Tag Archives: News event


Google has rare stumble


The company is so ubiquitous that its name is a verb. But being part of the lexicon isn’t a pathway to riches. What’s most interesting about Google’s earnings this quarter is the business media’s portrayal of a 19 percent rise in revenue as a misstep.

Rolfe Winkler and Alistair Barr wrote for the Wall Street Journal that increased costs caused the drop in profit:

Fast-rising expenses eroded Google Inc.’s first-quarter profits, disappointing investors and sending Google shares lower in after-hours trading.

The Internet-search giant said revenue for the quarter rose 19% to $15.4 billion from $13 billion a year earlier, excluding the Motorola Mobility business Google plans to sell to China’s Lenovo Group Ltd. Analysts had projected revenue of $15.5 billion on that basis, according to S&P Capital IQ.

But expenses grew faster—at 23%. As a result, Google’s net income increased 3% to $3.65 billion, or $5.33 a share, from $3.53 billion, or $5.24 a share. The figures were adjusted for the pending Motorola sale and a 2-for-1 stock split.

Excluding stock-based compensation and other items, Google said earnings were $6.27 a share; on that basis, analysts had predicted $6.41 a share.

“The top line was pretty good, but the margin compression probably disappointed the market,” said Brian Wieser, an analyst at Pivotal Research Group. “The margin erosion trend seems to be well in place.”

The New York Times headline said earnings “disappoint” in a story by David Streitfeld, which pointed out Google is making acquisitions in order to post growth — at some point:

Its core digital advertising business is so dominant that analysts are questioning just how much it can continue to grow. So Google is unleashing its vast cash hoard on robotics, artificial intelligence, smart thermostats and, just this week, high-altitude drone satellites.

The only thing all these acquisitions have in common is a focus on the future — often, the distant future.

The risk in thinking about what will be big in 2050, however, is that you can lose sight of 2014.

Google’s first-quarter earnings report, released after the market closed on Wednesday, surprised Wall Street. The company has traditionally gushed profits without breaking a sweat. Now it takes more of an effort.

One big reason was a problem of several years’ standing: Internet users are migrating to mobile devices, but ads on phones and tablets still do not have the familiarity and appeal they do on bigger computers. And they are not as profitable for Google. Google’s ad volume jumped 26 percent in the quarter, which sounds good but is less than expected, while the amount advertisers pay dropped 9 percent, which sounds bad and is.

The CNET story by Seth Rosenblatt led with the fact investors didn’t like the news either:

Google’s shares fell sharply in after-hours trading Wednesday following first-quarter earnings and sales that missed Wall Street’s expectations, thanks in part to its continued acquisition binge and the ongoing shift in ad revenue from desktop to mobile.

The stock was down 5.85 percent to $524 per share immediately after the markets closed.

Colin Gillis, senior technology analyst at BGC Financial, said “a little [investor] pullback is healthy.”

“[Cost-per-click on] mobile’s a major problem. People have had a decade to optimize their [desktop] sites,” he said. Even though mobile ad revenue is rising, it’s not rising as fast as desktop is shrinking.

Kevin Shalvey wrote for Investor’s Business Daily that Google’s fall was based on lower pay ad clicks:

Google since mid-2011 has focused on building mobile-ad technology, in part to increase revenue from users in emerging countries where smartphones are used more widely than traditional desktops.

But worldwide paid clicks on ads grew just 26% in Q1, down from 31% growth in the three months prior. Analysts expected 29% growth, says Seyrafi.

Advertisers still aren’t willing to pay as much for a click on a mobile ad. Google’s overall cost-per-click, or CPC, rate slipped 9% from a year earlier, although it remained unchanged from Q4.

“I believe, in the medium to near term, mobile pricing has to be better than desktop,” Chief Business Officer Nikesh Arora told analysts on the post-earnings conference call.

CNNMoney attributed the stumble to mobile in a story by James O’Toole:

The challenge for Google is convincing marketers to pay as much for mobile ads as they do for desktop ads, a task that’s become increasingly pressing as Web usage shifts to smartphones.

Google Chief Business Officer Nikesh Arora said in a conference call Wednesday afternoon that the company’s mobile ad revenue is being held up in part because merchants haven’t spent enough time developing their mobile sites, assuming that customers will make more purchases via desktop.

