June 24, 2017

‘C.S.I.’ Gets a New Financial Partner

Content Partners, a financial boutique that buys the future cash flow due stars and others from their screen and musical work, said on Wednesday that it had agreed to acquire the half of “C.S.I.” owned by an affiliate of Goldman Sachs in a deal that makes it a co-owner, with CBS, of the long-running series and its spinoffs.

Terms were not disclosed. But it was reported that Goldman had sought more than $400 million for the 50 percent interest.

Goldman’s GS Capital Partners investment arm had acquired the stake through its purchase, in 2007, of an interest in Alliance Atlantis, a Canadian entertainment company. Early this year, GS Capital Partners and others sold the Alliance Films unit to Canada’s Entertainment One.

As co-owner of the series, Content Partners will now own half of the production company revenue from old episodes, as they continue to be sold abroad or through home entertainment and other media, and from future episodes, as they are created.

When completed, the “C.S.I.” transaction will become the largest purchase for Content Partners. The company was created in 2006 by Steven H. Kram, a former William Morris Agency chief operating officer who is now the Content Partners chief executive, and Steven E. Blume, who was previously chief financial officer of the Brillstein-Grey management company. The entrepreneur Todd Wagner and the investor Paul Wachter are among its partners, and Mr. Wachter helped structure the current deal, Mr. Kram said.

“This proves the value of liquidity in an uncertain economic environment,” Mr. Kram added. He spoke recently by telephone of his company’s ability to use resources from its investors and lenders to buy an asset of the kind that is usually owned by large media companies. Bank of America and JPMorgan Chase provided financing for the purchase, he said.

Leslie Moonves, the president and chief executive of CBS, declined to comment.

For more than a decade, the “C.S.I.” franchise has been among the most profitable of television properties. According to the firm Media Metrics, the original “C.S.I.,” which is now in its 13th year on CBS, was the most-watched television show in the world last year, the fifth time in the last seven years that it has earned that ranking. And in one of those years, its spinoff, “C.S.I. Miami,” was the most-watched show. The worldwide audience for the original “C.S.I.” has frequently surpassed 70 million.

While “C.S.I. Miami” was canceled last year, the original and “C.S.I.: N.Y.” remain on the air. The latter is considered a show “on the bubble,” which means this could be its final season. But the original “C.S.I.” still generally wins its 10 p.m. Wednesday time period, and even after 13 years, averages 11.2 million viewers a week. A 14th season is all but certain.

In terms of historical value, the “C.S.I.” franchise, which includes 724 one-hour episodes, is almost surely at or near the top among television series, having generated billions in profits. That outcome makes it one of television’s cautionary tales because the show was originally the property of the Walt Disney Company, which walked away from ownership in the series when it landed at CBS. At the time, some Disney executives did not believe shows on CBS could attract the kind of young viewers needed to be successful.

CBS needed a last-minute partner to pay half the production costs before “C.S.I.” could go on the air. Alliance Atlantis became that company and gained a half share in one of the greatest gold mines in entertainment history.

By the nature of its business, Content Partners has been an unusually quiet operator in Hollywood. Mr. Kram declined to identify individuals who had sold interests to the company, or which titles were among the 119 movies and five television series to which it now holds rights.

Sellers to Content Partners, Mr. Kram said, receive cash from their work immediately, rather than waiting years for revenue to arrive from television, video and Internet sales. Mr. Kram and his partners profit when they bet correctly on the future value of entertainment.

The newly purchased stake, he said, does not include revenue participations that may be owed to the “C.S.I.” stars or creators, whose ranks include the producer Jerry Bruckheimer. Such rights are still owned by actors or others and are not part of the production companies’ share of revenue.

Article source: http://www.nytimes.com/2013/03/07/business/media/csi-gets-a-new-financial-partner.html?partner=rss&emc=rss

JPMorgan to Trim 4,000 Jobs

NEW YORK (AP) — JPMorgan will trim about 19,000 jobs over the next two years but cast a positive spin on the news: It is shrinking the unit it had beefed up to handle troubled mortgages.

The bulk of the cuts, about 15,000, will come at the mortgage unit, which had swelled to about 50,000 workers from a pre-financial crisis roster of 20,000 because the bank needed more people to process defaulted mortgages. The bank said it hopes to find jobs in other parts of the company for displaced workers through a “redeployment” program.

The rest of the cuts, about 4,000, will come from the consumer banking business, mostly the branches. JPMorgan said those cuts will come through attrition, not lay-offs.

The bank noted that it’s also adding jobs in certain areas, such as commercial banking and asset management. Overall, it expects its payroll to be down by about 17,000 at the end of 2014. That means it would fall to about 242,000 from its current 259,000, a 6.5 percent reduction.

The cuts were revealed in a presentation to investors Tuesday and are part of the bank’s bigger cost-cutting campaign. JPMorgan increased its profits and revenue in 2012 and has weathered the financial crisis and its aftermath better than most.

