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February 15, 2013

Daily newsletter from NYSSA for investment professionals

Top Story

Sen. Warren asks regulators about lack of prosecutions
Sen. Elizabeth Warren, D-Mass., used her first Senate banking committee hearing to question officials from the Commodity Futures Trading Commission, the Securities and Exchange Commission and other regulators about prosecution of Wall Street companies. Sen. Tim Johnson, D-S.D., chairman of the committee, said regulators should focus on completing Dodd-Frank Act rules before addressing the issue of "too big to fail." Reuters (2/14), The Hill/On the Money blog (2/14), Bloomberg (2/14), WealthManagement.com (U.S.)/Rulebook blog (2/14), The Wall Street Journal/Washington Wire blog (2/14)

Industry Update

Heinz to be sold to Berkshire Hathaway and Brazilian firm
Warren Buffett's Berkshire Hathaway and the Brazilian financial firm 3G Capital signed a $28 billion deal to acquire food giant H.J. Heinz. The buyers will pay $72.50 a share, a 20% premium to Heinz stock's closing price Wednesday, and assume existing debt. Day-to-day management of Heinz will be in the hands of 3G Capital, which took control of Burger King two years ago. The New York Times (tiered subscription model)/DealBook blog (2/14), Latin American Herald Tribune (Venezuela)/Agencia EFE (Spain) (2/14), Pittsburgh Post-Gazette (2/14)

Suspicious trading ahead of Heinz deal draws SEC's attention
The Securities and Exchange Commission launched an insider-trading inquiry related to the pending acquisition of H.J. Heinz Berkshire Hathaway and 3G Capital. The commission became suspicious after noticing a spike in trading activity for Heinz options Wednesday. The New York Times (tiered subscription model)/DealBook blog (2/14), Bloomberg (2/14), Financial Times (tiered subscription model) (2/14)

Nasdaq aims to start premarket trading 3 hours earlier
Nasdaq OMX Group said it wants to change the starting time for premarket trading from 7 a.m. to 4 a.m. Eastern. The change requires Securities and Exchange Commission approval and would be implemented no sooner than March 18, Nasdaq said. Bloomberg Businessweek (2/14)

FASB proposal would give banks flexibility when valuing assets
A rule proposed by the Financial Accounting Standards Board would reduce the importance of market value when banks report the worth of assets on financial statements. The rule would give banks broad flexibility in establishing the value of financial assets. Reuters (2/14), The New York Times (tiered subscription model) (2/14)

Editorial: Obama is right to oppose European transaction tax
The White House has voiced opposition to a proposed tax on financial transactions, such as stocks, bonds and derivatives, in 11 European nations. Concerns include how the levy would affect the economy, its cross-border reach and double taxation. "The Obama Administration is right to oppose the tax on grounds that it will punish American investors," this editorial argues. The Wall Street Journal (2/14)

New York Focus

Sen. Lautenberg says he'll retire when term ends in 2014
Sen. Frank Lautenberg, D-N.J., told his staff he will leave the Senate at the end of his current term next year. "While I may not be seeking re-election, there is plenty of work to do before the end of this term, and I'm going to keep fighting as hard as ever for the people of New Jersey in the U.S. Senate," he said. The New York Times (tiered subscription model) (2/14), The Star-Ledger (Newark, N.J.) (2/14)

Quinn has strong lead among Dems in NYC mayor's race, poll finds
Thirty-seven percent of registered Democrats support New York City Council Speaker Christine Quinn for mayor of New York City, the NY1-Marist Poll says. Forty percent is needed to achieve an outright victory in a city primary. The Wall Street Journal (2/14)

Career Development

Manage your talent like a sports team, says former Tyco CEO
Successful sports teams usually have a balanced roster of committed and talented players, says former Tyco International CEO Edward Breen. That's the same approach leaders should take in running their companies, Breen explains. "There's no one individual going to make a company. So I always want to put people around me who I think are better than me, who will challenge me," he says. Knowledge@Wharton (2/13)

Financial Products

PowerShares prepares debut of 2 low-volatility ETFs
Invesco PowerShares is set to launch two exchange-traded funds investing in low-volatility stocks. The PowerShares S&P MidCap Low Volatility Portfolio will pick stocks from the Standard & Poor's MidCap 400 Low Volatility Index. The PowerShares S&P SmallCap Low Volatility Portfolio will select equities from the S&P SmallCap 600 Low Volatility Index. Benzinga.com (2/13), IndexUniverse.com (2/13), ETF Trends (2/13)

SmartQuote

If you want to live a happy life, tie it to a goal. Not to people or things."

--Albert Einstein,
German-born theoretical physicist

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