SEC’s Former Top Lawyer Says He Had No Conflict in Madoff Case

Former U.S. Securities and Exchange Commission general counsel David Becker said he didn’t violate the law when he worked on agency policy about the Bernard Madoff case after inheriting money from the Ponzi scheme.

Becker, who stepped down in February, made the statement in remarks prepared for a U.S. House hearing today. He is testifying along with SEC Chairman Mary Schapiro and H. David Kotz, the inspector general who earlier this week released a 119-page report calling for Becker’s conduct to be reviewed by federal prosecutors.

‘Massive’ ETF Insider Trading, Google Ad Rates, UBS Board: Compliance

A former Goldman Sachs Group Inc. (GS) trader and his father were accused by U.S. regulators of making illegal trades based on confidential information related to the Wall Street firm’s exchange-traded fund investments.

Spencer Mindlin, 33, and Alfred Mindlin, 68, reaped at least $57,000 in illicit profits by trading in December 2007 and March 2008 “with knowledge of massive, market-moving trades” that Goldman Sachs​ planned to execute in four securities, the Securities and Exchange Commission said yesterday in a statement. The claims were outlined in an administrative proceeding filed by the SEC’s enforcement unit.

Safdie’s $413 Million Glass Tent, Big Onions Thrill Kansas City

The exterior of the Kauffman Center for the Performing Arts in Kansas City. Designed by Boston architect Moshe Safdie, of Safdie Architects, the $413-million center opened Sept. 16, 2011.

The new Kauffman Center for the Performing Arts faces downtown Kansas City, Missouri, with two bulging stainless-steel onions, sliced vertically. They cover a city block.

I liked them immediately. Their primal volumes glint in the sharp sunlight as evocatively as the paint-peeling grain silos that line nearby railroad lines.

The onions are the back of the building.

ABS Conflicts, Investment Advisors, UBS-Swiss Risk: Compliance

The U.S. Securities and Exchange Commission proposed barring bets against asset-backed securities by underwriters and securitization participants to root out conflicts of interest that might harm investors.

SEC commissioners voted 4-0 yesterday to seek comment on a rule, required by the Dodd-Frank Act, that would restrict those who package or sponsor asset-backed securities from engaging in deals that put their interests in conflict with buyers for a year after the first closing of a sale.

Poker-Playing ‘Apprentice’ Duke Tests Appetite for New League

Annie Duke, the poker player who reached the finale of 2009’s “Celebrity Apprentice,” says Texas hold ‘em pros are embracing her new league for the game’s elite. She’ll soon find out if TV viewers feel the same.

Telecasts of “Epic Poker League,” which restricts its main tournaments to qualifiers, premiere Sept. 30 on Discovery Communications Inc. (DISCA)’s Velocity network and Oct. 8 on CBS Corp. (CBS)’s namesake channel, according to Duke, the Epic league’s commissioner and co-founder of parent Federated Sports & Gaming Inc. in Los Angeles. A focus on top professionals will distinguish it from rivals, she said.

“Every other sport, even snowboarding and skateboarding, had a format where the best players in the world could play against the each other,” Duke, 46, said last week in an interview. “There’s a lot of value to limiting your field, both for the player experience and for the fan experience.”

Jefferies-Nasdaq, Colorado Plan, Hynix, Primary Global, SAP in Court News

Jefferies Group Inc. (JEF) sued International Derivatives Clearing Group LLC, accusing the Nasdaq OMX Group Inc. unit of fraud and breach of contract in connection with interest-rate swap futures contracts.

Jefferies & Co., the investment bank that has been expanding since the financial crisis, claimed in the suit that IDCG and its International Derivatives Clearinghouse unit induced it to enter into the contracts by saying the investment would be “economically equivalent” to transactions in similar instruments in the over-the-counter market. The suit was filed Sept. 16 in New York state court.

Dealers Add Treasuries in Biggest Buying Spree Since ‘07

The Fed holds $1.66 trillion of Treasuries, including $520 billion of debt due in 2014 and sooner.

Wall Street’s biggest bond traders are stockpiling Treasuries at the fastest pace since 2007 on speculation the Federal Reserve will announce a plan this week to buy longer-term debt to spur the faltering economy.

The 20 primary dealers held $15.1 billion of Treasury securities due in more than one year as of Sept. 7, up from a $75 billion bet against the debt on May 6, Fed data show. The last time dealers bought bonds at such a rapid pace was between July 2007 and September 2007, as losses on subprime mortgages began to infect credit markets and the central bank unexpectedly cut interest rates.

All but one firm expects the central bank to announce some type of what traders call Operation Twist, according to a Bloomberg News survey, the latest step by the Fed in its four- year effort to keep the economy out of a recession. U.S. debt due in 10 years or more has returned 17 percent this quarter, the most since the last three months of 2008, as unemployment holds above 9 percent and growth slows.

