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2. Is the VC industry a hotbed of sexism?

Esteemed bank analyst Mike Mayo generated buzz recently when he announced that he was buying modest amounts of stock in various banks with an eye on wielding more influence with managers.

A reminder that it doesn't take a huge ownership stake to be an important player in proxy season has cropped up. CtW, which advises union-sponsored pensions funds to effect change in corporate America, has apparently succeeded in its bid to place a resolution on the proxy that would split the CEO and chairman position at Goldman Sachs (NYSE:GS), reports the New York Post. Both jobs are currently held by Lloyd Blankfein. CtW owns just 25 shares of the bank.

The call to split the jobs is nothing new to the bank, as it has faced such requests often. At this point, no one thinks that the proposal will pass. But that's really not the point anymore. Shareholder activists will take a look at the percentage of shareholders voting in favor of the idea, and make lots of public relations hay if they can. JPMorgan is in a similar position.

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- here's the article

Read more about: analysts, Ceo Job
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By Jim Kim

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3. Sentenced insider trader seeks less prison time

In the view of some, the allegations of gross sexism at once-venerable Kleiner Perkins Caufield & Byers, which captivated people far beyond Silicon Valley, tainted the entire venture capital industry.

That might be unfair, but fairly or not, the bad reputation just might get a bit stronger in the wake of a lawsuit filed by three executive assistants at San Francisco-based VC firm CMEA Capital.

Fortune reports that, "The three plaintiffs -- Dawn-Shemain Weeks, Margaret Hines and Shannon Schlagenhauf -- tell of a hostile work environment and detail 35 different alleged examples of inappropriate sexual comments and advances. Some of the examples are shockingly lurid, and far more explicit than what is normally found in a Silicon Valley harassment lawsuit."

The allegations have already produced some change. John Haag, who served as CMEA's chief operating partner between 2006 and 2012 and the chief culprit in the complaint, was bought out after an internal investigation and is no longer with the company. But the plaintiffs feel they were forced to suffer retaliation for their complaints by other partners.

Here is the company's response: "For the record, CMEA flatly denies each and every allegation of wrongdoing. In reality, this lawsuit is the result of the least 'sexy' of its allegations: the plaintiffs' curtailment of overtime in late 2012 as the result of a new Firm-wide overtime policy. CMEA's appropriate handling of this matter is evidenced by the fact that for the last 8 months plaintiffs continued working for the Firm without incident, each of them resigning only after the across-the-board change in the Firm's overtime policy, and only after filing this lawsuit last month. CMEA is absolutely confident that it will prevail and continue its reputation as a trusted and innovative builder of solid financial and scientific relationships."

These sorts of situations are never comfortable, and it is lamentable when they spill out into public. At a minimum, it casts the industry as quite backwards in terms of women employees, making Wall Street look good by comparison.

For more:
- here's the article

Related articles:
Citigroup nixes speaker for jokes about women

By Jim Kim

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4. High yield bubble talk may be premature

Zvi Goffer stands as a cautionary tale for the likes of Matthew Martoma and anyone else accused of insider trading. They may be tempted to fight the charges, thinking they can buy lawyers who are far superior to government prosecutors. But if you roll the dice and go to trial, you run the risk of a lengthy prison sentence.

Goffer, a brash young hedge fund employee, played this game and lost. The former Galleon Group employee went to trial, steadfastly maintaining his innocence, only to be found guilty on 14 counts of fraud. He then abruptly changed courses. He threw himself at the mercy of the judge, promising to renounce his right to appeal in exchange for a lenient sentence.

But his bargain was rebuffed, and he was sentenced to 10 years in prison. He has been in a prison camp for 16 months. Bloomberg reports that Goffer is now seeking a reduction in his sentence, arguing that it was disproportionate to the crime and that he was undeserving of the third longest sentence in the insider trading crackdown. Raj Rajaratnam, the head of Galleon, was considered a bigger fish and got 11 years.

Prosecutors tell Bloomberg that Goffer's sentence was one month below federal guidelines.

In hindsight, Goffer played his cards all wrong. It's easy to say someone should have pleaded guilty after a resounding conviction. But what else is there to say at this point. It always looks good to defendants when they're talking to pricey defense lawyers, who tend to be a confident bunch. We'll see if Martoma ends up in a similar situation.

For more:
- here's the article

Related articles:
Zvi Goffer gets harsh term

Read more about: InsiderTrading
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By Jim Kim

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5. Icahn, Blackstone look at confidential Dell data

The high yield bond market has been on fire for much of the year, igniting lots of chatter about whether it had hit bubble proportions and was thus on the verge of a big, painful pop. Banks have underwritten more than $90 billion of high-yield debt this year, up 36 percent over last year. That comes on top of a banner year in 2012.

So is the bubble about to pop?

Reuters suggests that such talk is a bit premature right now.

"Yes, valuations are high, and the credit quality of new deals lately is not quite as good as previous years. But there are growing signs that an economic recovery in the United States is gaining pace and, even more importantly, the number of defaults is still around its historic low," it reported.

The non-bubble case is predicated mainly on the fact that the default situation remains quite favorable to the market right now. The economy is on the mend, and issuers are not in the dire straits they once were.

"In fact, the average implied default probability is currently decreasing. Moody's expects the default rate to drop to just three percent by the end of 2013 - below its historical average of 4.5 percent and well below its cyclical peak above 14 percent in late 2009. And while the high-yield index dollar price is close to its all-time high, and the yield-to-worst remains well below six percent, the asset class is still attractive relative to other fixed-income products," Reuters notes.

And what about interest rates?

Many people assume that rates have nowhere to go but up over the next few years, but there may be some counterintuitive market responses. Given the very low rates we've seen as of late, an uptick may prompt people to exit Treasuries and higher rated bonds and push into higher yielding bonds, bent on preserving income. That's been playing out this year, as rates have moved higher a bit as have yields on junk bonds.

For more:
- here's the article

Related articles:
Is the high-yield bubble about to pop?

Read more about: High Yield Bonds
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By Jim Kim

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