Morning Take-Out

TOP STORIES

New York Fed Faces Questions Over Policing Wall Street  |  As the Federal Reserve Bank of New York faced criticism for missing a multibillion-dollar trading loss at JPMorgan Chase, the regulator convened a town hall meeting in May to bolster employee morale. Two months later, the New York Fed staff members huddled again, after lawmakers questioned why the regulator had failed to rein in banks that manipulated benchmark interest rates.

“We were told to keep our heads down and stay focused,” said one person present at the July meeting, who requested anonymity because the gathering was not public.

The New York Fed, whose weaknesses were firs t exposed when the financial crisis hit, is undergoing a new trial by fire as it grapples with how to police Wall Street. While the regulator has revamped its approach to overseeing the nation's biggest banks since the crisis, recent black eyes suggest that fundamental problems persist.

Lawmakers will most likely focus on the record of the New York Fed when Timothy F. Geithner, the regulator's former president, testifies on Wednesday before the House Financial Services Committee. Mr. Geithner, now the Treasury secretary, will appear before a Senate panel on Thursday. DealBook '

 

When Picking a C.E.O. Is More Random Than Wise  |  What makes the perfect chief executive? If the way corporate boards at Yahoo and Duke Energy picked chief executives is any indication, it may be up to chance in large part, the Deal Professor writes.

Take Mar issa Mayer, the newly appointed chief of Yahoo. The Yahoo board decided to go with youth and decisiveness over experience. In doing so, the company has agreed to pay a package that could exceed more than $100 million over five years if Ms. Mayer works out. Is she the right choice? It is hard to know. DealBook '

 

DEAL NOTES

At Goldman Sachs, Something in the Water  |  Discolored tap water afflicted Goldman's gleaming new headquarters in Lower Manhattan earlier this month. DealBook '

 

On Wall Street, Gender Bias Runs Deep  |  Women make up more than half of the work force in the financial industry but are chief executives at fewer than 3 percent of American financial compan ies, Luisita Lopez Torregrosa reports for The International Herald Tribune. DealBook '

 

Adjusting to a Culture of Less Risk  |  Bloomberg News reports that some financial workers are finding solace in activities like the combat sport Muay Thai, as Wall Street jobs are affected by new regulations and economic malaise. “There's no sexiness, there's no fun, there's no intellectual intrigue, either,” Ethan Garber, who ran proprietary portfolios for Credit Suisse and Bear Stearns, told Bloomberg. bloomberg news

 

Where Have Wall Street's Good Times Gone?  |  Reuters writes: “Ever since the financial crisis, U.S. banks and their investors have held out hopes of a return to the good times, when lending profits steadil y rose and commercial and investment banking flourished together. But analysts and investors are now questioning whether things have changed for good.” reuters

 

 

Mergers & Acquisitions '

Shareholders of London Metal Exchange Back $2.1 Billion Takeover  |  Hong Kong Exchanges and Clearing won overwhelming support from London Metal Exchange's shareholders for its $2.1 billion takeover deal. DealBook '

 

Hong Kong Tycoon to Pay $1 Billion for British Gas Firm  |  The bid for MGN Gas Networks by four entities controlled by Li Ka-shing, Asia's richest person, seeks to broaden his global footprint in the energy sector. DealBook '

 

The Return of Merger Monday, July Edition  |  Deals normally evaporate in the middle of the summer as the temperature rises and bankers decamp for the beach. But the start of this week proved to be an exception to the rule and again revived the concept of a “Merger Monday.” DealBook '

 

Cnooc's $15 Billion Deal Expected to Secure Approval  |  The Chinese energy giant's bid for Nexen “offers enough incentives to pass a likely lengthy Canadian government vetting process, said investment bankers and attorneys,” The Wall Street Journal reports. wall street journal

 

Inside Cnooc's Nexen Deal  |  Reuters reports: “Nexen had been on the wish list of Chinese state oil company Cnooc for five years. The removal of C.E.O. Marvin Romanow was just the opening the Chinese needed to make their move, according to sources familiar with the situation.” reuters

 

Qatar Fund Increases Stake in Xstrata  |  Qatar Holding, which is tussling with Glencore International over the terms of the trading firm's takeover of Xstrata, increased its stake in Xstrata to more than 11 percent, according to Reuters. reuters

 

