billion in cash, stock and acquisition-related expenses.
Go to Press Release from Whirlpool via PRNewswire »
Go to Press Release from Whirlpool via PRNewswire »
Wednesday, December 06, 2006
Court Rejects I.P.O. Class Action Against Banks
That sound emanating from lower Manhattan on Tuesday was a communal sigh of relief from the major Wall Street banks. These firms scored a huge victory when a federal appeals court ruled that they will not have to face a huge securities class-action suit related to accusations that they manipulated the prices of initial public offerings of technology companies during the market boom of the late 1990s. If they had chosen to avoid a trial, the banks faced the prospect of paying billions of dollars to settle the suit, which involved 55 underwriters, including Merrill Lynch, Goldman Sachs, Morgan Stanley and Credit Suisse First Boston. A link to the full text of the ruling is below.
There was more good news for the banks in Tuesday’s ruling. The decision raises the prospects that earlier settlements in the case, in particular a $425 million agreement with J.P. Morgan Chase and a $1 billion guaranteed proposed deal with the issuers of the new shares that was still pending approval by the judge in the case, could be nullified.
Described by many as the largest consolidated securities class-action case ever, the I.P.O. lawsuit involved more than 300 individual investors and 309 issuers.
The ruling was a devastating blow to the embattled securities class-action powerhouse Milberg Weiss Bershad & Schulman, which is a co-leader for the plaintiffs. The firm has been operating under a cloud for months after it was indicted by a federal grand jury in Los Angeles in May. The firm and two of its named partners are accused of making $11.3 million in secret payments to entice people to serve as plaintiffs in more than 150 lawsuits.
Download the Appeals Court Ruling (PDF) »Go to Article from The New York Times »
There was more good news for the banks in Tuesday’s ruling. The decision raises the prospects that earlier settlements in the case, in particular a $425 million agreement with J.P. Morgan Chase and a $1 billion guaranteed proposed deal with the issuers of the new shares that was still pending approval by the judge in the case, could be nullified.
Described by many as the largest consolidated securities class-action case ever, the I.P.O. lawsuit involved more than 300 individual investors and 309 issuers.
The ruling was a devastating blow to the embattled securities class-action powerhouse Milberg Weiss Bershad & Schulman, which is a co-leader for the plaintiffs. The firm has been operating under a cloud for months after it was indicted by a federal grand jury in Los Angeles in May. The firm and two of its named partners are accused of making $11.3 million in secret payments to entice people to serve as plaintiffs in more than 150 lawsuits.
Download the Appeals Court Ruling (PDF) »Go to Article from The New York Times »
S.E.C. Proposes Compliance Delay for Small Firms
The Securities and Exchange Commission will propose giving the smallest companies an additional one-year delay before having to comply completely with the audit provisions of the Sarbanes-Oxley law, Commissioner Roel Campos said Monday.
Go to Article from Bloomberg News via The Los Angeles Times »
Go to Article from Bloomberg News via The Los Angeles Times »
The Real Stakes in the Hedge Fund Hearings
Limits on the amount of debt that companies such as private-equity firms use to finance acquisitions may be one of the fallouts from the increasing scrutiny of hedge fund practices, BusinessWeek says. • Go to Article from BusinessWeek
Tuesday, December 05, 2006
S.E.C. and Critics to Square Off in Senate
The Securities and Exchange Commission may have ended its investigation of Pequot Capital Management last week, but the questions surrounding the inquiry keep coming. Today, Linda C. Thomsen, the S.E.C.’s director of enforcement, and eight others are scheduled to go before the Senate Judiciary Committee to testify about allegations by former S.E.C. lawyer Gary Aguirre that the agency prematurely halted its inquiry after it led them in the direction of John Mack, Morgan Stanley’s chief executive.
The New York Times reports that a second S.E.C. official, who is also on Tuesday’s witness list, asked to be removed from the Pequot inquiry because of his serious misgivings about decisions made on the case. The Wall Street Journal writes that Ms. Thomsen will tell the committee that Mr. Aguirre “resisted standard supervision, and ignored the S.E.C.’s chain of command.”
Like Mr. Aguirre, S.E.C. investigator Eric Ribelin believed that the inquiry “was not handled right,” Senator Arlen Specter, the chairman of the Judiciary Committee, told The Times. “Something smells rotten here,” Mr. Ribelin wrote in an e-mail message to an S.E.C. supervisor last year.
Mr. Aguirre, who led the hedge fund investigation until he was fired last year, has told members of Congress that senior S.E.C. officials blocked him from taking testimony from Mr. Mack. S.E.C. officials deny that their probe of Mr. Mack was blocked by politics. Ms. Thomsen said in testimony prepared for today’s hearing that the S.E.C. has sued “captains of industry, presidential cabinet members, members of Congress and celebrities. The enforcement division does not pull its punches.”
The S.E.C. is also under review by the Government Accountability Office, the investigative arm of Congress. Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee, asked for the review in September because he was growing concerned, he said, about whether the S.E.C. was “faithfully adhering to its mission.”
Go to Agenda of Tuesday’s Hearing »Go to Article from The New York Times »Go to Article from The Wall Street Journal (Subscription Required) »Go to Article from Bloomberg News »
The New York Times reports that a second S.E.C. official, who is also on Tuesday’s witness list, asked to be removed from the Pequot inquiry because of his serious misgivings about decisions made on the case. The Wall Street Journal writes that Ms. Thomsen will tell the committee that Mr. Aguirre “resisted standard supervision, and ignored the S.E.C.’s chain of command.”