But like its peers, it’s facing a host of challenges. Banks are navigating new government regulations that have crimped some old sources of revenue, like issuing credit cards to students. The banks have also said that complying with the new regulations is costing them more money.

The move could signal a new direction for staffing: JPMorgan already shed about 1,200 jobs in 2012, after adding jobs in 2011 and 2010.

Bank of America, Citigroup, Morgan Stanley and Goldman Sachs all trimmed jobs in 2012. Morgan Stanley’s current round of job cuts has focused on senior ranks and investment bankers. Bank of America has also said it needs fewer people to work through problem mortgages, though it has cut jobs in other areas. Citigroup is scaling back in countries that it no longer sees as growth engines.

Shares of New York-based JPMorgan Chase Co. ended Tuesday down 10 cents at $47.60. The stock has gained about 24 percent in the past year.

Article source: http://www.nytimes.com/aponline/2013/02/26/business/ap-us-jpmorgan-job-cuts.html?partner=rss&emc=rss

DealBook: Japan Plans to Sell $10 Billion Stake in Cigarette Firm

A vending machine in Tokyo. Japan Tobacco is the world's third-largest tobacco company.Toru Hanai/ReutersA vending machine in Tokyo. Japan Tobacco is the world’s third-largest tobacco company.

TOKYO – The Japanese government is set to loosen its grip on Japan Tobacco, the world’s third-largest tobacco company, by selling a third of its stake in a sale that will net the country about $10 billion.

The Finance Ministry, which owns just over 50 percent of the former state monopoly, will sell 333 million of its shares in the cigarette manufacturer, according to a company statement issued on Monday.

The deal will be priced next month, from March 11 to 13, the statement said. In the run-up to the sale, Japan Tobacco will buy back up to 250 billion yen ($2.7 billion) of its shares.

Under laws passed in 2011 after a devastating earthquake and tsunami hit Japan, proceeds of the sale of Japan Tobacco shares will go toward rebuilding the country’s battered northeast coast. The reconstruction costs have threatened to weigh on Japan’s public finances at a time when public debt is twice the size of its economy.

It is an opportune time for the Japanese government to sell. Japan’s stock market has rallied since mid-November, and Japan Tobacco’s shares have tracked the market’s ascent, climbing 20 percent in the last three months.

Shares in Japan Tobacco closed 1.43 percent higher on Monday, at 2,901 yen, before the planned sale was announced. At that price, the government’s share sale would be valued at roughly 967 billion yen.

Japan has already been reducing its stake and involvement in the cigarette maker, which traces its origins to a Finance Ministry bureau set up in 1898 to create a national tobacco monopoly that lasted until 1985.

Even after the company went public, the Finance Ministry held two-thirds of its shares until 2004, when it reduced its stake to 50.1 percent, or roughly one billion shares. Other investors in Japan Tobacco include Mizuho Trust Banking, Goldman Sachs and the Children’s Investment Fund Management.

The position in Japan Tobacco has put the government in a controversial position.

The government has squeezed more funds from its smokers, raising the price of a pack of cigarettes about 40 percent in 2010, its single largest increase in tobacco taxes. Still, cigarettes remain relatively cheap in Japan, at about $4.30 a pack.

But antismoking advocates have blamed the Japanese government’s continued ownership of Japan Tobacco – whose brands include Camel, Winston and Mild Seven – for the country’s delay in passing laws to protect nonsmokers from cigarette smoke, for example, and more stringently regulating of tobacco-related marketing.

In a 2012 report, the Washington-based Global Business Group on Health said Japan’s ownership of Japan Tobacco shares “leads to a national conflict of interest, in which the government treats smoking as a behavioral issue rather than a health concern.”

Though smoking rates have started to decline in recent years, the Japanese remain heavy smokers, consuming about 1,841 cigarettes a person, according to data compiled last year by the World Lung Foundation and American Cancer Society. That compared with about 1,000 cigarettes a person in the United States.

To make up for declining cigarette consumption at home, Japan Tobacco has aggressively expanded overseas, acquiring Britain’s Gallaher Group in 2007 for $15 billion, and adding the Silk Cut and Benson Hedges brands to its portfolio. The company has also made a push into packaged foods and soft drinks, as well as pharmaceuticals.

The government’s sale of Japan Tobacco shares is part of a wider effort to raise money to finance reconstruction from the country’s natural and nuclear disasters in 2011. The government also plans to sell shares of Japan Post Holdings, which runs the country’s postal system and also acts as its biggest bank.

Article source: http://dealbook.nytimes.com/2013/02/25/japan-to-sell-10-billion-stake-in-cigarette-maker/?partner=rss&emc=rss

Apple’s Cook Calls Hedge Fund Manager’s Lawsuit a ‘Sideshow’

Waving aside Einhorn’s assertion that Apple is clinging to a “Depression-era” mentality, Cook said on Tuesday the company’s board is in “very active discussions” on how to dole out more of its $137 billion hoard of cash and marketable securities.

