February 29, 2024

Campaign Spotlight: Balance Bar’s New Owner Starts a Brand Campaign

The campaign, which got under way last week, is the first for the Balance Bar brand since it was acquired by NBTY, formerly Nature’s Bounty, which is owned by the Carlyle Group. NBTY and Carlyle agreed to buy Balance Bar at the end of November from Brynwood Partners, which acquired the brand from Kraft Foods in 2009.

It is hard to say whether brands that change hands often underperform because they have several corporate parents in a short time or whether they keep changing hands because they are already underperforming. Whatever happened with Balance Bar, NBTY executives say they are committed to revitalizing the brand.

“Carlyle is significantly interested in building brands,” says Katia Facchetti, chief marketing officer at NBTY in Ronkonkoma, N.Y. “A great example is Dunkin’ Donuts under its ownership.”

Her reference is to the period from December 2005 through August 2012, when Carlyle, along with two other private equity giants, Bain Capital and Thomas H. Lee Partners, owned Dunkin’ Donuts. During that time, the chain started its successful “America runs on Dunkin’ ” campaign.

The Balance Bar campaign carries the theme “Have you found your Balance?” — yes, “Balance” with a capital B, to reinforce the brand name. The campaign has a budget estimated at $5 million from now through September.

The effort is extensive, including a commercial, magazine advertisements, coupon inserts in newspapers, content on the Balance Bar Web site, online banner ads, ads in stores, a public relations initiative, sampling programs and a presence in social media like Facebook and Twitter.

The creative aspects of the campaign are being handled internally at NBTY. Moosylvania, an agency in St. Louis that worked for Balance Bar under the Brynwood ownership, is continuing to handle tasks that include balance.com and social media. The media buying duties are handled by Havas Media in New York, part of Havas, and 360 Public Relations in Boston is the public relations agency.

NBTY and Carlyle were interested in Balance Bar “to augment our portfolio” in the “active nutrition business,” Ms. Facchetti says, which includes brands like Body Fortress, MET-Rx and Pure Protein.

“There were several things about Balance Bar that made it appealing,” she adds, among them its “latent brand equity” and its “broad consumer base,” despite the lack of significant marketing support.

According to Kantar Media, a division of WPP that tracks ad spending in major media, Balance Bar spent $91,000 last year, $2,000 in 2010, nothing in 2009 and nothing in 2008. The only recent year when there was any ad spending of note was 2011, with $1.4 million.

“People still knew the brand, and loved the product, but it wasn’t top of mind,” Ms. Facchetti says. That was reflected in Balance Bar’s sales, which ranked seventh among the major nutrition bars according to Nielsen data shared by NBTY, coming after Clif Bar, Zone Perfect, Special K Protein Meal Bar, Pure Protein, Power Bar and Kind.

“You always want to support your brand as much as possible,” says Erin Lifeso, senior director of marketing for Balance Bar, who has been working on the brand since early 2010 and moved over to NBTY when the sale was made.

Under Brynwood, the emphasis was on “maximizing shelf distribution, developing new product offerings,” Ms. Lifeso says, and marketing took forms like “sampling events at the grass-roots level and social media.”

“We just didn’t have the spend” for advertising, she adds, which was unfortunate because “if you get people to taste it, they love it, and if you remind them about it, they go buy it.”

The new Balance Bar campaign is being aimed at consumers 25 to 54 years old. To make it easier for the ads to stand out amid the clutter, Ms. Lifeso says, “we wanted to make sure we have an ownable, iconic visual.”

Such an image is a centerpiece of the campaign: a seesaw, or teeter-totter, that is meant to symbolize what Ms. Lifeso calls “our teeter-totter world.”

“Everyone leads busy lives; we run from one thing to the next,” she says, and during a hectic day Balance Bar is intended “to keep you in balance.”

In the commercial, which is 15 seconds long, an animated couple in office attire is seen dashing after a commuter train, followed by the same couple, in athletic gear, exercising. The camera pulls back to show that the man and woman are on a seesaw; they are replaced there by a cookie-dough-flavor Balance Bar.

“Whether you’re running for a train or training for a run, find your balance,” a female announcer says. “Every delicious Balance Bar has 40-30-30 balanced nutrition, to give you energy that lasts.”