“The journey is just beginning for advertisers on the mobile side,” he said. As advertisers begin to see the potential of mobile ads, including location targeting, Arora added that the gap between desktop and mobile ad rates would likely close.

“Right now we can lead the horse to water, but we can’t make it drink,” he said.

Part of the way Google is addressing this issue in the meantime is through the “enhanced campaign” strategy it introduced last year, which requires advertisers to buy across multiple platforms.

Taken all together this might indicate that Google will likely continue to see earnings growth slow in the near-term. What isn’t so clear is how they’re positioning themselves for the future. If you believe in the acquisitions and that cost cutting could come into play, then this might be a temporary setback. Otherwise, it could be the beginning of a long decline.


Talking Biz News Today — April 16, 2014


Wednesday’s top business news stories:

The New York Times

Yellen signals continued need to keep rates low, by Nelson D. Schwartz


Google first-quarter revenue misses Wall Street targets, by Alexei Oreskovic
IBM revenue misses estimates as hardware sales fall, by Supantha Mukherjee


GM move to freeze lawsuits may cut customer payouts by billions, by Linda Sandler
BofA slides after posting loss tied to mortgage accords, by Hugh Son
Grads remaking China workforce as high-end threat to U.S., by David J. Lynch


Unpaid interns in NYC get a few rights. Up next: a salary? by Claire Zillman

And in local news:

News & Observer

Study says NC’s immigrants have positive economic impact, by David Ranii


App makes ordering dinner easier, by Jamie Nunnelly

Today in business journalism

Labor/environmental reporter Hamby to join BuzzFeed
Mossberg and Swisher talk about Re/Code founding
Obit writer leaving Wall Street Journal
GM still in the news

This date in business journalism history

2007: Wall Street Journal wins two Pulitzers
2013: WSJ starts MoneyBeat blog


April 16: Shelia Poole of the Atlanta Journal-Constitution

April 16: Margaret Magnarelli of Money

April 16: Andrew Sullivan of Reuters


GM still in the news


General Motors Co. continues to make headlines as Chief Executive Officer Mary Barra deals with the aftermath of recalls and public relations crises. Last week, two top employees were suspended, while Tuesday there were several more follow-up stories about what’s going on at the automaker.

Jeff Bennett wrote for the Wall Street Journal that GM is trying to increase safety standards:

General Motors Co. Chief Executive Mary Barra sought to shift the focus on Tuesday to the auto maker’s coming new vehicles and away from investigations of a troubled ignition-switch recall, but struggled amid a barrage of questions about its responses to the probes.

In New York ahead of an auto show, Ms. Barra deflected questions about a potential U.S. criminal probe, saying she wasn’t aware if the Department of Justice has sought documents from the company, and declined to say when GM expected to answer all questions posed by auto-safety regulator National Highway Traffic Safety Administration.

“We are working on those every day,” she said of the NHTSA inquiry while surrounded by a media crowd peppering her with questions. GM Global Product Chief Mark Reuss was recruited to help provide crowd control after her speech.

GM said it is forming a product integrity organization under Mr. Reuss that will include a newly named vehicle safety czar. GM named engineering veteran Jeff Boyer as vice president of global vehicle safety and charged him with handling all safety-related issues including recalls. His group will be moved into the new organization. Mr. Reuss declined to provide more details on how the group will work but did say he will make additions to the team in the coming days.

Writing for the Detroit Free Press, Nathan Bomey reported that Barra was also cleaning up the company’s leadership in the wake of the recalls:

Two members of General Motors’ senior leadership team are leaving the company three months after a transition to a new CEO and amid a crisis over the automaker’s failure to fix an ignition switch defect.

Selim Bingol, senior vice president of public policy and communications, and Melissa Howell, senior vice president for human resources, will “pursue other interests,” GM said in a statement.

A company spokesman, Greg Martin, said the departures were not connected to the recall of 2.6 million small cars from 2003 through 2010 for defective ignition switches. The ignition switch defect is tied to at least 31 crashes and 13 deaths in Chevrolet Cobalts and Saturn Ions.

