Tag Archives: News event
by Liz Hester
Koch Industries, controlled by billionaires Charles and David of the same name, is now looking to expand their reach to the media, something new for the conglomerate.
Here’s the story from the New York Times:
Other than financing a few fringe libertarian publications, the Kochs have mostly avoided media investments. Now, Koch Industries, the sprawling private company of which Charles G. Koch serves as chairman and chief executive, is exploring a bid to buy the Tribune Company’s eight regional newspapers, including The Los Angeles Times, The Chicago Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford Courant.
By early May, the Tribune Company is expected to send financial data to serious suitors in what will be among the largest sales of newspapers by circulation in the country. Koch Industries is among those interested, said several people with direct knowledge of the sale who spoke on the condition they not be named. Tribune emerged from bankruptcy on Dec. 31 and has hired JPMorgan Chase and Evercore Partners to sell its print properties.
The papers, valued at roughly $623 million, would be a financially diminutive deal for Koch Industries, the energy and manufacturing conglomerate based in Wichita, Kan., with annual revenue of about $115 billion.
Politically, however, the papers could serve as a broader platform for the Kochs’ laissez-faire ideas. The Los Angeles Times is the fourth-largest paper in the country, and The Tribune is No. 9, and others are in several battleground states, including two of the largest newspapers in Florida, The Orlando Sentinel and The Sun Sentinel in Fort Lauderdale. A deal could include Hoy, the second-largest Spanish-language daily newspaper, which speaks to the pivotal Hispanic demographic.
They’re not the only ones looking at the media properties. Here are a few more details from the Wall Street Journal:
The Kochs are among several parties that have shown interest in Tribune’s titles, the people said. Others include greeting-card magnate Aaron Kushner, who led a group that purchased the Orange County Register and six other Freedom Communications dailies last year. In an interview Sunday, Mr. Kushner reiterated his interest in a potential bid for all of the Tribune papers.
Koch Industries encompasses a vast array of mostly industrial businesses, from energy to paper milling, but to date has had little exposure to the media business.
The Koch brothers have been active funders of conservative causes such as the Americans for Prosperity political action committee, however, and Koch Industries has started its own website, KochFacts.com, to rebut what they see as inaccurate reporting about their activities.
The sale process is still in preliminary stages. Financial information on the papers is expected to go out next month, say people familiar with the situation. Formal bids wouldn’t be expected until some time later.
A representative for Tribune said it “our long-standing policy is to decline to comment on any speculation involving the company or its media businesses.”
The Times said the main competitor for the Los Angeles Times is a local group:
Koch Industries’ main competitor for The Los Angeles Times is a group of mostly Democratic local residents. In the 2012 political cycle, Mr. Broad gave $477,800, either directly or through his foundation, to Democratic candidates and causes, according to the Center for Responsive Politics. Mr. Burkle has long championed labor unions. President Bill Clinton served as an adviser to Mr. Burkle’s money management firm, Yucaipa Companies, which in 2012 gave $107,500 to Democrats and related causes. The group also includes Austin Beutner, a Democratic candidate for mayor of Los Angeles, and an investment banker who co-founded Evercore Partners.
“This will be a bipartisan group,” Mr. Beutner said. “It’s not about ideology, it’s about a civic interest.” (The Los Angeles consortium is expected to also include Andrew Cherng, founder of the Panda Express Chinese restaurant chain and a Republican.)
Apparently, the Tribune Co. is the preferred bidder for the newspapers, according to the New York Times:
At this early stage, the thinking inside the Tribune Company, the people close to the deal said, is that Koch Industries could prove the most appealing buyer. Others interested, including a group of wealthy Los Angeles residents led by the billionaire Eli Broad and Ronald W. Burkle, both prominent Democratic donors, and Rupert Murdoch’s News Corporation, would prefer to buy only The Los Angeles Times.
The Tribune Company has signaled it prefers to sell all eight papers and their back-office operations as a bundle. (Tribune, a $7 billion media company that also owns 23 television stations, could also decide to keep the papers if they do not attract a high enough offer.)
Koch Industries is one of the largest sponsors of libertarian causes — including the financing of policy groups like the Cato Institute in Washington and the formation of Americans for Prosperity, the political action group that helped galvanize Tea Party organizations and their causes. The company has said it has no direct link to the Tea Party.
A lot of the concern about the politicizing of the media reminds me of similar concerns voiced when Rupert Murdoch bought The Wall Street Journal. If people with the means are able to buy coverage or editorial page space, then there is the risk that others’ ideas won’t be covered.
