For any banks looking to do the same, officials describe their complaint against the Swiss bank as a “how to guide for bid-rigging and securities fraud.”

The SEC alleges that during the 2000 to 2004 time period, UBS’s fraudulent practices and misrepresentations undermined the competitive bidding process and affected the prices that municipalities paid for the reinvestment products being bid on by the provider of the products. Its fraudulent conduct at the time also jeopardized the tax-exempt status of billions of dollars in municipal securities because the supposed competitive bidding process that establishes the fair market value of the investment was corrupted. The business unit involved in the misconduct closed in 2008 and its employees are no longer with the company.

According to the SEC’s complaint filed in U.S. District Court for the District of New Jersey, UBS played various roles in these tainted transactions. UBS illicitly won bids as a provider of reinvestment products, and also rigged bids for the benefit of other providers while acting as a bidding agent on behalf of municipalities. UBS at times additionally facilitated the payment of improper undisclosed amounts to other bidding agents. In each instance, UBS made fraudulent misrepresentations or omissions, thereby deceiving municipalities and their agents.

“Our complaint against UBS reads like a ‘how-to’ primer for bid-rigging and securities fraud,” said Elaine C. Greenberg, Chief of the SEC’s Municipal Securities and Public Pensions Unit. “They used secret arrangements and multiple roles to win business and defraud municipalities through the repeated use of illegal courtesy bids, last looks for favored bidders, and money to bidding agents disguised as swap payments.”

According to the SEC’s complaint, UBS as a bidding agent steered business through a variety of mechanisms to favored bidders acting as providers of reinvestment products. In some cases, UBS gave a favored provider information on competing bids in a practice known as “last looks.” In other instances, UBS deliberately obtained off-market ”courtesy” bids or arranged “set-ups” by obtaining purposefully non-competitive bids from others so that the favored provider would win the business. UBS also transmitted improper, undisclosed payments to favored bidding agents through interest rate swaps. In addition, UBS was favored to win bids with last looks and set-ups as a provider of reinvestment products.

SEC Charges UBS with Fraudulent Bidding Practices Involving Investment of Municipal Bond Proceeds [SEC]
SEC v UBS Complaint [SEC]

Article courtesy of Dealbreaker

Shares of Comcast (CMCSA) are up 49 cents, or 1.8%, at $27.10 after the company reported Q1 EPS ahead of expectations for the first quarter since its formation of a joint venture with General Electric‘s (GE) to create NBC-Universal.

Q1 revenue was up 32%, year over year, at $12.13 billion, missing the average $12.97 billion estimate. EPS of 36 cents was higher than expected by 2 cents and up 16% from the prior-year period, excluding 2 cents in costs related to the closing of the NBC deal.

CEO Brian Roberts remarked, “We are off to a terrific start in 2011.”

Total revenue from the “cable communications” part of the business, excluding the contribution to the company from NBC, was up 5.8%, at $9.1 billion. An increase in operating cash flow margin from 40% to 41% helped the company deliver higher growth of 7.7% in operating cash flow.

NBC-Universal revenue fell 11.5%, year over year, to $4.35 billion, as the comparison was steep given the broadcasting of the Vancouver Olympics in the year-earlier period, Comcast said. Excluding the year-earlier Olympics proceeds, revenue would have been up 5% on a comparable basis, the company said.

Comcast completed its joint venture formation of NBC-Universal on January 29th.

Article courtesy of Tech Trader Daily

Fiber optics component supplier Oplink Communications (OPLK) this afternoon reported Q1 results in line with expectations, but forecast Q2 results well below expectations.

Q1 revenue rose 59%, year over year, to $53.5 million, yielding EPS of 49 cents. Analysts had been projecting $53.1 million and 49 cents, on average.

For the current quarter, Oplink sees revenue of $43 million to $47 million, and EPS of 22 cents to 28 cents, versus the consensus $53 million and 45 cents.

Shares seem to have been halted. The last quote is at 4:10 pm, Eastern, at $19, down 4 cents from the close.

Update: Oplink shares have resumed trading and are now down $1.84, or almost 10%, at $17.20. Shares of peer JDS Uniphase (JDSU) are down 9 cents, or 0.44%, at $20.18.