On screen, a diagram appears to show what the “40-30-30” refers to: a nutritional formula of 40 percent carbohydrate, 30 percent protein and 30 percent fat, echoing the dietary principles of Dr. Barry Sears, who popularized the Zone diet and brought out Balance Bar in 1992.

The commercial ends with the narrator’s final words: “Balance Bar. Have you found your Balance?”

The print ads take an identical approach, also depicting the couple and using the contrasts of “running for a train” and “training for a run.”

Two additional commercials are being developed, Ms. Facchetti says, and both will also use the seesaw because research among consumers who were shown the first commercial found “it signaled ‘balance’ instantly to them.”

Another benefit was that “you couldn’t put another brand, another bar” in the seesaw spots, she adds, because of how it symbolizes balance.

The tactic of incorporating a brand’s name into a slogan, jingle, theme or other intrinsic aspects of a campaign is a mnemonic device that has become known as “nameonics” on Madison Avenue.

Examples include “Vanguarding,” for Vanguard mutual funds; “Power through,” for Powerade sports beverages; “Zestfully clean,” for Zest soap; and, most recently, “It’s time for a Maacover,” for the Maaco chain of auto paint and body shops, which replaced another nameonics campaign, “Uh-oh, better get Maaco.”

***

Because of the Memorial Day holiday next Monday, look for the next issue of In Advertising on Tuesday, May 28.

If you like In Advertising, be sure to read the Advertising column that appears Monday through Friday in the Business Day section of The New York Times print edition and on nytimes.com.

Article source: http://www.nytimes.com/2013/05/20/business/media/campaign-seeks-to-strike-the-right-balance.html?partner=rss&emc=rss

GlaxoSmithKline to Sell Off Drink Brands

The plan was announced on Wednesday alongside first-quarter results that saw sales at Britain’s biggest drugmaker drop a slightly smaller-than-expected 3 percent from a year ago.

GSK launched a strategic review of the two drink brands earlier this year, ruling nothing in or out for their future. Most analysts had focused on the idea of a sale, which is likely to attract interest from private equity and trade buyers.

Chief Executive Andrew Witty told reporters there had been significant interest in the products, though the decision to pursue a sale was “subject to appropriate value realisation”.

Japan’s Suntory Holdings has been tipped as a possible buyer after previously buying soft drinks maker Orangina Schweppes for more than 300 billion yen ($3.0 billion) and New Zealand’s No. 2 beverage firm Funcor Group in 2009.

A Suntory spokeswoman declined to comment on the company’s potential interest but, when asked about a recent report that it was in talks with banks about assembling a knockout bid, said: “We don’t acknowledge this report as factual.”

Private equity firms are also hungry for deals and the strong cashflows generated by Lucozade and Ribena could attract the likes of Blackstone, BC Partners, PAI, Lion Capital, Bain Capital, CVC Capital Partners and KKR.

Officials at the private equity houses declined to comment.

Lucozade and Ribena no longer fit well in GSK’s portfolio, since the company is focusing its consumer health operations increasingly on emerging markets, where both brands are relatively weak.

Although GSK does not break out detailed sales for the two products, they bring in nearly 600 million pounds a year, with much of that generated in Britain.

Both are veteran products – Lucozade was launched in 1927 and Ribena introduced just 10 years later – but remain popular. Assuming potential buyers are prepared to pay two times sales, that would point to a valuation of some 1.2 billion pounds.

Analysts at Deutsche Bank said they believed the two brands should bring in more than 1.5 billion pounds.

MATURE PRODUCTS SPIN-OFF?

GSK also said it was creating a new global established products portfolio, consisting of around 50 medicines with annual sales of some 3 billion pounds, including stomach acid treatments Tagamet and Zantac, Imitrex for migraine, and anti-nausea treatment Zofran.

Witty said placing these so-called “tail” products in a division that would report separately from next January opened various options, but he declined to say if the division might be sold off at a later stage.

Jefferies analysts, however, said the formation of the portfolio “looks like a precursor to a spin-off to us”.

GSK’s group sales in the first quarter fell 3 percent to 6.47 billion pounds, generating flat core earnings per share (EPS) of 26.9 pence.

Analysts, on average, had forecast sales of 6.40 billion pounds and core EPS, which excludes certain items, of 25.0p, according to Thomson Reuters I/B/E/S.