Bingol, has led GM’s public relations team since 2010 when he was tapped by former CEO Ed Whitacre. His successor will be named later.

Howell, who had been in the top HR job since February 2013, joined the automaker in 1990.

The New York Times had a story by Alexandra Stevenson pointing out that GM still had some (or one) willing to defend the company:

General Motors has come up against a tide of criticism. Its chief executive has been grilled by lawmakers for creating a “culture of cover-up,” it has been fined, and it faces investigations by a Senate panel and regulators over when it knew about serious safety issues.

But there is at least one person outside the company who is willing to step forward to defend G.M.: J. Kyle Bass, the hedge fund manager who made a name for himself betting against subprime mortgages.

He is now betting on G.M., which is under political scrutiny for a decade-long delay in dealing with a defect tied to 13 deaths.

“The question is why isn’t anyone defending General Motors, and I think neither side of the aisle can gain political capital by defending them,” Mr. Bass said in an interview. “They’ve been indicted in the public court of opinion. If you’re talking about true legal liability, it is de minimis.”

Mr. Bass’s $2 billion hedge fund, Hayman Capital, owns eight million shares of G.M., according to a person close to the firm. It is a stake that is small relative to the size of the $51 billion company, but it is the fund’s single biggest holding.

James Detar wrote for Investor’s Business Daily that GM workers stood in the way of an internal inquiry into the faulty ignition switch:

General Motors (GM) came under fresh scrutiny as a report analyzing documents released last week indicated that co-workers apparently blocked an in-house investigation into a faulty ignition switch linked to 13 deaths.

GM shares, which had fallen 30% from a Dec. 26 high to last Friday, rose as much as 3% early Monday. Some analysts have said that the strong auto market in the U.S. and China could offset losses associated with recent recalls.

In a report released Monday based on GM internal emails released by the company last week, Bloomberg found that engineer Brian Stouffer began trying in summer 2011 to determine why some ignition switches caused cars to stall, resulting in accidents. But upper-level managers reassigned him three times in a year, hampering his investigation.

As the story continues to unfold, I’m reminded of something that one of the smartest public relations executives once told me. The gist of the advice was that once a company uncovers something that’s gone wrong, the best way to deal with it is all at once and upfront. It might be painful to air all the dirty laundry at once, but it does prevent the days and days of front-page and bold website headlines as stories unfold slowly. Once the original story is broken, it’s most likely to all come out.



Talking Biz News Today — April 15, 2014


Tuesday’s top business news stories:

The New York Times

In many cities, rent is rising out of reach of middle class, by Shaila Dewan
Etsy, home of the handmade, takes on a wholesaler’s role, by Elizabeth A. Harris

The Wall Street Journal

Radioactive waste is North Dakota’s new shale problem, by Chester Dawson

The Associated Press

Court upholds EPA emission standards, by Pete Yost


Rising food, housing costs push up U.S. inflation, by Lucia Mutikani
Coca-Cola sales beat estimates as China volumes soar, by Siddharth Cavale


Yellen says higher capital rules may be needed for big banks, by Steve Matthews

Today in business journalism

WSJ now seven years without Pulitzer for reporting
NYSSCPA names financial journalism award winners
Vancouver Sun revamps business section
Reuters editor in chief Adler on its first Pulitzer
How a Maine newspaper is increasing its business news coverage

This date in business journalism history

2008: Greenberg to leave MarketWatch, journalism to start research firm
2010: Financial site losing subscribers due to judge’s ruling

Business journalism birthdays

April 15: Amey Stone of CBS MoneyWatch

April 15: Deirdre Fernandes of The Boston Globe

April 15: John Burr of Jacksonville Business Journal


Citigroup beats estimates, vows turnaround


Citigroup Inc. finally had some good news as earnings beat analysts’ expectations for the quarter. But reporters had many different takes on the overall story.

Michael Corkery had this story for the New York Times:

Investors and analysts feared the worst from Citigroup, the global bank that has been besieged for months by regulatory problems and an industrywide trading slump.

But Citigroup managed to beat Wall Street expectations on Monday, with a 4 percent increase in first-quarter profits, compared with a year earlier.

The positive results come after a string of recent stumbles, including Citigroup’s failure to pass the Federal Reserve’s stress test and a costly fraud in its Mexican unit that has spawnedmultiple criminal investigations and broader questions about whether the bank is too large to manage effectively.