Einhorn and his Greenlight Capital are suing Apple as part of a wider effort to get the iPhone maker to share more of its cash pile, one of the largest among technology companies. They are challenging “Proposal 2” in Apple’s proxy statement, which would abolish a system for issuing preferred stock at its discretion.

Einhorn wants Apple to issue perpetual preferred shares that pay dividends to existing shareholders, which he argued would be superior to dividends or buybacks.

Cook gave Einhorn credit for a novel idea, but the usually unflappable chief executive turned slightly impatient when discussing the lawsuit. He was also dismissive of Einhorn’s media and legal blitz – which included the lawsuit as well as multiple television and media interviews.

Einhorn seeks an injunction to block a February 27 shareholders’ vote on Proposal 2, in what amounts to the biggest challenge to Apple from an activist investor in years.

“This is a waste of shareholder money and a distraction, and not a seminal issue for Apple. That said, I support Prop 2. I am personally going to vote for it,” Cook told a packed hall at Goldman Sachs’ annual technology industry conference in San Francisco.

The conflict over Prop 2 “is a silly sideshow,” added Cook, who on Tuesday traded in his usual casual jeans attire for slacks and a dark suit jacket, in a nod to Wall Street. Cook said he thought it “bizarre that we would find ourselves being sued for doing something good for shareholders.”

Einhorn’s clash with Apple centers on a proposed change to its charter that would eliminate the company’s ability to issue “blank check” preferred stock at its discretion. Apple, which said the change would not preclude future issuance of preferred shares, is recommending shareholders vote in favor at its annual meeting on February 27.

The lawsuit, filed in the U.S. district court in Manhattan, objects to the bundling of the charter change with two other corporate governance-related proposals in “Proposal 2.”

The hedge fund manager, a well-known short-seller and Apple gadget fan, counters that striking the preferred-share mechanism from the charter would make it more difficult to issue such securities down the road.

“If Apple thinks the lawsuit is a waste of resources, it could simply end the matter by complying with existing law and filing a new proxy that unbundles the proposed changes to the charter, so that shareholders can express their views on each matter separately,” a Greenlight Capital spokesman said in an emailed statement, responding to Cook’s comments.

On Tuesday, influential advisory firm Glass Lewis recommended shareholders vote in favor of Proposal 2, joining ISS and the California Public Employees Retirement System – the top U.S. pension fund – in voicing support for the measure.

Apple and Greenlight appear for oral arguments in U.S. district court in Manhattan on February 19.

DIMINISHING CLOUT

Investors however were disappointed that Cook – who rarely makes lengthy public-speaking engagements – did not provide a “more substantial” view on returning cash.

Apple’s share price has tumbled in recent months from a high of just over $700 last September. They finished 2.5 percent lower at $467.90 on Tuesday.

“The only thing that would substantially move the stock would be him saying they were returning cash to shareholders or hinting at a new product,” said a manager from a mid-size Dallas hedge fund that owns Apple shares.

“There was a small chance of that happening.”

Article source: http://www.nytimes.com/reuters/2013/02/12/business/12reuters-apple-cook.html?partner=rss&emc=rss

Shares Start Lower on Wall Street

The stock market drifted lower in thin trading on Monday, pulling the Standard Poor’s 500-stock index back from a five-year high.

With little in the way of market-moving news, the S. P. 500 slipped 0.92 of a point to close at 1,517.01. Last week, the broad-market index edged up slightly to its highest level since November 2007.

Seven of the 10 industry groups within the S. P. 500 dropped.

Now, with major indexes near record highs, many think the stock market’s six-week rally is ready for a pause.

“The consensus seems to be that we’re due for a correction,” said Brian Gendreau, market strategist at the Cetera Financial Group. “If you compound the increase we’ve had so far, this year would be the best year ever for stocks. And nobody thinks that that’s going to happen.”

The best year ever for stocks? For the S. P. 500 index that was 1933, when the index rebounded 46 percent in the middle of the Great Depression.

Among other stock indexes on Monday, the Dow Jones industrial average dropped 21.73 points to 13,971.24. The UnitedHealth Group led the Dow lower, losing 62 cents to $57.12.

The Nasdaq composite fell 1.87 points to 3,192.00.

Trading volume was light, with 2.6 billion shares trading on the New York Stock Exchange. That stands in contrast to a two-month moving average of 3.4 billion.

Solid earnings reports have helped feed the rally in recent weeks. Of the 342 companies in the S. P. index that reported results through last week, two out of every three have beaten Wall Street’s earnings estimates, according to research from Goldman Sachs.

Mr. Gendreau gave three reasons he believed that stocks still had room to run. Even after the market’s recent surge, he said, the typical stock looks fairly priced when compared to underlying earnings. Corporations keep finding ways to increase profits, which helps push stock prices higher. And Americans looking for places to put their savings have few attractive alternatives.