Murdoch did institute changes to the structure of stories but not to coverage. Let’s hope that if the Koch brothers do win the Tribune properties, there won’t be any meddling in the editorial policies.
by Chris Roush
Bloomberg photographer Kelvin Ma took the photo of wheelchair-bound Jeff Bauman near the marathon finish line — moments after he looked into the eyes of one of the men who tried to kill him.
Ma writes, “We were evacuated off the bridge shortly thereafter, at which point I texted my mom that I was OK and sent out a two-word Tweet—’I’m OK.’—for everyone else. I then contacted Bloomberg News, and the photo editor, Graham Morrison, encouraged me to find a place to sit down, regain my composure and transmit the images I had captured. I was running on pure adrenaline and had no idea what to do, but Morrison’s reassurance and counseling through all of the trauma and chaos helped me stay grounded in the situation.
“After securing an internet connection in the Prudential Center, I pushed my photos to the wire. I sent more emails and made more social media posts to let people know I was OK, and then headed back toward the scene, making some more photos along the way.
“The outpouring of support from the photojournalism community has been incredible, whether it be from people I’ve known for years to someone I just met on Monday. I can’t express enough how grateful I am to have such supportive brothers and sisters in my corner every step of the way.
“I tracked down the last runner I photographed before the blast and gave her a hug. Down to a matter of seconds, it really was a miracle she was standing there unscathed. I have never been so happy to see someone I hadn’t met yet.
“Around 9 p.m. Tuesday, I saw a familiar face on the New York Times website. Jeff Bauman, whose horrific injuries had kept me awake the night before, had survived and was stable in a local hospital. Learning that he had made it lifted the heavy cloud that had engulfed me. His recovery will no doubt be long and difficult, but he is still with us.”
Read more here.
by Chris Roush
Susan Anderson, the new business editor of the Casper Star-Tribune in Wyoming, writes about why business news coverage in the state is different than anywhere else.
Anderson writes, “If you try to describe living in Wyoming to someone from elsewhere, after you finish with our terrific outdoors and small cities or towns, you plunge right into what it’s like to work in the state with the least number of people spread over 98,000 square miles.
“Building a road in Wyoming has its unique issues. So does selling ice cream in a town of 10,000 that can balloon to 40,000 in travel seasons. It’s one of the delights of covering business in Wyoming to see the ways that people tackle their sometimes-exotic challenges.
“Give us a call
“People sometimes think we reporters know more than we do. In fact, we often don’t know about it if you don’t tell us.
“Writing about business in this Sunday section will be about much more than numbers and profit reports. The people who struggle and fail or succeed give us all insights that charts and numbers cannot.
“Expect to meet many of your neighbors in these pages. We want to know Wyoming people who are building their own businesses or struggling with universal challenges.”
Read more here.
by Liz Hester
Remember when the market was peaking? Well, it seems that all that optimism on corporate performance was misplaced. Several companies have reported earnings that missed analysts estimates, prompting investors to pair back exposure to stocks.
Let’s start with the Wall Street Journal’s coverage of the market:
Technology and consumer stocks led the market’s decline following a basket of lackluster earnings reports.
The Dow Jones Industrial Average fell 63 points, or 0.4%, to 14559, in late trading Thursday. The Standard & Poor’s 500-stock index slid nine points, or 0.6%, to 1543, on pace for its lowest level since early March. The Nasdaq Composite Index sank 40 points, or 1.3%, to 3164.
Stocks have seen big swings this week, alternating between gains and losses, starting with Monday’s 266-point decline, the Dow’s biggest of the year. Tuesday’s rebound was nearly washed away by Wednesday’s 138-point drop for the blue chips.
Quarterly earnings reports from a host of major corporations set the tone of trading.
Through Thursday morning, first-quarter earnings growth for 82 of the S&P 500′s companies had declined 0.4%, according to FactSet, on pace to mark the second year-over-year decline in earnings in the past three quarters. Meanwhile, corporate revenue is expected to rise 3.2% in the first quarter, well below growth of 6% in the first quarter last year, according to S&P Capital IQ.
“The revenue side of the equation looks challenged on the whole,” said Bill Stone, chief investment strategist at PNC Asset Management Group. “That’s a testament, unfortunately, to a global economy that continues to struggle.”
Reuters decided that the declines were due to “weak economic data” and said it was the third day of losses:
Stocks fell on Thursday for the third day this week after data showed signs of slower growth ahead for the U.S. economy, while bearish technical signals added to doubts about the market’s strength.