Fate of Tiger Beer to Be Decided by Friday  |  The board of Fraser and Neave is weighing offers for its Tiger Beer asset, Reuters reports. reuters

 

INVESTMENT BANKING '

Former Lehman Operating Chief Puts Mansion Up for Sale  |  Joseph M. Gregory, Lehman Brothers' former chief operating officer, led a lavish lifestyle. It now seems that he has listed his Long Island mansion for sale, with an asking price of $22 million. DealBook '

 

Bond Trading Loses Some Swagger  |  Tighter regulations and electronic technology are revolutionizing the once-stodgy bond market, threatening profits and jobs, Nathaniel Popper and Peter Eavis write in The New York Times. DealBook '

 

Investment Banks Cut Jobs in Asia  |  According to the research firm Coalition, 18 percent of global layoffs from m ajor banks happened in Asia in the first quarter, compared with 8 percent in 2011, The Wall Street Journal reports. wall street journal

 

Perella Weinberg to Assess the Value of a Brokerage Firm  |  The investment bank Perella Weinberg Partners has been called in to offer an assessment of Morgan Stanley Smith Barney, which is valued very differently by its two owners, Morgan Stanley and Citigroup, Reuters reports, citing two unidentified people familiar with the assignment. reuters

 

Bank Analyst Sees Little Benefit in Friendly Service  |  Richard X. Bove, the outspoken bank analyst, got a taste of unhelpful customer service at his Wells Fargo branch in Tampa, Fla. But the conclusion he reached, in a subsequent rese arch note, was that customer service might actually distract banks from the more important job of selling products and managing risk, The New York Times reports. “I'm struck by the fact that the service is so bad, and yet the company is so good,” he wrote. new york times

 

Wells Fargo's Murky Assets  |  Among big banks, Wells Fargo had the highest percentage of so-called Level 3 assets, which are relatively difficult to value, according to Standard & Poor's, Bloomberg News reports. bloomberg news

 

Deutsche Bank Blames Weak Euro for Drop in 2nd-Quarter Profit  |  The preliminary earnings report demonstrates the challenges facing Anshu Jain and Jürgen Fitschen, who took over in May as co-chief executives of Deut sche Bank. DealBook '

 

Goldman Official Tries Out a Bigger Role  |  Elizabeth Beshel Robinson, Goldman Sachs's treasurer, had a prominent role during a conference call this week, fueling speculation that she may be in line to succeed David A. Viniar as chief financial officer, The New York Post reports. new york post

 

Bankia Said to Plan to Spread Payments Over Time  |  Bloomberg News reports: “Spain's Bankia group wants to pay holders of 3 billion euros ($3.6 billion) of its preferred shares most of their money back, though not for years to come, a person with direct knowledge of the matter said.” bloomberg news

 

P RIVATE EQUITY '

Ancestry.com Is Said to Be in Talks for a Buyout  |  The genealogy Web site is in discussions with TPG Capital and Providence Equity Partners and Permira, according to people with knowledge of the matter. DealBook '

 

Clayton Dubilier Sells Off Last of Its Sally Beauty Shares  |  Clayton Dubilier & Rice said on Tuesday that it was selling its final holdings in Sally Beauty Holdings, garnering some $1.9 billion in proceeds from its investment. DealBook '

 

Carlyle Hires Liguori as Media Adviser  |  The Carlyle Group says it has hired Peter Liguori, a former Discovery Communications chief operating officer, as an adviser to t he firm's telecommunications and media group. DealBook '

 

Hong Kong Firm Raises $1 Billion for Energy Fund  |  The private equity firm Kerogen Capital, based in Hong Kong, plans to use its new energy fund to invest in regions that cater to Asia, Reuters reports. reuters

 

China Allows Insurers to Invest More in Private Equity  |  Insurers in China will be allowed to invest up to 10 percent of their assets in private equity, compared with 5 percent previously, Reuters reports. reuters

 

HEDGE FUNDS '

Third Point Increases Stake in Yahoo  |  A ccording to a filing with the Securities and Exchange Commission on Tuesday, Daniel S. Loeb's Third Point, the activist fund that pushed for changes at Yahoo, now owns more than 73 million shares of the company, or about 6 percent, Reuters reports. reuters

 

Greenlight Capital Exits Best Buy Investment  |  David Einhorn said in a letter to investors that his fund had taken a “loss” on Best Buy when “unexpected problems emerged,” Reuters reports. The letter said the fund declined 3.2 percent in the second quarter. reuters

