Reuters blog archive

from DealZone:

Deals wrap: Takeda offers $12 billion for rival Nycomed

Takeda Pharmaceutical is in talks to buy privately-held Swiss rival Nycomed for more than $12 billion, said sources with direct knowledge of the matter. Japan's largest drugmaker is seeking to boost its presence in Europe and emerging markets, as well, the acquisition would help them gain a lung disease drug from Nycomed which has just been approved in the U.S. Japanese drugmakers have been actively pursuing acquisitions to boost growth as they face the loss of patent protection on key medicines.

A planned rescue deal involving Saab and China's Hawtai Motor Group collapsed after it failed to get necessary approvals, leaving Saab's owner, Spyker, chasing new funding alternatives to restart production at the Swedish automaker. Spyker said it was continuing talks with Hawtai, while a Reuters exclusive reported the Dutch sportscar-maker was also talking to another Chinese company, Great Wall Motor about a possible tie-up.

Glencore's CEO Ivan Glasenberg said recent falls in commodity prices were due to "froth" in the market and had not affected strong demand for the company's IPO. Commodity price volatility in the past week has prompted worries over Glencore's planned $11 billion IPO, with fund managers sensing an opportunity to drive down prices. The commodities giant recently unveiled the prospectus for their IPO, detailing plans to raise funds in a dual listing in London and Hong Kong.

Hedge fund manager Raj Rajaratnam was found guilty on all 14 counts of insider trading, and could face at least 15 years in prison. The Galleon founder was at the center of the biggest insider trading investigation in decades and the use of phone taps in his conviction may have marked a turning point in prosecution of Wall Street crimes. This piece in the New York Times by Peter Lattman and Azam Ahmed takes a look inside Rajaratnam's circle of friends and business associates, and how they played a crucial role in his scheme.

from DealZone:

Deals wrap: Icahn turns inward

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.  REUTERS/Chip East Seems billionaire investor Carl Icahn has had enough of managing money for outsiders. The 75-year-old stock picker dropped a bit of surprising news on Tuesday when he said he plans on returning all of his clients' money, making him the latest in a string of investors to do so.

Barnes & Noble's bid to reinvent itself as a formidable competitor in the burgeoning e-books sector is off to a solid start. Its Nook is the second best-selling e-reader on the market behind Amazon's Kindle, and the book chain's chief says it has 25 percent of the e-books market.  So why can't the bookseller find any buyers? Reuters correspondents Phil Wahba and Jessica Hall take a closer look in a new piece.

from DealZone:

Deals wrap: Galleon trial to be a “battle royal”

Raj Rajaratnam, the principal in the $21 million Galleon Group hedge-fund insider trading case, leaves Manhattan Federal Court for a bail hearing on conspiracy and securities fraud charges in New York, January 12, 2010.  REUTERS/Shannon Stapleton The insider trading case against Galleon Group hedge fund founder Raj Rajaratnam finally goes to trial next week. Rajaratnam faces up to 25 years in prison if convicted of conspiracy and securities fraud but plans to fight the charges and clear his name in court.

"All signs are pointing to a battle royal," one securities attorney said of the upcoming trial in an interview with Reuters correspondent Grant McCool. According to a Wall Street Journal report, Goldman Sachs CEO Lloyd Blankfein has agreed to testify for the U.S. government at the trial. Here's a rundown of some of the other main players involved in the case.

from Financial Regulatory Forum:

Why U.S. inside traders escape harsh sentences

US Courthouse, New YorkBy Andrew Longstreth

NEW YORK, Jan 6 (Reuters Legal) - The recent flurry of insider-trading arrests by the Manhattan U.S. Attorney has set Wall Street on edge. But if recent history is any guide, people found guilty of that crime tend to get off relatively easy, a Reuters Legal analysis suggests.

The analysis covers sentences imposed in 2009 and 2010 in 15 insider-trading cases brought by the U.S. Attorney in New York, representing virtually all those imposed in that court during this period. Of these, 13 sentences, or nearly 87 percent, were lighter than the terms prescribed by the U.S. Sentencing Guidelines -- and seven of the sentences carried no prison time at all. The data from 2009, culled from a report issued last year by law firm Morrison & Foerster, reveal that only one prison term, for 63 months, was issued for insider trading in 2009.

from Financial Regulatory Forum:

Lessons from Galleon

In the prosecution of Galleon Group, the SEC and the Justice Department have charged the principals of the hedge fund with receiving inside information. Court documents reveal a pattern of self-destruction at the firm, according to Marianne M. Jennings, professor of legal and ethical studies at the WP Carey School of Business at Arizona State University, writing in Thomson Reuters Checkpoint's WG&L Accounting & Compliance Alert.