“I’ll go out on a limb and say that I think earnings growth, attractive valuations and pent-up demand will add up to a fairly strong year for equities,” Mr. Gendreau said.

Apple’s stock gained $4.95, to $479.93, after The New York Times reported that the technology giant was developing a wristwatchlike device — in essence a smart watch — that would run the same operating system used for iPhones and iPads.

The stock market raced to a stunning start this year. The Dow and the S. P. 500 have already gained more than 6 percent for the year. The Nasdaq is up 5.7 percent.

Among the companies in the news on Monday, the Danish drug maker Novo Nordisk dropped 14 percent after the Food and Drug Administration refused to approve the company’s proposed diabetes treatments until it received more data, which the drug maker said it could not supply this year. Novo Nordisk’s depositary receipts lost $26.89, to $165.40.

Loews fell 34 cents, to $43.51, after it reported on Monday that it lost $32 million in its fourth quarter, hurt by insurance losses from Hurricane Sandy and sliding prices for natural gas. Loews, a holding company with dealings in insurance, oil and gas and hotels, is largely controlled by the Tisch family of New York.

Carnival, the cruise-ship operator, slipped 29 cents to $38.72 after an engine room fire over the weekend left its cruise ship Triumph stranded in the Gulf of Mexico.

In the bond market, interest rates showed little change. The price of the 10-year Treasury note fell 4/32, to 97, while its yield rose to 1.96 percent, from 1.95 percent late Friday.

Article source: http://www.nytimes.com/2013/02/12/business/daily-stock-market-activity.html?partner=rss&emc=rss

Advertising: Finding a Documentary Audience, for a Cause

The director and backers of “Girl Rising,” a documentary that is a cornerstone of a media campaign about educating girls around the world, hope to change that. To promote the new film, and demonstrate the impact that documentaries can have on audiences, they will rely on technologies often used by more traditional advertisers, including personalized ads for employees of companies viewing them online.

“If what you are after is engagement and connection to a cause,” said Richard E. Robbins, the director, “how you use the tools that are available to you is very different than if you are trying to market ‘Batman.’ ”

Money donated by consumers seeing the film will be funneled to a nonprofit group, 10×10, which will then distribute the funds to various nonprofits helping to educate girls.

Many documentary filmmakers have trouble quantifying the social and financial impact their films can have, Mr. Robbins said. And many are confronted with “a dearth of evidence to support the idea that documentary films affect change.”

But using highly targeted advertising can help filmmakers learn who is donating, how much they are donating, how much interest there is in a film and whether there is enough interest to warrant a screening in a city, he said. Having that information might also help persuade future investors to support documentaries connected to causes.

“Girl Rising,” which will be released in March, is being financed in part by 10×10, which supports educating girls around the world through film and social media advocacy.

Ads promoting “Girl Rising” will be shown to employees of 57 companies that the filmmakers selected in hopes they will support efforts to educate girls in developing countries. Those companies include Apple, Bank of America, Oracle, Goldman Sachs, Wal-Mart, Disney and Procter Gamble.

“Those companies are deeply invested in vibrant economies overseas, healthy supply chains, diversity, attracting and retaining and identifying new employees, skilled employees,” said Holly Gordon, executive director at 10×10. “We thought that they would be advocates for these issues of gender diversity and global education.”

Employees at the companies will see ads on their computers at work, customized to use the company name. For example, an Oracle employee will see an ad that says “Oracle employees can change the world,” with a link to see a trailer for the film and donate to the cause.

A group of former ABC News journalists, known as the Documentary Group, and Vulcan Productions announced the creation of 10×10 and its media campaign at the United Nation’s first International Day of the Girl in October. Additional funds for organization came from Intel, the Ford Foundation, Google, the Nike Foundation, the Skoll Foundation and the Fledgling Fund.

“Girl Rising,” the first film backed by the group, features stories inspired by nine girls in countries like Haiti, Nepal, Sierra Leone, Uganda and Afghanistan. Some of the segments are narrated by celebrities like Meryl Streep, Selena Gomez and Kerry Washington.

Well-known writers from each of the countries, including Mona Eltahawy, an Egyptian-American author, and Edwidge Danticat of Haiti helped to write the stories of each of the girls to whom they were paired. Each story will be presented differently; some will be animated while others will be live action.

Chris Golec, the chief executive of Demandbase, the company behind the ads, said technology that aimed at the Internet addresses at the companies would be used to find the right users for each ad.

“Targeting people at work is four times more likely to drive engagement than somebody coming from a residential I.P. address,” said Mr. Golec, referring to the Internet addresses of home viewers. “If you personalize the ad with the company name that they work for you get a three times higher click through rate on the ad.”

Using such digital advertising also helps the filmmakers and producers in another way, said Mr. Robbins. “It’s infinitely more trackable, there’s so much more data,” he said. “We can measure conversion rates, who our audience is — its not just anonymous people buying tickets.”

