Jeffrey Gundlach, who was fired from TCW Group Inc. and started his own firm, won a $66.7 million jury award against his former employer for unpaid wages.

A Los Angeles jury today awarded the money to Gundlach and three of his colleagues, while also finding that he breached his fiduciary duty to TCW and misappropriated its trade secrets. The jury awarded no damages on the breach claim. A judge will determine damages on the trade secret claim.

TCW, the Los Angeles-based unit of Societe Generale SA, sued Gundlach, 51, in January 2010, after more than half of its fixed-income professionals joined DoubleLine Capital LP, the asset-management firm Gundlach started within weeks after TCW fired him. TCW sought as much as $566 million in damages.

The jury found that Gundlach and DoubleLine didn’t act willfully and maliciously in misappropriating trade secrets.

Gundlach, who had worked at TCW for 25 years and was named Morningstar’s Fixed Income Manager of the Year in 2006, countersued, saying TCW fired him to avoid having to pay management and performance fees for the distressed-asset funds his group managed and that went “through the roof.” Gundlach sought about $500 million.

The jury heard more than six weeks of testimony as the two sides provided conflicting views of Gundlach’s falling out with TCW Chief Executive Officer Marc Stern in 2009, which ended with Stern’s buying Metropolitan West Asset Management LLC to run TCW’s fixed-income group and firing Gundlach in December 2009.

Became Suspicious

Stern testified that he became suspicious of Gundlach after a series of September 2009 meetings and instructed TCW’s in- house lawyer to start monitoring the e-mail of Gundlach and others in his group. The investigation showed Gundlach’s people were downloading TCW’s proprietary information and looking for office space, Stern said.

Gundlach denied that DoubleLine used any of TCW’s proprietary software systems and data.

DoubleLine’s lawyers argued that Stern started looking to replace Gundlach as early as June 2009, about the time Stern returned to active management. Gundlach and other senior managers at TCW had opposed Stern’s return out of retirement and wanted the firm to be run by a management committee instead.

Performance Fees

Gundlach had negotiated for him and his group to receive 60 percent of the performance fees for the distressed-asset funds he set up in 2007 and 2008. The funds invested in mortgage- backed securities that were downgraded and dropped in value with the collapse of the U.S. housing market.

As the funds performed better than expected, Paris-based Societe Generale and TCW wanted to replace Gundlach with a less expensive asset manager, DoubleLine’s lawyers said. TCW argued that Gundlach wasn’t entitled to management and performance fees from the funds after his firing.

The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County (Los Angeles).

SOURCE 

FULL STORY HERE

FROM CNBC 

Asian stocks opened higher on Friday after advances on Wall Street, helped by news that top central banks will coordinate a plan to ease dollar funding for stricken European banks, reducing the threat of an emerging credit crunch.

The ECB’s announcement reassured markets and boosted investor confidence ahead of Friday’s meeting of euro zone finance ministers, to be joined by U.S. Treasury Secretary Timothy Geithner.

The FTSE CNBC Asia 100 Index [.FTFCNBCA  6007.39    137.12  (+2.34%)], which measures markets across Asia, gained 0.8 percent.

Japan’s benchmark Nikkei average [.N225  8852.86    184.00  (+2.12%)] opened up 1.34 percent at 8,785.28 on Friday, while the broader Topix gained 1.15 percent to 760.41.

Seoul shares advanced as coordinated efforts by global central banks eased fears about the euro zone debt crisis. The KOSPI [.KS11  1832.94    58.8

Key large-cap stocks rallied, with Samsung Electronics, the largest share on the main KOSPI, gaining 3.8 percent. Banks also posted strong gains, with KB Financial Group up 3.6 percent.

Shares in Korea Electric Power Corp, a state utility, were in focus after electricity shortages caused widespread blackouts across the country on Thursday.

Australia’s S&P/ASX 200 index [.AXJO  4155.10    83.40  (+2.05%)] advanced 1.3 percent, helped by gains in large cap banking counters.

Australia’s top four banks lead the charge, with Westpac up 2.4 percent.