“We came into this worrying everything else was going to get worse,” said Moshe Orenbuch, a banking analyst at Credit Suisse. “It was not the case.”

Citigroup’s surprisingly good profit drove its shares up 4.4 percent, as investors expressed relief that the results were not as bad as expected.

Still, the results reflected little broad improvement in the bank’s ability to expand its fundamental businesses.

The Wall Street Journal story by Christina Rexrode and Saabira Chaudhuri focused on CEO Michael Corbet’s promise to deal with the bank’s the regulatory issues:

Citigroup Inc. Chief Executive Michael Corbat vowed to find an “industrial-strength” solution to the regulatory problems dogging the bank

Speaking after Citigroup reported better-than-expected first-quarter earnings Monday, Mr. Corbat faced more than a dozen questions from analysts on the bank’s recent failure to win regulatory approval to return capital to shareholders.

“Is the Fed denial a wake-up call for Citi or not?” CLSA analyst Michael Mayo asked. “We’re wide awake,” Mr. Corbat replied after declaring earlier, “I want, and I know shareholders deserve, an industrial-strength, permanent solution that paves the way for sustainable capital return over time.”

Mr. Mayo has a “buy” rating on Citigroup.

The nearly two-hour analyst call, coming less than three weeks after the Federal Reserve rejected the bank’s capital plan last month, was dominated by questions over the so-called stress tests.

By contrast, the third-largest U.S. lender by assets fielded only two questions on mortgage lending and one on fixed-income trading, two of the most pressing concerns on Wall Street.

While Corbat might have faced his toughest questions about regulation, Reuters reporter David Henry decided to lead with expense cutting, another focus for the bank:

At a meeting with 300 senior Citigroup officials in the first week of February, Chief Executive Michael Corbat said the bank needed to focus on two things above all else this year: expenses and efficiency.

The bank’s first quarter results on Monday showed just how much work Citigroup executives have ahead of them in those areas.

In Citigroup’s main businesses, revenue fell 3.5 percent in the quarter while operating expenses eased only 1.5 percent compared with a year earlier, the bank said. It still needs to cut another 3.5 percent, or $1.5 billion, from its annual operating expenses to meet its own 2015 targets for efficiency, according to Reuters calculations.

The company’s expenses are too high given its weak revenues, said Gary Townsend, a longtime bank stock investor who owns Citigroup shares and formerly ran Hill-Townsend Capital.

High costs have bedeviled Citigroup for a decade. For years, the bank’s problems were mainly linked to its failure to fully integrate businesses built up over years of acquisitions.

That integration is mostly done. But now the bank, like other major American banks, is struggling to cut costs as it seeks to cope with the expense of complying with a welter of new laws and regulations following the financial crisis.

Executives at Citigroup, which had to be rescued by the U.S. government three times during that crisis, in the past 18 months have already eliminated $2.8 billion from the company’s overall annual expense base through layoffs and assorted reorganization and productivity steps, Chief Financial Officer John Gerspach said on a conference call with analysts. A big chunk of that stems from the company’s December 2012 announcement that it was eliminating more than 11,000 jobs.

Dakin Campbell wrote for Bloomberg that Corbat was taking responsibility for the company’s shortcomings in the stress test:

The bank will focus on preparing for the 2015 stress test rather than requesting additional buybacks or dividend increases this year, Corbat said today on a conference call with analysts.

The stress-test rejection means “it’s hard to imagine” a scenario in which the company can meet its 2015 goal of reaching a 10 percent return on tangible common equity, Chief Financial Officer John Gerspach said today on a conference call with journalists.

Corbat said his conversations with regulators lead him to conclude they aren’t opposed to the bank’s business model or strategy. The CEO said he expects the board to hold him responsible for the stress-test failure.

“I’m accountable,” Corbat said on the call. “It is something I’m sure the board will hold me accountable for in 2014 when they reflect upon the year.”

I’m sure the board will hold him accountable and likely so will investors. Citigroup has had a tough time since the financial crisis and its latest regulatory problems. Maybe Corbat can turn it around and maybe not, but the profit is a good start.