During a conference call with analysts this evening, Oplink CEO Joe Liu said that the company was “generally pleased with our execution across the business in the quarter” and that “long-term optimism” remains.

However, he also said that “we have recently experienced some softness” in orders, which appears to be coming from an “inventory correction,” and that “visibility beyond one quarter remains limited.”

Article courtesy of Tech Trader Daily

An letter to Albany:

April 28, 2011

New York has rich resources that position our state for continued success in the 21st century – a leading financial center, strong industry clusters, and renowned educational, research and cultural institutions. But major employers know that the single greatest asset New York has to offer is its ability to attract the best talent from around the world. This is crucial, because the size, quality and diversity of the talent pool are the first criteria for business in determining where to locate jobs.

To remain competitive, New York must continue to contend with other world cities to attract top talent. Increasingly, in an age where talent determines the economic winners, great states and cities must demonstrate a commitment to creating an open, healthy and equitable environment in which to live and work.

This is why it is so important that New York State grant full rights to all of its citizens by passing marriage equality. As other states, cities and countries across the world extend marriage rights regardless of sexual orientation, it will become increasingly difficult to recruit the best talent if New York cannot offer the same benefits and protections.

Many employers have adopted non-discrimination policies and extended domestic partner benefits long before most cities and states passed them into law. As New Yorkers and business leaders, we believe that attracting talent is key to our state’s economic future. We strongly urge New York State to enact marriage equality legislation to help maintain our competitive advantage in attracting the best and brightest people the world has to offer and to reaffirm our commitment to both freedom and fairness.

Candace K. Beinecke
Tom A. Bernstein
Lloyd C. Blankfein
Kevin Burke
Philippe P. Dauman
Daniel L. Doctoroff
Patrick C. Dunican, Jr.
Thomas Glocer
Jonathan N. Grayer
Klaus Kleinfeld
Rochelle B. Lazarus
Daniel S. Loeb
John J. Mack
Alan J. Patricof
Ronald O. Perelman
William C. Rudin
Kevin P. Ryan
Paul E. Singer
Jerry I. Speyer
Jes Staley
Stuart Match Suna
Kathryn S. Wylde
Strauss Zelnick
Mortimer B. Zuckerman

NY’s Business Leaders Want Marriage Equality, Too [Gothamist]

Article courtesy of Dealbreaker

Shares of RightNow Technologies (RNOW) were flat in recent after hours trading, even as the company reported better-than-expected earnings for the first quarter.

The software and cloud computing firm said diluted earnings per share came in at 4 cents, while non-GAAP diluted earnings were 10 cents a share, compared  7 cents in the year-ago period and 8 cents analysts had forecast. Revenue rose to $52.3 million, squeaking past the consensus of $52.1 million.

For the second quarter, RightNow sees earnings of 12 cents a share, a penny ahead of estimates, on $54 million in revenue, in-line with analysts’ forecasts. Full year revenue estimates of $226 million were also just ahead of the consensus.

The company said that new and recurring business came from companies including Activision (ATVI),  Cabela‘s (CAB) , CyberDefender (CYDE), DeVry (DV), Electronic Arts (ERTS), Ellie Mae (ELLI), Equifax (EXF), and Logitech (LOGI), among others.

Barrons.com spoke with CEO Greg Gianforte after the earnings release. He says the company’s quarter was very solid, with recurring revenue growth–”the best indicator in the industry”–up 27%. He’s not concerned about the market’s tepid reaction: “We’re one of the fastest growing cloud application companies in the industry…and the stock is up more than 75% in the last year, so a little adjustment [in the price after hours] isn’t a concern in light of the full year performance.”

Despite the stock’s run, he is also optimistic that the shares will continue to grow going foward, given the large addressable business-to-consumer market. (RightNow helps large companies reach out to consumers and improve their experiences over web, social and contact center platforms.) “I’ve done over 90 individual customer visits this year to big companies from DirecTV to Nike, and what they’re telling us is that consumers are getting more frustrated,” Gianforte says.  “The core differentiation [between large consumer companies] is tied to the experience they deliver to customers, and they must do this over new emerging social and mobile channels, as well as contact centers. To do that piecemeal leaves an empty taste in consumers’ mouths. So that’s the primary driver of our business. We realized we’ve spent 13 years investing in solutions, and there is massive market opportunity, so we’re going to push the accelerator down [on sales and distribution] all while expanding operating margins. I believe the recognition the stock is getting in the market is tied to that continuing top line growth.”

