Wednesday, October 26, 2011

Jaroslovsky: “Steve Jobs” is Remarkable Book





Source :Bloomberg :Rich Jaroslovsky:Oct:25,2011


Jaroslovsky

Steve Jobs was a remarkable man. Walter Isaacson’s “Steve Jobs” is a remarkable book, fully capturing its brilliant, maddening, sometimes appalling, always fascinating subject.
Written in a short span as its prime source lay in the grip of mortal illness, “Steve Jobs” shows no signs of haste in its reportage, writing or critical thinking. Its sole concession to the unusual circumstances of its creation is that, unlike Isaacson’s previous biographies of Benjamin Franklin and Albert Einstein, it doesn’t attempt to place Jobs in a broader historical context. The focus here is on the man, what he achieved and how he achieved it.
The overarching theme of those achievements was Jobs’s ability to locate himself at the nexus of technology and the humanities. His experiences as an acid-dropping, India- sojourning, Dylan-loving ex-hippie had at least as much to do with his eventual success as his fascination with things electronic.
He was shaped, too, by a complex family history. Born out of wedlock to parents who later married, produced another child -- the novelistMona Simpson -- and then split up, he was adopted by Paul and Clara Jobs, a working-class couple in the San Francisco Bay Area.

Feeling Special

Isaacson sees this as the origin of a sense of abandonment that eventually led Jobs to seek substitute father figures throughout his business career. It’s worth noting, though, that Jobs himself rejected that analysis. To him, the most important message of his childhood was the one conveyed by the Jobses.
“I have never felt abandoned,” he told Isaacson. “I’ve always felt special. My parents made me feel special.”
The specialness manifested itself in the form of academic achievement and an unruly and sometimes volatile personality. Then, in high school, he found Steve Wozniak, who shared his love of electronics and mischief.
Together, they made and sold “blue boxes,” gadgets designed to rip off the telephone company for free long-distance calls. Eventually, they gravitated toward the nascent field of personal computing, making first a kit they sold to fellow hobbyists, then a revolutionary breakthrough: a complete, plug- and-play machine that normal people could use. It was the Apple II, the first true personal computer.

Creating Apple

If much of the technological wizardry was Wozniak’s, it was Jobs who burned to create a business around it. At one point, Wozniak’s father confronted Jobs to demand a larger share for his son. “Wozniak, however, understood better than his father the symbiosis they had,” Isaacson writes. “If it had not been for Jobs, he might still be handing out schematics of his boards for free.”
In short order, the Apple II launched the company now known as Apple Inc. (AAPL), landed Jobs on magazine covers and made him a millionaire. It also made him insufferable, particularly to the series of poor saps tasked by investors to manage the unmanageable boy wonder.
Indeed, one comes away from “Steve Jobs” with a sense of pity for figures like John Sculley, recruited by Jobs himself from PepsiCo Inc. to become Apple’s chief executive. Jobs developed the Macintosh, yet another revolution in computing, then mismanaged and schemed his way into a boardroom showdown with Sculley that he lost.

On the Defensive

In one of the book’s most memorable scenes, Sculley is so demoralized even in victory that he tells his wife he’s thinking of resigning. She jumps into her car, hunts Jobs down in the parking lot of a Silicon Valley restaurant and confronts him, demanding, “Do you have any idea what a privilege it has been even to know someone as fine as John Sculley?” For once, it’s Jobs on the defensive.
Far more often, though, Jobs was the one orchestrating confrontations. Isaacson doesn’t sugar-coat his behavior, recounting the screaming tirades, tears and perhaps the worst insult he could aim at employees, colleagues and competitors: dismissing them as bozos, worthy only of contempt.
And yet. Somewhere along the line, perhaps during his years in exile, he honed his vision of that technology-humanities aesthetic. Or maybe it’s just that the technology finally caught up with where his mind had been all along.