Talking Biz News Today — April 14, 2014


Some of Monday’s top business stories:

The New York Times

Local news, off college presses, by Jennifer Conlin
Citigroup reports 4% rise in quarterly profit, despite regulatory woes, by Michael Corkery

The Wall Street Journal

Odd-hour workers face loss of employer health plans, by Lauren Weber
Bangladesh union organizers allege intimidation, by Syed Zain Al-Mahmood and Shelly Banjo


U.S. retail sales post biggest gain in one-and-a-half years, by Lucia Mutikani

The Associated Press

Chances of getting audited by IRS lowest in years, by Stephen Ohlemacher


Lending plunges to 17-year low as rates curtail borrowing, by Kathleen M. Howley, Zachary Tracer and Heather Perlberg

Today in business journalism

Bloomberg View hires El-Erian as daily columnist
Dallas Morning News revamps biz coverage
The WSJ and the Medicare data
Mainebiz names new editor
Yahoo moves into TV

This date in business journalism history

2009: AP launches personal finance package
Reuters editor punished for comment in company chat room

Business journalism birthdays

April 12: Sharon Epperson of CNBC



Yahoo moves into TV


Last week, Yahoo announced yet another strategy to win over Internet users – moving into original TV programming.

The Wall Street Journal had this story by Mike Shields and Douglas MacMillan:

Yahoo Inc. is raising its ambitions in online video, with plans to acquire the kind of original programming that typically winds up on high-end cable-TV networks and streaming services like Netflix, people briefed on the company’s plans said.

The company is close to ordering four Web series, these people said. And unlike in years past, Yahoo isn’t looking for short-form Web originals, but rather 10-episode, half-hour comedies with per-episode budgets ranging from $700,000 to a few million dollars, the people said.

The projects being considered would be led by writers or directors with experience in television. “They want to blow it out big time,” said one of the people briefed about the plans.

Yahoo Chief Executive Marissa Mayer is hoping to show off TV-caliber content to advertisers on April 28 when Yahoo holds its “NewFront” event that is Internet companies’ answer to the so-called upfront ad-sales presentations made by TV networks each spring.

David Carr of the New York Times called Yahoo a “permanent adolescent in search of an identity” in his column about their latest move:

At a time when the culture is addicted to high-end television narratives, Yahoo wants in on the action, partly because while its site may have (flat) traffic — 700 million global visits a month — and (declining) revenue, it has zero cachet and no discernible way forward.

For many years, digital media players watched longingly as HBO and then AMC, FX and Showtime managed to rise above the clutter on television, where Americans still spend five hours a day. So last year, when Netflixbroke through with “House of Cards,” it made sense that companies like Amazon, Hulu and Yahoo would want to follow suit.

There are signs that it is working — streaming for Amazon Prime tripled in the last year and the company has introduced its own device, Fire TV, which will fight for shelf space in your home along with Apple TV, Chromecast and Roku. At the same time, Comcast is seeking a merger that will give it the scale to invest in technology, and HBO Go is pushing to follow the consumer onto mobile. “People always want to be what they aren’t,” said Jonah Peretti of BuzzFeed when we discussed the crisscross the other day.

The prize is dear. Winning in the distribution of high-end content is about mining an audience, and you can’t blame technology companies for believing they have relevant skill sets.

Bloomberg Businessweek reported in a story by Claire Suddath that Yahoo is planning to pay for its new content by selling ads:

Yahoo’s shows will theoretically be ad-supported and available to people for free online, aligning it more closely with YouTube (GOOG) than, say, Netflix’s subscription-driven strategy. Also unlike Netflix (NFLX), which captured an existing audience with the already-beloved Arrested Development and then jumped headfirst into the serialized drama fray with House of Cards, Yahoo is looking for 10-episode comedy series with a per-episode cost that’s less than “a few million dollars,” as the Journal put it—or about the price of a regular network sitcom. That’s a deft move on Yahoo’s part: Audiences already have plenty of novelistic dramas, but what they can’t get online (as original content, anyway) is a new half-hour comedy that really makes them laugh.