Easing SEC Regulations, Volcker Rule, UBS U.K. Trader Charged: Compliance

House Republicans have embraced at least one proposal in President Barack Obama’s jobs package: changing the rules to make it easier for closely held companies to raise money without going public.

Republicans have already lined up with hearings and bills to support expanding exemptions from U.S. Securities and Exchange Commission rules for companies trying to raise capital, and two lawmakers introduced legislation Sept. 15.

Wall Street May Be Blocked Off Again

Demonstrators rally on Wall Street in lower Manhattan in New York, U.S., on Saturday, Sept. 17, 2011.

New York City police may limit access to Wall Street for a third day, requiring workers and residents to show identification, after a weekend of protests targeting financial firms.

The arrangements, including the identification requirement, “will be re-assessed” this morning, Paul Browne, a police spokesman, said in an e-mail.

KKR Gathers $1 Billion for Mezzanine Fund to Finance Private-Equity Deals

KKR & Co., the private-equity investor behind three of the four biggest leveraged buyouts in history, has raised more than $1 billion for its first fund to originate debt for takeovers.

KKR Mezzanine Partners I aims to finance private-equity investments and corporate acquisitions, the firm said today in a statement. The mezzanine business will finance mostly third- party transactions.

KKR Co-Chairmen Henry Kravis and George Roberts have charged William Sonneborn, chief of KKR Asset Management, with adding products and exploiting investment opportunities beyond traditional leveraged buyouts as the 35-year-old firm seeks new sources of revenue. The mezzanine fund will try to take advantage of a climate in which financial turmoil has crimped bank lending.

Accused Financier Allen Stanford ‘Complains of Amnesia’:

R. Allen Stanford, the former Texas financier being held on charges involving a $7 billion Ponzi scheme, says he’s suffering from amnesia and can’t remember events prior to his arrest in June 2009, the Wall Street Journal reported, citing a person familiar withe the matter.
U.S. District Judge David Hittner will hear a doctors’s report on Stanford’s condition soon, the newspaper said.

SOURCE

NYSE Owners Lose Big on German Embrace

Traders work on the floor of the New York Stock Exchange in New York, U.S.

Duncan Niederauer’s embrace of Deutsche Boerse AG (DB1) is transforming NYSE Euronext’s “merger of equals” into the worst takeover in America.

Since the owner of the New York Stock Exchange agreed in February to sell itself in return for equity in Deutsche Boerse, the value of the $9.53 billion agreement has plummeted by 21 percent, according to data compiled by Bloomberg. The decline is the largest of any all-stock takeover worth $1 billion or more. The offer is now below NYSE Euronext’s share price before the two venues said they were in talks to merge.

Boehner Asks Debt Panel to Take on Tax Breaks, Reject Hike

John Boehner spoke in May to Wall Street leaders at the Economic Club of New York, where he said congressional Republicans wouldn’t let the U.S. default on obligations to bondholders in the debate over raising the nation’s debt limit.

House Speaker John Boehner called on the congressional debt-reduction supercommittee to lay the foundation for a tax-code overhaul that would reject rate increases and curb some tax breaks.

In a speech to the Economic Club of Washington today, the Ohio Republican said the 12-member panel should recommend $1.5 trillion in budget savings by focusing solely on cuts to federal spending and overhauling Social Security, Medicare and Medicaid. The panel should fashion “principles” for a later, broad rewrite of the tax code that include lowering tax rates for individuals and companies, he said.

Obama Picks a Fight to Define 2012 Election: Margaret Carlson

At least the charade is over. For far too long, President Barack Obama clung to the notion that we can all get along in a bitterly divided capital and nation.

He’d come to look like a chump being rolled -- and rolled again -- by his Republican opposition. His most ardent supporters were losing faith as he sought to show independents what a reasonable fellow he is.

Goldman Sachs Shuts Global Alpha Fund

A pedestrian passes 200 West Street, which houses the headquarters of Goldman Sachs Group Inc., in New York, U.S. Goldman Sachs has been shrinking Global Alpha since 2007 when it lost 40 percent because of bad bets on currencies, equities and bonds worldwide.

Goldman Sachs Group Inc. (GS), the fifth-biggest U.S. bank by assets, will shut its Global Alpha fund after clients pulled money from the quantitative trading pool that was once the firm’s largest hedge fund.

Barclays Leads LBO Financing Retreat

Barclays Plc., headquarters in Canary Wharf financial district in London.

Barclays Plc (BARC) is leading investment banks in a retreat from a form of leveraged buyout financing that has made the firms and their clients vulnerable to allegations of a conflict of interest.

Barclays changed its policy following a February opinion from a Delaware judge, who said the bank deceived Del Monte Foods Co. (DLM) when it advised the company on a sale and failed to disclose its plans to also arrange funding for the buyer until late in the process. That funding, also known as sell-side financing, allowed Barclays to collect about twice as much in fees than it would have gotten from just offering M&A advice.

