The Wall Street Report: Stock Rally To 200 Points !!!

The Bulls Are Running Freely ...

The Dow is up 234 points (+ 2.94%) and Nasdaq is also up 56.39 points (+ 3.55%).
[Report as of 3:10pm EST]

It turned out to be a good Thursday for Wall Street and the stock market after a surprise preliminary earnings report from Wells Fargo & Co. sent stocks rallying more than 245 points.

This comes despite an overall disappointing group of retail sales reports most notably from the retail giant Wal-Mart.

Today’s Markets

At the 4 p.m. close in New York, the Dow Jones Industrial Average futures jumped 246.27 points, or 3.14%, to 8083.38, the S&P 500 rose 31.38 points, or 3.80%, to 856.54 and the Nasdaq Composite added 61.88 points, or 3.89%, to 1652.54. The consumer-friendly FOX 50 index added 20.51 points, or 3.31%, to 639.66.

Overall, the Dow gained approximately 1% for the week - its fifth-straight week - despite a two-day slide on Monday and Tuesday.

Thursday's trading session will be the last for this week, with the bonds, commodity and stock markets closed Friday in observance of Good Friday.

Wells Fargo (WFC: 19.52, 4.64, 31.18%) was the fuel for the market's fire after the San Francisco-based bank said it sees a profit of $3 billion, 55 cents per share in the first quarter, widely topping estimates for 23 cents per share and the $2 billion profit the bank earned this time last year. Shares of Wells soared more than 30%.

The bank also said its 2008 acquisition of then-dying Wachovia Bank has "exceeded expectations" and sees charge-offs declining to $3.3 billion.

"The market was prepared for everything but positive surprises," said Ted Weisberg, a NYSE trader with Seaport Securities. "But we certainly got a positive surprise out of Wells Fargo today. It was enough to get the market to get it going."

The Wells Fargo news lifted the entire financial sector, with Citigroup (C: 3.07, 0.39, 14.55%), Bank of America (BAC: 9.66, 2.61, 37.02%) and JPMorgan Chase & Co. (JPM: 32.85, 5.5, 20.11%) all posting double-digit gains out of the gate.

Enthusiasm for banking stocks overshadowed another round of bleak retail sales reports. Analysts polled by Thomson Reuters expected same-store sales to decline by 1% last month amid the deepest recession since World War II.

The biggest drag on the Dow was the retail giant Wal-Mart (WMT: 50.47, -2.15, -4.09%), which disappointed the market by saying its same-store sales excluding fuel rose by 1.4% in March, well short of expectations for a 3.2% jump. Shares of the Arkansas-based retailer were down 5%.
Wal-Mart wasn't alone as Costco (COST: 46.9, -0.8, -1.68%), Macy's (M: 11.86, 1.53, 14.81%), Target (TGT: 39.8796, 2.2696, 6.03%), Limited Brands (LTD: 10.66, 1.07, 11.16%), Wet Seal (WTSLA: 3.93, 0.19, 5.08%) and Bebe Stores (BEBE: 7.55, 0.51, 7.24%) all posted declines in same-store sales for March. On the upside, Buckle (BKE: 36.9, 3.15, 9.33%) said same-store sales rose by a better-than-expected 14.7% last month.

But for the most part, retailers were posting positive gains in Thursday trading - with the S&P 500 retailers index up 3%.

On the economic front, the Labor Department said initial jobless claims tumbled by 20,000 last week to 654,000, the 10th straight week above the 600,000 mark. Continuing claims, which are filed by those out of work for more than one week, surged by 95,000 to 5.8 million, the highest level since data began in 1967.

Also, the government said U.S. import prices rose for the first time in eight months thanks to a jump in oil prices. The Labor Department report showed prices were up in March by 0.5%, half as much as economists expected. Excluding oil, import prices tumbled for the eight-straight month amid the global recession.

In the commodity markets, crude oil futures ended higher by $2.64 per barrel, or 5.31%, to $52.00 a barrel. Gold slipped $6.50 per ounce, or 0.73%, to $879.30.

Corporate Movers

Berkshire Hathaway (BRK: undefined, undefined, undefined%), billionaire Warren Buffett's holding company, lost its perfect "AAA" credit rating from Moody's, which cited the ongoing recession and heavy investment losses in the insurance sector. Last month Fitch Ratings similarly stripped Berkshire of its "AAA" rating.

