Why Google CFO is trading spreadsheets for backpack

Google Inc's finance chief said on Tuesday that he plans to retire, the latest in a series of changes in the company's upper ranks but a move that some analysts said was unlikely to cause major disruptions.

Patrick Pichette is leaving Google to go backpacking, the 52-year-old French Canadian announced in a lengthy post on his personal Google+ Web page on Tuesday.

Google, which dominates the online advertising business, expects to find a replacement for Pichette within six months, the company said in a regulatory filing with the U.S. Securities and Exchange Commission. Pichette's retirement date has not been set and Google said Pichette intends to help find a successor.

Shares of Google closed down 2.4 percent at $555.01 and were unchanged after hours.

Pichette's decision to retire, which he said caps about 30 years of "nearly nonstop work," came as a surprise to investors, although Wall Street took the news in stride.

Pichette's decision to travel after seven years at Google, appears reasonable, said Hudson Square Research analyst Daniel Ernst.

While Google is a massive company which analysts expect to generate roughly $76 billion in revenue this year, the business is relatively straightforward, said Ernst.

"Any experienced CFO could slot in there and see how it all works," he said.

A former telecom industry executive who joined Google in 2008, Pichette is credited by some on Wall Street for maintaining spending discipline even as Google has embarked on ambitious "moon shot" projects including self-driving cars, satellites and healthcare.

For Google, Pichette's exit marks the latest change in its upper ranks.

Last year, Google Chief Business Officer Nikesh Arora left unexpectedly to become vice chairman of Japan's SoftBank Corp. Vic Gundotra, the head of Google's social networking services, left in April 2014.

Google Chief Executive Officer Larry Page in October turned over day-to-day management of major products and services to Senior Vice President Sundar Pichai, freeing him up to focus on bigger-picture issues.

Pichette said in his blog post that he decided to retire after a recent trip climbing Africa's Mount Kilimanjaro when his wife suggested they continue traveling.

"I could not find a good argument to tell Tamar we should wait any longer for us to grab our backpacks and hit the road," Pichette wrote, referring to his wife.

In a separate post on Google+, CEO Page wished Pichette well, describing his "unconventional" farewell note as "well worth reading."

source: www.abs-cbnnews.com

'The markets are not rigged'

WASHINGTON - U.S. Securities and Exchange Commission Chair Mary Jo White flatly rejected claims that retail investors are being fleeced by high-frequency traders who can use their speed to jump ahead with buy and sell orders that fetch better prices.

 "The markets are not rigged," White told a U.S. House of Representatives panel on Tuesday, in response to a blunt question from New Jersey Republican Congressman Scott Garrett.

"The U.S. markets are the strongest and most reliable in the world," she added.

White's comments to the House Financial Services Committee mark the first time she has directly responded to allegations in Michael Lewis' new book "Flash Boys: A Wall Street Revolt" since its publication about a month ago.

In the book, Lewis claims that high-speed traders are engaged in a form of front-running, in which the firms are able to quickly identify an investor's desire to buy a stock, rush to buy it first and then sell it back at a higher price.

The book has since prompted the FBI, the SEC, the U.S. attorney general and the New York state attorney general to disclose they are investigating potential abuses by high-speed traders.

White reiterated on Tuesday that her agency's investigators are actively pursuing probes into high-speed traders and dark pools, or anonymous trading venues.

But she also sought to dispel the notion that using high-speed technologies to trade ahead of others using stock quotes disseminated on public data feeds could meet the legal definition of "unlawful insider trading."

"There is some confusion about that," she said.

The SEC has long been reviewing equity market structure issues, particularly following the May 6, 2010 flash crash incident when the Dow Jones Industrial Average sharply plunged before quickly rebounding.

But in recent weeks, Michael Lewis' book has re-ignited a long-standing debate over the role of high-speed traders, and whether they may be getting an unfair advantage over ordinary investors.

Many Wall Street brokers and stock exchanges have lambasted the book as a one-sided account that fails to acknowledge the liquidity benefits that high-speed traders bring to the markets.

But others have lauded it as a breath of fresh air that they hope will finally prod U.S. regulators to take action.

Although staff at SEC are considering whether to launch some pilot studies to test different regulatory proposals, there are no immediate plans to issue rules to crack down on high-speed trading or trading in unlit markets.