Distribution of “Girl Rising” will be in phases, beginning in January at the Sundance Film Festival, where one chapter will be shown. It will make its official debut in March for International Women’s Day at an event in New York City, and with a smaller event in Los Angeles. CNN will show the film in June as part of the network’s new film division.

Organizers are also using technology to get viewers to book a screening of the film in the city of their choice. Supporters of 10×10 will receive an e-mail asking them to go to a Web site, Gathr.us, which will keep track of the number of screening requests from various cities.

Article source: http://www.nytimes.com/2012/12/18/business/media/finding-a-documentary-audience-for-a-cause.html?partner=rss&emc=rss

DealBook: Goldman to Pay $1.5 Million for Failing to Supervise Trader

Goldman Sachs's headquarters in Manhattan.Mark Lennihan/Associated PressGoldman Sachs’s headquarters in Manhattan.

Goldman Sachs has agreed to pay $1.5 million to settle federal accusations that it failed to supervise a trader who fabricated “huge” positions at the bank, a modest deal that divided the government regulators who brought the case.

The Commodity Futures Trading Commission, which voted 3 to 1 in favor of the fine, took action against Goldman over trades stemming from late 2007.

At the time, Matthew Marshall Taylor, then a trader at the Wall Street firm, was accused of entering fabricated trades that concealed a $8.3 billion position. The trading resulted in nearly $119 million in losses for Goldman.

The Wall Street firm, the commission said on Friday, “failed to have policies or procedures reasonably designed to detect and prevent” improper trades.

The agency further claimed that Goldman did not keep a close enough eye on Mr. Taylor.

The bank, in striking the settlement deal, agreed to improve its compliance systems.

But the fine, a token sum for a firm the size of Goldman, caused a stir among the agency’s commissioners.

Bart Chilton, a Democratic commissioner at the agency, supported the regulatory sanctions but declined to endorse a fine that he cast as too low.

“Given the egregious nature of the failure to supervise adequately, combined with the high number of violative transactions, I believe that the monetary penalty should be significantly higher in order to represent a sufficient punishment, as well as to denote a meaningful deterrent to future illegal activity,” Mr. Chilton said in a dissenting opinion.

“I do not believe” that the $1.5 million penalty “is anywhere close to an amount representing a sufficient penalty or deterrent.”

The agency’s two Republicans — Jill E. Sommers and Scott D. O’Malia — voted in favor of the fine. So did Mark Wetjen, another Democratic commissioner.

Gary Gensler, the agency’s chairman, was recused from the case because he had spent nearly two decades at Goldman as a banker and later an executive.

In challenging the penalty, Mr. Chilton cited an agency rule that allows it to assess $130,000 in fines for each violation. In the case of Goldman, the agency pinpointed 60 violations, which could have prompted a fine of $7.8 million, a sum that Mr. Chilton called “more appropriate.”

His dissent called to mind broader questions about the government’s use of enforcement muscle on Wall Street. The trading commission this year levied a major $200 million fine against Barclays for manipulating interest rates, the first of several expected sanctions against big banks.

But public frustration has run high with the larger struggle to charge Wall Street executives involved in the financial crisis.

Federal judges also have balked at fines the Securities and Exchange Commission has assessed against big banks like Citigroup, questioning whether the firms received a free pass.

Unlike the crisis, however, the trading commission’s case against Goldman was limited. The agency saved its most significant accusations for Mr. Taylor. “Taylor admitted his conduct following market close and was subsequently terminated,” the bank said in a statement.

“Since these events, we have enhanced our controls,” Goldman said, adding that the trades had no impact on customer money.

In a separate enforcement action last month, the trading commission accused Mr. Taylor of defrauding his employer. Mr. Taylor, the agency said, bypassed Goldman’s internal controls and manually entered his “fabricated” futures trades so they did not register on the radar screen of the CME Group, the giant exchange.

That case is still pending. His lawyer, Ross B. Intelisano of Rich, Intelisano Katz, declined to comment on Friday. Previously, he has said that his client denies all the allegations.

Despite the stain on his record, Mr. Taylor was hired by Morgan Stanley. He has since left the firm.

He is not the only Goldman trader to end up at Morgan Stanley that has recently run into trouble with regulators.

In recent weeks, regulators at the CME, which runs commodity and futures exchanges, said in a regulatory filing that they are investigating Glenn Hadden and his trading activity in Treasury futures in 2008 while he was at Goldman. Mr. Hadden, a former Goldman partner, was hired as the head of global rates at Morgan Stanley in early 2011.

A lawyer for Mr. Hadden declined to comment. In a previous statement, he said his client acted properly and followed established market practice.

A version of this article appeared in print on 12/08/2012, on page B3 of the NewYork edition with the headline: Goldman Fined Over Improper Trading.