Building Pixar

From “Star Wars” creator George Lucas, he acquired a tiny computer company called Pixar that, working with a supremely talented staff, he built into a motion-picture powerhouse that he took public and eventually sold to Walt Disney Co. (DIS) -- but only after a memorable clash with Disney CEO Michael Eisner that brings to mind the old line about irresistible forces and immovable objects.
Then came his return to a nearly bankrupt Apple, where he engineered the ouster of yet another “bozo” CEO, seized the reins himself and began the string of products that revolutionized -- there’s that word again -- how everyday people do everyday things: the iPod, iPhone and most recently the iPad.
As proud as he was of those accomplishments, Jobs told Isaacson, his most important goal was to do what an earlier pair of Silicon Valley giants, Bill Hewlett and Dave Packard, had achieved: to “create a company that was so imbued with innovative creativity that it would outlive them.”
As Hewlett-Packard Co. (HPQ) lurches from management crisis to management crisis, that seems a far-fetched desire. Yet HP has strayed far from the culture instilled by its founders. The question for Apple as it looks to the future is whether the vision will prove strong enough to sustain it in the absence of the visionary.
“Steve Jobs” is published by Simon & Schuster (630 pages, $35). To buy this book in North America, click here.
(Rich Jaroslovsky is the technology columnist for Bloomberg News. The opinions expressed are his own.)

Rajat Gupta Surrenders to Federal Authorities



Source :PatriciaHurtado:Bloomberg:oct 26,2011:6.34pm ist



Rajat Gupta, the former Goldman Sachs Group Inc. director once accused of feeding tips to Galleon Group LLC hedge fund manager Raj Rajaratnam, surrendered to federal authorities to face insider trading charges, making him the highest-ranking executive to be arrested in the probe.
Gupta, 62, gave himself up today in Manhattan to face “various insider trading charges,” said J. Peter Donald, an FBI spokesman. After a four-year investigation by the agency of insider trading at hedge funds, Gupta will be prosecuted by the office of Manhattan U.S. Attorney Preet Bharara, who with the FBI has directed a nationwide investigation of illegal trading at hedge funds, technology firms, banks and consulting firms.
“Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless,” his lawyer, Gary Naftalis, said in an e-mailed statement yesterday. “He did not trade in any securities, did not tip Mr. Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo.”

Westport Home

Gupta left his home in Westport, Connecticut, opposite Long Island Sound today, at 6:15 a.m. The case against him comes seven months after federal prosecutors in court first called Gupta and Rajaratnam’s brother Rengan “unindicted co- conspirators.”
Gupta isn’t being charged based on evidence provided by Raj Rajaratnam, said a person familiar with the matter who declined to be identified because the matter isn’t public. The charges are based on evidence uncovered by the Federal Bureau of Investigation’s probe, the person said.
Ellen Davis, a spokeswoman for Bharara, declined to comment.
Rajaratnam, the central figure in what prosecutors have called the largest crackdown on insider trading at hedge funds in U.S. history, was arrested in October 2009. He was convicted of conspiracy and securities fraud by a Manhattan federal jury in May and sentenced to 11 years in prison on Oct. 13. More than 50 people have been charged in the probe.

Interview

In an interview in Newsweek this month, Rajaratnam said prosecutors pushed him to plead guilty to one criminal charge and inform against Gupta. Rajaratnam understood that he would be sentenced to as little as five years in prison, according to the Newsweek article.
Rajaratnam told Newsweek that he refused to inform on Gupta or wear a wire to record him for the FBI.
At Rajaratnam’s trial, Goldman Sachs Chief Executive Officer Lloyd Blankfein testified that Gupta violated the New York-based bank’s policies by allegedly telling the defendant about the company’s results and plans.
The U.S. Securities and Exchange Commission in March filed an administrative action contending Gupta passed inside information to Rajaratnam about Goldman Sachs and Procter & Gamble Co. That action was dropped in August after Gupta, who denied the allegations, sued the SEC for violating his rights by not bringing its case in federal district court.

Administrative Proceeding

In the administrative proceeding, the SEC had claimed Gupta tipped Rajaratnam, 54, aboutBerkshire Hathaway Inc.’s $5 billion investment in New York-based Goldman Sachs. The agency also said Gupta told Rajaratnam about quarterly earnings of Goldman Sachs and Cincinnati-based P&G, the world’s largest consumer products company.
Gupta left the Goldman Sachs board in 2010 and stepped down from P&G’s board in March.
Aside from serving on those two boards, Gupta from 1994 to 2003 ran McKinsey & Co., the global consulting firm. He remained a senior partner there until 2007.