Of course, cloud computing and customer relationship management (CRM) is a crowded field, and RightNow has larger competitors, like Oracle (ORLC) and Salesforce.com (CRM).  However, Gianforte notes that the firm’s services are unique in the industry: “Oracle continues to use an outdated model. They have everything [set up for] on-premise deployment, they sell perpetual licenses, they have not embraced the cloud. Because we do everything on the cloud, our system is going faster and costs less to own, so that’s a significant advantage. Companies like Oracle and Salesforece.com have a more traditional approach to CRMt; they have focused primarily on internal improvements, making employees inside a company more efficient, while we make consumers more effective. That’s why we focus on consumer experience, it’s a bigger market than traditional CRM, and it includes components that aren’t even available from other vendors.”

Article courtesy of Tech Trader Daily

Japanese mobile social network Gree has purchased mobile social game platform operator OpenFeint for $104 million.

Yes, it’s time to start yelling “The Japanese are coming. The Japanese are coming.” Gree’s purchase of the Burlingame, Calif.-based startup follows the $403 million acquisition of mobile game firm Ngmoco by Japan’s DeNA, which is a big rival of Gree’s. The deal shows that mobile is heating up and multiple companies see the value of building a platform that helps mobile games get discovered.

Like Ngmoco, OpenFeint operates a social platform for mobile games. By adopting OpenFeint’s development platform, mobile game makers can make their games more social, more discoverable, and easily cross-promoted. OpenFeint provides features such as multiplayer challenges, leaderboards, and cross promotion.

Gree has more than 25 million users and a market value of $3 billion in Japan, where it operates a social mobile game platform where users can buy games, socialize and interact with all sorts of content. OpenFeint has more than 5,000 games using its platform, and those games have more than 75 million users across iOS (iPhone, iPod Touch, and iPad) and Android devices.

Gree is going to provide OpenFeint with additional operating capital to accelerate the platform’s growth. In contrast to Ngmoco and DeNA, Gree and OpenFeint will not build a uniform gaming network for all consumers worldwide. Rather, they will create tailored products for specific markets. It plans to provide OpenFeint and Gree services on a global level.

Jason Citron, chief executive of OpenFeint, will remain as CEO. He and the OpenFeint team will have long-term incentives and grow the company into a “multi-billion dollar business.” That’s consistent with the business vision of Neil Young, chief executive of Ngmoco, as stated in an interview with VentureBeat.

Gree said it understands that there is a shift in gaming expectations toward higher-quality expectations and that social is now driving gaming. That’s why the company did this deal. OpenFeint is funded by YouWeb, the incubator headed by mobile and social gaming entrepreneur Peter Relan. DeNA had a stake in OpenFeint but evidently it sold that off or is selling it off now. OpenFeint said it hopes to double its headcount within the year, although that is easier said than done in Silicon Valley, where there is a talent shortage.

“At Gree, we are socializing the next evolution of games and, as the best-in-class US-based mobile social network, OpenFeint is the ideal partner for us to offer the best mobile social games to the largest global audience,” said Yoshikazu Tanaka, founder and CEO of Gree, in a statement.

“This acquisition further emphasizes Gree’s commitment to providing the first and best global gaming ecosystem, with both the developer and consumer in mind,” says Naoki Aoyagi, CEO of Gree International, the subsidiary that recently opened an office in San Francisco. Gree International will now be merged into OpenFeint. Gree has 24 million users on its mobile social network. Recently, Gree teamed up with feature-phone based mobile social network Mig33.

In an interview, Takafumi Kawane, vice president business operations for Gree International, said in an interview that there is no point in Gree duplicating the business of OpenFeint in North America and vice versa for Gree in Japan. Gree has more than 400 employees that work on the company’s social network service and its games in Japan. Gree has seven of its own games on feature phones in Japan and its service hosts hundreds of other games from third parties. In the fiscal year ending March 31, the company is targeting revenues of $700 million.