Bank ‘Living Wills,’ Adviser Rule, Zamora Resigns: Compliance

U.S. regulators approved two sets of guidelines that banks including Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) will have to follow in drafting plans to protect the broader economy in the event of their own collapse.

EU Transactions Tax, India Yuan Loans Decision, SEC Swap Rule: Compliance

The European Union’s planned tax on financial transactions should have a “broad base” covering equities, bonds, currencies and derivatives to ensure it can’t be evaded, the finance ministers of France and Germany said.

The levy should be imposed when at least one party to a trade is located in the EU, with territorial coverage in the region to be “as broad as legally permissible,” Germany’s Wolfgang Schaeuble and France’s Francois Baroin said in a joint letter to the European Commission published Sept. 9.

The commission, the 27-nation EU’s executive arm, last month said it will draw up proposals for a transaction tax before a summit of world leaders in November, backing calls by French President Nicolas Sarkozy and German Chancellor Angela Merkel for the levy.

Germany Readies Surrender Over Greece

Germany's chancellor Angela Merkel.

Germany may be getting ready to give up on Greece, as measures in the credit markets signal growing concern about the smaller nation’s ability to repay investors.

Yields on Greek two-year notes rose as much as 12 basis points today to a record 57.10 percent as of 8:25 a.m. London time. Credit-default swaps to insure the country’s five-year bonds and to speculate on government securities closed at a record 3,500 basis points on Sept. 9, according to CMA. The contracts are the highest in the world and more than three times the 1,134 basis points on Portugal’s debt.

Friedman Ignores Trotsky, Blasts Both Parties for U.S. Decline: Review

“A country that steps up to the challenges that it faces and masters them is the country that used to be us.”

Not very encouraging words, but the authors of “That Used To Be Us,” Thomas L. Friedman and Michael Mandelbaum, insist they’re optimists.

“We want to maintain American greatness,” they write. “We’re Fourth of July guys.” Hence the U-turn of their subtitle: “How America Fell Behind in the World It Invented and How We Can Come Back.”

They’re convincing on the fell-behind part -- so convincing that I found their chipper, can-do tone grating. They’re like a doctor who says you have stage-four cancer and then adds brightly, “Think of it as an opportunity!”

Friedman and Mandelbaum identify the four major challenges the U.S. faces as globalization, the information revolution, astronomical deficits and the lethal combination of runaway energy consumption and climate change. The sensible measures they offer in response include more government spending on education, stricter energy standards, higher taxes (especially on fossil fuels) and cuts to Medicare and Social Security benefits.

Good luck with that.

Obama Says Decade Since Sept. 11 Terror Attacks Proves American Resilience

U.S. President Barack Obama marked the 10th anniversary of the Sept. 11, 2001, terrorist attacks by emphasizing Americans’ perseverance, saying for all the wars, disruptions and soul-searching of the past decade the country’s values and optimism remain.

Japan Stocks Fall to Lowest Since 2009 on Europe’s Worsening Debt Crisis

Japanese stocks fell for a third day, pushing the benchmark Nikkei 225 Stock Average to the lowest close since April 2009, as Europe’s worsening debt crisis saps demand for riskier assets.

Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, fell 2.7 percent after the cost of insuring against default on European sovereign and financial debt surged to records. Toshiba Corp. (6502), Japan’s largest maker of nuclear power plants, sank 5.1 percent after a newspaper said the company is in talks to buy Shaw Group’s 20 percent stake in Westinghouse Electric, a reactor builder. Kansai Electric Power Co., a nuclear-power operator, jumped 3.5 percent after Japan’s new prime minister indicated his support for atomic energy.

Pools Mist Names of the Dead With Grace at 9/11 Memorial; James S. Russell

As a breeze whips the veils of water cascading into the 9/11 memorial’s pools, sparkling garlands dissolve into mist.

Water falls in the north pool of The National September 11 Memorial and Museum in New York. Pools are located on the sites of the two towers of the World Trade Center destroyed in the terrorist attacks.

The dancing waters don’t strike the solemn note I expected from this shrine to 2,983 deaths on the site of the World Trade Center’s twin towers.

CEOs Cutting Forecasts Fall 38% With S&P Cheapest in September Since 1985

Lowe’s Cos., the second-largest U.S. home-improvement retailer, was among the 138 companies that cut estimates last month.

The number of chief executive officers cutting profit forecasts fell 38 percent below average last month, even as the slowing economy pushed valuations to the lowest level at the start of September since 1985.

Toshiba Falls on Report Company May Buy Shaw Group’s Stake in Westinghouse

Toshiba, which already owns 77 percent of Westinghouse, is in talks to buy out Shaw Group’s 20 percent holding in the Pittsburgh-based company, the Journal reported, citing people it didn’t identify.

Toshiba Corp. (6502), Japan’s biggest maker of nuclear reactors, fell to the lowest in more than two years in Tokyo trading after the Wall Street Journal said the company may buy Shaw Group Inc. (SHAW)’s stake in Westinghouse Electric Co.