Bloomberg led with earnings, but included the Philadelphia region manufacturing numbers, then returned with context about the quality of earnings this season.
Stocks kept losses after a measure of manufacturing in the Philadelphia region expanded at a slower pace and the index of U.S. leading indicators unexpectedly declined for the first time in seven months. The S&P 500 fell below its 50-day moving average for the first time this year. That level, currently at around 1543, is watched by some analysts to gauge the trend of the market.
Almost 30 companies in the S&P 500 were scheduled to post results today. Of the 82 that have reported since the season began, 74 percent have beaten analysts’ estimates for profit and 49 percent have exceeded sales forecasts, according to data compiled by Bloomberg. Analysts project first-quarter results dropped 1.4 percent, the first contraction since 2009.
The Chicago Board Options Exchange Volatility Index (VOL), or VIX, increased 4.9 percent to 17.31. The gauge briefly erased losses for the year after climbing as much as 10 percent. The VIX, which moves in the opposite direction to the S&P 500 about 80 percent of the time, reached a six-year low in March and has since risen 53 percent.
“When we were heading into this earnings season, the estimates had come down, but the S&P itself was still in a situation where sentiment was high and correcting,” Sam Turner, a fund manager with Richmond, Virginia-based Riverfront Investment Group LLC, said in the phone interview. His firm manages $3.7 billion. “That can play itself out with a consolidation.”
And for the international perspective, let’s look at the Financial Times, which said investors were worried about global growth prospects:
Equity and commodity markets in the US and Europe had a choppy time as investors struggled to shake off lingering concerns about the prospects for global economic growth.
Gold also experienced a fresh bout of volatility but managed to keep intact its recovery from a two-year low struck earlier this week. The yellow metal was up 0.8 per cent to $1,387 an ounce, although silver edged back slightly.
The latest economic reports out of the US did little to quell worries that a slowdown could be under way.
The Philadelphia Federal Reserve’s April survey of manufacturing activity weakened slightly while the index of leading indicators for March also fell. Meanwhile, initial jobless claims edged up slightly last week – the survey period for the Bureau of Labour Statistics’ April non-farm payrolls report.
“The spring and summer dips in economic activity that dominated 2011 and 2012 look to be repeating this year again,” said Steven Ricchiuto, chief economist at Mizuho Securities USA.
The data kept alive the sense of uncertainty in the markets prompted earlier in the week by unexpectedly weak Chinese GDP figures, some worrying numbers from Germany and the International Monetary Fund’s downgrade to its 2013 global growth forecasts. Indeed, Andrew Kenningham at Capital Economics argued that the IMF’s projections – while far from bullish – still looked too optimistic.
Either way, seems some of that investor optimism is heading out the door and money is being pulled out of the markets. No matter what you blame it on, it seems the stock market party might be over.
by Liz Hester
There were a couple of stories out Tuesday about housing and its current state. While seeming unrelated, together they help readers make a prediction about which way the market will go.
The first story about new home starts comes from the Wall Street Journal:
New-home construction leapt last month to the highest level since before the financial crisis, driven by a big gain in the volatile multifamily-home segment.
Construction of homes with at least five units rose about 27% in March from a month earlier, to the highest level since January 2006, while single-family homes were down 4.8% on a monthly basis.
The government’s figures for the multifamily sector tend to be volatile. But analysts see continued strength for the apartment market, especially as many families have damaged credit and are locked out from buying homes for several years.
“The processing of foreclosed and delinquent properties is transitioning many households away from homeownership and into rentership, which accounts for the relative strength of multi-family starts over single family starts,” wrote Michael Gapen, an economist with Barclays Capital.
Analysts cautioned against being overly concerned about the decline in single-family construction, especially since the previous month’s figures were the highest since May 2008. The data “do not alter the overall picture of single-family new construction activity, which continues to recover gradually,” analysts at RBS Securities Inc. wrote in a note to clients.
Economists largely believe improvements in the housing market will be a bright spot for the tepid economic recovery this year. Investments in residential projects and home improvements have contributed to overall economic growth for seven consecutive quarters.
That’s good news that more money is pouring into a sector that previously saw little investment. It’s also a good sign that banks are lending to finance new construction as loans have been tight in the past several years. But it’s not just new homes that are getting financing, according to Bloomberg Businessweek.