Citron said in an interview this evening that the move will accelerate OpenFeint’s expansion around the world. The company has offices in Silicon Valley, London and Beijing now. Developers will benefit because they can create games that can run on the social platforms of OpenFeint, Gree, and Mig33 without having to rewrite them (once the companies create their joint applications programming interface). Citron thinks that OpenFeint has a multi-billion dollar opportunity as smartphones and tablets will become the dominant devices of the new era.

“The economic opportunity here is so tremendous and gaming is the killer app,” Citron said. “We are at the beginning of a new age.”

Citron acknowledged that the purchase price wasn’t as big as other deals, but he said the deal was structured so that it will have a bigger payoff for OpenFeint employees down the road if they hit their milestones. He also confirmed that DeNA is no longer a part owner of OpenFeint.

Tags: mobile social network

Companies: Gree, Ngmoco

People: Jason Citron, Neil Young

Article courtesy of VentureBeat » deals

Shares of Verizon Communications (VZ) are down 54 cents, or 1.4%, at $37.25, after the company reported Q1 revenue and earnings per share slightly ahead of analysts’ estimates.

Q1 revenue rose 0.3%, year over year, to $26.99 billion, just a hair above analysts’ average $26.86 billion estimate. EPS of 51 cents per share was a penny better than expected.

Verizon said its wireless business added 1.8 million customers, excluding acquisitions, for a total of 104 million “connections.” Wireless service revenue rose 6.3%, and data revenue was up 22.3%, the company said. Retail postpaid churn was 1.01%, Verizon said, while total retail churn was 1.33%, both improvements from a year earlier, the company said.

Verizon activated 2.2 million of Apple’s (AAPL) iPhone 4 after the device went on sale at the beginning of February. The company had to deal with some slowing of its ARPU growth, at just 2.2%, as customers held off on purchasing other products in advance of the phone’s introduction, Verizon said. But ARPU growth rose to 2.8% exiting the quarter.

Operating cash flow of $5 billion was lower than the $7 billion booked a year earlier as promotions for the iPhone 4 ate up cash, Verizon said.

CEO Ivan Seidenberg remarked that Verizon, “are executing on our business plans and building momentum, and we are on track to meet both our revenue and earnings objectives for the year.”

Verizon will hold a conference call with analysts at 8:30 am, Eastern this morning, which you can listen to here.

Article courtesy of Tech Trader Daily

Can you feel the froth? Investment in U.S. venture-backed companies rose 35 percent in the first quarter, according to a report by Dow Jones VentureSource. Venture firms invested $6.4 billion into 661 deals in the U.S. during the quarter.

The increased activity is consistent with the buzz in the tech industry about an overall recovery, an increase in optimism, and a faster pace for innovation among start-ups. There is considerable discussion about whether there is a bubble in tech investing, with a major story on the topic every week or so. The Wall Street Journal ran its latest bubble piece on Tuesday, with the headline, “In Silicon Valley, investors are jockeying like its 1999.

The debate is about whether there’s a comeback, with a recovery that is just beginning, or a bubble that is getting ready to burst.

The media amount raised in the first quarter was $5 million for a round of funding, up from $4.4 million a year earlier and on part with the 2009 medium.

“Large deals for capital-intense industries — such as renewable energy, healthcare and information technology — drove the investment increase in the first quarter,” said Jessica Canning, global research director for Dow Jones VentureSource, in a statement. “Venture capitalists, however, were not the only investors giving venture-backed companies sizable cash infusions. With acquisition prices on the rise, corporations are more inclined to invest and they funded three of the 10 largest deals confirmed during the quarter.”

Corporations accounted for were the source of $448 million of the $6.4 billion raised by venture-backed startups. Business and financial services companies raised $935 million in 125 deals, 17 percent more capital and 21 percent more deals than a year earlier.

Ad technologies and services companies — which raised $306 million in 43 deals — accounted for the largest proportion of deals in the business and financial services segment.

Consumer services companies raised $1.2 billion for 106 deals in the recent quarter. That was  more than double the $517 million raised for 102 deals during the same period last year.