Barclays Capital (BCS: 10.8912, 1.5212, 16.23%) announced the sale of its iShares exchange-traded funds to CVC Capital for $4.4 billion.

Morgan Stanley (MS: 25.35, 2.73, 12.07%) is expected to take a higher-than-expected first-quarter hit of $1.2 billion to $1.7 billion on a rebound in its bond prices, The Wall Street Journal reported. While rising bond prices are generally thought of as a positive, the write downs add to problems in real-estate and other business lines and could send Morgan to its first back-to-back quarterly losses since it went public 23 years ago, the newspaper reported.

Toyota Motors (TM: 79.2336, 3.4936, 4.61%) plans to overhaul its U.S. operations by combining engineering, manufacturing and sales under one exec, the Journal reported.

General Motors (GM: 2.01, 0.081, 4.2%) could receive $100 million to $200 million for its Hummer brand, which is still being bid on by three companies, including private-equity firms and wealthy individuals, Reuters reported. Of the three remaining bidders, which don't include any auto makers, only one is from the U.S., the wire service reported.

Wells Fargo (WFC: 19.52, 4.64, 31.18%) is likely to hold onto Evergreen Investments, the money-management unit inherited when Wells acquired Wachovia last year, the New York Post reported. However, Wells Fargo is likely to keep a smaller version of Wachovia's investment bank on hand, the newspaper reported.

World Markets

European indexes were solidly in the green, led by a 1.05% jump for Germany's DAX and a 0.42% rally for France's CAC 40.

Amid news of a Japanese stimulus package, Asian markets rallied overnight. Japan's Nikkei 225 soared 3.74% to 8916.06 and Hong Kong's Hang Seng rose 2.95% to 14901.41.



Stocks Rally in Time for the 3-day Easter Weekend ...


NEW YORK -- U.S. stocks soared on Thursday, sparking a 200-point rise in the Dow Jones Industrial Average( DJIA), with investor spirits lifted by a surprising first-quarter profit prediction by Wells Fargo & Co. . The Dow Jones Industrial Average gained 204.85 points to 8,041.96. The S&P 500 Index(.INX) climbed 25.55 points to 850.71. The Nasdaq Composite (.IXIC)rose 51.62 points to 1,642.18.

Rare talk of "profits" for a bank sparked big gains in the financial sector, which led the broader market higher on Thursday.

There's a growing body of evidence that the economy is beginning to make a cyclical turn and that the financial sector is finding a more even keel. Wholesale inventories fell by the largest increment on record, according to a Wednesday report, and the inventory-to-sales ratio, the most direct measure of supply and demand in the economy, showed that the latter is gradually catching up with the former. Lawrence Summers, a key economic adviser to President Barack Obama, noted Thursday the promise of a cyclical surge in production revealed by the inventory data.

The Dow Jones Industrial Average was up 196 points to 8033.36, the S&P 500-stock index gained 2.9% to 849.44 on a 8% surge in its financial sector. The Nasdaq Composite Index was up 3.3% to 1653.30, and is up 4.1% for the year. Traders are betting on the technology and consumer stocks that would benefit from a recovery. Dell shares rose 7.3% to $10.94 and eBay gained 6.9% to $14.91.

Wells Fargo shares jumped 24% to $18.48 after the bank said it expects to report record net income of approximately $3 billion, or 55 cents a share, for first quarter. The company said that it is seeing strong operating results from its acquisition of Wachovia and that lending activity has been brisk. Wells said it expects consolidated net interest margin of approximately 4.1%.

"There is going to be a clear difference between ... (click here to read more of this story.)

The Wall Street Report: Two-Day Slide Halted

Matt Egan
FOXBusiness

After a back-and-forth trading session, Wall Street's two-day selloff ended on Wednesday as big rallies for retailers and life insurers overshadowed the latest bleak economic news.

Today's Markets

The Dow Jones Industrial Average rose 47.55 points, or 0.61%, to 7837.11, the S&P 500 added 9.61 points, or 1.18%, to 825.16 and the Nasdaq Composite picked up 29.05 points, or 1.86%, to 1590.66. The consumer-friendly FOX 50 gained 4.12 points, or 0.67%, to 619.15.