Even as banks impose stricter mortgage standards, the improving job market is lifting incomes and helping families such as the Schmitts repair credit scores, expanding the pool of eligible buyers and providing additional firepower to the housing recovery. About 7 million mortgage holders have had to leave their homes since 2007 because of foreclosure or a short sale, in which a property is sold for less than is owed, according to RealtyTrac. More than 1 million of them are now eligible for mortgages backed by the Federal Housing Administration, which considers applicants three years after a foreclosure or short sale, says Mark Zandi, chief economist for Moody’s Analytics (MCO). Eligible households will expand to nearly 2 million by the end of 2014. “This could be a significant source of housing demand going forward,” Zandi says. “Lots of people lost jobs through no fault of their own. They will be good credit risks in a reasonably good economy. It was not their willingness that was the problem, but their broad ability to pay.”
As the economy has recovered, Americans have lifted their credit scores by paying off credit cards, car loans, and other debts, says Joanne Gaskin, product management director for scores at FICO (FICO), which assesses creditworthiness. Says Ezra Becker, a vice president at credit bureau TransUnion: “One of the great tenets of credit is that time heals.”
While lending standards remain restrictive compared with the real estate boom, they’re easing. The average FICO score for conventional home loans fell to 761 in February from 764 a year earlier, according to Ellie Mae (ELLI), which provides software to the mortgage industry. Average down payments declined to 20 percent from 22 percent. Lenders may further loosen standards when the current refinancing boom ends and they turn their focus to home buyers, according to Andrew Davidson, president of Andrew Davidson & Co., a consulting firm.
Taken together, that’s more homes and more potential buyers. But it’s hard not to feel uneasy when people start looking to housing to grow the economy and create wealth. So many lost so much turning the last downturn. Here’s hoping that all the optimism is tempered by some caution and realism.
by Chris Roush
Bloomberg L.P. filed a lawsuit on Tuesday against the top U.S. derivatives regulator to fight a new rule that would make the trading of swaps more expensive and hurt its business.
Douwe Miedema of Reuters writes, “Bloomberg is one of a dozen or so providers that plan to launch platforms on which to trade swaps, as regulators globally crack down on the $650 trillion market to prevent a repeat of the 2008 financial crisis.
“Under a rule by the Commodity Futures Trading Commission (CFTC), buyers and sellers of swaps must set aside enough money- so-called margin – to cope with the impact of a deal falling apart, assuming it takes five days to unwind the position.
“But for futures, a rival type of product, the assumption is that deals can be unwound in one day, making them far cheaper to use.
“‘These arbitrary requirements are the result of a flawed rule-making process and a patently deficient cost-benefit analysis,’ said Eugene Scalia, Bloomberg’s high-profile lawyer. ‘The rule will have a serious adverse effect on the market.’
“The CFTC declined to comment on the lawsuit, filed in federal court in Washington, D.C.”
Read more here. The question is whether Bloomberg News can now objectively cover the regulator with this conflict of interest. It was argued by some that Bloomberg’s coverage of the Federal Reserve was tainted when it filed a lawsuit seeking to disclose what banks had been lent money during the economic crisis of 2008.
by Liz Hester
In a fun turn of events for technology reporters and Wall Street, Dish Network decided to put together a $25.5 billion bid for Sprint Nextel, offering a competing bid to Japanese Softbank’s.
Here are some of the details from the New York Times:
The pay-TV operator Dish Network said on Monday that it had submitted a $25.5 billion bid for Sprint Nextel.
The move is an attempt to scupper the planned takeover of Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in the American cellphone operator in a complex deal worth about $20 billion.
Dish Network thinks it can do better. Under the terms of its proposed bid, Dish Network said it was offering a cash-and-stock deal worth about 13 percent more than SoftBank’s bid.
Dish Network values its offer at $7 a share, including $4.76 in cash and the remainder in its shares. The offer is 12.5 percent above Sprint Nextel’s closing share price on Friday.
“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charles W. Ergen, Dish Network’s chairman.
Mr. Ergen said a “Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”
The Wall Street Journal put the latest move by Dish into great context in this piece:
The unsolicited offer is Mr. Ergen’s most audacious attempt yet to move from the slow-growing pay-television business into the fast-evolving wireless industry. The satellite TV pioneer eased into the industry by amassing spectrum and winning approval from regulators last year to use it to offer land-based mobile-phone service. But he lacks much of the rest of the operation, including a cellphone network, which would be costly and time-consuming to build.
Combining his company with Sprint would allow Dish to offer video, high-speed Internet and voice service across the country in one package whether people are at home or out and about, Mr. Ergen said. People who don’t have access to broadband from a cable company would be able to sign up for Internet service delivered wirelessly from Sprint cellphone towers to an antenna installed on their roof, Mr. Ergen said.
