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  Monday, 13 Oct 2014 | 2:23 PM ET

Now Steve Cohen is paying for being extra ethical

Posted By: Lawrence Delevingne

Steve Cohen's new family office is taking a largely unprecedented step to push employees to be highly ethical and civic-minded: a cash bonus.

The sullied billionaire investor continued his rebranding campaign in October after the hedge fund firm he founded, SAC Capital Advisors, pleaded guilty to criminal insider trading charges and agreed to $1.8 billion fine and to stop managing external capital. Cohen has hired new senior leaders for Point72 Asset Management, including a former federal prosecutor as "chief surveillance officer" and a former McKinsey & Co. director as president.

The recently announced "Rewarding What Matters" bonus system is for stock investment teams based in the U.S., the family office's main strategy.

According to Point72 spokesman Mark Herr, the up-to-4 percent bonus is tied to a combination of criteria including "sustainable and repeatable" investment returns and "significant contributions" to the firm and community outside of financial performance. Internally, that includes "adhering to the highest ethical standards" and helping train analysts. Externally, it can be nonprofit work, such as running a charitable foundation.

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  Monday, 13 Oct 2014 | 3:03 PM ET

Bank earnings: Lawsuit costs loom for some

Posted By: Jeff Cox

Bank earnings performance for the third quarter could rest as much on what happened in the courtroom as the boardroom.

No institution will feel that pinch more than Bank of America, which had to pay a $17 billion settlement during the quarter, primarily related to alleged misdeeds from Merrill Lynch and Countrywide, both of which were acquired during the dark days of the financial crisis. The settlements resolved claims over subprime lending, which saw mortgages approved for less-desirable borrowers often under onerous terms.

Ditto to a lesser degree for Citigroup, which shelled out $7 billion on its own behalf to settle claims.

As a result, the two firms will be on the lower end of earnings, reporting of which will begin this week when the four largest U.S. banks plus a few other big Wall Street names will provide quarterly results.

BofA, the second-largest bank, is on one end, and is expected to show a loss of 9 cents a share when it reports Wednesday, according to FactSet. That loss will come on expected revenue of $21.34 billion, which would be about a 1 percent drop.

On the other end of the big-bank spectrum is Goldman Sachs, which analysts expect on Thursday to report powerful earnings of $3.21 a share on sales of $7.82 billion.

In between are Citi, predicted to show a profit of $1.12 a share on sales of $19.16 billion, and Wells Fargo, which kicks things off Tuesday amid consensus expectations of $1.02 a share on revenue of $21.1 billion.

»Read more
  Monday, 13 Oct 2014 | 11:15 AM ET

After VIX 'super spike,' is the worst ahead?

Posted By: Jeff Cox

Technical strategist Abigail Doolittle is holding tight to her prediction of market doom ahead, asserting that a recent move in Wall Street's fear gauge is signaling the way.

Doolittle, founder of Peak Theories Research, has made headlines lately suggesting a market correction worse than anyone thinks is ahead. The long-term possibility, she has said, is a 60 percent collapse for the S&P 500.

In early August, Doolittle was warning both of a looming "super spike" in the CBOE Volatility Index as well as a "death cross" in the 10-year Treasury note. The former referenced a sharp move higher in the "VIX," while the latter used Wall Street lingo for an event that already occurred in which the fixed income benchmark saw its 50-day moving average cross below its 200-day trend line.

Both, she said, served as indicators for trouble ahead.

»Read more
  Monday, 13 Oct 2014 | 3:23 PM ET

Ex-hedgie halts political run over harassment suit

Posted By: CNBC.com staff
Marc Abrams
Source: Marc Abrams for State Representative | Facebook
Marc Abrams

A hedge fund manager-turned-politician has suspended his campaign for Connecticut's general assembly because of resurfaced sexual harassment allegations.

Greenwich-area Democrat Marc Abrams was sued in 2010 by two women who worked for Titan Capital, the investment firm he founded with his brother Russell.

Abrams characterized the lawsuit—which alleged that the Abrams brothers used their power to "intimidate, degrade and discriminate against women"—as frivolous in an interview with Hearst's Connecticut Media Group. But under pressure from Gov. Dannel Malloy and others, Abrams paused the campaign citing ongoing state court claims.

»Read more
  Sunday, 12 Oct 2014 | 9:00 AM ET

Wall Street backs GOP horses—with loads of cash

Posted By: Lawrence Delevingne
Elliott Management founder and CEO Paul Singer speaks during the SkyBridge Alternatives conference in Las Vegas, May 9, 2012.
Jacob Kepler | Bloomberg | Getty Images
Elliott Management founder and CEO Paul Singer speaks during the SkyBridge Alternatives conference in Las Vegas, May 9, 2012.

Wall Street is spending more on midterm elections than ever before—particularly in support of Republicans, who have a good shot of taking control of the Senate. But the donations are not coming from whom you might think.

A small group of ultra-wealthy private fund managers are dominating political spending this cycle, making up for declining involvement from banking executives.

CEOs like Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JP Morgan have tossed a few thousand dollars to a candidate or two of choice. Dimon, for example, gave House hopefuls Jeb Hensarling, a Republican, and Joe Crowley, a Democrat, $2,600 each this year, his only direct political contributions of 2014.