The moves by Yahoo and Microsoft are just part of a larger erosion of the traditional TV audience. The shrinking started in 2011 when Nielsen (NLSN) reported that the number of U.S. homes with television sets dropped for the first time in 20 years. As a result, the number of people who watched traditional TV programming, via broadcast or cable, started to decline as well. So far the decline has been slight but in a few years will probably pick up speed. Last year 86 percent of Americans still had cable—down from 88 percent just three years before. The premium cable channels have been hit the hardest: 32 percent of people subscribed to HBO, Showtime, or Starz last year, down from 38 percent in 2012, according to NPD group. Meanwhile, the number of Netflix subscribers rose 24 percent, to 31.1 million people.

As cable audiences shrink and the providers reduce competition by merging (Comcast and Time Warner), there is room for more original programming. The big question is whether Yahoo can move into that space. The firm’s reputation as an Internet innovator and go-to location for content has been damaged during the past few years. Many earlier adopters have left the platform for others. It will be interesting to see if it can win back users or if this is just another phase in its identity search.


Talking Biz News Today — April 11, 2014


Friday’s top business news stories:

The New York Times

G.M. documents show years of talks on flaw, by Hilary Stout and Bill Vlasic
Sony warns some new laptop batteries may catch fire, by Neil Gough

The Wall Street Journal

Amazon preparing to release smartphone, by Greg Bensinger and Evelyn Rusli
U.S. corn exports to China dry up over GMO concerns, by Jacob Bunge

The Associated Press

4 years after spill, questions on long-term health, by Stacey Plaisance and Kevin McGill


JPMorgan loses money every time it makes a mortgage, by Stephen Gandel


How Chick-fil-A spent $50 million to change its grilled chicken, by Vanessa Wong
Samsung’s war at home, by Cam Simpson

Today in business journalism

Mainebiz names new editor
WSJ putting standards editor in Hong Kong
Looks like Cohen gets off

This date in business journalism history

2006: Feds file charges on insider trading scam using BusinessWeek info
2013: CNBC.com hires SmartMoney.com editor


April 11: Olivia Barrow of Dayton Business Journal


The WSJ and the Medicare data


Erik Wemple of The Washington Post writes about the role of The Wall Street Journal in obtaining the release of data about how much Medicare was paying doctors across the country.

Wemple writes, “Colleen Schwartz, a spokeswoman for Dow Jones & Co., tells the Erik Wemple Blog, ‘If it weren’t for the Journal’s efforts to overturn the injunction, the public would not have this information.’

“Injunction? Indeed: Settle in for a wild government-records story, one that dates back to the time that the Department of Health & Human Services was known as the Department of Health, Education and Welfare (HEW). In March 1977, HEW helped out the public by releasing information identifying physicians that had received Medicare reimbursements of $100,000. The department was getting ready to make public more data about Medicare when the Florida Medical Association and some physicians sued to stop the release of information. They prevailed: In October 1979, federal Judge Charles R. Scott issued a permanent injunction against disclosing ‘any list of annual Medicare reimbursement amounts, for any years, which would personally and individually identify those providers of services under the Medicare program who are members of the recertified class in this case.’

“And for the most part, there the matter stood for decades. In 2009, the Wall Street Journal, along with the Center for Public Integrity (CPI) began trying to chip away at the records denial, as outlined in this court document. Following the submission of a Freedom of Information Act request by CPI, the parties reached a settlement with HHS to access something called the ‘Carrier Standard Analytic File,’ essentially a bunch of Medicare data that hadn’t ever seen sunlight. The Wall Street Journal used the information as the basis for a celebrated 2010 series on Medicare; it was a finalist for the Pulitzer Prize, which commended the publication for ‘its penetration of the shadowy world of fraud and abuse in Medicare, probing previously concealed government databases to identify millions of dollars in waste and corrupt practices.’

“The Wall Street Journal wasn’t done, however. In January 2011, Dow Jones filed suit to kill the entire injunction, the better to open access to the whole trove of Medicare reimbursement data. It pushed the clear public interest in the disclosure, noting that Medicare ‘has grown twenty-fold in nominal dollars, and nearly three-fold as a percentage of the total federal budget’ since the 1979 injunction. The May 2013 ruling in the case read in part, ‘Intervenor Dow Jones & Company, Inc.’s Motion to Vacate Permanent Injunction (Doc. 56) is GRANTED.’”