Taking over Sprint would be a big bite. The wireless carrier booked $35.3 billion in revenue last year, compared with $14.3 billion for Dish. The combined company would carry more than $36 billion in debt, according to CapitalIQ, even before loading on the $9 billion Dish indicated it would borrow to do the deal.
Dish said it would be able to execute a definitive merger agreement after reviewing Sprint’s books. The satellite company said it is being advised by Barclays, which is confident it can raise the funding.
Earlier this year, Dish made an informal offer to buy Clearwire Corp. —a wireless carrier that is half-owned by Sprint and that has agreed to sell Sprint the other half. Dish has yet to move forward with a formal bid.
Mr. Ergen said the “deck was stacked against us” with Clearwire due to a tangle of contractual obligations. With Sprint, the only obstacle is a $600 million breakup fee that would be due Softbank. He said he is willing to pay that.
Bloomberg Businessweek wrote a frequently asked questions piece, which offered this info on regulatory and David Einhorn’s position in Sprint:
Are there regulatory issues?
Probably not. Given the power of Verizon (VZ) andAT&T (T), analysts don’t expect a Dish, Sprint tie-up to hit anti-trust hurdles. On the contrary, Dish says the deal would be particularly good news for rural consumers who don’t have access to traditional broadband. If there’s anything FCC commissioners like, it’s rural consumers.
How about that David Einhorn?
Right? Einhorn’s Greenlight Capital snapped up a bunch of Sprint shares as the company swooned in recent years. At the end of the first quarter last year, when Sprint shares were wallowing below $3, Greenlight had 68 million of them.
The Bloomberg wire story quoted an analyst as saying the deal had some merits despite the heavy debt load the potential company might hold:
The combined company will have an estimated $40 billion in debt, a heavy load, said Philip Cusick, an analyst at JPMorgan Chase & Co. in New York. Still, the long-term synergies and cash generation make the idea “very compelling,” he said.
“The next question is the response from the Sprint board and whether Softbank comes back with another bid, potentially using its balance sheet advantage with more cash,” Cusick, who has a neutral rating on Dish, said in a report.
Dish’s offer extends a frenzy of consolidation for the U.S. wireless industry. Smaller carriers are seeking out merger partners to help wage a stronger attack against the two dominant competitors, Verizon Communications Inc. and AT&T Inc.
T-Mobile USA Inc., the fourth-largest U.S. carrier, is closing in on a merger with MetroPCS Communications Inc. (PSC), which is No. 5 in the industry. Deutsche Telekom AG (DTE), T-Mobile’s parent company, sweetened its offer for MetroPCS last week in order to get reluctant investors to agree to the terms.
It’s going to be interesting to see which deal the Sprint board selects and what reasons they offer for their choice. Dish obviously has grand ambitions and sees some part of Sprint playing into its plans. But does the Sprint board agree? Only time will tell.
by Chris Roush
Colleen Nelson, a Wall Street Journal staff reporter, finished the Boston Marathon on Monday just minutes before the explosions that killed two and injured more than 100.
I crossed the finish line of the Boston Marathon a little later than I had hoped—at about three hours and 49 minutes—but was relieved to be done. I limped forward on Boylston, grabbing Gatorade and retrieving my finisher’s medal.
I’d made it several yards past the finish line when I heard the first startling boom.
I kept walking but only took a couple more steps when I heard it again: Boom!
Cheers were replaced by silence and confusion. Farther away, I could hear screams.
“Was that a bomb?” runners asked one another. Was someone shot? Someone pointed to a nearby construction site and suggested that perhaps a crane had fallen.
I was just far enough away that I couldn’t see the gory scene unfolding a block away. There, injured and bloodied spectators who had cheered me on a few minutes earlier now were being rushed to medical tents originally set up for hobbled runners.
Read more here.
by Liz Hester
There were two similar stories in the Wall Street Journal and the New York Times on Thursday about the complexity of large financial firms and what they’re doing to simplify their structures.
The Journal story focused on the number of subsidiaries that many of the largest financial firms have and where they’re located.
Wells Fargo & Co. Chief Executive John Stumpf has described the bank’s business model as “meat and potatoes.” But the fourth-largest U.S. lender has 3,675 subsidiaries, up 8.6% from five years ago, according to an analysis provided to The Wall Street Journal by Swiss research firm Bureau van Dijk Electronic Publishing Inc.