But hedge fund investors like Paul Singer of Elliott Management and Bob Mercer of Renaissance Technologies have poured millions of dollars to influence a slew of races across the country. Singer, for example, has given between $1 million and $2 million to three different conservative political action committees this year alone, groups that work to shape elections in numerous states.

»Read more
  Saturday, 11 Oct 2014 | 1:00 PM ET

In hunt for clients, Wall St. plays dirty—literally

Posted By: Stephanie Landsman

The meal ticket to lock in new business on Wall Street may soon have a lot less to do with food and drinks.

Firms are looking for more creative ways beyond traditional dinners to entertain clients and prospective business partners.

It's now becoming about sweat, stamina and overcoming obstacles at activities such as spinning, CrossFit and even races like Tough Mudders.

Stephanie Cadet, a sales rep at investment bank CLSA, has scheduled events for clients at SoulCycle, the boutique indoor cycling chain. She has another one coming up later this month.

"There are definitely many more options now—especially in the past couple of years. They have sort of flourished," Cadet said.

»Read more
  Friday, 10 Oct 2014 | 10:45 AM ET

Dimon: Shadow banking threat to US economy

Posted By: Jeff Cox

Cancer can't keep Jamie Dimon down, and he thinks there isn't a lot that will keep the U.S. economy down.

However, he sees one thing that could derail the recovery: The $3.2 trillion ($15 trillion globally) nonbank financial system, or "shadow banks."

Read MorePE still beatingstocks: Report

The JPMorgan Chase CEO spoke Friday at the Institute of International Finance membership meeting in Washington, D.C., and delivered a mostly upbeat message.

However, asked what keeps him up at night, he said nonbank lending poses a danger "because no one is paying attention to it." He said the system is "huge" and "growing."

Nonbank lending was a contributing factor in the financial crisis due to firms lending money to low-quality borrowers who then defaulted on mortgages in droves.

He said, though, that the long-range prospects are good for the U.S.

"I'm a real long-term bull on the U.S. economy," he said on a panel with other Wall Street banking heavyweights, including Morgan Stanley CEO James Gorman and Bank of America CEO Brian Moynihan, in a discussion about the future of finance.

»Read more
  Friday, 10 Oct 2014 | 8:50 AM ET

Gartman says the euro 'is doomed to failure'

Posted By: Jeff Cox

Conflicting economic priorities in Europe likely will spell the end for the region's common currency, widely followed investor Dennis Gartman said.

The author of The Gartman Letter attributes much of the global market tumult this week to weakness in the European Union, and specifically remarks Thursday from European Central Bank President Mario Draghi.

Speaking in Washington, Draghi, who famously promised two years ago to do "whatever it takes" to keep the EU together, emphasized that central banks can't by themselves save the world and need cooperation from fiscal policy. It's hardly the first time that message has been sent—former Federal Reserve Chairman Ben Bernanke often pleaded with Washington for fiscal policy coordination—but Gartman, writing in his daily missive, said global markets needed to hear more:

As the world awaited a hoped-for clear and precise statement that the ECB was prepared to actually take action on monetary policy and become expansionary, it instead heard a lecture explaining that he and the others on the ECB's monetary policy committee had done all that they could do to try to strengthen the economy there and that the real battle had to be waged by the political authorities to reform the sclerotic nature of the economies there.

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  Friday, 10 Oct 2014 | 9:08 AM ET

A market in 'disarray' awaits the next move

Posted By: Jeff Cox

Investors held their breath Friday during another wild day on Wall Street, in a whipsaw week that has seen some of the biggest gains—and losses—for stocks all year.

Whether it's anticipation of interest rate movement, headwinds posed by global macroeconomic factors or the impending earnings season, there's been something for everyone, bulls and bears alike.

The market has had three consecutive days of 1.5 percent moves or more either up or down, something that has happened only 54 times since 1928, according to Bespoke Investment Group.

The week looked to be ending in uncertain fashion, with stocks searching for direction during Friday morning trading.

"Wall Street is in disarray this week as the violent gyrations are causing havoc for fund managers and active investors hoping for a smooth fourth quarter," said Todd Schoenberger, president of J. Streicher Asset Management. "The fear factor is beginning to hit panic levels as worries about a worldwide economic slowdown become real, despite round after round of stimulus and central bank intervention."

»Read more
  Thursday, 9 Oct 2014 | 1:33 PM ET

Volatile markets are facing the 'old normal'

Posted By: Jeff Cox

Those looking to stay in the financial markets may want to keep a steady supply of antacids nearby.

The stomach-churning volatility the market has seen in recent days likely isn't going anywhere—not with the Federal Reserve trying to prepare a graceful exit from monetary easing while a panoply of other concerns haunt investors.

Forget the "new normal," which bond giant Pimco defined as a long-term period of low growth. This looks like something different.

"It's going back to the old normal," said Quincy Krosby, chief market strategist at Prudential Annuities. "Markets have volatility and markets used to have pullbacks," she added, referring to the more than two years the S&P 500 has gone without at least a 10 percent correction.

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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