The three months to end-March were always going to be tough, due to a difficult comparison with a year earlier when GSK booked revenue from over-the-counter products and an incontinence drug that have since been sold.

GSK is expecting better times ahead as its pipeline starts to deliver – and it reiterated its 2013 expectations for sales growth, at constant exchange rates, of around 1 percent and core EPS growth of 3-4 percent.

Witty is banking on a number of new drugs to revive its fortunes in the next few years, including six that have already been submitted for approval in lung disease, melanoma, diabetes and HIV/AIDS.

Hopes for its new drug pipeline received a boost last week when a U.S. advisory panel recommended approval of Breo for smoking-related lung damage. The Food and Drug Administration is due to decide on the drug – a follow-on to GSK’s top-seller Advair – by May 12.

At 01:30 p.m. British time, GSK shares were little changed at 1,681 pence.

(Additional reporting by Anjuli Davies and James Topham; Editing by Kate Kelland and Mark Potter)

Article source: http://www.nytimes.com/reuters/2013/04/24/business/24reuters-glaxosmithkline-results.html?partner=rss&emc=rss

DealBook: Permira to Buy Japanese Sushi Chain for About $1 Billion

Akindo Sushiro is an Osaka-based operator of sushi bars in Japan.Akindo SushiroAkindo Sushiro is an Osaka-based operator of sushi bars in Japan.

The European private equity firm Permira has struck a deal to acquire a Japanese sushi restaurant chain, with plans to help it expand overseas.

The agreement values Akindo Sushiro, an Osaka-based operator of sushi bars in Japan, at roughly $1 billion including debt, Permira said in a statement. The private equity firm is buying a stake in Sushiro from Unison Capital, a Japanese rival.

The deal is among this year’s largest private equity transactions in Japan. In June, Bain Capital agreed to buy 50 percent of a Japanese TV shopping company, Jupiter Shop Channel, for more than $1 billion.

For Permira, the deal is a significant foray into Japan, following its 2008 acquisition of Arysta Lifescience, an agrichemical company, for about $2.2 billion.

Akindo Sushiro, which was founded in 1984, ranked first among Japan’s “revolving sushi” chains by sales last year, according to the company. Unison Capital came on board in 2007.

Permira “was attracted to Sushiro’s corporate vision of providing high quality sushi at attractive prices and sees ample potential in exporting Japan’s food culture further,” Alex Emery, co-head of the firm’s Asian business, said in a statement on Friday. “Sushiro has successfully grown over the last few years and has now become a very well-known and popular brand.”

Permira is betting it can take Sushiro beyond the growth it achieved on Unison’s watch, seeing an opportunity to expand the chain into other countries.

“We believe that there is growing demand both in Japan and elsewhere for our value proposition,” Kenichi Toyosaki, Sushiro’s chief executive, said in a statement.

Permira is making the purchase through Consumer Equity Investments, an investment company based in Ireland that is backed by the private equity firm’s funds. The acquiring company was advised by Nomura Securities. Mitsubishi UFJ Morgan Stanley advised Unison Capital.

Article source: http://dealbook.nytimes.com/2012/08/24/permira-to-buy-japanese-sushi-chain-for-about-1-billion/?partner=rss&emc=rss

DealBook: The United States Economy Through a Private Equity Lens

Mitt Romney's campaign held a rally at Wofford College in Spartanburg, S.C., on Wednesday.James Estrin/The New York TimesMitt Romney’s campaign held a rally at Wofford College in Spartanburg, S.C., on Wednesday.

Imagine how Mitt Romney would campaign if he actually ran as a private equity executive, dangerous though that may be in this era of the Tea Party and Occupy Wall Street.

Aggressively attacked by a super PAC supporting Newt Gingrich, Mr. Romney stands accused of being a rapacious capitalist intent on destroying jobs for personal gain. Mr. Romney has responded: Au contraire! He argues that his work at Bain Capital, one of the earliest and most successful private equity firms, created jobs by making companies more efficient and successful.

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Many people on Wall Street are befuddled. After all, a private equity firm creating jobs is like Adam Sandler winning an Academy Award — it would be nice if it happened, but it sure wasn’t the goal.

The goal, of course, is high returns.

If Mr. Romney were really running as a private equity executive, how would he view what his campaign regards as one of the nation’s most pressing issues, the national debt?

