Weil on Finance: Deal time for Feds and SAC Capital?
Happy hump day, View fans. Here is a look at some of what I’ve been reading this morning.
How much must SAC Capital pay to make the feds go away?
Yesterday Bloomberg News reported that lawyers for SAC Capital Advisors (which is presently under indictment) had told prosecutors the hedge fund would be willing to settle the case for a fine of close to $1 billion. Now the Wall Street Journal reports that prosecutors proposed settling for $1.5 billion to $2 billion. So it looks like this case won’t be going to trial. The Journal reports that the government would insist on a guilty plea by SAC. Whether Steve Cohen’s firm survives as anything more than a family office, we’ll see. That would be tough with a criminal conviction on its record.
Amway goes to China, does well
The household-products seller has opened stores in China and teamed up with (never would have guessed this) Harvard’s John F. Kennedy School of Government, which “has been training Communist apparatchiks known as Amway Fellows,” write Dune Lawrence and Liza Lin of Bloomberg News. Amway’s sales in the country have been surging, and China is now its top market. Whatever you think of Amway –- don’t you dare say it looks like a pyramid scheme, or the company will get very upset –- it’s thriving.
Hong Kong Stock Exchange, a model of strong listing standards?
Alibaba Group Holding Ltd., the Chinese Internet giant, is threatening to go public in New York instead of Hong Kong, where the stock exchange doesn’t allow dual-class stock structures or similar devices for management to keep corporate control. Steven Davidoff, an Ohio State University law professor, says: “Unfortunately, this may be a race to the bottom –- with the United States leading the way.” He wrote this in the flagship newspaper of the New York Times Co., which has a dual-class stock structure.
Sign of a top for house flippers
Matthew Goldstein of Reuters writes that the home gold rush is over: “The news that Oaktree Capital Management and Carrington Mortgage Services are putting the 500 homes they’ve acquired and leased out up for bid may well be an indication of more to come. With increases in rents leveling off, the economics of buying single-family homes to rent them out becomes more dicey -–especially given the 20% or greater surge in home prices in the markets favored by investors.”
Matt Taibbi on what AIG’s Robert Benmosche told WSJ
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)