Wells Fargo isn’t alone. In all, the six largest U.S. banks have 22,621 subsidiaries, according to the Journal’s analysis.
While that is down 18% in the past five years, regulators said they are getting frustrated with banks’ slow and uneven progress in streamlining their labyrinths of business units, offshore entities and other appendages.
Comptroller of the Currency Thomas Curry, whose agency oversees national banks, said in an interview that his staff intends to pay closer attention to “needless corporate complexity” and “whether it’s time to start cutting some of the brush out.”
The sprawling nature of the largest U.S. banks will be on display starting Friday, when Wells Fargo and J.P. Morgan Chase Co. report first-quarter financial results. A Wells Fargo spokesman declined to comment on the data provided by Bureau van Dijk “because we do not know its methodology” and said its filings show subsidiaries down by 23% since the end of 2008, to 1,361. The number of legal entities “is not an indicator of risk and Wells Fargo has a long track record of prudent risk management in all our businesses.”
Complexity in the banking sector has vexed regulators since the financial crisis, when troubles at big U.S. firms quickly spread throughout global markets. The U.S. government intervened to prop up the largest firms, prompting calls to break up those deemed “too big to fail.”
Regulators have introduced rules requiring banks to maintain a fatter financial cushion against losses than other institutions, accept strict limits on the biggest banks’ exposure to one another and submit a new set of plans showing how they would be unwound in the crisis.
And according to the Times, some of the largest firms are shifting assets and risk to other parts of the market, which may cause regulators to have a skewed picture of their capital.
Banks have been shedding risky assets to show regulators that they are not as vulnerable as they were during the financial crisis. In some cases, however, the assets don’t actually move — the bank just shifts the risk to another institution.
This trading sleight of hand has been around Wall Street for a while. But as regulators press for banks to be safer, demand for these maneuvers — known as capital relief trades or regulatory capital trades — has been growing, especially in Europe.
Citigroup, Credit Suisse and UBS have recently completed such trades. Rather than selling the assets, potentially at a loss, the banks transfer a slice of the risk associated with the assets, usually loans. The buyers are typically hedge funds, whose investors are often pensions that manage the life savings of schoolteachers and city workers. The buyers agree to cover a percentage of losses on these assets for a fee, sometimes 15 percent a year or more.
The loans then look less worrisome — at least to the bank and its regulator. As a result, the bank does not need to hold as much capital, potentially improving profitability.
Some regulators say they are concerned that in some instances these transactions are not actually taking risk off bank balance sheets. For instance, a financial institution may end up lending money to clients so they can invest in one of these trades, a move that could leave a bank with even more risk on its books.
Critics point to other reasons to worry. Most of these trades are structured as credit-default swaps, a derivative that resembles insurance. These kinds of swaps pushed the insurance giant American International Group to the brink of collapse in September 2008. Another red flag is that banks often use special-purpose vehicles located abroad, frequently in the Cayman Islands, to structure these trades.
Both these stories, while different in focus and tone, tackle the complicated issue of simplifying the banks and determining if they’re making progress toward complying with new laws. As the rules continue to be shaped, coverage of the banks and if they’re working to prevent a collapse will be increasingly important and likely to go on for years.
by Chris Roush
U.S. law enforcement officials have reversed a decision to wind down an investigation into how news agencies handle the release of economic data to investors, concerned some sensitive information may have leaked into financial markets.
Timothy Ahman of Reuters writes, “The Wall Street Journal reported earlier on Wednesday that Thomson Reuters Corp, the parent of Reuters News, Bloomberg LP and Dow Jones & Co., a unit of News Corp, were among the media companies under investigation.
“The source who spoke to Reuters declined to provide details.
“Reuters and the Wall Street Journal reported in January that law enforcement authorities had conducted an investigation into whether media companies facilitated insider trading by prematurely releasing market-sensitive data, but decided not to bring charges.
“Media organizations are provided sensitive economic data during “lockups” in which they are not supposed to transmit any information until a set embargo time has lifted.
“The Wall Street Journal reported on Wednesday that the FBI had been frustrated the Commodity Futures Trading Commission had not provided data sought by investigators. Citing officials familiar with the probe, it said the CFTC had since agreed to provide trading data and analysis to help the investigation.
“‘We are not aware of a current investigation nor any embargo violations,’ said Ty Trippet, a spokesman for Bloomberg LP. A spokeswoman for Dow Jones, Paul Keve, said the government had not contacted Dow Jones about any criminal investigation. Thomson Reuters spokesman David Girardin declined to comment.”
Read more here.