Unless, you know, it can. But for now, book those flights and hotels to one of the Midwest’s, uh, cities.

Warren Buffett may be 91, and his number two, Charlie Munger, may be 98. But both are fully vaccinated and, given Berkshire Hathaway’s feelings about the vaccine-industrial complex, presumably also fully boosted. And, it seems, crucially, they are as sick of Zoom as your grandparents. Which means it’s time to start planning your first trip to Omaha in two years, ‘cuz Buffettstock is coming back live. Unless the next variant makes that impossible. You know how these things go by now.

Berkshire Hathaway, the conglomerate that Mr. Buffett runs, said on Tuesday that it was planning to hold its annual shareholder meeting in person this year. The event is scheduled for April 30, and it will also be streamed live, as it has been for several years…. Details of how this year’s meeting will proceed, including any coronavirus testing or vaccination requirements for attendees, were not disclosed. The company said it would provide additional information when it publishes its annual report next month.

Berkshire Hathaway plans to hold its next annual meeting in person. [NYT]

And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud.

According to the Justice Department—and now, a federal jury—the people running a Texas lender, United Development Funding, went to great pains to mislead investors and the Securities and Exchange Commission about the success of tis funds. And it worked, because when UDF started complaining that hedge fund manager Kyle Bass was spreading false and misleading information about it, the SEC rushed in to take a look.

Of course, the SEC didn’t find anything, which is probably because the things that Bass said—notably, that UDF was a Ponzi scheme—rang true, at least to the aforementioned jury.

The federal jury convicted UDF Chief Executive Hollis Morrison Greenlaw and three other executives of 10 counts, including conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud, and securities fraud…. The U.S. Department of Justice alleged that when developers failed to repay money they borrowed from one UDF fund, the executives transferred money out of another fund to pay distributions to the original fund’s investors without disclosing the transfers to the SEC and investors. The defendants face up to 25 years each in federal prison.

Convictions at Real-Estate Firm Are Win for Investor Kyle Bass [WSJ]

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More mask muddle; more morose outlooks; more alts for Allianz; and, well, more!

New York judge strikes down state mask mandate [NBC News]
Judge Thomas Rademaker of New York State Supreme Court on Long Island found that the state legislature last year curbed any governor's ability to issue decrees, such as a mask mandate, amid a declared state of emergency…. Governor Kathy Hochul, a Democrat, vowed to fight back, saying in a statement, "We strongly disagree with this ruling, and we are pursuing every option to reverse this immediately."

IMF cuts 2022 global growth forecast as U.S., China recovery wanes [CNBC]
“The global economy enters 2022 in a weaker position than previously expected,” the report noted, highlighting “downside surprises” such as the emergence of the omicron Covid variant, and subsequent market volatility, since its October forecast…. The U.S. is expected to grow 4.0% in 2022, 1.2 percentage points lower than previously forecast as the Federal Reserve moves to withdraw its monetary stimulus, even as supply chain disruptions weigh on the economy. The updated outlook also removed President Biden’s signature Build Back Better fiscal policy package from its baseline projection after failure to pass the original bill.

Credit Suisse issues fourth-quarter profit warning as legal costs rise [CNBC]
The Swiss bank said a charge of roughly 500 million Swiss francs ($545 million) is expected to push its earnings to breakeven…. “These litigation provisions have been incurred in respect of a number of cases where the Group has more proactively pursued settlements and primarily relate to legacy litigation matters from our investment banking business….”
Switzerland’s second-largest lender also on Tuesday flagged a decline in trading revenues at its investment bank and wealth management businesses. It attributed this to both a seasonal slowdown and a “reversion to more normal trading conditions” after the unusually high volumes seen through 2020 and 2021.

‘Crypto Winter’ Fears Chill the Battered Bitcoin Faithful [Bloomberg]
Memories of 2018 are sparking fears that a repeat is playing out now after the world’s largest cryptocurrency plummeted 50% from its most recent high of almost $69,000 in November…. The pullback has hit all corners of the crypto ecosystem, from Bitcoin to memecoins and publicly listed crypto exchanges. While the collapse has been rattling enough on its own, it has spawned an even bigger concern that the pain may persist for many months, according to UBS….
Mentions of “crypto winter” and “crypto ice age” have flooded social media amid the latest drop.

Lee Enterprises asks investors to help fight off hedge fund [AP via Fox 42]
“A ‘Vulture Hedge Fund’ is seeking to acquire Lee at a steep discount. Don’t let it take value that belongs to you,” Lee said in its letter to shareholders…. Two other hedge funds that each hold more Lee stock than Alden — Cannell Capital and Praetorian Capital — have said they believe the company is worth much more than Alden is offering. Cannell holds 8.2% of Lee’s stock and Praetorian owns 7.3%.

Allianz Doubles Down on Alternatives After Hedge Fund Blowup [Bloomberg]
“Flirting with passive strategies wouldn’t be the first thing I would do,” Wimmer said in a wide-ranging interview last week. “But you don’t have to categorically rule out anything for the future….”
The potential fallout from the implosion of the Structured Alpha Funds notwithstanding, Allianz remains one of the potential consolidators as the asset management industry is forced to reduce costs to compete with cheaper, passive funds. Wimmer said while his priority is to grow Allianz’s asset management business organically, he wouldn’t rule out a deal.

Just saying.

What’s in a name? To Bill Foley, apparently, not much: After all, when he bought the company that would make him a billionaire back in 1984, he didn’t apparently care that it shared a sobriquet with another rather well-known player in the financial services space. He cared so little, in fact, that when that company—Fidelity National Financial—bought a data processing operation in 2003, he named it Fidelity, too.

Indeed, his lack of care is such that when he got into the special-purpose acquisition company game way back in 2016, he used his first to buy another company called Fidelity—Fidelity & Guarantee Life—which he then sold to the first Fidelity he bought.