Article source: http://dealbook.nytimes.com/2012/12/07/goldman-to-pay-1-5-million-for-failing-to-supervise-trader/?partner=rss&emc=rss

F.D.A. May Tap Experts on Energy Drinks

The Food and Drug Administration said in a letter released on Tuesday that it was likely to seek advice from outside experts to help determine whether energy drinks posed particular risks to teenagers or people with underlying health problems.

The letter appears to signal a change in the agency’s approach to the drinks, which contain high levels of caffeine.

Previously, F.D.A. officials have said that they were investigating possible risks posed by popular products like 5-Hour Energy, Monster Energy and Red Bull. But an agency spokeswoman, Shelly Burgess, said the new letter was the first time that the F.D.A. had said it might turn to outside experts.

The F.D.A. letter, which was released Tuesday by Senator Richard J. Durbin of Illinois and Senator Richard Blumenthal of Connecticut, follows disclosures that the agency received reports of 18 deaths and over 150 injuries that mentioned the possible involvement of energy drinks.

The filing of such reports with the F.D.A. does not prove that a product was responsible for a death or an injury. Energy drink makers have said their products are safe and were not responsible for the health problems.

The officials said a review of the drinks might be “greatly enhanced by also engaging specialized expertise” from an outside group, like the Institute of Medicine, which is part of the National Academy of Sciences.

Industry analysts said the letter indicated that the F.D.A. did not plan any immediate actions on energy drinks, an interpretation that set off a rally on Tuesday in the stock of Monster Beverage, the producer of Monster Energy. Company shares closed at $51.97, up over 13 percent. Any regulatory outcome is likely to be “benign,” Judy Hong, an analyst at Goldman Sachs, said in a note to investors, according to Bloomberg News.

In Canada, however, the use of an outside panel led to limits on caffeine levels in energy drinks.

In their letter, F.D.A. officials indicated that an outside review would focus on the possible risks posed by high levels of caffeine, a stimulant, to certain groups. They reiterated that daily consumption of significant levels of caffeine, which is found in products like coffee and tea, is safe.

“Areas of particular focus would include such matters as the vulnerability of certain populations to stimulants and the incidence and consequence of excessive consumption” of energy drinks, especially by young people, F.D.A. officials wrote.

In Canada, an expert panel made several recommendations, including arguing that such beverages be labeled “stimulant drug-containing drinks.”

Health Canada, that country’s counterpart to the F.D.A., did not adopt many of the group’s recommendations, but it has put in place new rules limiting caffeine levels in cans of energy drinks to 180 milligrams.

Some larger-size cans of energy drinks sold in the United States, like the 24-ounce can of Monster Energy and the 20-ounce can of Red Bull, have caffeine levels above that limit.

An eight-ounce cup of coffee, depending on how it is made, can contain from 100 to 150 milligrams of caffeine.

In the new letter, F.D.A. officials also said that studies that had examined other ingredients, like taurine, that are often used in energy drinks had determined those substances were safe. The agency also said that a survey suggested that energy drinks constitute a small portion of the caffeine consumed in this country, even by teenagers.

Article source: http://www.nytimes.com/2012/11/28/business/fda-may-tap-experts-on-energy-drinks.html?partner=rss&emc=rss

DealBook: Milken’s Past Invoked in Gupta Sentencing

Michael Milken at a health conference in 2009.Fred Prouser/ReutersMichael Milken, who was a symbol of Wall Street greed in the 1980s, has become a prominent philanthropist.

More than two decades after pleading guilty to securities fraud, the financier Michael Milken still looms large. The demand for junk bonds, a market that he helped create, have touched record levels this year. A number of his disciples, like Leon Black of Apollo Global Management, are among the most powerful players on Wall Street.

And though it was a generation ago that Mr. Milken – who earned a $550 million bonus in 1986 – became a symbol of Wall Street greed, he remains a presence in the world of white-collar crime. Mr. Milken’s continued influence became clear during the sentencing of Rajat K. Gupta.

Last Wednesday in Federal District Court in Manhattan, Mr. Gupta, a former Goldman Sachs director, received a two-year prison term for leaking boardroom secrets about the bank to the hedge fund manager Raj Rajaratnam.

Judge Jed S. Rakoff, the presiding judge in Mr. Gupta’s case, made a surprising reference to Mr. Milken during the hearing. It came after Mr. Gupta’s lawyer, Gary P. Naftalis, made a plea for a lenient sentence. Mr. Naftalis cited the hundreds of letters of support for Mr. Gupta, who in addition to his business accomplishments has played a leading role in fighting global disease. He read a letter from Barry Bloom, the former dean of the Harvard School of Public Health.

“Dr. Bloom stated, ‘To my knowledge, as someone who has worked in global health for 40 years, with the sole exception of Bill Gates, no leader of the private sector or corporate world has invested so much of his time, energy, and personal credit to do so much for the poorest people of the poorest countries than Rajat Gupta,” Mr. Naftalis said.

“I’m glad he didn’t say except for Michael Milken,” Judge Rakoff responded.