Without any major economic reports and mixed signals on the earnings front, the markets searched for direction throughout the day before ending near their midpoint. Stocks were pushed higher by strong gains from retailers thanks to positive earnings from Bed, Bath & Beyond (BBBY: 31.7, 6.19, 24.26%) and a surge in the life-insurer sector amid talk of a government bailout.

“I think right now the earnings picture is going to dictate trading. It’s going to be choppy, as it has been,” said Dan Greenhaus, equity analyst at Miller Tabak. “Companies that perform like Bed, Bath & Beyond are going to be rewarded and those that don’t are going to be punished.”
The gains were Wall Street's first of the week and came despite Alcoa's (AA: 8.06, 0.24, 3.07%) weaker-than-expected quarterly results and the Federal Reserve downgrading its already gloomy economic forecast.

The Nasdaq Composite widely outpaced the broader market thanks to big gains from tech and consumer discretionary stocks. The vast majority of the Nasdaq 100's components closed in the green, led by Bed Bath & Beyond and Juniper Networks (JNPR: 17.51, 1.89, 12.1%).

Home Depot (HD: 25.11, 0.77, 3.16%), Alcoa and American Express (AXP: 15.73, 0.76, 5.08%) led the way up on Dow. On the downside, General Motors (GM: 1.929, -0.071, -3.55%), Citigroup (C: 2.68, -0.08, -2.9%) and Bank of America (BAC: 7.05, -0.28, -3.82%) tumbled. Last week the blue-chip index put the finishing touches on its strongest four-week win streak since 1933.

“We’re coming off a 26% rally [from the March lows] so one would believe there would be some give back. Nothing goes up forever,” said Greenhaus.

Wall Street's rally was nearly derailed after the Fed released its March 17-18 minutes, which showed the central bank is no longer banking on a 2009 recovery. Policy makers, which decided at last month's meeting to inject another $1 trillion into the economy, expect a slow recovery next year and unemployment to continue rising.

Retailers Dominate Earnings Kickoff

A day after earnings jitters sent the Dow to a 186-point plunge, Wall Street put a positive spin on mixed earnings reports as all five major companies reporting results ended higher.

Consumer discretionary stocks like Macy's (M: 10.33, 0.65, 6.71%) and Aeropostale (ARO: 26.92, 1.39, 5.44%) rallied around Bed Bath & Beyond, which beat the Street by 11 cents and said it’s comfortable with analyst expectations for the current quarter and full year. Similarly, discount retailer Family Dollar (FDO: 34.61, 1.88, 5.74%) soared to 52-week highs after it matched expectations and upped its full-year outlook again. Also, Ruby Tuesday (RT: 6.08, 2.24, 58.33%) surged more than 50% after the restaurant operator widely exceeded estimates.

The upbeat news from the retail sector overshadowed the results from aluminum maker Alcoa, which officially started earnings season late Tuesday by reporting a weaker-than-expected loss of 59 cents per share. Mosaic (MOS: 45.575, 2.615, 6.09%) also disappointed the Street as the fertilizer company’s net income plunged 88% last quarter.

Insurers, M&A Provide Strength

Life insurers were the biggest winners on Wednesday as stocks like MetLife (MET: 24.75, 0.67, 2.78%) and Genworth Financial (GNW: 2.34, 0.24, 11.43%) surged after The Wall Street Journal reported the Treasury Department plans to soon offer TARP funds to a number of struggling life insurers that own federally chartered banks. Sources confirmed to FOX Business the government is considering such a move.

Life insurers were the ... (Click here to read the rest of this story.)

The Wall Street Report: GM In Process Of Bankruptcy ?

The Bulls Are Baaaaack !!!

The markets gave back a chunk of last week’s big gains on Tuesday as Wall Street braces for the ugly corporate reality likely to be exposed by the start of earnings season.

Today's Markets

The Dow Jones Industrial Average (.INDU) lost 186.29 points, or 2.34%, to 7789.56, the S&P 500 fell 19.93 points, or 2.39%, to 815.55 and the Nasdaq Composite (.IXIC) slid 45.10 points, or 2.81%, to 1561.61. The consumer-friendly FOX 50 dropped 13.10 points, or 2.22%, to 615.03.