So, when one of his half-dozen (at least) blank-check companies struck upon the perfect acquisition company—advertising-technology player System1—he probably didn’t bother to Google the term “System1.” And given the opacity that’s built into the whole SPAC structure, System1 probably didn’t have to bother to tell him that had been accused of copyright infringement by another company called “System1,” and, what’s more, this other System1 was also an ad-tech company. Not that, given his history, Bill Foley was likely to care much about the coincidence, but the first System1 still cares very much.

In September, U.K. firm System1 Group PLC—yet another ad-tech firm, this one traded on London’s Alternative Investment Market as “SYS1”—filed a complaint in a New York court for trademark infringement, unfair competition and deceptive trade practices. “Such ongoing and expanding use” of the “SYSTEM1” mark, it said, “is likely to cause significant confusion….”

The American System1, formerly known as OpenMail, rebranded shortly after [April 2017]. In a statement, it claims the other firm has been aware of it since at least 2018 and only alleged trademark infringement after the announcement of the SPAC deal…. Still, the U.K. firm complained to the U.S. Patent and Trademark Office back in 2017.

SPACs Are Running Out of Names to List [WSJ]

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Nor has anyone accused Josh Harris of sexually assaulting anyone, but no matter.

You might think that Apollo Global Management founder Leon Black’s downfall had something to do with his doggedly sticking by his convicted sex offender buddy, Jeffrey Epstein. You might think, whether you believe her to be telling the truth or not, that his alleged sexual abuse of his former mistress might be at fault.

Black, as only a billionaire can, knows better. After all, as he and his ilk well know, no one ever enjoys his level of success is actually capable of wrongdoing. No: His disgrace has nothing to do with his penchant for picnicking on a private island dedicating to sex trafficking in underage girls, nor his long and fruitful (for Epstein, anyway) “limited” business relationship with the dead pedophile, nor even people and prosecutors getting unduly but predictably exercised about the same. No, the only reason he is no longer chairman and CEO of the private equity behemoth he built is because he told his longtime partner and co-founder Josh Harris that he couldn’t succeed him, and Harris decided to have his revenge.

Mr. Harris “waged a highly coordinated and orchestrated campaign to destroy Mr. Black’s professional and personal reputation,” said Mr. Black’s lawyer, Susan Estrich. Mr. Harris’s advisers “whispered to investors, placed articles and ultimately supported and encouraged an effort by Ms. Ganieva to make knowingly false claims in the courts about her relationship with Mr. Black,” she said.

All of which would be much more compelling had Black, like Prince Andrew, not waged his own campaign to destroy his reputation by remaining buddy-buddy with Epstein after his first conviction for sex crimes, a fact which Harris can’t help but point out, all too gleefully, we imagine.

Mr. Harris, his spokesman said, “was direct with Black that his connections to Epstein were damaging the company. The notion that Mr. Harris was motivated by anything other than the best interests of the company is false—Black’s relationship with Epstein was disqualifying, plain and simple.”

To all of which Apollo itself can only desperately plead, “nothing to do with us, no sir.”

“The firm has never been more aligned or better positioned to create value for all of our stakeholders,” an Apollo spokesman said. “The legal dispute playing out between two former employees is unfortunate but won’t impact our strategy, businesses, or mission.”

Sure doesn’t sound like his old firm will be putting the welcome mat out for old Leon any time soon.

Dispute Between Apollo Co-Founders Black, Harris Boils Over [WSJ]

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NVM WSB; trickle-down Joe; Evergrande goes begging; and more!

WallStreetBets Loses Its Cool Factor [WSJ]
Those who once scoured the online message forum for brazen and unexpected trading ideas say they are mostly finding members still chatting about stocks such as GameStop Corp. and AMC Entertainment Holdings Inc. Constructive feedback on trades, some users complain, has largely been replaced by cheerleading…. Veterans… say the newbies are taking more than they are giving. The number of text posts, as well as the number of total comments across WSB’s main page, has been falling. On an average day last November, there were about 27,000 comments on the forum’s main page, which features “hot” content, down from about 47,000 a year before….

Activist Investors Assemble [DealBook]
Unilever has faced pressure on multiple fronts for weeks, including pushback from shareholders over its now-abandoned pursuit of GlaxoSmithKline’s consumer business. Now the consumer goods giant must deal with a potentially bigger headache: Trian Partners, the activist investment firm run by Nelson Peltz….
In a letter to the embattled at-home fitness equipment maker, Blackwells Capital called for directors to fire [Peloton’s] C.E.O., co-founder John Foley, and to weigh a sale as its shares tumble amid falling sales…. The retailer Kohl’s has received a roughly $9 billion offer to go private in a deal with an investment consortium led by Acacia Research, which is backed by the activist hedge fund Starboard Value….

Yellen Unveils Twist on Reagan in ‘Modern Supply-Side Economics’ [Bloomberg]
“Our new approach is far more promising than the old supply-side economics, which I see as having been a failed strategy for increasing growth,” Yellen said in a speech to the World Economic Forum’s virtual Davos Agenda. “Modern supply-side economics seeks to spur economic growth by both boosting labor supply and raising productivity, while reducing inequality and environmental damage….”
Criticizing generations of Republican moves to lower federal tax rates, Yellen said that “significant tax cuts on capital have not achieved their promised gains, and deregulation has a similarly poor track record.” She added that “this approach has deepened disparities in income and wealth by shifting the burden of taxation away from capital and towards labor.”

Ex-Goldman Bond Trader Builds a $5.6 Billion Crypto Behemoth [Bloomberg via Yahoo!]
The Pantera Bitcoin Fund has returned more than 65,000% since 2013, and his Pantera Capital Management, once a traditional hedge fund that wagered on macroeconomic trends, oversaw $5.6 billion of crypto assets at year-end. That’s on top of the $6 billion the firm has returned to investors…. “Crypto is so much more compelling than any other trade out there.”