Right at the top of his campaign’s home page, Mr. Romney proclaims, “We have a moral responsibility not to spend more than we take in.” The United States’ debt is such a problem, it’s like an addiction: “The first step toward recovery is admitting we have a problem and refusing to allow any more irresponsible borrowing,” his site says.

It’s almost as if Mr. Romney never worked in — what’s that other phrase for private equity? — oh yes, a leveraged buyout firm. Leverage as in debt, debt and more debt. Debt amplifies the returns of L.B.O. firms. Indeed, they often saddle companies with extra debt precisely so that their investors can cash out faster, a technique Bain deployed under Mr. Romney’s watch.

L.B.O. firms certainly never think of debt as immoral. When the borrowing is good, private equity is going to grab the money. When Mr. Romney rails against debt, he is running away from his entire career in business.

So what about the federal government? The 10-year Treasury bond rate is 1.87 percent. Since inflation is higher than that, real rates are actually below zero, meaning that a lender to the United States government will get back less money in 10 years than it started with.

That’s right: When the government borrows, its lenders actually lose money. Yet foreigners and Americans, institutions and individuals alike are extraordinarily willing to shovel money at the United States government right now.

Are there private equity executives anywhere in the world who would counsel their companies not to borrow at such extremely low rates? I haven’t had the privilege of meeting one. Their mantra is, borrow now, for tomorrow the Mayans might turn out to be right. Few indeed are the companies that could borrow that cheaply and not make some kind of return on essentially free money.

“If debt is available to you historically cheaply, it almost always makes sense to take it,” said Shivan Govindan, a private equity executive for the Resource Financial Institutions Group. “Your capital strategy isn’t something ideological. You are going to optimize it for the best mix.”

So, by the logic of private equity, the United States government should borrow much more right now.

But what about the unsustainability of our debt? If a company has out-of-control costs and is spiraling toward default, it should not borrow more. True, but no company that is truly headed toward imminent default can borrow as cheaply as the American government.

If the United States government is headed toward bankruptcy, lenders are surely not acting that way. Maybe those people are making a good decision; maybe they are deluded. It doesn’t matter to the borrower.

Of course, an issue for the United States, as for a company, is whether it could put the money to good use.

“Surely, government investments would have a real return in a 10-year period higher than zero, even with waste and corruption,” said Paul L. Kasriel, an economist for Northern Trust. “This means that these investments will boost future real G.D.P. growth, which will boost future tax revenues to service the increased debt.”

There will be bridges and roads that we must fix over the next decade. We could put more young people in college, improve elementary school education, train veterans so they can find good jobs or finance exploration of alternative fuels. People will quibble — or maybe, in our polarized culture, fight tooth and nail — over the choices, but most could think of something that would be a good investment.

On a deeper level, the debate over private equity raises questions about using the metaphor of America as a business. That kind of thinking can reduce society to the sum of its revenues and profits, ignoring that much of what we do to provide for the common defense and promote the general welfare cannot or should not be measured, especially in economic terms. We take care of our elderly because it is the right thing to do, not because we expect a return on investment. Shouldn’t society promote and protect freedom and human rights? Even when there are times when doing so may be expensive or uneconomical?

There are moral issues that confront our country. Debt isn’t one of them.


Jesse Eisinger is a reporter for ProPublica, an independent, nonprofit newsroom that produces investigative journalism in the public interest. Email: jesse@propublica.org. Follow him on Twitter (@Eisingerj).

Article source: http://feeds.nytimes.com/click.phdo?i=967a0d78b048b9b04587f0e9551074cb

DealBook Column: Mitt Romney’s Run Puts Spotlight on Private Equity

Mitt Romney at Bain Capital in 1993. Mr. Romney has largely avoided getting into the details of the private equity business.David L. Ryan/The Boston GlobeMitt Romney at Bain Capital in 1993. Mr. Romney has largely avoided getting into the details of the private equity business.

On Wednesday, Mitt Romney, the Republican candidate for president, will attend fund-raisers in Manhattan given by his former private equity peers and Wall Street bankers, putting the spotlight on the private equity industry and Mr. Romney’s role in it.