The triple-digit selloff adds to Monday’s minor losses and comes amid new signs of a potential bankruptcy for General Motors (GM: 2, -0.25, -11.11%) and worries about earnings season, which is set to kick off Tuesday evening with results from aluminum titan Alcoa (AA: 7.82, -0.09, -1.14%).

“The hopes and wishes rally seen over the past month will be met with the reality of earnings season and we'll see what dreams come true and which get scorched. Earnings will be ugly but commentary about [the second quarter] will be most relevant,” Peter Boockvar, equity analyst at Miller Tabak, wrote in a note.

Few were surprised with the pullback as Wall Street had been in the midst of one of its strongest stretches on record. Thanks to newfound economic optimism and more confidence in government actions, the Dow last week capped off its best four-week win streak since 1933.

“We have come far fast and with little to fundamentally support the move. I don't want to sound too negative -- I am not,” Peter Kenny, managing director at Knight Capital Group, wrote in a note. “If we give back [some gains], look for the market to show some resilience. Dips will likely be bought.”

On a technical basis, Kenny said he expects the S&P to be resilient near the 770-800 level.

Citigroup (C: 2.76, 0.04, 1.47%) and Microsoft (MSFT: 18.76, 0, 0%) were the only two of the Dow's 30 components that made headway Tuesday. The biggest percentage losers on the benchmark index included GM, General Electric (GE: 10.6309, -0.5191, -4.66%) and Caterpillar (CAT: 29.43, -1.84, -5.88%).

The vast majority of the Nasdaq 100's members also closed lower, led by steep drops for tech stocks like BlackBerry maker Research in Motion (RIMM: 59.95, -4, -6.25%) and Dell (DELL: 9.83, -0.5, -4.84%). The sector remains rattled by the apparent collapse of IBM's (IBM: 98.67, -2.85, -2.81%) takeover of Sun Microsystems (JAVA: 6.28, -0.3, -4.56%).

Tuesday's dive erased the majority of last week's rally and bolsters the case by some that Wall Street's recent surge was overdone to the upside.

“I think we’re going to retest the lows. Historically that’s what you do. There is this rush to believe the worst is behind us and that may well be true but the bottoming process can be very difficult and painful,” Tony Dwyer, equity market strategist at FTN Equity Capital, told FOX Business.

'Sell-and-See' Approach to Earnings

Traders clearly weren't waiting around on the hopes companies will sound upbeat tones in their earnings reports in the midst of the deepest recession since World War II.

While the focus will be on companies' second-quarter and full-year forecasts, analysts expect first-quarter earnings to have declined 37% from the year before. A decline in earnings would mark the seventh-straight contracting quarter, the longest such streak since the Great Depression, according to Bloomberg.

Alcoa, the largest U.S. mining and aluminum company, is expected to report a loss of 57 cents per share, potentially kicking off earnings season on a bleak note. In addition to Alcoa, earnings were expected Tuesday evening from Bed Bath & Beyond (BBBY: 25.51, -0.86, -3.26%), Mosaic (MOS: 42.96, -1.91, -4.26%) and Ruby Tuesday (RT: 3.84, -0.21, -5.19%).

GM, Energy Drag on Markets

Energy stocks such as BP (BP: 39.58, -1.08, -2.66%) and ExxonMobil (XOM: 68.66, -1.32, -1.89%) were some of the biggest weights on the market Tuesday as crude oil ended in the red for the third straight day. Crude slid $1.90 per barrel, or 3.72%, to $49.15. On the other hand, gold headed higher, rising $10.70 per ounce, or 1.23%, to $882.20.

Financial stocks were also under some pressure Tuesday as banks like Morgan Stanley (MS: 23.21, -0.122, -0.52%) and State Street (STT: 32.16, -0.83, -2.52%) tumbled on new worries about banks’ toxic assets. The International Monetary Fund is expected to say toxic debts owned by banks and insurers could jump to $4 trillion, including $3.1 trillion in the U.S. alone, British paper The Times reported.

Meanwhile, the markets were provided with another reminder of the precarious state of the U.S. auto industry as Bloomberg News reported General Motors (GM: 2, -0.25, -11.11%) is speeding up preparations for a possible bankruptcy filing. The auto maker is reportedly considering a “363 sale” under the bankruptcy code that would allow it to create a new company from the assets and brands of GM.