Bitcoin Price Has Lost Half Its Value—Again [WSJ]
The cryptocurrency has declined for six out of the last seven days, retreating nearly 10% on Monday, compared to its level at 5 p.m. on Friday. It traded for as little as $33,046, its lowest level since July…. The drop shouldn’t come as too much of a surprise to crypto enthusiasts. It is the eighth time since Bitcoin launched in 2009 that it has fallen by more than 50%, and the third time since 2018…. Retail investors also appear to be taking a step back from investing in crypto, according to Ms. Reyes. The volume of smaller-sized transfers, a proxy for retail trader use, declined by over 40% between the first and fourth quarters last year….

China Evergrande seeks more time from creditors for debt restructuring plan [Reuters]
Evergrande on Monday urged bondholders to refrain from taking "radical legal actions" and that it looked forward to communicating with various overseas creditors to formulate a debt restructuring plan.
The company needs further studies and evaluation before entering into communication with the creditors, it said in a statement on its website.

Of course, everyone else's have, too.

Americans may be ready for a sort-of bitcoin exchange-traded fund. But they are still not yet ready for real, actually-investing-real-money-in-fake-money one, and certainly not one run by Anthony Scaramucci.

The U.S. Securities and Exchange Commission rejected Intercontinental Exchange’s NYSE Arca proposal for a Bitcoin exchange-traded fund from Anthony Scaramucci’s Skybridge Capital.

The filing did not meet "the requirement that the rules of a national securities exchange be 'designed to prevent fraudulent and manipulative acts and practices' and 'to protect investors and the public interest,'" the SEC said Thursday in a filing.

Whatever would make Gary Gensler & co. think that the Mooch wasn’t up to protecting people from scams? Not that it really seems to matter who’s proposing these things.

The regulator used similar arguments to deny proposals from Valkyrie Investments and Kryptoin in December. 

SEC Rejects Bitcoin ETF Plan From Anthony Scaramucci’s Skybridge Capital [Bloomberg]
The SEC has blocked Anthony Scaramucci's Bitcoin ETF [Reuters via CNN Business]

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You’d like to think ripping the world’s largest asset manager off would be more exciting, but no.

Manhattan U.S. Attorney Damian Williams says that Hollywood producer William Sadleir’s scamming of BlackRock was “a brazen plot that could be ripped from one of the films he distributed.” Indeed, conning “a New York investment fund of over $30 million using a fake company, fake documents, and even a fake identity” sounds exciting.

In reality, it was a pretty run-of-the-mill, humdrum fraudulent affair, without enough twists and turns to fill a mere Lifetime movie, or even probably one of those low-budget true-crime shows in which the Sadleir story would only be expected to fill perhaps eight minutes. Basically, Sadleir convinced Larry Fink & co. to invest $75 million in his Aviron Group, promising to spend the money buying prepaid media credits alongside advertising agency GroupM Worldwide. A closer look shows that the $25 million actually went to something called GroupM Media Services, and then to buying Sadleir a sweet Tesla Model X and even sweeter Beverly Hills pad.

The home, which has been featured in Architectural Digest several times, is on the market for $16.8 million, with amenities including a pool, a sauna, a steam room and a “man cave” that makes you feel as if you “went to heaven,” according to the listing on Zillow.

Now, it seems, Sadleir will have to make due with somewhat more modest residential arrangements.

The 67-year-old Sadleir pleaded guilty in New York on Wednesday to two counts of wire fraud and reached a forfeiture agreement with prosecutors… Sadleir, who had been scheduled to go to trial next week, faces as much as 20 years in prison when he is sentenced May 10.

BlackRock-Scamming Producer Pleads Guilty to Diverting Funds [Bloomberg]

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Blank-check backlash; the wisdom of the crowd; Credit Suisse fined again; on superbubbles and stimulus; and more!

The SPAC Ship is Sinking. Investors Want Their Money Back. [WSJ]
Shares of half of the companies that finished SPAC deals in the last two years are down 40% or more from the $10 price where SPACs typically begin trading, erasing tens of billions of dollars in startup market value. Losses top 60% from the peak about a year ago for many once-hot names like the sports-betting company DraftKings Inc. and space-tourism firm Virgin Galactic Holdings Inc., founded by British billionaire Richard Branson….
A number of companies are now withdrawing from previously announced SPAC deals, even though they sometimes have to pay millions of dollars to the SPAC for backing out. Savings and investing app Acorns Grow Inc. was the latest to do so, ending its roughly $2.2 billion SPAC agreement on Tuesday and becoming the 10th company to terminate a SPAC deal since early November, according to Dealogic.

How Robinhood Investors Robbed Themselves [WSJ]
In what some contend is part of its psychological toolbox that induces people to trade excessively—stoking FOMO, the fear of missing out—Robinhood tells customers what others are doing on the platform. The results aren’t pretty.
Many stocks that joined the top-100 list after strong performances at some point in 2021, such as Clover Health Investments, Coinbase and even Robinhood itself, which went public last summer, have since faded sharply. The broker’s shares have lost more than three-quarters of their value since peaking shortly after the IPO. On average, those 27 stocks are down by 16% just this month.

Fed releases long-awaited study on a digital dollar but doesn’t take a position yet on creating one [CNBC]
“A CBDC could fundamentally change the structure of the U.S. financial system, altering the roles and responsibilities of the private sector and the central bank,” the report says…. The paper lists a checklist of 22 different items for which it is soliciting public feedback. There will be a 120-day comment period. Fed officials say the report is the first step in an extensive process but there is no timetable on when it will be wrapped up.

Crypto Selloff Pushes Bitcoin to a Six-Month Low of $38,000 [Bloomberg via Yahoo!]
Bitcoin has suffered a rocky start to the year and prices are down roughly 40% from the early November peak. Digital assets suffered especially in recent days against a wider tech selloff, rising regulatory threats and concerns around tightening U.S. monetary policy…. A technical pattern based on a momentum indicator known as the weekly relative strength index hinted at the possibility that Bitcoin’s slump might be due a breather. The indicator on Friday fell into a region that in the past accompanied floors in Bitcoin selloffs.