The consumer information services sector — which includes social media, gaming and online shopping companies — raised $875 million in 81 deals. That was triple the amount raised during the same period a year ago; the number of deals only increased 7 percent, which means the amount per deal was way up at $10.8 million, far above average. A handful of large rounds accounted for the big increase, said Scott Austin, editor of Dow Jones VentureWire. For consumer companies overall, the median amount raised is $4 million, which is less than half of the media round size during the dot-com bubble in 2000.

Deals for healthcare companies were down 6 percent but capital invested rose 21 percent. There were 148 deals worth $1.6 billion in this sector. Biopharmaceuticals raised $849 in 61 deals, a 13 percent drop in deals and 15 percent increase in the amount invested.  Medical devices companies raised $635 million in 60 deals, a 14 percent drop in deals and 31 percent increase in capital raised.

Information tech companies raised $1.6 billion in 212 deals, a 10 percent increase in deals and 16 percent increase in capital invested. Within that sector, software companies closed 152 deals worth $741 million, up 24 percent in deals and 10 percent in money invested.

Energy and utilities companies raised $742 million in 33 deals, almost double the amount of capital raised a year ago. Six renewables companies raised $50 million-plus rounds. Rewewable energy companies altogether raised $671 million in 26 deals. Early stage rounds were 38 percent of deals and 16 percent of capital invested. A year ago, 39 percent of deals were seed and first-round deals. They were 20 percent of capital raised. Later stage deals were 40 percent of the number of deals and 64 percent of capital raised. that was up from 35 percent of deals and 54 percent of capital raised last year.

Tags: Venture Capital

Companies: dow jones venture source

Article courtesy of VentureBeat » deals

Apple (AAPL) management held a conference call this evening with analysts following a fiscal Q2 report that substantially beat analysts’ estimates and a Q3 view that expressed the typical conservatism in Apple’s outlook, coming in about $800 million shy of estimates in terms of revenue.

Revenue rose more than 80% to $24.7 billion, the highest March quarter in Apple’s history, CFO Peter Oppenheimer noted at the outset of the call. Operating income was at an all-time high of $7.9 billion. Net income of $6 billion nearly doubled.

While Apple has more or less balanced supply and demand for its Mac, iPhone and iPod products exiting the quarter, COO Tim Cook said the company was “heavily backlogged” for its iPad 2 and that it was working to close the gap.

Oppenheimer said that the company ended the quarter within its target range of 4 to 6 weeks of inventory for the iPhone, but that ending inventory of 850,000 iPads was below the same target for that device.

“The demand on iPad 2 has been staggering,” said Cook. He noted that K-through-12 schools were ordering iPads on a one-to-one basis with their Mac purchases, which Cook said surprised him, given the conservative nature of the K-through-12 market.

Despite the iPad constraints last quarter, confidence in the “manufacturing ramp” inclined Apple to go ahead with introduction of the iPad in another 25 countries at the end of March, Cook noted. “So, I’m very confident that we can produce a very large number of iPads for the quarter. We have gotten off to a materially better start and produced a lot more units than we did on the original ramp of the first iPad.”

Oppenheimer said the expected rise in iPad shipments this quarter is the primary reason Apple is modeling its Q3 gross profit margin to decline from Q2 by about three and a half percentage points. Cook noted that the company doesn’t typically buy components for its machines on the spot market, and so the company expects to be relatively unaffected should component prices rise this year.

Cook noted that iPhone sales in the U.S. rose 155%, trumping IDC’s estimate for smartphone growth of 48% in the quarter. iPhone sales in China “continued to be on a tear,” said Cook, rising 250%. “In terms of the June quarter, I would expect to see a significant year-over-year increase in sales,” of iPhone, said Oppenheimer.

Cook declined to say what average selling prices were for iPhone and iPad, so as not to “help out our competitors.”

All told, the company has now shipped a cumulative total of 189 million devices based on its iOS operating system.

During the Q&A, Mike Abramsky with RBC Capital asked Cook and Oppenheimer if they were concerned that the battle with Google’s (GOOG) Android operating system could repeat the battle between Mac OS and Microsoft’s (MSFT) Windows in the early ’90s, and become an obstacle to Apple’s growth.