Northwestern, Harvard

He has been on advisory boards at Northwestern University’s Kellogg School of Management, University of Pennsylvania’s Wharton School, Massachusetts Institute of Technology’s Sloan School of Management and Harvard Business School, his alma mater. In 2001, Kolkata-born Gupta founded the Indian School of Business in Hyderabad.
As of May 2010, Rajaratnam had a stake in a fund managed by New Silk Route NSR Partners LLC, co-founded by Gupta. At a January 2007 benefit honoring Rajaratnam called “A Night for India,” Gupta was the honorary chairman along with conductor Zubin Mehta, according to a program.
Blankfein said Gupta and other board members were told in October 2008 that Goldman Sachs was facing the possibility of a quarterly loss for the first time since it went public in 1999. Prosecutors said Gupta tipped Rajaratnam, who sold Galleon’s position in Goldman Sachs, warding off millions of dollars in losses.

Gupta Recording

At the Galleon co-founder’s trial, prosecutors also played a secret recording of a July 2008 phone call in which Gupta can be heard telling Rajaratnam that the Goldman Sachs board had discussed acquiring a commercial bank or an insurance company.
The SEC brought its action against Gupta in Washington on March 1. He sued in Manhattan federal court on March 18, claiming the SEC violated his rights by pursuing an administrative action rather than a lawsuit. Gupta would have more procedural protections in district court, including the right to a jury trial and the use of federal rules of evidence.
U.S. District Judge Jed Rakoff ruled in July that Gupta could argue that the agency intentionally singled him out for unfair treatment in retaliation for claiming his innocence. The judge said that all the SEC’s other lawsuits related to the Galleon insider-trading case were in federal court.
The agency dropped its administrative proceeding in August and agreed that it would bring any subsequent action against Gupta in district court. Gupta agreed to withdraw his lawsuit against the SEC.