Mr. Romney, a co-founder of Bain Capital, will spend time at the sprawling Park Avenue apartment of his former rival and sometime deal partner, Stephen A. Schwarzman, the co-founder of the Blackstone Group. He will also be toasted at the Waldorf Astoria by James B. Lee Jr., vice chairman of JPMorgan Chase, who helped orchestrate many of the private equity industry’s biggest deals, along with a smattering of other senior executives from the bank.

(Jamie Dimon, the bank’s chief executive and a longtime Democrat, will not be among them; as a board member of the Federal Reserve Bank of New York, he is prohibited from raising money for political candidates, and it is still unclear which candidate he will support.)

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While the fund-raisers are likely to generate many thousands of dollars and galvanize support among Mr. Romney’s former peers, they may also give an opening to critics like the Occupy Wall Street movement.

Already, Americans United for Change, a pro-union Democratic group, has begun a campaign comparing Mr. Romney to Gordon Gekko, the Michael Douglas character in “Wall Street.” It has even started a Web site, RomneyGekko.com.

The private equity industry’s titans have long been worried this moment would come — and about the effect Mr. Romney’s presidential campaign will have on the industry.

“If he is a nominee, well, hold your seats,” Henry Kravis, the co-founder of Kohlberg Kravis Roberts, told a room of executives at a dinner in Hong Kong last month, according to Reuters.

“They’re going to describe us all as asset strippers; we’re flippers of assets, we just put on a lot of debt, fire a lot of people and that’s how we make money,” he added. “You know that’s not the case. That’s absolutely not what we do.”

“There is no doubt that the Obama administration will clearly come out after Mitt Romney and the whole private equity industry,” Mr. Kravis said. “Mitt Romney may become the single source of all U.S. unemployment by the time the election happens.”

Stephen A. Schwarzman, a Blackstone Group co-founder.Peter Foley/Bloomberg NewsStephen A. Schwarzman, a Blackstone Group co-founder.

A looming issue for the private equity industry is the tax treatment of what is known as carried interest. Private equity executives pay only the capital gains rate — 15 percent — on most of their income instead of the ordinary income rate, which in their case would typically be 35 percent.

So far, however, Mr. Romney has managed to dodge most efforts to brand him as a true Gordon Gekko. And the private equity industry has managed to avoid becoming the focal point of criticism, which instead has been directed at the Wall Street banks.

The crucial question is whether that will change as the campaign becomes more heated. Already, Republican rivals like Newt Gingrich are seizing on his track record at Bain Capital. On Monday, Mr. Gingrich suggested that Mr. Romney “give back all the money he earned from bankrupting companies and laying off employees over his years at Bain.”

But Mr. Romney appears to have kept a studied distance from the most current Gilded Age. A profile of Mr. Romney in The New York Times on Sunday about his relationship with money described a penny-pinching cheapskate who enjoyed flying on JetBlue and frowned upon ostentatious displays of wealth — hardly the lavish spending habits of some of private equity’s current kingpins. (Mr. Romney does, however, have a soft spot for real estate.)

In truth, while Mr. Romney may be worth several hundred million dollars, he is a pauper next to the founders of the biggest firms since he left the industry in 1999, well before the bubble of the next decade that produced billion-dollar riches.

Mr. Romney’s opponents, of course, have combed through his former deals at Bain looking for tales of excesses and failure. Perhaps the worst deal he worked on — which has been highlighted by several news organizations — was the buyout of Dade International, a medical company, which filed for bankruptcy after Bain had cashed out with $242 million.

But criticism about the Dade deal has not stuck as a true talking point, in part because the details painted a complicated story.

Dade was on the verge of bankruptcy when Bain originally bought the company. While Mr. Romney made cuts at the company, he also invested heavily, turning it into the industry leader. At one point, he pushed back against colleagues who wanted to flip the business for a quick profit and instead directed them to make an acquisition to bolster it.

It was only after Dade had been turned around that Bain and the company’s other investors leveraged the company up even more and paid themselves a huge dividend, saddling the company with too much debt.

Some critics contend that private equity firms are skilled at cutting costs at businesses but can choke off growth with large amounts of debt. In the context of the government’s budget, Mr. Romney’s embrace of streamlining may just be what’s in order, but it still poses political challenges.

Mr. Romney’s former colleagues are quietly waiting to see whether he will try to leverage — pun very much intended — his role at Bain in his campaign or will continue to shy away from it.