Credit Suisse is fined $9 mln in U.S. over research conflicts, customer safeguards [Reuters]
The Financial Industry Regulatory Authority said the Swiss bank published more than 20,000 research reports between 2006 and 2017 that contained inaccurate disclosures about potential conflicts.
It said about 6,400 reports omitted required disclosures, including that the companies had been clients in the last year or were expected to hire Credit Suisse for investment banking in the next three months.

‘Good luck! We’ll all need it’: U.S. market approaches end of ‘superbubble,’ says Jeremy Grantham [MarketWatch via MSN]
“For the first time in the U.S. we have simultaneous bubbles across all major asset classes,” said Grantham, co-founder of investment firm GMO, in a paper Thursday. He estimated wealth losses could total $35 trillion in the U.S. should valuations across major asset classes return two-thirds of the way to historical norms…. The Federal Reserve doesn’t seem to “get” asset bubbles, said Grantham, pointing to the “ineffably massive stimulus for COVID” (some of which he said was necessary) that followed stimulus to recover from the bust of the 2006 housing bubble. “The only ‘lesson’ that the economic establishment appears to have learned from the rubble of 2009 is that we didn’t address it with enough stimulus,” he said. 

All it takes to get billionaires to reject a guaranteed return is an association with the most odious man on the planet.

Hedge funds were once big backers of a little special-purpose acquisition company called Digital World Acquisition Corp. Owned almost all of its shares, in fact, until the men they entrusted their money with decided (or simply announced what had been previously decided, depending on who you believe) with former Donald Trump’s still-nonexistent National Socialist social media platform. Having not been let on to the former president’s alleged little secret with DWAC chief Patrick Orlando, most of them quickly dumped their shares, which was easy, because there was no shortage of buyers.

Still, perhaps given the continued success of DWAC, these moneymen could be convinced to back Trump Media & Technology Group. The terms of the SPAC-associated PIPE deal were pretty much can’t miss, as, you’d think, was this opportunity:

Early on, Trump Media bankers told some prospective investors that they would get a call from Mr. Trump if they put in $100 million, according to interviews with those investors. Later on, other investors were told that $50 million was enough for a call.

What a bargain! Truly, this man is an Artist of the Deal. And yet,

More than a dozen well-known hedge funds and investment firms were hesitant to go into business with Mr. Trump, people briefed on the matter said, because any association with him could risk alienating their investors….

Now why would that be?

Among the funds that turned down Trump Media’s bankers were Millennium Management, a $57 billion hedge fund; Hudson Bay Capital, a $15 billion hedge fund; and Balyasny Asset Management, a hedge fund with $13 billion in assets, according to a spokesman. Apollo Global Management, the big private equity firm, also passed…. Highbridge Capital Management, a hedge fund unit of JPMorgan Chase, the nation’s biggest bank, had bought shares in the initial public offering of Digital World Acquisition, the SPAC that later agreed to merge with Mr. Trump’s company. However, Highbridge didn’t go into the PIPE deal because of the optics of doing business with Mr. Trump….

Trump Deal Faced Widespread Investor Doubt Before Raising $1 Billion [NYT]

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FAFO.

If the definition of insanity is doing the same thing over and over and expecting different results, the Trump family is out of their damn minds. Eric Trump already worked himself into a public tantrum and tried to weasel out of a deposition in the New York Attorney General’s investigation of his family business, prompting AG Letitia James to file a public motion to compel his testimony laying out a raft of embarrassing details about his family’s business.

Now the former president, Don Jr., and Ivanka Trump have been subpoenaed, so naturally they ran exactly the same play. Because it worked so well the first time! Which is how we all wound up reading that 115-page motion to compel when it dropped last night at 11pm — an hour when Trump’s lawyers were conveniently asleep and unable to jump in front of a microphone.

The major allegations weren’t new, although this was the first time the AG confirmed that her office is investigating some of them. In the main, they concern the way Trump’s habit of inflating his real estate valuations, both in financial disclosures to lenders and for the purpose of persuading Uncle Sam to subsidize his business through conservation tax credits.

The second most hilarious example involves a golf course in Los Angeles located in an area prone to landslides. After his lawyer Sherri Dillon intensively massaged the appraisal from Cushman Wakefield, Trump claimed a $25 million conservation credit for continuing to use the land as a golf course and not building houses to fall into the sea.

But the most hilarious by far is Trump’s claim that his apartment in New York was 30,000sf. In fact, it was 10,996, as Forbes worked out back in 2016 when he tried to sell this line to the magazine. But it’s one thing to look like a blowhard trying to con a reporter, and quite another thing to use the number as the basis for a financial statement. Trump’s accountant Allen Weisselberg conceded they had valued the apartment by the foot, and thus the exaggeration resulted in a $200 million overstatement of its value.

Weisselberg, who was recently indicted along with the company for tax fraud, comes in for some special attention here. His son Barry, who ran the Wollman Ice Rink for the Trump family, is already in the hot seat for possibly receiving undeclared compensation which he did not pay tax on. Now his other son Jack is in the frame, after Weisselberg shopped an appraisal of the building at 40 Wall Street which “did not reflect a good faith assessment of value” to Jack in his position at Ladder Capital.

And in case the threat to people’s children was unclear, the AG lays out Ivanka Trump’s sweet deal on her Park Avenue penthouse, on which she paid below market rent with an option to purchase at $8.5 million, although the unit was valued at three times that amount. There’s also an ominous reference to her being “the primary contact for the Trump Organization’s largest lender, Deutsche Bank” and causing “misleading financial statements to be submitted to Deutsche Bank and the federal government.”

Trump’s lawyers argued in their motion to quash that the existence of a criminal investigation into the same matters by District Attorney Alvin Bragg forecloses their clients’ cooperation with the AG. Well, first they ranted that the entire investigation is “an unprecedented and unconstitutional maneuver” by a biased prosecutor. But when they got finished fulminating, they made a case that their clients can’t testify because they might be forced to say something that would incriminate them with the DA.