The comment by the judge caught the courtroom by surprise. Over the last several decades, Mr. Milken has been a prominent philanthropist. Still, while his family foundation has been a significant contributor to education initiatives and medical research causes, it has not been involved in global public health matters.

“Michael Milken wasn’t there on this issue,” Mr. Naftalis said.

Judge Jed. S. Rakoff of Federal District Court in Manhattan.Fred R. Conrad/The New York TimesJudge Jed. S. Rakoff of Federal District Court in Manhattan.

Later in the hearing, Judge Rakoff referenced his earlier comment about Mr. Milken. The judge rejected the recommendation by Mr. Gupta’s lawyer that his client receive a probationary sentence and perform community service in Rwanda, saying that said this would amount to insufficient punishment because Mr. Gupta had already devoted himself to such activities. He called the Rwanda idea “innovative” but at the same time mocked it, noting that it sounded like a “Peace Corps for insider traders.”

“Moreover, someone who has suffered a reputational loss has a strong motive to do those kinds of things,” Judge Rakoff said. “I somewhat unfairly made a joke at the expense of Mr. Milken previously, but he is a good example of a person who has attempted to recapture his reputation by doing good works.”

Both Judge Rakoff and Mr. Naftalis, the lawyer for Mr. Gupta, have more than just a passing interest in Mr. Milken. Both men have deep connections to the late 1980s insider trading scandal that featured Mr. Milken’s former firm, Drexel Burnham Lambert. As a criminal defense lawyer, Mr. Rakoff represented Martin A. Siegel, a former Kidder Peabody investment banker who admitted to leaking inside information to the financier Ivan Boesky. And Mr. Naftalis represented Kidder Peabody in the case, working closely with Mr. Rakoff.

A spokesman for Mr. Milken, Geoffrey Moore, took umbrage at Judge Rakoff’s comments. He bristled at the idea that Mr. Milken’s philanthropic efforts were solely a function trying to restore his reputation.

In a statement to DealBook, Mr. Moore listed Mr. Milken’s numerous charitable efforts and emphasized that Mr. Milken endowed his family foundation with several hundred million dollars in 1982, long before his legal troubles.

“Mike’s efforts today are no more than a continuation of the same efforts that began long before his reputation was damaged,” Mr. Moore said. “He is far too busy trying to advance medical science to worry about what others think of him.”

Article source: http://dealbook.nytimes.com/2012/10/29/milkens-past-invoked-in-gupta-sentencing/?partner=rss&emc=rss

DealBook: Former Banker Promises Inside Peek at Goldman

Greg Smith, author of the book Why I Left Goldman Sachs, which is scheduled to be published on Oct. 22 by Grand Central Publishing.Herman EstevezGreg Smith, author of the book “Why I Left Goldman Sachs,” which is scheduled to be published on Oct. 22 by Grand Central Publishing.

Wall Street has plenty of worries heading into autumn: the stability of the euro zone, persistent United States unemployment and the historically volatile October stock market.

Goldman Sachs has an additional concern: Greg Smith’s book.

Mr. Smith’s memoir, “Why I Left Goldman Sachs,” is set for publication on Oct. 22. The release date comes just seven months after Mr. Smith publicly resigned from the bank with an Op-Ed page article in The New York Times that detailed his disappointment with Goldman’s business practices that reflected, more broadly, a corrosive culture at the nation’s largest banks.

The article struck a nerve. Within 24 hours, it had more than three million views online. Publishers clamored for the rights to a book. Grand Central Publishing, a division of the Hachette Book Group, secured a deal, offering Mr. Smith an advance of close to $1.5 million, according to people with direct knowledge of the negotiations.

His book comes at an inopportune moment for Goldman, which has largely disappeared from the spotlight after a wave of negative publicity damaged the bank’s reputation.

Greg Smith's Op-Ed article in The New York Times earlier this year reignited a debate over whether Wall Street was corrupted by greed and excess.The New York TimesGreg Smith’s Op-Ed article in The New York Times earlier this year reignited a debate over whether Wall Street was corrupted by greed and excess.The Daily Mash carried a parody of the Goldman letter, supposedly written by Darth Vader.The Daily Mash carried a parody of the Goldman letter, supposedly written by Darth Vader.

In addition, it paid $550 million to settle a civil case brought by the government over a subprime mortgage product that it sold to clients. An insider trading scandal ensnared the firm, with a member of its board facing prison time and at least two other executives under investigation.

And its depiction as a blood sucking “vampire squid” in a Rolling Stone article captured the public’s imagination, helping to make Goldman a symbol of Wall Street’s dark side.

But in recent months, Goldman has steered clear of the negative finance coverage dominating the headlines, most notably the huge trading losses at JPMorgan Chase and the growing scandal involving certain banks’ manipulation of interest rates.