Sundance Resources stocks rose 4.7 percent in early trade after media reports that China’s Hanlong Mining will continue with its A$1.3 billion bid, despite an investigation by the market regulator ASIC into alleged insider trading by Hanlong executives.

Over in Greater China, shares of Europe-focused fashion retailer Esprit Holdings [0330.HK  11.70    -3.38  (-22.41%)] fell more than 20 percent after the Asia’s No.6 apparel and accessories retailer reported a worse-than-expected drop in full-year profit.

In Southeast Asia, Singapore’s STI [.FTSTI  2802.55    36.60  (+1.32%)] and Malaysia’s KLCI [.KLSE  1430.93    -6.68  (-0.46%)] tracked gains seen around the region.

Foreign direct investment (FDI) in China slowed slightly in the first eight months of 2011 from a year ago although economists said the outlook is still positive given the higher growth rate in the world’s second biggest economy.

The country drew $77.6 billion between January and August this year, up 17.7 percent from a year ago, the Ministry of Commerce said in a statement issued on its website (www.mofcom.gov.cn) late on Thursday.

That marked a slight slowdown from the 18.6 percent annual growth clocked in the January-July period and 18.1 percent in the first eight months of 2010.

In August, China attracted $8.4 billion in FDI, a rise of 11.1 percent compared with a year earlier.

The outlook for genuine FDI, however, still looks constructive, said Wei Yao, economist at Societe Generale in Hong Kong.

“Things are still not as bad as 2008 and we don’t have that kind of liquidity crunch around the globe like last time,” she said. “China’s overall economic growth is still a very big comparative advantage … so this is still the major attraction.”

FDI into China, which surged in the years after the nation joined the World Trade Organisation in 2001, have rebounded since a slump during the global financial crisis.

Recently, China’s growing services sector and lower-cost cities in central and western regions have become bigger magnets for foreign firms and investors are eager to secure a foothold in the world’s fastest-growing major economy.

China aims to let investors use the yuan to pay for foreign direct investment from September, the Commerce Ministry said last month. But no details of that plan have come out.

SOURCE

The jury has reached a verdict in a courtroom battle between Trust Company of the West and former investment chief Jeffrey Gundlach, concluding a six-week trial that has transfixed the financial industry.

The Los Angeles Superior Court jury’s verdict — after just two days of deliberations — will be released Friday morning.

The legal showdown between the “king of bonds” and the unit of French bank Societe Generale (SOGN.PA) had offered an insider’s view into money management firms and the outsized personalities that operate them.

TCW fired Gundlach in December 2009 and sued him a month later, accusing him of stealing trade secrets, plotting to form a new company using TCW proprietary information, and gutting the firm of its entire mortgage-backed securities team.

Gundlach fired back with a counter-lawsuit, alleging his former employer owed him hundreds of millions of dollars in compensation and had secretly plotted to fire him when he was chief investment officer.

The case in Superior Court of California, County of Los Angeles is Trust Co of the West v. Jeffrey Gundlach et al, BC429385.

SOURCE 

DETAILS AT CNBC 

Mexican bloggers’ bodies disemboweled, hung from bridge

The Postal Service, struggling to cut costs and conserve cash, said on Thursday it wants to end overnight delivery of letters and postcards and will study about 250 processing sites for possible closure.

The agency, which lost more than $3 billion last quarter, has said it must downsize drastically or will be forced to stop delivering mail by the end of next summer. Overseen by Congress and a regulator, it funds its services with postal-related revenue and does not get any taxpayer dollars.

Delivering First Class mail in two to three days instead of one to three days could save about $3 billion by 2015, the agency said. The change would allow it to close facilities, cut back on overnight work and eliminate about 35,000 jobs.

“Our entire network was designed based on a requirement that we maintain the capability to deliver First Class mail the next business day,” said chief operations officer Megan Brennan.

“This has enormous implications for the way we process mail … and it’s why we currently maintain so many mail processing locations,” she said. “Our plan is to rebuild our network based on a two- to three-day standard for First Class mail.”

The Postal Service has struggled to offset falling mail volumes as consumers correspond by email and pay bills online. Personnel costs for its half a million employees are among the factors driving the agency out of business.