The argument rests on New York’s automatic grant of transactional immunity for witnesses subpoenaed to testify before a grand jury. Trump argues that, because AG James is coordinating with DA Bragg, the investigation is inherently criminal, and thus a civil deposition is functionally the same as un-immunized grand jury testimony.

The OAG is engaged in a criminal investigation that has an active Grand Jury. It cannot issue subpoenas for testimony under the guise of a civil investigation that will immediately become available – to its own OAG/DANY criminal investigation. New York State’s statutory and constitutional protections were not designed to be so easily avoided. The subpoenas are an obvious improper end-run around the rules.

This provided the perfect opportunity for the AG to reveal that Weisselberg and Eric Trump each pled the Fifth more than 500 times during their depositions. Clearly these parties are sophisticated enough to know how not to incriminate themselves in a deposition. And you may have the right to remain silent, but you don’t have the right to avoid being asked a question because it would be super embarrassing to have to invoke that right.

“Each witness is free to invoke their Fifth Amendment privilege against self-incrimination,” James notes. “A witness’s exercise of that right in a civil investigation (or any other civil or administrative proceeding) is neither uncommon nor a denial of a constitutional right. Rather, witnesses routinely face such a decision and invoke the privilege—as witnesses have done in this investigation.”

Moreover, she points out that Trump’s Fifth Amendment arguments undermine any claim that his testimony would bears no reasonable relation to the investigation:

In addition, as Mr. Trump appears to concede in his moving brief (Respondents Mem. at 13), if he appears for an interview under oath and “chooses not to testify” on the basis of his Fifth Amendment privilege, then “an adverse inference may be drawn in” a civil action—should OAG choose to bring one under Executive Law § 63(12). That concession necessarily means his appearance bears a “reasonable relation” to OAG’s investigation—because the generation of an adverse inference against Mr. Trump or his businesses could support a judgment on the merits (even a grant of summary judgment) in that civil action. See, e.g., Access Capital, 302 A.D.2d at 48 (affirming summary judgment based on adverse inference resulting from defendant’s invocation of Fifth Amendment privilege against self-incrimination).

The memorandum of law and supplemental petition cover a lot of ground, but one other fun detail stands out. The AG is seeking to compel production of documents from the Trump Organization regarding the former president’s participation in preparing his own financial statements. Other parties have produced documentation that shows he played a role in their preparation, and Trump’s own accountants testified that they spoke to him about it. Nevertheless, the company insists that they have no responsive documents, and nothing that would tie Trump to his own financial statements.

It’s not as ridiculous as Trump’s federal lawsuit trying to divest the state court of jurisdiction and get James thrown off the case. But it’s pretty ridiculous all the same.

People of the State of New York v. Trump Organization, Inc. [Docket]

Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

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Correcting after correction; SPACapore; banks’ bills; running from RenTech; and more!

Stocks Rise After Nasdaq Enters Correction [WSJ]
The Nasdaq Composite Index rose 1.6%, a day after a late tech selloff dragged down indexes. The S&P 500 climbed 1.1% and the blue-chip Dow Jones Industrial Average added 1%.... On Wednesday, the ragged, weekslong selloff pushed the Nasdaq down more than 10% below its record close, putting it in correction territory. Those kinds of plateaus usually bring in bargain hunters, but on its own is no indication a selloff is over, observers say.

Singapore’s first SPAC debuts four months after rule change, closes 1% higher [CNBC]
Vertex Technology Acquisition Corporation (VTAC), is sponsored by Vertex Venture, a wholly owned subsidiary of state investor Temasek Holdings…. The company raised $200 million Singapore dollars (more than $148 million) from investors including other Temasek subsidiaries Venezio Investments and Fullerton Fund Management….
Singapore is one of the first markets in Asia to allow such listings.

US jobless claims rise to 286,000, highest since October [AP]
“We could see one more week of notably higher claims before they should top out,″ analysts with Contingent Macro Advisors predicted. “This bears close watching going forward….″ A surge in COVID-19 cases has set back what had been a strong comeback from last year’s short but devastating coronavirus recession. Jobless claims, a proxy for layoffs, had fallen mostly steadily for about a year and late last year dipped below the pre-pandemic average of around 220,000 a week.

Banks’ Rising Expenses Don’t Have to Be So Costly [WSJ]
Investors might not be as focused on investment spending, perhaps thinking it is the good kind of cost. But here is where costs might need a closer look. Higher investment spending can be put toward faster growth in the future but, if it only helps to preserve what banks already have as financial-technology rivals encircle them, then it is really just a higher cost of doing business. The same can be true for investments in compliance systems.

Renaissance Investor Exodus Nears $15 Billion Despite 2021 Gains [Bloomberg]
The withdrawals show a reckoning isn’t over after Renaissance’s algorithms misfired when the pandemic started unfolding in 2020, inflicting losses of 19% to 31% in its trio of funds by the end of that year. Gains since then have been too slow to stanch outflows. Some investors aren’t willing to stick around for what could be another volatile period -- with the Federal Reserve set to battle the steepest inflation in a generation with a series of rate increases.

Turkey’s Erdogan Meets El Salvador’s Bitcoin-Boosting Leader Amid Economic Crisis [WSJ]
With El Salvador planning to launch a $1 billion bitcoin-backed bond, Turks and foreign investors are watching closely to see if the meeting between [Turkish President Recep Tayyip] Erdogan and President Nayib Bukele in Ankara marks a shift in how Turkey’s government views cryptocurrencies, despite the past month’s slump in bitcoin’s dollar value.
The Turkish government has taken a restrictive approach to cryptocurrencies in recent years, but analysts expect Mr. Bukele to advocate for the use of crypto during the meeting, which comes during a period of turbulence in the Turkish economy. 