“Why I Left Goldman Sachs” promises to be a tell-all of Mr. Smith’s 12-year career at the bank. His opinion article in The Times described Goldman as a once-vaunted institution that had lost its way. He wrote that when he first joined the bank as an intern in the summer of 2000, it obsessively put its clients’ interests first.

But over time, Mr. Smith said, Goldman devolved into a “toxic and destructive” culture that put profit before principle. His former colleagues mocked their clients, he said, derisively referring to them as “muppets.”

“I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival,” Mr. Smith wrote. “It makes me ill how callously people talk about ripping their clients off.”

Not everyone embraced Mr. Smith’s article. Mayor Michael R. Bloomberg of New York dismissed the piece as “ridiculous,” calling it nothing more than a nasty letter from a disgruntled employee. It also spawned numerous parodies on the Internet, including “Why I Am Leaving the Empire,” by Darth Vader.

David Wells, a Goldman Sachs spokesman, minimized the significance of the book. “Every day, some young professional, after a decade in a postcollegiate job, reassesses his or her career and decides to move on and do something else,” he said in an e-mailed statement. “Others can better judge whether Mr. Smith’s particular career transition is of unique interest.”

Grand Central has planned a robust print run of 150,000 copies in hardcover and expects to sell a sizable number of copies in e-book format.

“Many people on Main Street distrust Wall Street right now, yet few can put their finger on why,” Jamie Raab, publisher of Grand Central, said in a statement. “Greg Smith’s candid account of his years at Goldman Sachs does just that.”

A big selling point of Mr. Smith’s book is that it is about Goldman, which has long been a subject of fascination because of its immense profits and political connections. Also, within the hushed confines of the bank, a code of silence has always prevailed, so an insider’s account is especially tantalizing.

Several nonfiction releases about Goldman have had some success, most recently the best seller “Money and Power” by William D. Cohan, but the bank has never been the focus of a tell-all.

Yet many in the publishing industry, including several people who met with Mr. Smith in March, have their doubts, and question whether the book has the makings of a best seller.

Was Mr. Smith, a midlevel derivatives salesman who failed to become a managing director and had no one reporting to him, privy to Goldman’s inner workings? Does he have access to the firm’s previously untold secrets?

While Mr. Smith’s opinion article became rich fodder for critics of Wall Street banks and the reckless lending and business practices that led to the global financial crisis, it was largely devoid of specific details. Whether the 288-page book fills in the blanks remains an open question.

Grand Central will distribute the book with the secrecy of a Bob Woodward publication, with bookstores told not to display any copies until its release. Adding to the suspense around the book’s publication date, Mr. Smith has not done any interviews or media appearances since the article was published.

People familiar with the contents of Mr. Smith’s book say that while it shines an unsavory spotlight on the ways of Wall Street, it is not just a finger-wagging polemic.

Instead, much of the memoir details the whole of Mr. Smith’s career at Goldman Sachs, from when he joined the firm during the frothy dot-com boom to the grim days of the financial crisis.

A summary of the book on Amazon hints at some of the book’s details: “From the shenanigans of his summer internship during the technology bubble to Las Vegas hot tubs and the excesses of the real estate boom; from the career lifeline he received from an N.F.L. Hall of Famer during the bear market to the day Warren Buffett came to save Goldman Sachs from extinction, Smith will take the reader on his personal journey through the firm, and bring us inside the world’s most powerful bank.”

Grand Central considers the book a potential successor to “Liar’s Poker,” Michael Lewis’s firsthand account of the freewheeling antics of Salomon Brothers’ bond-trading desk during the 1980s.

Other Wall Street memoirs — including “F.I.A.S.C.O.” by Frank Partnoy, a former Morgan Stanley salesman, and Lawrence G. McDonald’s “A Colossal Failure of Common Sense,” a tale about Lehman Brothers — have not sold nearly as well as “Liar’s Poker,” which has sold more than two million copies.

Mr. Smith turned his book around quickly, eschewing a ghostwriter and writing his own first draft.

He did get some assistance from a professional writer, who provided advice and helped him polish the manuscript, said Jimmy Franco, a spokesman for Grand Central. The book’s editor is John Brodie, a former journalist and editor at Fortune magazine.

Once the book is released, the 33-year-old Mr. Smith, a South African native who lives in New York, is expected to do television and radio interviews, though no specific appearances have been announced. He has no plans for a traditional book tour with signings and readings.

One possible television spot would be on “The Colbert Report.” In March, Stephen Colbert, the show’s host, mocked Mr. Smith for including in his article that he had won a bronze medal in table tennis at the Maccabiah Games in Israel.

Joked Mr. Colbert: “Way to reinforce the stereotype that Ping-Pong players control the banking industry.”

A version of this article appeared in print on 09/13/2012, on page B7 of the NewYork edition with the headline: Book by Former Banker Promises Peek Inside Goldman Sachs.

Article source: http://dealbook.nytimes.com/2012/09/12/former-banker-promises-inside-peek-at-goldman-sachs/?partner=rss&emc=rss