 

Hedge Fund Managers Back Same-Sex Marriage  |  A group of Republican-leaning hedge fund managers, including Paul Singer, Clifford S. Asness and Daniel S. Loeb, is supporting efforts to leg alize same-sex marriage in four states, The Financial Times reports. financial times

 

Hedge Funds Square Off Over Tribune Bankruptcy  |  A judge approved a plan to give control of the Tribune Company to a group of creditors led by Oaktree Capital and other firms. But other creditors, like Aurelius Capital Management, have appealed the decision, FINalternatives reports. finalternatives

 

I.P.O./OFFERINGS '

Netflix Contends With Shrinking Subscriptions  |  Netflix reported a return to profitability in the second quarter, but investors were spooked by news that a decline in subscriptions for the company's DVD-by-mail business outpaced gains in streaming subscriptions, the Media Decoder blog reports. new york times media decoder

 

Knight Capital Expected to Support Nasdaq's Compensation Plan  |  The Knight Capital Group, which says it took a loss trading Facebook, is “likely to express support” for Nasdaq's plan to compensate brokers for losses related to Facebook's debut, The Wall Street Journal reports, citing an unidentified person familiar with the broker's position. wall street journal

 

Europe's Crisis Looms Over United States I.P.O.'s  |  The Financial Times writes: “Europe's woes have sent a widely watched measure of U.S. market volatility higher just as weak equity capital markets in New York look to rebound from the fallout from Facebook's much-criticized public debut in May.” financial times

 

Malaysian Hospital Operator Rises on Debut  |  The stock of IHH Healthcare rose nearly 10 percent on Wednesday, after attracting $2.1 billion in the company's initial offering of shares, Reuters reports. reuters

 

VENTURE CAPITAL '

New Enterprise Associates Raises $2.6 Billion Fund  |  The venture capital firm New Enterprise Associates, which has backed Groupon and Diapers.com, has raised $2.6 billion for its latest fund. DealBook '

 

Square Expects New Financing and a Loftier Value  |  The mobile payments start-up Square, best known for its pint-size credit card reader, is close to raising about $200 million, which would give the company an implied valuation of $3.25 billion. DealBook '

 

Tenaya Capital Raises a $372 Million Fund  |  The latest fund is the venture capital firm's first since it spun out of Lehman Brothers in September 2008. wall street journal

 

Twitter Plans an Archiving Function  |  Dick Costolo, Twitter's chief executive, told The New York Times, “We're working on a tool to let users export all of their tweets.” H e added, “You'll be able to download a file of them.” new york times bits

 

LEGAL/REGULATORY '

Technology Analyst Expected to Plead Guilty in Insider Case  |  John Kinnucan, founder of Broadband Research, based in Portland, Ore., is expected to plead guilty on Wednesday to sharing secret information about technology companies with money managers. DealBook '

 

JPMorgan Settles Credit Card Lawsuit  |  JPMorgan Chase has agreed to pay $100 million to settle a lawsuit filed by customers who said that the nation's largest bank raised minimum payments due on credit cards to generate more fees. DealBook '

 

Fed Expected to Favor New Stimulus if Economy Lags  |  The New York Times reports: “A growing number of Federal Reserve officials have concluded that the central bank needs to expand its stimulus campaign unless the nation's economy soon shows signs of improvement, including job growth.” new york times

 

Soccer Case Highlights Differences Between U.S. and English Bankruptcy Law  |  A British judge found that a rule favoring the claims of a soccer team's players and its league did not violate English bankruptcy law, writes Stephen J. Lubben, DealBook's In Debt columnis t. DealBook '

 

European Officials Approach Antitrust Settlement With Google  |  European regulators said recent concessions by Google could lead to a settlement, according to The Associated Press. associated press

 

Moody's Dims Outlook for Europe's Bailout Fund  |  A day after it reduced its outlook for the ratings of Germany, the Netherlands and Luxembourg, Moody's assigned a “negative” outlook for the euro zone's temporary rescue fund, The Associated Press reports. associated press

 

Europe's Medicine Weakens Greece  |  The New York Times writes: “Greece's lenders say they will not finance the country any further unless it meets its goals. But many experts say that the targets were never within reach and that pushing three increasingly weak Greek governments to comply has only profoundly damaged the economy.” new york times