Let’s give a warm welcome to Wells Fargo’s new scapegoat-in-chief.

“Chief risk officer at Wells Fargo” sounds about as poisoned a chalice as exists in any c-suite anywhere. Not quite as unpalatable as, say, chief compliance officer of Credit Suisse (or Wells Fargo, for that matter), but no cup of tea all the same. Now, things aren’t quite as bad as they used to be, someone’s gotta do it, and Derek Flowers has already spent some time mulling over Wells’ precarities as chief credit and market risk officer, so, you know, in for a penny….

The move, effective immediately, follows the announcement earlier this month that Amanda Norton, who previously held the post, will retire this summer…. “Over the last several years, he has played a critical role managing the build-out of the company’s risk and control frameworks,” Charlie Scharf, Wells Fargo’s chief executive, said of Mr. Flowers in a statement.

Jeez, Chuck, we’re not sure that’s quite the endorsement you think it is.

In September, the Office of the Comptroller of the Currency fined the bank $250 million for failing to fix risk-and-compliance problems in its home-lending business. In April 2018, the bank entered into a $1 billion settlement over claims of misconduct in its lending businesses and agreed to improve its risk management practices.

Wells Fargo Names Derek Flowers Its Chief Risk Officer [WSJ]
Derek Flowers named Wells Fargo’s Chief Risk Officer [press release]

Less trading, more pay; Zoom firing CEO not fired; another Chinese crackdown; and more!

Bank of America profits rise 28%, wage expenses up too [AP]
The bank said Wednesday that it earned a profit of $7.01 billion, or 82 cents per share, in the fourth quarter. That’s up from a profit of $5.47 billion, or 59 cents a share, in the same period a year earlier. Analysts surveyed by FactSet were expecting the bank to post a profit of 77 cents a share…. Much of the growth was in BofA’s investment banking division, which saw profits climb to $2.68 billion from $1.67 billion.

Morgan Stanley outperforms rivals with profit beat [Reuters via Yahoo!]
Net income surged 37% to $15 billion and revenue jumped 23% to nearly $60 billion…. The bank's wealth management unit delivered a 10% rise in revenue to $6.25 billion powering a record annual profit…. In contrast to some rivals, Morgan Stanley had benefited from bringing technology in-house through its acquisitions rather than having to build it from scratch, Gorman told analysts.

Wall Street banks eye 'new normal' for trading revenue [Reuters via Nasdaq]
"None of us could have anticipated the environment that we've lived through over the last two years and particularly the environment this year, which was obviously a significant tailwind for our business," Goldman Sachs' chief executive, David Solomon, told analysts after the bank on Tuesday posted earnings that fell short of market forecasts.
"We in no way see that as a permanent environment that's going to continue at this pace," Solomon said.

Big U.S. banks see higher expenses from workers' rising wages [Reuters via Yahoo!]
The nation's six biggest banks - JPMorgan Chase & Co , Bank of America, Citigroup, Wells Fargo & Co, Morgan Stanley and Goldman Sachs Group Inc - have taken steps to raise some workers' wages in 2021 and several raised expense projections for the coming year…. "We are seeing certainly fierce competition in the war for talent, and that's playing out in wage inflation," Emily Portney, chief financial officer for Bank of New York Mellon Corp, told Reuters in an interview after reporting fourth-quarter earnings on Tuesday.
Portney said wages are even rising at the lower pay scales.

The CEO who fired 900 employees over Zoom is coming back [CNN Business]
Vishal Garg is returning to his "full-time duties" as CEO, according to a letter sent to employees Tuesday from the company's board of directors. The letter noted that Garg used a leave of absence to "reflect on his leadership, reconnect with the values that make Better great and work closely with an executive coach."
The online mortgage company's letter to employees, which was obtained by CNN Business, also said an outside law firm reviewed Better's workplace culture. The company is implementing changes, including adding more managers and a chief human resources officer.

China Notifies Firms of Tougher Investment Rules for Big Tech [WSJ]
The country’s top internet regulator, the Cyberspace Administration of China, recently told some companies that it would establish a new mechanism that requires internet companies to obtain formal approval for investment deals if they have 100 million users or more or have posted revenue in the previous year of at least 10 billion yuan, equivalent to $1.57 billion, the people said…. The new rules being planned would affect China’s biggest technology companies, including Tencent Holdings Ltd. , Alibaba Group Holding Ltd. and ByteDance Ltd., each of whose products boast more than one billion active users.

Profit down, pay up? What is this, the Salvation Army?

Turns out all of those grumpy Goldman Sachs old timers warning about the dangers of coddling the bank’s snowflakes (who aren’t even coming into the fucking office, for heaven’s sake!) were right.

In the final three months of 2021, Goldman’s profit dropped 13 percent from the previous year to $3.94 billion, or $10.81 a share, falling short of analysts’ expectations…. The bank reported “significantly higher compensation” expenses, which rose 33 percent in 2021 compared with a year earlier…. “There is real wage inflation everywhere in the economy — everywhere,” [CEO David] Solomon said.

Yes, but David: Goldman isn’t supposed to be like everywhere in the economy. It’s supposed to be like Goldman Sachs. Not that you’d understand.

Profit fell 13 percent for Goldman Sachs in 4th quarter as it raised employee pay. [NYT]

Microsoft plays the game; Larry Fink is no SJW; investors not buying what Jefferies is selling; and more!

Microsoft’s $68.7 billion deal for Activision once again shows big tech’s dominance over legacy media [CNBC]
Microsoft will acquire Activision for $95 per share. Activision shares were trading as low as $42 about two years ago, in February 2019. Turn the clock back further, to 2012 or 2013, and Activision shares were about $10 each…. Maybe the Activision deal will prompt a legacy media company to finally make a play for another large gaming company such as Take-Two Interactive — which just announced a deal to buy Zynga — or Electronic Arts.