Corporate Movers

American International Group's (AIG: 1.05, -0.06, -5.41%) asset management business has drawn interest from about a half-dozen bidders but the bailed-out insurer may have to sell it for a discount due to client withdrawals and declines in asset prices, The Wall Street Journal reported. Potential buyers, which include several private-equity firms, have offered between $400 million and $800 million, the newspaper reported.

Sun Microsystems (JAVA: 6.28, -0.3, -4.56%) CEO Jonathan Schwartz’s job could be in jeopardy if his company’s deal with IBM (IBM: 98.67, -2.85, -2.81%) is not revived, the Journal reported. Schwartz favored the IBM offer but a board faction led by Sun chairman and co-founder Scott McNealy opposed it, the newspaper reported. Talks have reportedly broken down amid pricing and regulatory concerns.

Royal Bank of Scotland (RBS: 7.7182, -1.1818, -13.28%) said the U.K. government’s stake in the lender will rise to 70.3%, up from 58%, due to a failed effort to raise money in the private sector. RBS also said it is in talks with unions about cutting as many as 9,000 back-office jobs over the next two years.

Blockbuster (BBI: 0.78, -0.0999, -11.35%) saw its shares dive a day after the movie rental chain warned its auditors believe the risk of not restructuring its credit facilities raises “substantial doubt” about its ability to continue as a going concern.

Brinker International (EAT: 16.8501, 0.6001, 3.69%), the parent of Chili’s Grill & Bar, forecasted a better-than-expected adjusted-quarterly profit of 44 cents to 45 cents per share.

World Markets

European indexes ended in the red as London's FTSE 100 sank 1.58% to 3930.52, Germany's DAX slipped 0.63% to 4322.50 and Paris' CAC 40 fell 0.94% to 2902.31 .

In Asia, Japan's Nikkei 225 fell 0.28% to 8832.85 and Hong Kong's Hang Seng tumbled 0.46% to 14928.97. China's Shanghai Stock Exchange saw its benchmark index, the Shanghai Composite, rise 0.8% to 2439.18 after being closed on Monday.



GM Could File for Bankruptcy, Reports Say
Kathryn Elizabeth Tuggle
FOXBusiness

General Motors Corp. (GM: 2.049, -0.201, -8.93%) could be moving more quickly toward bankruptcy, according to numerous reports that cite individuals familiar with the matter.

A possible bankruptcy would be hastened in spite of company directors who are seeking to explore savings to aid the company in the months to come, the reports said. Those funds could potentially be used to finance a bankruptcy.

GM’s new CEO, Fritz Henderson, took over the company after former CEO Rick Wagoner was replaced by the President’s Administration last week. Henderson appeared on NBC’s discussion program, “Meet the Press” on Sunday and said that bankruptcy was not inevitable for GM, but was possible.

“We are planning to get the job done. Our preference is to do it outside of a bankruptcy process, but it would only be prudent to make sure that we're planning for if we need to resort to that, that we can move and we can move fast,” Henderson said in the interview, according to a transcript released by NBC.

GM has been infused with roughly $13 billion in government bailout funds over the last 12 months, and has requested another $16 billion for its complete recovery.

“As I look at the situation, we need to accomplish a set of goals, and accomplishing those is -- can't be compromised. So if it can't be done outside of a bankruptcy process, it will be done within it,” Henderson said in the interview.

“Our worry is -- how do we get General Motors going forward? And that's where we're going to spend 100% of our time,” he added.

The Wall Street Report: The Monday (Big) Blues

The Markets today took a breather. As the Dow Jones Industrial Average (.DJIA) fell 41.74 points (-0.52%) to 7975.85. The Nasdaq (.IXIC) fell also -15.16 (-0.93%) to 1606.71.

Stocks In Focus For Tuesday

SAN FRANCISCO -- Among the companies whose shares are expected to see active trade in Tuesday's session are Alcoa Inc., Bed Bath & Beyond Inc. and Mosaic Co.

Alcoa (AA: 7.91, -0.19, -2.35%) is expected to report a first-quarter loss of 58 cents a share, according to analysts surveyed by Thomson Reuters.

Bed Bath & Beyond (BBBY: 26.37, -1.25, -4.53%) is forecast to post earnings of 44 cents a share in the fourth quarter, according to analysts surveyed by FactSet Research.