Oppenheimer responded by rattling off the accomplishments of iOS:

On a worldwide basis, we are — we just did 18.6 million iPhones, which is up 113%, which is materially faster than the market rate of growth. And we launched the iPad 2 and sold every one of them that we could make. As we’ve said before, we’re gaining traction in enterprise on both iPhone and iPad with astonishing 88% and 75%, respectively, of the Fortune 500 companies deploying or testing these. We’ve got the largest app store with over 350,000 apps for iPhone and over 65,000 iPad-specific apps on iOS, versus what appears to be fewer than 100 on Android. And so, we feel very, very good about where we are and we feel great about our future product plan. We’ve also paid over $2 billion to developers, and we’ve had well over 10 billion applications downloaded, and so our business proposition is very, very strong.

Q3 Outlook: When Toni Sacconaghi with Sanford Bernstein asked Oppenheimer why Apple expects Q3 revenue to decline from Q2, given that the opposite has been the case in prior years, Oppenheimer pointed out that Apple had a build-up of iPhone channel inventory last quarter, something Apple hadn’t managed at the same point in the prior two fiscal years. Moreover, the year-ago Q3 had the introduction of the original iPad, whereas it came in Q2 this year.

Steve Jobs: Piper Jaffray’s Gene Munster asked Cook how close CEO Jobs has stayed during his leave of absence from daily responsibilities. Cook responded, “We do see him on a regular basis. And as we’ve previously said, he continues to be involved in major strategic decisions, and I know he wants to be back full time as soon as he can.”

Retail Stores: Oppenheimer said Apple expects to reach its 1 billionth retail store customer “in the next few days,” as the stores approach their tenth anniversary on May 19th. Retail revenue rose 90% to $3.19 billion, Oppenheimer said, as traffic to the stores rose 51% from a year earlier to 71 million visitors. Oppenheimer said Apple will open 40 new stores this year.

Japan: Asked about the repercussions from Japan, Cook said there is “nothing we feel we can’t handle” looking at the state of affairs in Japan’s supply chain through as things now stand, barring any “turn for the worse.” Although there was “some revenue impact” in the March quarter, it was “not material to Apple’s consolidated results,” he added.

“Our preference from the beginning of this tragedy has been to remain with our long-term partners in Japan,” said Cook. “And I have to say they have displayed an incredible resilience that I’ve personally never seen before in the aftermath of this disaster.”

Samsung Suit: Regarding the effect of Apple’s patent infringement suit against Samsung, filed Monday, Cook said it shouldn’t shake Apple’s ability to get parts from Samsung. “We are Samsung’s largest customer, and Samsung is a very valued component supplier to us, and I expect the strong relationship will continue. Separately from this, we felt the mobile communication division of Samsung had crossed the line, and after trying for some time to work the issue, we decided we needed to rely on the courts.”

Apple shares rose $13.34, or almost 4%, to $355.75 in late trading.

Article courtesy of Tech Trader Daily

$$$ Meredith Whitney To Goldman: What’s The Endgame? [CNBC]

$$$ Nasdaq, ICE Sweeten Bid For NYSE [WSJ]

$$$ Bank of America Merrill Lynch to Exit Private Equity Business [CNBC]

$$$ The trouble with defining insider trading [FT Alphaville]

$$$ Good-looking women discriminated against by female recruiters [Telegraph]

$$$ After the brief presentation, actress Demi Moore tweeted about the company. She noted that “everything has a price!”—a reference to her role in the film “Indecent Proposal,” about a man’s $1 million offer to borrow a stranger’s wife for a night. Within 48 hours, Zaarly raised its first seed round of $1 million. Among those piling into the deal, according to Mr. Fishback: Ms. Moore’s husband, the actor Ashton Kutcher, and Lightbank, a venture fund created by the founders of online-coupon giant Groupon. [WSJ]

$$$ S&P stated the much-needed obvious on U.S. debt [BreakingViews]

$$$ Wall Street Is No Longer Paved With Goldman [Heard on the Street]

Article courtesy of Dealbreaker