BlackRock CEO Says Stakeholder Capitalism Isn’t ‘Woke’ [Bloomberg]
“Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero,” he said. “And BlackRock does not pursue divestment from oil and gas companies as a policy….”
“We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” he wrote, encouraging companies to prioritize long-term profits over short-term results.

Palihapitiya’s SPAC to Merge With ProKidney in $2.6 Billion Deal [Bloomberg]
ProKidney is developing a technology to treat chronic kidney disease by using the patient’s own cells to restore kidney function…. The partnership between Palihapitiya and Suvretta Capital has so far resulted in four SPACs that have each raised $250 million. The SPACs are each targeting a different subsector within biotechnology: neurology, oncology, organs and immunology.

Some Lawmakers Push to Ban Stock Trading by Colleagues [WSJ]
Democratic Sens. Mark Kelly of Arizona and Jon Ossoff of Georgia introduced legislation that would prohibit all members of Congress, their spouses and dependent children from trading individual stocks and would require them to place their stock portfolios into a blind trust…. In the House, Rep. Abigail Spanberger (D., Va.) and Rep. Chip Roy (R., Texas) have a similar bill with 15 sponsors.

Leda Braga, AMG Acquire BlueCrest’s Stake in Hedge Fund Systematica [Bloomberg]
Billionaire Michael Platt’s BlueCrest had kept an undisclosed equity stake in the $13 billion hedge fund firm after selling a part of its 49% holding to West Palm Beach, Florida-based AMG in 2015 when Braga spun out of the firm. Following the latest transaction, Braga will have an increased majority stake, while AMG holds a minority interest….

Jefferies gives up on buyout fund manager investing business-sources [Reuters via Nasdaq]
It is a blow to Jefferies' Leucadia Asset Management division, which offers alternative investment products such as private equity…. Dubbed Stonyrock Alt Fund I, the fund was seeking to raise $1 billion but had amassed only $38 million as of April 2021, according to a regulatory filing at the time.

Bankers making bank; Chris Hohn on top; Antonio Horta-Osorio less so; the wrath of Musk; and more!

Pay on Wall Street will surge after a bumper year. [NYT]
“We want to be very, very competitive on pay,” Jamie Dimon, JPMorgan’s chief executive, told analysts on a conference call Friday. “There’s a lot more compensation for top bankers and traders and managers, who I should say, by the way, did an extraordinary job in the last couple years….”
“There is a war for talent — it’s real,” and it will probably spark higher compensation across Wall Street, said David George, a senior bank analyst at Robert W. Baird & Company in St. Louis. JPMorgan’s position as an industry leader means that “if they’re going to spend a lot of money, others are going to have to follow suit or else they’ll be vulnerable,” Mr. George said.

These Are the World’s Top Hedge Funds for 2021 [Bloomberg]
The group of top 20 hedge fund firms generated $65.4 billion in after-fees gain last year, according to estimates by LCH Investments…. [TCI Fund Management] recorded its 13th straight profitable year in 2021, making 23.3%, D.E. Shaw ended last year with double-digit gains in its two biggest funds, while Citadel bested its mega-multi-strategy peers, posting a 26% return. Tiger Global Management was the only hedge fund in the list to lose money last year.

Credit Suisse boss Horta-Osorio resigns over Covid breaches [BBC]
[Antonio] Horta-Osorio, who was with the bank for just nine months, left following an internal investigation…. It has emerged he breached Covid rules last year, including by attending the Wimbledon tennis finals…. Mr Horta-Osorio has been replaced by board member Axel Lehmann.

Elon Musk’s Tesla Asked Law Firm to Fire Associate Hired From SEC [WSJ]
The target of Mr. Musk’s ire was a former U.S. Securities and Exchange Commission lawyer whom Cooley had hired for its securities litigation and enforcement practice and who had no involvement in the firm’s work for Tesla. At the SEC, the attorney had interviewed Mr. Musk during the agency’s investigation of the Tesla chief executive’s 2018 tweet claiming, wrongly, to have secured funding to potentially take the electric-vehicle maker private…. Cooley has declined to fire the attorney, who remains an associate at the firm, the people said. Since early December, Tesla has begun taking steps in several cases to replace Cooley or add additional counsel, legal documents show.

Pharma Bro Martin Shkreli banned for life from drug industry in monopoly case, ordered to pay $64.6 million [CNBC]
“Americans can rest easy because Martin Shkreli is a pharma bro no more,” said New York Attorney General Letitia James…. Shkreli is serving a seven-year federal prison term for financial crimes unrelated to his controversial price increase of Daraprim, a drug used to treat parasitic infections in pregnant women, babies, HIV patients, and others….
[Judge Denise Cote] concluded, “Shkreli’s egregious, deliberate, repetitive, long-running, and ultimately dangerous illegal conduct warrants imposition of an injunction of this scope.”

How a Flood of Money Swamped Cathie Wood’s ARK [WSJ]
What’s happened at ARK is a counterblast to the belief that ETFs are superior in every way to mutual funds. Over the past decade, investors have been stampeding into ETFs—which are, on average, much cheaper and more tax-efficient than mutual funds. ETFs have one critical flaw, however: They can get too big too fast, and nobody can stop it…. What about ARK? The firm grew so big so fast that it quickly ended up owning large percentages of many of its holdings. That could limit its ability to trade them without adversely affecting the price, says Corey Hoffstein, chief investment officer at Newfound Research, an asset-management firm in Wellesley, Mass.

This may come as a surprise to Sen. Ron Wyden, but not to Anthony Scaramucci.

Anthony Scaramucci was, however briefly, a member of the Trump administration. Not only that, but his 10 days in office happened to coincide with the period when Steve Mnuchin and Gary Cohn were crafting the Republican tax heist that proved the only legislative achievement of the former president. Now, Mn uchin may not have thought much of the Mooch, but surely even this somewhat sketchy pedigree means that Scaramucci knows a bit better what exactly the White House intended for the “Opportunity Zone” tax breaks the law created than does Sen. Ron Wyden, who was not consulted on the matter nor voted for it.