In June, the agency stopped making biweekly payments into a retirement fund and, in July, it said it was considering more than 3,600 post offices for potential closure. It also wants to stop Saturday delivery to save cash.

While the agency has some ability to consolidate and cut costs, officials are relying on Congress for serious structural reforms. The Postal Service said Thursday’s proposal would not require congressional approval but it would still need broader changes to get on a path toward financial health.

‘RADICALLY REALIGNING’

The agency will study more than 300 of its 500 processing facilities — about 60 were already under review — and close sites that handle low volumes or could be consolidated with others, Postmaster General Patrick Donahoe said on Thursday.

The studies will take about three months and include meetings with affected communities. The agency expects to reduce mail processing payrolls by about 20 percent, mostly by not filling jobs when workers retire, Donahoe said.

“It is no exaggeration to say that we are radically realigning the way that we process mail, the way that we deliver mail and the way that we operate our retail network,” he said.

Business mailing group The Coalition for a 21st Century Postal Service said on Thursday its members backed the plan.

But a spokesman for the National Association of Letter Carriers said “willy-nilly proposed cuts” should not be the solution to the agency’s financial problems.

The plan to close facilities could also face resistance from members of Congress, who have proposed a range of ways to overhaul the agency but are often less amenable when closings and job cuts are proposed in their districts.

There is little consensus on legislation to overhaul the agency, which could include cutting Saturday delivery, allowing the agency to dip into an estimated surplus in a retirement fund or raising its borrowing limit.

The House of Representatives, in its continuing budget resolution this week, included an extension that would give the Postal Service until mid-November to make a $5.5 billion payment for retiree health benefits the agency says it cannot afford.

The White House is working on its own overhaul proposal. The plan is expected to be introduced next week, sources said.

SOURCE 

New York’s adult smoking rate fell to record low of 14 percent in 2010, said Mayor Michael Bloomberg, who has led the city’s effort to curb tobacco use for the past nine years.

The rate dropped from 22 percent in 2002, meaning about 450,000 fewer people are smoking, the mayor said. New York’s rate among high school students dropped to 7 percent last year from 18 percent in 2001, as the U.S. rate fell to 19 percent from 29 percent, he said. The smoking decline will translate to 50,000 deaths prevented by 2052, Bloomberg said.

“New York City for an awful lot of people sets the style — people copy New York City,” Bloomberg, who quit smoking about 30 years ago, said today at a press conference in Queens. “So the fact that we’ve made all this progress here really will help the entire country.”

Bloomberg, 69, has made the battle against smoking a hallmark of his mayoral tenure. In 2002, he worked with the City Council to ban smoking in offices, bars and restaurants. He also rolled out a media campaign with graphic depictions of the harmful effects of smoking, cracked down on illegal cigarette sales and increased tobacco taxes. In May, the city extended the smoking ban to parks, beaches and pedestrian plazas.

The efforts coincide with the city’s other health initiatives, such as reducing sodium content in foods and increasing access to fresh fruits and vegetables in low-income neighborhoods.

New York, the most-populous U.S. city, with 8.2 million residents, is seeking to lower the adult smoking rate to 12 percent by next year, Health Commissioner Thomas Farley told reporters at the press briefing. Staten Island remains the borough with the highest smoking rate, he said. Smoking is the leading cause of preventable death in New York, Bloomberg said.

The mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.

SOURCE

FROM REUTERS

Treasury Secretary Timothy Geithner is likely to suggest to European finance ministers on Friday that they leverage their bailout fund along the lines of the U.S. TALF program, EU officials said.

“Geithner will probably insist on the importance of leverage to have more funds to ringfence the big Europeans, Italy and Spain, and to find a solution for Greece,” one EU official said.

“The leveraging of the EFSF — I think this is something that he will put on the table,” the official said. “There could be some openness to the proposal.”

TALF — the Term Asset-Backed Securities Loan Facility — was set up by the U.S. Federal Reserve and the U.S. Treasury during the global financial crisis in 2008 to jumpstart the frozen Asset Backed Securities (ABS) market.