Like Mr. Aguirre, S.E.C. investigator Eric Ribelin believed that the inquiry “was not handled right,” Senator Arlen Specter, the chairman of the Judiciary Committee, told The Times. “Something smells rotten here,” Mr. Ribelin wrote in an e-mail message to an S.E.C. supervisor last year.
Mr. Aguirre, who led the hedge fund investigation until he was fired last year, has told members of Congress that senior S.E.C. officials blocked him from taking testimony from Mr. Mack. S.E.C. officials deny that their probe of Mr. Mack was blocked by politics. Ms. Thomsen said in testimony prepared for today’s hearing that the S.E.C. has sued “captains of industry, presidential cabinet members, members of Congress and celebrities. The enforcement division does not pull its punches.”
The S.E.C. is also under review by the Government Accountability Office, the investigative arm of Congress. Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee, asked for the review in September because he was growing concerned, he said, about whether the S.E.C. was “faithfully adhering to its mission.”
Go to Agenda of Tuesday’s Hearing »Go to Article from The New York Times »Go to Article from The Wall Street Journal (Subscription Required) »Go to Article from Bloomberg News »
Market Regulators to Ramp Up Scrutiny of Hedge Funds
Hedge funds will face greater scrutiny as U.S. market regulators coordinate efforts to uncover illegal trading, the New York Stock Exchange’s head of market surveillance said. “Given the proliferation of hedge funds and the impact they can have on a marketplace, we’re looking at ways to build up our database on hedge funds,” Robert Marchman told Bloomberg News. “Our scope of review of relationships between hedge funds and other financial business-related entities will expand,” he said.
The N.Y.S.E. and the NASD, which are merging their regulatory arms, will work with the Securities and Exchange Commission and the Chicago Board Options Exchange as pressure mounts on regulators to better police hedge funds for crimes, including insider trading, which will be the focus of a Senate Judiciary Committee meeting later today.
Go to Article from Bloomberg News »
The N.Y.S.E. and the NASD, which are merging their regulatory arms, will work with the Securities and Exchange Commission and the Chicago Board Options Exchange as pressure mounts on regulators to better police hedge funds for crimes, including insider trading, which will be the focus of a Senate Judiciary Committee meeting later today.
Go to Article from Bloomberg News »
Monday, December 04, 2006
Nice Deal for Wall Street, Bummer on Main Street
Dec. 1 (Bloomberg) -- Opinion By Susan Antilla:
The Wall Street crowd is giddier than a 10-year-old with a PlayStation 3 over news that the NASD and the New York Stock Exchange will be merging their regulatory units.
It has set off industry-wide celebration. Brokerage officials are handing out happy quotes to reporters about the welcome change. Lawyers who represent crooked stock brokers are making statesmanlike predictions of regulatory synergies.
The last time I saw people in the brokerage industry this happy, the Republicans had just swept the Senate. As with all mergers, though, this one is bound to be bum news for someone. I hate to throw cold water on this party, but what does it all mean for the customers?
The Wall Street crowd is giddier than a 10-year-old with a PlayStation 3 over news that the NASD and the New York Stock Exchange will be merging their regulatory units.
It has set off industry-wide celebration. Brokerage officials are handing out happy quotes to reporters about the welcome change. Lawyers who represent crooked stock brokers are making statesmanlike predictions of regulatory synergies.
The last time I saw people in the brokerage industry this happy, the Republicans had just swept the Senate. As with all mergers, though, this one is bound to be bum news for someone. I hate to throw cold water on this party, but what does it all mean for the customers?
Commentary: Beat the Clock (and Get a Double Bonus)
While the flurry of year-end deal announcements may seem like someone’s hitting the egg nogg a little too often, it’s more likely that someone else wants to stuff a little more into their stockings. One reason for the late rush of multibillion-dollar buyouts and sales is that investment bankers are trying to wrangle a bigger year-end gift in what some call the “double-bonus game,” Andrew Ross Sorkin writes in his Sunday DealBook column. Read on to see how it works.
SEC Democrats balk at plan
The honeymoon for Christopher Cox may soon be over at the Securities and Exchange Commission.
A Democratic commissioner Friday, Dec. 1, said he expects that the agency will be divided over a vote later this month on investor rights. If so, this will be the first time the agency has been split on a critical vote since Cox took charge at the SEC almost two years ago.
At issue is a federal appeals court's Sept. 5 ruling that the SEC was wrong to let American International Group Inc. exclude from its proxy an investor proposal intended to make it easier for shareholders to nominate alternative director candidates on corporate ballots.
To resolve the difference between the SEC's interpretation of the rules and the court's, Cox's most viable options would force him to choose between one option sure to be opposed by the SEC's two Democrats and another that faces resistance from at least one of his GOP colleagues.
A Democratic commissioner Friday, Dec. 1, said he expects that the agency will be divided over a vote later this month on investor rights. If so, this will be the first time the agency has been split on a critical vote since Cox took charge at the SEC almost two years ago.
At issue is a federal appeals court's Sept. 5 ruling that the SEC was wrong to let American International Group Inc. exclude from its proxy an investor proposal intended to make it easier for shareholders to nominate alternative director candidates on corporate ballots.
To resolve the difference between the SEC's interpretation of the rules and the court's, Cox's most viable options would force him to choose between one option sure to be opposed by the SEC's two Democrats and another that faces resistance from at least one of his GOP colleagues.
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