Wyden sent letters Thursday to several organizations that have invested in Opportunity Zones -- low-income areas where investors can qualify for large capital-gains tax breaks for providing funds for real estate and business. In addition to SkyBridge Capital and Baker Tilly, Wyden also sent to Cresset Partners, Hatteras Sky, PTM Partners, Related Group and Shopoff Realty Investments.

“I have long been concerned that the Opportunity Zone program may permit wealthy investors another opportunity to avoid billions of dollars in taxes without meaningfully benefitting the distressed communities the program was intended to help,” Wyden, an Oregon Democrat, said in the letter…. Wyden said he is worried that the Opportunity Zones, which were created in the 2017 Republican tax law, aren’t helping struggling communities develop, but rather funding luxury real estate projects -- including a yacht marina in Palm Beach, Florida, and a Ritz Carlton hotel in Portland, Oregon.

To which Scaramucci might as well have replied, “Uh, no shit, Ron. Remember who wrote it?” Instead, he said essentially the same thing in more diplomatic language.

Scaramucci, in response to a request for comment, said, “We are very proud to be a part of the program and are fully cooperating with Senator Wyden’s request. We built a beautiful hotel in New Orleans which I hope added a lot of construction jobs and permanent hotel jobs.”

Yes, Mooch, there’s nothing more permanent these days than a hotel job.

Top Democrat Targets Scaramucci’s SkyBridge, Others in Opportunity-Zone Probe [Bloomberg]

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Well, this is fun; Biden aims to fill up the Fed; Kyle Bass is feeling like Kyle Bass; and more!

Businesses are whipsawed again as the Supreme Court blocks OSHA’s vaccine mandate. [NYT]
In a November poll of 543 companies by the consulting firm Willis Towers Watson, 57 percent said they either required or planned to require Covid-19 vaccinations. That included 32 percent that planned to mandate vaccines only if the OSHA rule takes effect. Seven percent said they planned to carry it out regardless of the outcome…. Some companies have been concerned about losing employees when workers are already scarce, and although firms with mandates have said those concerns have largely not come to fruition, a national requirement could have further eased those concerns.

BlackRock now manages more than $10 trillion in assets [CNN]
BlackRock, owner of the popular iShares family of ETFs, announced Friday that it ended the year with more than $10 trillion in assets under management. That's up 15% from 2020 levels.
Nearly a third of that $10 trillion total was invested in ETFs…. As [CEO Larry] Fink noted, "the world continues to navigate uncertainty and profound shifts in economies and societies at large."

Biden unveils three nominees for top Federal Reserve posts as bank plots to lift interest rates [MarketWatch]
The White House nominated Sarah Bloom Raskin, Lisa Cook and Philip Jefferson to fill three seats on the Fed’s powerful Board of Governors. If confirmed they would join lone Democrat Lael Brainard on the seven-member board….
For Raskin it’s her second go-around. The Duke professor was a Fed board member from 2010 to 2014 during the Obama administration and previously served with current Chairman Jerome Powell. Her husband is U.S. Rep. Jamie Raskin of Maryland…. Cook and Jefferson, who are both black, are distinguished economists…. The Fed has only had three other African-American board members in its 108-year history.

‘There’s no way the stock market goes up this year — it probably goes down pretty aggressively,’ says hedge-fund honcho Kyle Bass [MarketWatch]
“I think,” the hedge-fund manager said, “they are going to have to back away from that plan, once they start hiking….”
Bass sees the market facing significant challenges and doubts that the central bank will have the conviction to raise rates substantially without push back from the markets.

Tech Selloff Pushes Ex-Unicorn Bonds Into Distressed Hands [WSJ]
High-yielding convertible debt from former unicorn startups like Beyond Meat Inc., SmileDirectClub Inc. and Vroom Inc. have been pitched as a buy by investment banks to distressed-debt investors in recent weeks, people familiar with the matter said. All three companies have little other debt besides their convertible bonds, giving investors an avenue to become significant stakeholders in their businesses at a low cost and to earn a major windfall if their stock prices swing back up…. With so much new paper in the market and tech valuations now in flux, the market has dislocated, bringing in opportunistic investors to pick and choose companies that they believe can survive a potential bear market for tech stocks.

Billionaire Daniel Och flips 220 CPS sky palace for $190M [N.Y. Post]
The Och-Ziff Capital Management founder has sold his penthouse at 220 Central Park South for close to $190 million to mystery buyers —that’s almost double the $93 million he paid in 2019. He paid an additional $2 million for a one-bedroom unit on a lower floor, although it’s unclear whether or not the small unit was included in the sale…. Och still has a residence at 15 CPW, which he had put on the market for $57.5 million in 2019, the year he bought at 220 and moved to Florida for tax purposes. It is no longer on the market. 

Banamex goes bye-bye.

If you work for Citigroup’s Mexican retail bank and you really, really don’t want to get vaccinated against COVID-19, Jane Fraser has some good news for you:

Citigroup Inc. is planning to exit retail-banking operations in Mexico -- where it has its largest branch network in the world -- as part of Chief Executive Officer Jane Fraser’s continued push to overhaul the firm’s strategy.

The lender will keep its institutional businesses in the country, according to a filing Tuesday. The exit could ultimately take the form of a sale or a public-market alternative, and will be subject to regulatory approval, Citigroup said.

The move follows Citi’s bidding hasta mañana to its Philippine business last month, and ensures that along with coronavirus, it need no longer fear another nasty bout of banking Montezuma’s revenge. Or does it?

“Mexico is a priority market for Citi -- that will not change,” Fraser said in a separate statement.

Boy, Jane, you’ve got a funny way of showing it.

Citi to Exit Mexico Retail Banking, Its Biggest Branch Network [Bloomberg]
Citigroup Continues Consumer-Banking Pullback With Philippine Sale [WSJ]

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