Mosaic (MOS: 44.87, -0.65, -1.43%) is estimated to report a profit of 25 cents a share in the fiscal third quarter, according to analysts surveyed by FactSet Research.

After Monday's closing bell, Immucor Inc. (BLUD: 24.06, -0.48, -1.96%) said its fiscal third-quarter profit was virtually flat, up to $19.5 million, or 27 cents a share, from $19.3 million, or 27 cents a share, in the year-ago period. Revenue rose to $75.3 million from $67 million last year. Analysts surveyed by FactSet Research estimated a quarterly profit of 22 cents a share on revenue of $73.1 million. The medical diagnostics company expects earnings of 97 cents to $1.02 for 2009 on revenue of $292 million to $300 million. Analysts estimate 99 cents on revenue of $295.5 million.

Watch list

Caterpillar Inc. (CAT: 31.27, -0.8801, -2.74%) and Navistar International Corp. (NAV: 31.8899, 1.1899, 3.88%) said they signed a definitive truck agreement that was first proposed in June. Under the agreement, the companies will produce Caterpillar heavy-duty vocational trucks for the North American market and will form a 50-50 joint venture to pursue the global commercial truck market outside of North America. Financial details of the agreement were not disclosed.

ConAgra Foods Inc. (CAG: 17.13, 0.05, 0.29%) said it plans to sell $1 billion in senior notes to help pay down debt. The offering is made up of $500 million in 5.875% senior notes due April 15, 2014, and $500 million in 7% senior notes due April 15, 2019. ConAgra expects to close the offering on April 14.

Harley-Davidson Inc. (HOG: 17.11, 0.56, 3.38%) said that Keith Wandell will become its new president and chief executive officer, effective May 1. Wandell, 59, will succeed James Ziemer, who is retiring. Wandell is currently president and chief operating officer of Johnson Controls Inc. (JCI: 15.09, -0.47, -3.02%)

Sun Microsystems Inc. (JAVA: 6.58, -1.91, -22.5%) is standing by its leadership team following a breakdown in talks with International Business Machines (IBM: 101.52, -0.7, -0.68%) to buy the company, The Wall Street Journal reported. After the deal collapsed over the weekend, speculation arose concerning the future of Jonathan Schwartz, Sun's chief executive. "As a policy Sun does not comment on rumors or speculation. What we can say is that Sun is committed to its leadership team, growth strategy and building value for its shareholders -- with continued alignment of resources to best position the company for improved financial performance," the company said, according to the Journal.

Ventas Inc. (VTR: 25.41, -0.56, -2.16%) expects to see adjusted 2009 funds from operations of $2.55 to $2.65 a share. Analysts surveyed by FactSet Research estimate funds from operations of $2.60 a share. The health-care real estate investment trust also plans to sell 8.5 million shares of common stock and $200 million in senior notes due in 2016 to help pay down debt. Ventas has about 143.4 million shares outstanding. Separately, Ventas said it plans to buy back up to $310 million in senior notes due between 2010 and 2015.

http://www.foxbusiness.com/story/markets/industries/transportation/stocks-focus-tuesday-1873720267/

Merkin Charged With Fraud for Steering Money Into Madoff's Scheme

Financier J. Ezra Merkin was charged Monday with fraud by the New York Attorney General’s Office for his role in steering billions of dollars of investors’ funds into Bernard L. Madoff’s massive Ponzi scheme.

Merkin, according to a statement issued by the Attorney General’s office, “ignored irregularities and other glaring red flags related to Madoff’s investments.”

The 54-page complaint filed in New York State Supreme Court states that Merkin collected $470 million in management and incentive fees in return for funneling $2.4 billion to Madoff.

Merkin’s money management company, Gabriel Capital, which oversaw several funds including Ascot Fund Limited, Gabriel Capital L.P. and Ariel Fund, is also charged in the suit. In the wake of the Madoff scandal, Merkin in January stepped down from his position as chairman of GMAC, the financing arm of General Motors (GM: 2.2599, 0.1199, 5.6%).

It’s the second fraud suit filed against so-called third party feeder funds that invested their clients’ money with Madoff.