White was careful not to rule out any potential regulatory changes for U.S. equity markets, saying the agency could later consider measures to improve market quality.

She acknowledged at one point that the market is not "perfect" and told lawmakers that the agency's "data-driven" review of market structure issues surrounding areas such as order types, dark pool trading and data feeds was still ongoing.

But she also cautioned against tinkering with the rules before understanding the potential consequences.

In one exchange with a lawmaker on the panel, she forcefully defended the functioning of the market and rejected claims that mom-and-pop investors are being harmed.

"I want to be very clear that the market metrics suggest that the retail investor is ... very well-served by the current market structure," White said.

Her cautious approach to market structure rule-making won her praise from many Republicans on the panel.

"I believe you and your staff are approaching this ongoing review of our equity markets in just the way you should," Garrett told her.

"It is critical that you and your agency do not fall into the trap of adopting half-baked potential changes in order to publicly respond to a sensationalized and over-hyped media narrative," he added. "The SEC has to be the grownup in the room."

source: www.abs-cbnnews.com

Texas tycoons hid $550 M in profits offshore, U.S. tells jury

NEW YORK -- Texas tycoons Sam and Charles Wyly employed a labyrinthine system of offshore trusts to conceal stock trades in four companies on whose boards they sat, netting themselves more than $550 million in undisclosed profits, a U.S. government lawyer told a federal jury on Thursday.

"This is a case about lies, deception and fraud," said Bridget Fitzpatrick, a lawyer for the U.S. Securities and Exchange Commission, at the start of a civil trial in New York against Sam Wyly and the estate of his late brother, Charles.

The SEC has accused the Wylys of concealing stock trading from 1992 to 2004 in Sterling Software Inc, Michaels Stores Inc, Sterling Commerce Inc, and Scottish Annuity & Life Holdings Ltd through the use of more than a dozen trusts and 40 different entities in the Isle of Man.

But Stephen Susman, a defense attorney for the Wylys, told the jury that the brothers relied on an "army of lawyers" to tell them what they were legally required to do and never intended to violate any securities law.

"The Wylys acted in complete good faith - the exact opposite of being a liar and fraudster, as charged by the SEC," he said during his opening statement.

The trial, which follows years of litigation and investigation of the Wylys by the SEC, is the latest test of the regulator's ability to win verdicts against individuals, following a recent series of losses in fraud and insider trading cases.

The jury of eight women and four men will be asked to decide whether the Wylys controlled the securities held in the offshore system, as the government claims, or whether trustees had sole power to sell the stock, as the Wylys contend.

In her opening statement to the jury, Fitzpatrick argued that every transaction in the offshore entities originated as a "recommendation" from the Wylys that was effectively a command.

"The Isle of Man trustees were not independent," she said. "They did everything the Wylys wanted."

Susman, however, pointed to language in the trust contracts that granted the trustees authority over stock sales.

According to the government, the brothers sold more than $750 million of stock in the four companies, while failing to disclose that such transactions had occurred. They used the proceeds to buy everything from jewelry for their wives to a horse ranch in Dallas, Fitzpatrick said.

Susman told the jury he did not dispute that the trades occurred and that they used the profits to buy various items. But, he said, the trusts were created to protect assets and reduce tax liabilities, not to hide anything from the SEC.

The trial will feature testimony from several people involved in operating the offshore system, including the Wylys' former lawyer, Michael French. French will appear as a government witness after reaching a deal this month to settle charges against him by paying $794,609 and admitting to aiding in the Wylys' alleged scheme.

The 79-year-old Wyly will also take the stand, though his lawyers have indicated he will only testify for up to two hours at a time due to unspecified medical issues. Charles Wyly died in a 2011 car crash.

The SEC has also accused the Wylys of earning $31.7 million from insider trading of Sterling Software.

The jury will not consider those charges. Once the jury phase is over, U.S. District Judge Shira Scheindlin will preside over a second proceeding on the insider trading claims.

The trial comes after several recent upsets for the SEC in other fraud and insider trading cases, most prominently in October when a jury cleared Mark Cuban, owner of the Dallas Mavericks basketball team, of insider trading.

The case is SEC v. Wyly et al, U.S. District Court, Southern District of New York, No. 10-05760.

source: www.abs-cbnnews.com