U.S. Plans to Charge 10 More After Rajaratnam Arrest



Raj Rajaratnam, billionaire founder of the Galleon Group,

Source :Bloomberg:Joshua Gallu and David Scheer:Oct 19,2011



 Federal investigators plan to charge at least 10 securities professionals with insider trading, some linked to the criminal case against billionaire hedge-fund manager Raj Rajaratnam that shook Wall Street last week, people familiar with the matter said.
The pending crackdown, more than two years in the making and among the biggest undercover operations into insider trading, may yield charges against hedge-fund managers and their associates as early as this week, the people said, declining to be identified because the cases aren’t public. Authorities had planned to arrest Rajaratnam this week as part of a broader sweep, expediting it after learning he had bought a plane ticket to travel to London on Oct. 16, one person said.
The case against Rajaratnam, built on recorded conversations within a web of alleged conspirators, offers a glimpse of how U.S. investigators are using more aggressive tactics to identify illegal trades hidden within a blizzard of hedge-fund investments. Additional probes stem from a secret Securities and Exchange Commission data-mining project set up to pinpoint clusters of people who make similar well-timed stock investments. Some probes, like the one against Rajaratnam, rely on wiretaps.
“If you’re going to shoot the king, you better shoot to kill,” said Bradley Bennett, a law partner atBaker Botts LLP in Washington who formerly focused on insider-trading cases as an SEC investigator. “If they’re going to take on a billionaire, they need to have the strongest possible cases. The defendant’s own words are the strongest possible evidence.”
Intel, McKinsey, IBM
SEC spokesman John Heine declined to comment, as did Alejandro Miyar, a spokesman for the Justice Department.
Rajaratnam, who founded the Galleon Group in 1997, was arrested with five alleged conspirators on Oct. 16 in what prosecutors called the biggest insider-trading ring targeting a hedge fund. Prosecutors said he and his firm reaped as much as $18 million by investing on tips from a hedge fund, a credit- rating firm and employees within companies including Intel Capital, McKinsey & Co. and IBM Corp. IBM said today it put executive Robert Moffat, one of Rajaratnam’s alleged conspirators, on temporary leave following the charges.
Rajaratnam, born in Sri Lanka’s capital of Colombo, has a net worth of $1.3 billion, making him the 559th richest person in the world, according to Forbes Magazine. In the early years of this decade, Galleon ranked among the world’s 10 largest hedge funds, managing $7 billion at its peak in 2008.
No Plea Entered
Rajaratnam hasn’t yet entered a plea. His lawyer, Jim Walden, said last week that prosecutors are misconstruing the evidence and that the case isn’t as strong as they allege.
U.S. senators including Pennsylvania Democrat Arlen Specter have pressed regulators to more aggressively scrutinize hedge funds. Some of those concerns were spurred by the SEC’s decision in 2006 to close an insider-trading probe of Pequot Capital Management Inc., once the world’s biggest hedge- fund manager, after investigators said they lacked evidence to bring the case.
The SEC later reopened part of the inquiry focusing on whether Pequot abused information from a former Microsoft Corp. employee. In August, Pequot and founder Arthur Samberg, 68, said they may be sued by the agency. Insider-trading claims would be “without merit,” they said.
The SEC has also expressed concern that hedge funds may engage in insider trading based on information from their own investors.
Many cases begin when stock exchanges send the SEC reports on traders who place profitable bets shortly before corporate announcements. Someone who rarely trades may have difficulty explaining later what prompted an uncharacteristic investment. Hedge funds, on the other hand, can more plausibly attribute their windfalls to skill or chance.
Blue Sheets
To overcome that hurdle, the SEC began using computer software about two years ago to sift hundreds of millions of electronic trading records, known as blue sheets, attached to the stock exchange reports about suspicious incidents, according to people familiar with the project. By looking for patterns in the library of data, they identified groups of traders who repeatedly made similar well-timed bets.
Once investigators find a cluster of correlated trades, they tap other sources of information to unravel how its members obtain and share tips, the people said. For example, if a group profits on trades before a series of corporate takeovers, the SEC may check so-called league tables listing which investment banks or law firms advised the deals. If one firm was involved in all of them, an employee there may be the source of the leak.
Data Mining
The data-mining strategy yielded one of its first cases in February, when the SEC and U.S. prosecutors charged takeover advisers at UBS AG and Blackstone Group LP with taking part in an $8 million insider-trading case, people familiar with the inquiry said. Authorities used a “novel” technique to detect the scheme, the SEC’s lead investigator on the case, Daniel Hawke, said at the time, without elaborating.
While the investigation of Rajaratnam didn’t stem from the data-mining project, it did start with the SEC’s identification of suspicious trades, people with knowledge of the case said.
Investigators developed at least one informant in the ring, who began meeting in November 2007 with agents from the Federal Bureau of Investigation, according to charging documents. Prosecutors also obtained warrants for wiretaps, a level of surveillance typically reserved for organized crime, drug syndicates and terrorism prosecutions.
Prosecutors are also being helped by at least three of Rajaratnam’s former colleagues, the Wall Street Journal reported today, citing people familiar with the criminal investigation. Those people include California hedge-fund managers Ali Far and Choo Beng Lee, the Journal said.
Further Surveillance
Surveillance during the probe of Rajaratnam, 52, led investigators to other suspects and more charges are likely, people familiar with the matter said. U.S. Attorney Preet Bharara said Oct. 16 the Justice Department will continue using wiretaps to root out insider-trading.
The SEC is adopting other strategies to crack difficult cases. SEC Enforcement Director Robert Khuzami, a former federal prosecutor who joined the agency in March, said last week that he’s seeking greater access to grand-jury evidence and wants to expand deal-making and cooperation with informants.
“Insider-trading cases are notoriously difficult to prosecute because the evidence is often circumstantial,” said Bill Mateja, a former Justice Department lawyer now at Fish & RichardsonPC in Dallas. “If law enforcement is actively going to go out and target this with covert investigative techniques, I think it’s going to keep people on their toes.”
The filed cases are U.S. v. Rajaratnam, 09-02306, and U.S. v. Chiesi, 09-02307, U.S. District Court for the Southern District of New York (Manhattan).