user: DealBook's Week in Review: Reading MF Global's E-Mails

katemillerheidkeVEVO WEEK IN VERSE DealBook is listening to Kate Miller-Heidke and getting ready to win $640 million.

We watched a stock exchange trip over itself, found the irony in Warren Buffett’s tax problem, read MF Global e-mails and braced for credit downgrades at big banks. A look back on our reporting of the past week’s highs and lows in finance.

PROXY FIGHT LOOMING, YAHOO NAMES 3 TO BOARD Third Point said it still planned to pursue a proxy contest and chided the board for its unwillingness to accept Daniel S. Loeb’s compromises, Evelyn M. Rusli reported.

THREE MAJOR BANKS PREPARE FOR POSSIBLE CREDIT DOWNGRADES Moody’s Investors Service has said it will decide in mid-May whether to lower its ratings for 17 global financial companies, Susanne Craig and Peter Eavis reported. Morgan Stanley appears to be the most vulnerable, but Bank of America and Citigroup may also get hit.

The biggest impact may be felt in the banks’ business in derivatives contracts, many of which have triggers that activate if a bank’s credit rating falls below predetermined levels. Derivatives trades that are set up for five years or more would be especially affected.

“Clients will take that long-dated business to JPMorgan or Goldman,” said Brad Hintz, an analyst with Sanford C. Bernstein & Company. “That’s a problem for Morgan Stanley.”

EXPECTED FLOOD OF OPPORTUNITIES IN EUROPE IS STILL A TRICKLE American private equity firms have been raising billions of dollars to snap up cheap assets for as little as 10 cents on the dollar. But Mark Scott reports that financial firms, particularly those in Southern Europe, no longer have an urgent need to sell assets, thanks to more than a trillion dollars’ worth of cheap loans from the European Central Bank.

“People are talking a big game around distressed investing, but we haven’t seen that many real opportunities yet,” said Fotis Hasiotis, head of European financial sponsors at the advisory firm Lazard in London. “To date, returns on distressed funds in Europe have been disappointing.”

HEDGE FUND MANAGERS FARE WELL The top managers still took home $14.4 billion in 2011, according to the annual ranking by AR Magazine. “Even when returns suffer, the largest hedge funds can collect big paychecks, thanks to the fees they charge pensions, endowments and wealthy individuals to manage money,” Julie Creswell and Azam Ahmed reported.

“The industry’s fees and performance are so out of whack it’s unbelievable,” said Bradley H. Alford, who invested in hedge funds while he was at the Duke Endowment in the late 1990s but today oversees a lower cost mutual fund firm that competes with them. “Fifteen years ago, you got double-digit performance for those fees, but last year, the S.& P. was positive and hedge funds were negative. There’s no alignment with the fees.”

A BILL TO LOOSEN HEDGE FUND MARKETING A little-known provision in the JOBS Acts would reverse parts of a nearly 80-year-old regulation preventing hedge funds and private equity firms from discussing even the most basic items with outsiders, Mr. Ahmed and Kevin Roose reported.

MILLENNIAL SHARES HAVE STRONG FIRST DAY Shares of the mobile advertising company, closed at $25, nearly double its initial offering price of $13. Michael J. de la Merced reports that the recent results suggest that the market for newly public companies is returning to life after a period of weakness. Investors, eagerly awaiting the debut of the social network Facebook, are pouring their money into smaller offerings in the meantime.

“There’s hardly been a deal that has not worked since February,” said Scott Sweet, a managing partner of IPOboutique.com. “The I.P.O. market is more frothy now.”

BERTELSMANN CONSIDERS I.P.O. TO AID EXPANSION The move is a striking change of heart by the controlling Mohn family, which previously resisted such efforts, reports Eric Pfanner.

MICHAELS STORES PREPARES FOR A PUBLIC OFFERING The arts and crafts retailer owned by the Blackstone Group and Bain Capital, plans to file to go public as soon as next week, Mr. de la Merced reported. The initial public offering could be one of the biggest of the year.

START-UP AIRLINE FINDS ITS PLACE IN MALDIVES George Weinmann, the chief executive of Mega Maldives Airlines, is going after a growing niche, linking increasingly affluent China with the tiny island nation, reports Ron Gluckman from Beijing.

“Over the next 10 years, the Maldives can become the playground in the backyard of India and China, similar to the way the Caribbean is to the U.S.A. and Canada,” Mr. Weinmann said.

BRITISH BANKS CALLED WEAK IN CHECKING FOR CORRUPTION A review of 15 investment banks by Britain’s financial regulator showed that a majority lacked adequate anticorruption and bribery checks, Julia Werdigier reported.

SILENCE, THEN FRUSTRATION AT MF GLOBAL HEARING Top MF Global executives and their lawyers have been meeting with federal authorities investigating the collapse of MF Global and the firm’s misuse of customer money, Ben Protess and Mr. Ahmed reported. Edith O’Brien, an assistant treasurer of MF Global, continued her silence and standoff ensued as lawmakers hurled pointed questions.

“I appreciate your consistency in having nothing to add,” Representative Michael E. Capuano, a Massachusetts Democrat, said to the witnesses.

THE TRADE: STILL SEEING PERIL IN SIZE OF BANKS Jesse Eisinger of ProPublica says that the annual report from the Federal Reserve Bank of Dallas is “a radical indictment of the nation’s financial system.” The lead essay contends that a cartel of megabanks is still hindering the economic recovery and the institutions remain too big to fail.

It’s one thing for the Occupy movement to point out how bailing out the biggest banks — with little cost to their executives or shareholders and creditors — has demolished credibility. It’s quite another for top officials in the Federal Reserve system to put it in an annual report.

BANKRUPTCY REPORTEDLY IN THE WORKS FOR JET MAKER Hawker Beechcraft is readying a bankruptcy filing, Mr. de la Merced and Peter Lattman reported, dealing a blow to its private equity owners, Goldman Sachs and Onex Partners.

S.E.C. TOLD TO SHARE NOTES IN INSIDER TRADING CASE Judge Jed S. Rakoff has ordered Securities and Exchange Commission lawyers to turn over their notes to federal prosecutors handling the criminal case against Rajat K. Gupta, Mr. Lattman reported.

SHAKE-UP AT LAW FIRM LOSING STAFF “The troubled New York law firm Dewey & LeBoeuf has overhauled its leadership amid questions about its financial condition and a stream of partner defections,” Mr. Lattman reported.

DEALBOOK COLUMN: PRIVATE JETS, BUFFETT AND TAXES Andrew Ross Sorkin says that the U.S. government’s lawsuit against a unit of Warren Buffet’s company “is a remarkable window into the nation’s byzantine tax code … And it shows why even someone like Mr. Buffett would seek to challenge [the rules].”

“It’s funny — it’s a great irony,” Keith G. Swirsky, a lawyer at GKG Law who runs the firm’s aviation practice. And on the merits of the case, Mr. Swirsky, who is not involved in the litigation, said: “He’s got an excellent argument,” adding, “He shouldn’t pay taxes that are not properly due.”

BATS ERROR REINFORCES THE CASE FOR CURBS Policy makers say the botched the listing of BATS Global Markets own initial public offering illustrates the continued need for sophisticated tools like circuit breakers, Mr. de la Merced and Mr. Protess reported.

Write a one or two sentence summary.


assistant: We watched a stock exchange trip over itself, found the irony in Warren Buffett's tax problem, read MF Global e-mails and braced for credit downgrades at big banks. A look back on our reporting of the past week's highs and lows in finance.