While Mr. Romney often invokes his broad experience at Bain, he has typically avoided getting into the details of the private equity business, seemingly to avoid the negative connotation that the industry has for some Americans.

But given the clear bipartisan sense that the United States government is marred by inefficiency and is in need of a turnaround, it will be interesting to see whether he tries to highlight the details of his private equity work as a way to demonstrate how he would run the country.

In 2007, Mr. Romney famously said of his private equity work that “sometimes the medicine is a little bitter, but it is necessary to save the life of the patient.”

Some critics have taken that quotation to suggest he is a heartless mercenary. Others have said that the nation may need a dose of the same kind of medicine.

How well Mr. Romney manages those perceptions may determine whether private equity makes it into the White House.

Article source: http://feeds.nytimes.com/click.phdo?i=37321413d89521662cf5f35353e51e59

DealBook: Buyout Firms to Buy Drug Research Company for $3.9 Billion

Jonathan Alcorn/Bloomberg News; Noah Berger/Bloomberg NewsDavid M. Rubenstein, left, co-founder of the Carlyle Group, and Warren Hellman, chief of Hellman Friedman.

7:02 p.m. | Updated

The buyout firms Carlyle Group and Hellman Friedman struck one of the largest private equity deals of 2011, agreeing to buy the clinical research company Pharmaceutical Product Development for $3.9 billion.

The acquisition, which was announced Monday, will pay the company’s owners $33.25 a share, 30 percent above the stock’s closing price on Friday. The deal was a rare bright spot on a gloomy day on Wall Street. Shares of Pharmaceutical Product Development ended up 25.8 percent, at $32.28, on a day when the broader stock market tumbled.

Pharmaceutical Product Development, based in Wilmington, N.C., provides outsourced clinical research and laboratory services to drug companies. It is a hot business. The world’s largest pharmaceutical companies, as their profit margins come under pressure and the cost of getting drugs approved has increased, have gradually shifted some of their research and development activities to outside contractors. Private equity firms are also attracted to these companies for their relatively stable cash flow, allowing the firms to easily borrow money to finance their purchases.

Among Pharmaceutical Product Development’s chief competitors is Quintiles Transnational, a big manager of clinical trials based in nearby Research Triangle Park, N.C. Quintiles has been owned for nearly a decade by private equity firms. Bain Capital, TPG Capital and 3i Group now control the company alongside its founder, Dennis B. Gillings.

Last year, Thomas H. Lee bought InVentiv Health, a pharmaceutical support company, for $1.1 billion. In a recent deal, Avista Capital Partners led the $230 million acquisition of Kendle International, a clinical researcher, and combined it with INC Research, a company in the area that it already owned.

A number of the largest buyouts since the financial crisis have been in the health care industry. In the biggest private equity deal this year, a group of funds led by Apax Partners bought Kinetic Concepts, a provider of wound treatments, for $6.3 billion. In 2009, TPG and a Canadian pension fund acquired IMS Health, a provider of health care data, for $4 billion.

The Pharmaceutical Product Development buyout is welcome news for the private equity business, which has undergone a slowdown in activity as the stock market has swooned and bank shares have tumbled. Carlyle and Hellman needed to tap four banks — Credit Suisse, JPMorgan Chase, Goldman Sachs and UBS — to secure financing for the deal.

The clinical research business has been a boon to North Carolina’s Research Triangle, a cluster of academic and business institutions. The University of North Carolina at Chapel Hill has been a beneficiary of the industry’s success.

Pharmaceutical Product Development, founded 25 years ago by Fred Eshelman, employs 11,000. Mr. Eshelman graduated in 1972 from the pharmacy school of the University of North Carolina, a school that now bears his name after he donated $20 million to the university.

Right next door to the U.N.C. Eshelman School of Pharmacy is the U.N.C. Gillings School of Global Public Health, named after Mr. Gillings, the founder of Quintiles, who in 2008 donated $50 million to the school.

Article source: http://feeds.nytimes.com/click.phdo?i=202c3aed178f79d63d6ac2d12f08bd61

DealBook: Zvi Goffer Found Guilty in Insider Trading Case

Zvi Goffer

A federal jury in Manhattan on Monday found Zvi Goffer and two co-conspirators guilty of insider trading, the latest development in the government’s investigation into insider trading at hedge funds.