Massachusetts’ top securities regulator filed suit last week against Fairfield Greenwich Group, a Connecticut-based firm that invested $7 billion with Madoff while collecting hundreds of millions in fees.
The New York suit seeks unspecified damages and repayment of all fees paid to Merkin by Madoff.

The complaint says Merkin did not tell his clients that their money was going to Madoff yet represented himself as an “investing guru.” Merkin was instead a “master marketer” who used his connections as a well-known Wall Street financier to convince investors over a period of nearly 20 years to turn their money over to him.

“Merkin profited enormously from Madoff’s scheme, reaping huge commissions while investors lost all their money,” Attorney General Andrew Cuomo said in the statement. “Merkin duped individual investors, nonprofits and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into history’s largest Ponzi scheme.”

Merkin is an influential figure, especially in New York, where he was prominent both on Wall Street and in social and charitable circles. While he and Madoff were still riding high, Merkin sat on the boards of such New York institutions as Carnegie Hall, Yeshiva University and the Fifth Avenue Synagogue.

The complaint alleges that two of Merkin’s “most trusted colleagues” repeatedly warned Merkin that Madoff’s returns were too good to be true.
In addition, the complaint says Merkin used “fraudulent quarterly reports, investor presentation materials and offering documents” to conceal Madoff’s role and embellished his own role.

Merkin's attorney, Andrew J. Levander, issued a statement saying Merkin will "vigorously" defend himself against "this hasty and ill-conceived lawsuit."
Levander said Merkin has been fully cooperating with Cuomo's investigation into Madoff's operations, and that, contrary to the allegations in Cuomo's complaint, Merkin's investors knew their money was going to Madoff.

"Mr. Merkin performed extensive due diligence on Madoff and his trading strategy, and in addition arranged meetings with Madoff for many investors to perform their own due diligence. Unfortunately, Mr. Merkin's due diligence, just like the detailed investigations performed by countless others, including regulators, was thwarted by the intricate, fraudulent scheme perpetrated by Madoff," Levander said.

Michael Shapiro, an attorney with Carter Ledyard & Milburn who represents several of Madoff victims, said New York securities laws require don’t require the Attorney General to prove that Merkin knew that Madoff was operating a fraud.

Cuomo needs to prove only that Merkin’s marketing materials included “material misstatements.”
“They don’t have to prove any intent to defraud or deceive,” said Shapiro.

Shapiro, a former prosecutor, said it was “inevitable” that financial advisors who, knowingly or not, turned a blind eye to Madoff’s unorthodox operations while collecting tens of millions of dollars in fees “would be held to account.”

Merkin is already facing civil suits filed by investors, including New York University, who claim Merkin hid from them the fact that he was turning their money over to Madoff.

Source: FoxBusiness


Sun Shares Plummet After IBM Talks Collapse


NEW YORK--Shares of Sun Microsystems Inc (JAVA: 6.49, -2, -23.56%)tumbled 24% on Monday after the company rejected rival computer and software maker International Business Machines Corp' (IBM: 100.64, -1.58, -1.55%) $7 billion offer.

Sun shares fell to $6.44 in pre-market trading after Sun pulled the plug on the deal which might have spelled the end of an era for a networking company that was once synonymous with the Internet.

The buyout was seen as a means for survival for the once-storied Silicon Valley company, which has been losing market share.

Sun was unhappy with IBM's offer of $9.40 per share or below, and it was unclear if talks would resume, according to a source, who was not authorized to speak publicly about the matter. The bid represented a premium of up to 89% on Sun's shares before deal talks were first reported last month.

Sun shares had risen to $8.49 on Friday, from $4.97 on March 17, a day before talks between the two technology companies were first reported. The Wall Street Journal had previously said IBM's original bid was $10 to $11 a share.

The deal may have helped IBM bolster its offering of computer servers, storage equipment and software as competition heats up with rivals like Hewlett-Packard Co (HPQ: 33.34, -0.82, -2.4%).

Sun rose to prominence selling high-end computer servers in the 1990s but never fully recovered from the dot-com bubble burst earlier this decade. Analysts also say it failed to fully capitalize on its software assets including Solaris and Java.

Failed talks with IBM could mean that Sun will need to find another buyer, and contend with a lower offer. But no bidder other than IBM has emerged in the months that Sun has been shopping itself.