Read more here.

SAC Capital

Looks like Cohen gets off


SAC Capital settled charges of insider trading Thursday, and sources close to the firm are saying that this is likely the end of the line for charges.

The Wall Street Journal story by Christopher M. Matthews led with the news that prosecutors are not likely to continue pursuing founder Steven Cohen:

After a decadelong probe into SAC Capital Advisors LP, federal prosecutors won approval of a $1.8 billion settlement with the hedge fund but appear to have all but given up efforts to charge its billionaire founder, Steven A. Cohen.

On Thursday, a federal judge approved a guilty plea entered on behalf of SAC and a landmark insider-trading settlement with the firm. Prosecutors and the Federal Bureau of Investigation have eyed Mr. Cohen for years, but haven’t been able to mount a criminal case against him personally. While prosecutors aren’t barred under terms of the settlement from indicting Mr. Cohen or other SAC traders, no new charges are imminent, according to a person familiar with the matter.

U.S. District Judge Laura Taylor Swain accepted the criminal settlement in federal court in Manhattan, calling the pact unprecedented. “The defendants’ crimes were striking in their magnitude and strikingly indicative of a lack of respect for the law,” Judge Swain said.

After years of denials, the hedge fund agreed to plead guilty to insider trading in November and pay a $1.8 billion penalty, marking a high point in the government’s yearslong clampdown on such illicit practices. Over the past two decades, SAC became one of the most successful hedge funds in the world, earning billions of dollars in profits for Mr. Cohen and his investors.

The New York Times pointed out all the recent changes at the firm, including a new name, in a story by Matthew Goldstein and Ben Protess:

Now the 57-year-old investor is hoping for a less litigious transition for his firm, as it becomes a so-called family office, rechristened Point72 Asset Management, that will manage about $9 billion of his own fortune.

Federal authorities, speaking on condition of anonymity, privately acknowledge that additional charges against SAC employees are unlikely unless new evidence surfaces. And the authorities, who still have a smattering of insider trading cases to file against other hedge funds, have seen a slight downtick in reports of suspicious trading.

But to shake fully its tainted past — and steer clear of the spotlight — Mr. Cohen’s firm will have to do more than plead guilty and change its name. And for Mr. Cohen, who has not been criminally charged despite spending the better part of a decade under investigation, a few legal hurdles remain before he can exhale.

Mr. Cohen still faces a civil action from the Securities and Exchange Commission, which during the course of the case could identify additional wrongdoing and permanently bar him from managing money for outside investors. The Federal Bureau of Investigation, authorities say, also continues to examine a handful of stocks for signs of insider trading at SAC, while several former employees who cooperated with the investigation have yet to be sentenced, a sign the case is not officially closed.

Patricia Hurtado’s story for Bloomberg offered this background on the investigation, which has been going on since 1999:

The alleged scheme involved more than 20 companies and went back as far as 1999. Indicted in July, the hedge fund agreed in November to plead guilty to four counts of securities fraud and one count of wire fraud, and to shutter its investment advisory business.

Cohen’s firm managed about $11.9 billion in assets as of Feb. 1, according to regulatory filings. Executives at the hedge fund had expected to start this year with only $9 billion after returning capital to investors.

The grand jury indictment of the fund outlined criminal conduct by at least eight former SAC Capital employees. Noah Freeman, Donald Longueuil, Wesley Wang, Richard Choo-Beng Lee, Richard Lee and Jon Horvath have all pleaded guilty. Two portfolio managers, Mathew Martoma and Michael Steinberg, were convicted separately after trials in Manhattan federal court.

The government said SAC Capital encouraged its employees to obtain an informational “edge” over competitors, and hired people specifically for their contacts with insiders at publicly traded companies.

Manhattan U.S. Attorney Preet Bharara, whose office has pursued SAC Capital and its employees for more than six years, described the hedge fund as a “firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct.”

The saga has been long and drawn out, but it does bring up the issue of, what’s the point of it all? Years of government time and effort, and the man responsible likely isn’t going to face criminal prosecution. While he may not be able to manage others money, his personal wealth is still more than the vast majority of hedge funds have in their coffers. It’s hard to see the punishment.