Mr. Goffer, his brother Emanuel Goffer and Michael A. Kimelman were convicted of participating in an insider trading scheme that produced more than $20 million in illegal profits.

The case was connected to the prosecution of Raj Rajaratnam, the hedge fund tycoon and co-founder of the Galleon Group, who was found guilty last month in the largest insider trading case in a generation. Zvi Goffer, who sat in on much of Mr. Rajaratnam’s trial, was employed by Galleon.

Like the case against Mr. Rajaratnam, this trial had phone wiretaps playing a central role. The jury heard recordings of Mr. Goffer swapping secret corporate information with fellow traders.

Much of the illegal trading featured in the Mr. Goffer trial was based on on illegal tips about mergers and acquisitions from two corporate lawyers at Ropes Gray in Manhattan. The two lawyers, Arthur Cutillo and Brien Santarlas, had previously pleaded guilty to providing Mr. Goffer and others with information about the secret deals. Mr. Santerlas testified during the trial.

Among the transactions the lawyers leaked to Mr. Goffer: TPG’s $1.3 billion acquisition of Axcan Pharam in November 2007 and Bain Capital’s agreement to pay $2.2 billion for 3Com in September of that year.

Zvi Goffer, 34, worked at a number of different trading shops before joining Galleon in 2008. After just nine months there he left to start his own hedge fund, Incremental Capital, with his brother and Mr. Kimelman.

A parallel civil complaint brought by the Securities and Exchange Commission said that Mr. Goffer’s nickname among his fellow traders was “Octopussy” — a reference to the James Bond movie — because his arms reached into so many sources of information.

During the trial, William Barzee, the lawyer for Mr. Goffer, described his client as a “gold miner” who panned for gold along the “river of gossip.”

Mr. Kimelman, who was tried as one of Mr. Goffer’s co-conspirators, practiced law at Sullivan Cromwell before becoming a Wall Street trader.

“We are enormously disappointed with the verdict as we believed the evidence clearly showed that Mr. Kimelman had not engaged in any insider trading,” said Michael Sommer, the lawyer for Mr. Kimelman. “We will of course pursue all avenues of appeal.”

Mr. Barzee and Michael Ross, the lawyer for Emanuel Goffer, did not immediately respond to a request for comment.

Article source: http://feeds.nytimes.com/click.phdo?i=de96ec101a70a0651d8db8f70ff07fb5

Economix: C.E.O. of the U.S.A.

The job of the president is technically that of the chief executive of the United States. But I’m still fascinated by the extent to which business acumen is being emphasized by the early presidential contenders.

Newt Gingrich, small-business man, on Chris Usher/CBS-TV, via Associated PressNewt Gingrich, small-business man, on “Face the Nation.”

“I think I have proven I can manage money,” Newt Gingrich said Sunday on the CBS News program “Face the Nation.” “As a small-business man I run four small businesses. They have been profitable. They’ve employed people. This is the opposite of the Obama model.”

And here was Donald Trump, back when he was toying with a run: “I’m a much bigger businessman and have a much, much bigger net worth. I mean my net worth is many, many, many times Mitt Romney,” Mr. Trump told CNN’s Candy Crowley. “Mitt Romney is a basically small-business guy, if you really think about it. He was a hedge fund. He was a funds guy. He walked away with some money from a very good company that he didn’t create. He worked there. He didn’t create it.”

Mr. Romney, of course, has emphasized his record as head of the private equity firm Bain Capital: “My experience, my history is in turning things around. I will get America on the right track again.”

I do wonder how smoothly business executive experience translates to being president of the United States. There is a very different set of stakeholders to please and negotiate with. The budget issues are quite different, too, and not only because the federal government can print money and businesses can’t.

To some extent “big business” has been vilified in the last few years, in part because of the financial crisis and in part because there has been so little hiring even as profits soared. So whatever its actual relevance to qualifications for the presidency, it will be interesting to see how effective the “I’m a big-business man” rhetoric is with voters. Presumably this has already been focus-grouped.

Note that the last time this became a major talking was in the 2000 presidential campaign, when George W. Bush’s business experience — and his M.B.A., as he became the first president ever to hold such a degree — was cited as evidence of his facility with fiscal constraint.

I’ll let readers come to their conclusions about how accurate that projection was.

Article source: http://feeds.nytimes.com/click.phdo?i=55c78d97f378a3f64b6d175744145925