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from Breakingviews:

Private equity discord is best collusion defense

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Even when it might help them, private equity firms can’t seem to cooperate. Blackstone Group, KKR and TPG are now willing to pay a combined $325 million to resolve allegations that they colluded to limit prices on deals. Three other firms previously settled for less. Carlyle Group is still holding out. Legally speaking, there’s safety in numbers. Yet the buyout shops can’t even agree on how to resolve the case.

Despite some unhelpful emails and other evidence uncovered by the suing shareholders of private equity takeover targets, the defendants seemed like pretty bad candidates for conspirators. The lawsuit gave attention to some mega-debacles, including the $43 billion acquisition of TXU, which is now the bankrupt Energy Future Holdings. It is hard to see how shareholders that sold to KKR, TPG and Goldman Sachs seven years ago might have been short-changed.

While excessive fraternizing during company auctions would be foolish – and potentially illegal – groupthink in court makes more sense. There’s safety, and greater clout, in numbers when negotiating with aggrieved investors. That hasn’t happened, though. In June, Bain Capital agreed to pay $54 million and Goldman $67 million. In July, Silver Lake proffered about $30 million. After claiming to produce 5.5 million pages of documents and having 14 executives deposed, Blackstone, KKR and TPG are tendering considerably more. None admit wrongdoing.

from Breakingviews:

Goldman chums return John Thain to semi-importance

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

John Thain is returning to significance with a little help from some former Goldman Sachs colleagues. Thain has been doing penance running lending minnow CIT for the past four years after serving as Merrill Lynch’s last boss. Now he’s spending $3.4 billion to buy OneWest Bank, which is owned by, among others, a gaggle of Goldman alums. The deal manages to bring CIT, and Thain, back into the club of systemically important financial institutions, if just barely.

from Alison Frankel:

Is this the inside info that triggered Goldman’s MBS ‘big short’?

It is an axiom of the financial crisis that Goldman Sachs realized before any of the other big banks that the mortgage-backed securities market was going to implode in 2007. Goldman dumped MBS and shorted the market, turning a profit in its mortgage department when every other major financial institution suffered record losses.

So what tipped Goldman to start off-loading its MBS exposure at the end of 2006? In a new brief in its securities fraud case against the bank, the Federal Housing Finance Agency has an intriguing theory.

from Breakingviews:

Medtronic-Covidien is blast from M&A advisory past

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investment bankers had a rude awakening over the weekend. A mega-merger like the $43 billion cash and stock tie-up Medtronic and Covidien announced on Sunday often provides a feast for a raft of advisory firms. Not this time. The two medical devices companies are only using one each.

from Breakingviews:

Morgan Stanley gets most relief from first quarter

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Few banks have reported much to crow about in their first-quarter earnings. But Morgan Stanley can claim relief, at least, from the $1.45 billion in net income it unveiled on Thursday. Chief Executive James Gorman presided over a far better start to the year than in 2013, including bucking the Wall Street trend in fixed-income trading. More importantly, Gorman looks closer to hitting targets than rivals like Bank of America and Citigroup.

from Alison Frankel:

Can banks force clients to litigate, not arbitrate?

If you are a customer of a big bank -- let's say a merchant unhappy about the fees you're being charged to process credit card transactions -- good luck trying to bring claims in federal court when you're subject to an arbitration provision. As you probably recall, in last term's opinion in American Express v. Italian Colors, the U.S. Supreme Court continued its genuflection at the altar of the Federal Arbitration Act, holding definitively that if you've signed an agreement requiring you to arbitrate your claims, you're stuck with it even if you can't afford to vindicate your statutory rights via individual arbitration.

But what if you're a bank customer who wants to go to arbitration -- and, in a weird role-reversal, the bank is insisting that you must instead bring a federal district court suit? Will courts show the same deference to arbitration when a plaintiff, rather than a defendant, is invoking the right to arbitrate and not litigate?

from India Insight:

Markets this week: M&M, GAIL top Sensex losers

By Sankalp Phartiyal and Ankush Arora

India’s benchmark indexes ended lower this week after scaling fresh peaks on Tuesday. The Sensex ended the week down 0.26 percent in its second consecutive week of falls. Indian markets were shut on Monday for a public holiday.

While strong buying by foreign investors bolstered blue chips, profit-booking and worries U.S. interest rates would rise sooner than expected kept shares under pressure.

from Breakingviews:

Lego clan beats Goldman in $1.5 bln ISS float

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Lego has trumped Goldman Sachs in the $1.5 billion flotation of cleaning giant ISS. The Danish toymaker’s owners, the Kirk Kristiansen family, made a minority investment in the group in 2012 to help cut its debt. ISS’s successful stock-market debut has brought a sparkling return for the Lego latecomers, leaving owners EQT and Goldman in the dust.

from Breakingviews:

Lazard puts M&A feet firmly in big boys’ camp

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Lazard has put its feet firmly in the big boys’ camp. The advisory and asset management firm didn’t just make progress on financial targets that Chief Executive Ken Jacobs set two years ago. Its bankers also goosed revenue in the second half of the year. That makes Lazard look more like Goldman Sachs, Morgan Stanley and JPMorgan than smaller rivals Evercore and Greenhill.

from MacroScope:

Why are US corporate profits so high? Because wages are so low

U.S. businesses have never had it so good.

Corporate cash piles have never been bigger, either in dollar terms or as a share of the economy.

The labor market, meanwhile, is still millions of jobs short of where it was before the global financial crisis first erupted over six years ago.

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