He took an $800 million hedge fund and grew it into an $8 billion one over a seven-year period. He was known for eerie accuracy in his forecasts about companies. He had an active presence on the social circuit of receptions for young, up-and-coming executives.
He is Raj Rajaratnam, the former head of Galleon Group, who now stands at the center of one of the SEC’s largest insider trading rings since Ivan Boesky roamed Wall Street. The ring took nearly one-half page in the Wall Street Journal to depict fully. The ring was so widespread that U.S. officials have issued an unusual call-out in the newspapers: “If you are involved, come in early. Talk to us before we talk to you.”
In a classic tipper/tippee insider trading case, the SEC and the Justice Department have charged the principals of the Galleon Group with receiving information from insiders that they then used to position themselves profitably in the markets. The guilty pleas are flowing in, with a former McKinsey consultant awaiting indictment and entering a guilty plea to accepting payments for information he provided about clients. In what has been called the highest profile case of a generation, there are some lessons to be learned. And we can get to these lessons through a look at the presence of many of the seven signs of ethical collapse—those faint signals that trouble might be afoot. More evidence of the signs is likely to emerge as the cases proceed, but even in the initial stages there is enough from court documents and secondary reports to indicate the pattern of self-destruction was evident.

from Breakingviews:

Still on the hunt for a big hedgie

The biggest insider trading prosecution in two decades still would not be more than a one- or two-day story if it wasn't for the criminal charges against hedge fund titan Raj Rajaratnam.

For all the talk about disposable cellphones, bags of cash being delivered to tipsters and people with nicknames like Octopussy and the Greek, nearly all of the 20 defendants in this case appear to be nothing more than typical low-level Wall Streeters working at dime-a-dozen day-trading shops.

from Financial Regulatory Forum:

U.S. SEC says insider-trading may be a “business model” for some hedge funds

Robert Khuzami, director of Enforcement at the Securities Exchange Commission, speaks at a news conference in Washington, June 19, 2009.    REUTERS/Joshua Roberts    (UNITED STATES CRIME LAW BUSINESS)   By Jonathan Stempel and Rachelle Younglai
NEW YORK, Nov 6 (Reuters) - A top U.S. securities regulator said some funds may now view insider trading as a central tenet of their business models, rather than as a one-time opportunity for big rewards as sometimes happened in the 1980s.

Robert Khuzami, head of enforcement at the U.S. Securities and Exchange Commission, spoke on Friday, a day after the SEC, the Department of Justice and the FBI announced dozens of new charges in what was already the biggest hedge fund insider-trading scandal ever.
Investigators have been examining trading involving Galleon Group and a variety of hedge funds.

from Financial Regulatory Forum:

New arrests in Galleon insider-trading case

NEW YORK, Nov 5 (Reuters) - Nine more people have been arrested in the Galleon Group insider-trading scandal, bringing to 15 the number charged in the biggest hedge fund-related case in history.

The new arrests include Wall Street traders, lawyers and hedge fund managers, according to complaints filed in federal court in New York on Thursday,

from Breakingviews:

The missing pieces in Galleon’s puzzle

Think of the Galleon Management insider trading case as a puzzle with several pieces left to be snapped into place by federal authorities.

Prosecutors and securities regulators appear to have already put together the big pieces with last month's arrests of former Galleon co-founder Raj Rajaratnam and two executives from a former Bear Stearns hedge fund.

from Breakingviews:

Bear is the securities case worth watching

The financial world remains abuzz over the latest twist and turns in the insider-trading case involving Galleon Management co-founder Raj Rajaratnam. At the same time, too little attention is being paid to the criminal trial of two former Bear Stearns hedge fund managers.

The trial of Ralph Cioffi and Matthew Tannin began in federal court in Brooklyn the same week that Rajaratnam and five others were charged. But it's the Bear trial that may have a far more lasting impact on the future of securities fraud prosecutions.