Sovereign Fund Attempts to End $7.5 Billion Citi Share Purchase; Credit Suisse to Pay U.S. $536 Million Penalty; Cohen: U.S. Economy to Slow in 2010; Roy Disney Dead at 79; Former TPG, Lazard Employees Sued by SEC for Insider Trading; Galleon Group Founder Indictment Alleges Fraud, Conspiracy; Comcast Launches Online TV Service
- The Abu Dhabi Investment Authority (ADIA) is trying to call off a deal it made to buy $7.5 billion of Citigroup Inc. (NYSE: C) stock at eight times yesterday's (Wednesday) price, saying Citi misled it about the investment, Bloomberg News reported. The sovereign fund alleged "fraudulent misrepresentations" and seeks more than $4 billion in damages if the deal is upheld, ADIA said in an arbitration claim. Citi calls ADIA's claims "entirely without merit."
- Switzerland's Credit Suisse Group AG (NYSE ADR: CS) will pay the U.S. government $536 million for conducting business with Iran and other sanctioned countries, prosecutors said yesterday (Wednesday). The bank moved more than $1.6 billion through the U.S. financial system on behalf of Iran, Sudan, Myanmar, Cuba and Libya, documents filed in federal court and obtained by Reuters showed.
- U.S. housing starts rebounded sharply, rising 8.9% to a seasonally adjusted 574,000 units on an annualized basis in November, the Commerce Department said. Economists polled by MarketWatch.com were expecting a pace of 563,000. "We now expect both starts and permits to rally significantly further over the next few months, though the big test for the market will come in the spring," said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd.
- Although the U.S. economy returned to growth in the third quarter and is expected to expand in the current quarter, it will slow in 2010, says Abby Joseph Cohen, chief equity strategist at Goldman Sachs Group Inc. (NYSE: GS) . "Next year, our GDP forecast is below consensus," Cohen told CNBC in an interview. "Under normal post-recession conditions, we would be expecting GDP next year of 3 % -3.5 % in 2010, but we have trimmed that number down to 2.5% because of continued concern about labor markets and household balance sheets which continue to de-lever."
- Roy E. Disney, whose influence contributed to the departure of The Walt Disney Co.'s (NYSE: DIS) former Chief Executive Officer Michael Eisner, died yesterday (Wednesday) in Newport Beach, Calif. after a yearlong bout with stomach cancer. He was 79. Roy, nephew of Walt Disney, was "much more than a valued 56-year company veteran - Roy's true passion and focus were preserving and building upon the amazing legacy of Disney animation that was started by his father and uncle," President and CEO Bob Iger said. He oversaw production of such hit films as 1994's "The Lion King." While Roy never got a chance to lead the company that his uncle and father - Roy O. Disney - did, he did manage as an investor to turn his Disney stock into a billion-dollar fortune.
- Two former employees at investment firm TPG Capital LP and mergers and acquisitions (M&A) adviser Lazard Ltd. (NYSE: LAZ) leaked information about pending buyouts and collected kickbacks in a "serial insider-trading scheme," the U.S. Securities and Exchange Commission (SEC) alleged in a lawsuit. "These financial professionals betrayed their firms and clients to make some easy money with their friends, and they tried to cover their tracks to no avail," SEC Enforcement Director Robert Khuzami said.
- A U.S. grand jury has indicted Galleon Group hedge fund founder Raj Rajaratnam and co-defendant Danielle Chiesi, charging them with securities fraud and conspiracy in an insider trading case that implicates employees at some of the best-known companies in the world, including Intel Corp. (Nasdaq: INTC) and Google Inc. (Nasdaq: GOOG). "Mr Rajaratnam is innocent and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence," said Rajaratnam's attorney John Dowd after the indictment was returned.
- Comcast Corp. (Nasdaq: CMCSA) has formally launched Fancast XFINITY TV, its on-demand, Web-based service that includes television content from programmers like Time Warner Inc. (NYSE: TWX) and Viacom Inc. (NYSE: VIA.B). Comcast says Fancast is limited to U.S. subscribers of its TV and Internet services, but Money Morning was able to view content without providing any type of authentication.