Under TALF, the New York Fed would lend out up to $200 billion, taking ABS as collateral with a haircut and the Treasury offered $20 billion credit protection for the Fed.

In this way, a little bit of public money leveraged a much larger central bank contribution and the same idea could work for the European Financial Stability Facility, which has 440 billion euros at its disposal, to offer credit protection to, for example, the ECB to buy euro zone sovereign bonds.

“One of the difficulties is that leverage may be seen as a potential liability,” a second EU official said. “But it deserves to be looked at in detail.”

A third euro zone official said that Canada has made the same suggestion for Europe.

“It could help those countries where the sovereign bond market is still curable,” the third official said.

Such a solution would help ease market concerns that the EFSF does not have enough money to bail out Greece, Ireland Portugal and also help Spain and Italy.

“Of course you would have to see if on the basis of the EFSF mandate you can do something similar,” the first official said, adding the solution had not been free of hurdles in the United States either and in Europe they could be even bigger.

“From an economic point of view it is a reasonable idea,” the first official said, noting however that the ECB would have to play along with such a scheme.

“The issues are more on the institutional and legal side and of course political — you have to find a way for the ECB not to, de facto, finance fiscal policy, but on the other hand you need to have resources that the ECB has and the EFSF has not.”

Leveraging the EFSF, however, would not take place before the fund’s new powers of intervention on bond markets, extending precautionary credit lines or lending for bank recapitalization were ratified by the end of September, the official said.

“Once the EFSF becomes more flexible, you can see if there are ways similar or different to try to leverage more the EFSF or find other ways to have a critical mass to ringfence Italy Spain and the others,” the official said.

“You can also think about leveraging on other actors, not necessarily just the ECB,” the official said.

Amish investor charged with defrauding his community of millions of dollars

Members of the Amish community traditionally have settled their scores independent of secular society, but the federal legal system will decide the fate of Monroe Beachy, 77, of Sugarcreek, Holmes County.

Beachy was charged (pdf)Wednesday with defrauding thousands of his fellow Amish farmers, carpenters and neighbors of tens of millions of dollars in an alleged Ponzi scheme that has earned Beachy a nickname: The Amish Bernie Madoff.

Beachy, who has a 10th-grade education, acquired much of his financial knowledge from classes at H&R Block. He declared bankruptcy in 2010. He faces one count of mail fraud, and was expected to surrender to federal authorities by Friday.

U.S. Attorney Steven Dettelbach will hold a news conference at 2 p.m. today in Cleveland to detail the charges.

Since 1990, Beachy raised an estimated $33 million from more than 2,600 investors — many of them fellow members of the Amish community who reside in this pastoral locale about a two-hour drive south of Cleveland.

When the Securities and Exchange Commission charged Beachy with fraud in February, the agency said he had lost nearly half of his investors’ money.

Beachy had assured his investors that their money was safe, earning higher returns than banks in U.S. government securities, and he issued periodic statements that government officials allege were fictitious.

In reality, Beachy had lost nearly all of his investors’ money by 1998 in speculative investments such as stocks, mutual funds and junk bonds, officials said. But he continued to solicit investments from new investors, which he used to repay earlier investors — a so-called Ponzi scheme similar to that operated by the infamous Bernard Madoff, which lost an estimated $18 billion in 2009, according to investigators. It was the largest loss in history and earned Madoff a sentence of 150 years in prison.

Since Beachy’s bankruptcy filing, Sugarcreek’s Amish community has been in turmoil, with many victims upset at being dragged into court rather than resolving the case among the Plain People themselves.

Some of Beachy’s creditors argue that forcing them to pursue claims through the court would be a violation of their religious freedom.

SOURCE HERE

COURTESY OF MARKET FOLLY 

Netflix Says One Million Customers Expected To Depart After Price Hike

TRENTON, N.J. – September 15, 2011 (WPVI) — MTV’s “Jersey Shore” GTL motto might now stand for gym-tax credit-laundry instead of gym-tan-laundry.

The state Economic Development Authority on Wednesday approved covering $420,000 of the production costs for the hit reality series’ inaugural 2009 season.

Assemblyman Declan O’Scanlon told the Statehouse Bureau of The Star-Ledger of Newark and The Record newspaper he can’t believe taxpayers are paying “for fake tanning for `Snooki’ and `The Situation.”‘

The show centers on the cast living it up along the beach and boardwalk in Seaside Heights.

Seaside Heights Mayor P. Kenneth Hershey says the local economy gets a boost when the cast is in the town.

Gov. Chris Christie suspended the film tax credit program in 2010 to close a budget deficit.

SOURCE

Story Here

__________________

“The rent’s too damn high,” to quote Jimmy McMillan, former New York State gubernatorial candidate.

And for Donald Trump, that’s true when it comes to rent in cold hard dollars, given his sharp criticisms of the Federal Reserve’s open fire hydrant of dollar printing and the Obama Administration’s fiscal policies.

Which is why, for the first time ever, Trump will accept today gold bullion instead of dollars for a lease deposit from his newest tenant in one of his marquee properties, 40 Wall Street, a 70-story skyscraper in Manhattan’s Financial District that at one time was the tallest building in the city until the Chrysler Building surpassed it. Trump will accept the gold at an event in the lobby of the Trump Tower at 725 Fifth Avenue.
Read more: http://www.foxbusiness.com/markets/2011/09/15/trump-accepts-gold-instead-dollars-from-tenant/#ixzz1Y2EwXWY9

PUERTO GAITAN, Colombia — “I don’t have any problems firing everyone I need to fire,” Venezuelan President Hugo Chavez thundered in 2002, as he began purging state oil company executives who had mounted protests against him.

Months later, nearly 20,000 oil workers, from petroleum engineers to geologists and managers, had been fired. But with the company under the president’s tight control, production has swiftly fallen and Venezuela has slipped from the world’s fifth-largest oil exporter to the 11th.

The oilmen who were banished have taken their experience drilling for Venezuela’s tar-like oil to countries as varied as Iraq, Nigeria and Canada. But the presence of Venezuelan petro-scientists has been most vital here in Colombia, where they have helped oil companies sharply increase the production of crude, much of which is exported to the United States.

“Chavez has been a huge help for the petroleum industry in Colombia,” said Humberto Calderon, a former Venezuelan mining minister who now runs Vetra Energy in southern Colombia.

Colombia is now on the verge of achieving what just a few years ago was unthinkable: pumping 1 million barrels of oil a day, up from 540,000 barrels daily in 2005.

“This is practically doubling production during the last four or five years,” said Javier Gutierrez, president of Colombia’s state oil company, Ecopetrol. “It’s a spectacular development.”

The new El Dorado is here in Colombia’s stark eastern plains, a wild land known for its horsemen and harp-based folkloric ballads.

Across 700 square miles, Pacific Rubiales Energy, which is listed on the Toronto stock exchange, jacked up production from 14,000 barrels a day as recently as 2007 to 224,000 last week. Although 12,000 Colombians work here, the company’s top directors and those overseeing exploration and production cut their teeth at the Venezuelan state oil company, Petroleos de Venezuela, known worldwide as Pdvsa.

“The top management of Pdvsa is now the top management of Pacific Rubiales,” said Ronald Pantin, the chief executive and founder of the company, himself a former high executive at Pdvsa (pronounced peh-deh-veh-sah). “All the people we brought from Venezuela have more than 25 years of experience, so people with a huge knowledge of all this geology.”

A new reality

That experienced oilmen are now considering Colombia as a destination is a testament to a new reality on the ground in this once-chaotic country and what oil analysts call Venezuela’s mismanagement of its oil sector.

Once terrorized by leftist rebel groups that often bombed oil pipelines, much of rural Colombia has been pacified after a long army offensive supported by U.S. aid. Colombia’s previous government, led by President Alvaro Uribe, also introduced financial incentives that lured scores of oil companies, said Ramon Espinasa, senior oil and gas specialist at the Inter-American Development Bank.

Gutierrez of Ecopetrol said 65 percent of the basins that may hold oil have now been awarded to oil companies; eight years ago only 13 percent of the potential oil fields were being developed.

SOURCE 

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