2013 01 18 cmyk NA 04 - The Wall Street...
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YELLOW ****** FRIDAY, JANUARY 18, 2013 ~ VOL. CCLXI NO. 15 WSJ.com HHHH $2.00 ceptable,” Chairman Jan du Ples- sis said. “We are also deeply dis- appointed to have to take a further substantial write-down in our aluminum businesses.” Rio Tinto’s shares fell 1.5% to close at 64.60 Australian dollars (US$68.29) in Sydney. At least 20 mining CEOs have stepped down in the past year un- der mounting pressure from in- vestors and boards, who blame the executives for costly mining projects that were conceived dur- ing the commodities boom and Please turn to the next page countability for all aspects of the business rests with the CEO,” said the 55-year-old engineer. The bulk of the write-down, between $10 billion and $11 bil- lion, relates to aluminum assets acquired in 2007 that have socked the Anglo-Australian company be- fore. The remaining $3 billion is for Mozambique coal operations acquired only two years ago. “A write-down of this scale in relation to the relatively recent Mozambique acquisition is unac- Rio Tinto Chief Executive Tom Albanese agreed to step down Thursday, the latest in a string of leaders toppled by shifting for- tunes at the world’s biggest min- ing companies. The New Jersey native ended his six-year tenure as the com- pany said it would write off roughly $14 billion in the value of various assets—among the largest charges ever in an industry in- creasingly rocked by runaway costs. Mr. Albanese, who was behind two large, ill-timed acquisitions at the world’s second-biggest mining company, took responsibility for the hit. “I fully recognize that ac- CONTENTS Books............................... D7 Corporate News... B2-7 Global Finance........... C3 Heard on the Street C8 In the Markets.......... C4 Movies............................. D5 Opinion.................. A13-15 Sports ........................... D10 Television...................... D6 Theater........................... D8 U.S. News................. A2-6 Weather Watch ........ B7 World News.......... A8-11 DJIA 13596.02 À 84.79 0.6% NASDAQ 3136.00 À 0.6% NIKKEI 10609.64 À 0.1% STOXX 600 287.35 À 0.5% 10-YR. TREAS. g 14/32 , yield 1.873% OIL $95.49 À $1.25 GOLD $1,690.40 À $7.70 EURO $1.3377 YEN 89.87 s Copyright 2013 Dow Jones & Company. All Rights Reserved Vital Signs Builders broke ground for more new houses in December. Residential construction rose 12% from November and 37% from a year ago to an annual rate of 954,000 units. That is the highest level since 2008, but below the 1.4 million-unit pace seen before the recession. The number of building permits issued also rose, indicating future gains in construction. A2 Housing starts, seasonally adjusted at an annual rate (in millions) Source: Commerce Department '09 '10 '11 '12 ’08 ’07 0 0.3 0.6 0.9 1.2 > T he FAA approved the Dreamliner for service in 2011 partly based on data gen- erated by Boeing that indicated the plane’s novel battery sys- tems had safeguards that ren- dered them nearly foolproof. B1 n BofA and Citigroup posted earnings that underscored the lingering illnesses afflicting some large U.S. banks, while results from regional lenders showed comparative health. C1 n Wells Fargo plans to start its own aircraft-leasing firm, the latest bid by a big bank to seek new revenue sources. C3 n China’s economic growth accelerated in the fourth quar- ter, GDP data showed, confirm- ing a rebound after a more than two-year slowdown. A9 n Rio Tinto CEO Tom Alba- nese agreed to step down, as the world’s No. 2 mining com- pany said it would take roughly $14 billion in charges. A1 n Financial markets are sig- naling that they think the euro zone’s debt crisis is fading, even though Europe’s economies show few signs of recovery. C1 n Stocks rallied amid encour- aging news on the U.S. econ- omy and potential progress on the debt ceiling, with the Dow gaining 84.79 points. C4 n Intel’s quarterly profit fell 27%, the latest sign that per- sonal-computer demand re- mains weak despite new hard- ware and software offerings. B3 n A potential $23 billion deal for Dell is spurring hope among banks, private-equity firms and investors that the LBO machine will get cranking again. C1 n BlackRock marked its best quarter ever, reporting net in- come of $690 million, as in- vestors continued to pile into exchange-traded funds. C3 n AT&T warned that it would record a $10 billion charge on an accounting shift related to its pension- and postre- tirement-benefit plans. B2 n Geithner, in his final days as Treasury secretary, said the U.S. economy is “resil- ient” and defended the re- sponse to the financial crisis. A2 n Chrysler is close to strik- ing a deal with Spanish lender Banco Santander to set up an in-house financing arm through a joint venture. B2 n GE Capital is expected to account for nearly half of its parent’s 2012 profit, despite GE’s promise to reduce reli- ance on the finance unit. B1 n American Express and Capital One said provisions for loan losses and expenses increased in the fourth quar- ter, weighing on earnings. C2 n A former superintendent at the Massey coal mine that was the site of a deadly 2010 explosion was sentenced to 21 months in prison. A4 n Moody’s said it would probably rate securities backed by rental payments on single-family homes at just above “junk” status. C3 n An Algerian raid to free for- eign hostages left some dead. Most governments with citi- zens at the site said they were unable to offer fatality num- bers or account for their miss- ing, including what U.S. offi- cials said could be as many as eight Americans. The U.S., U.K. and Japan said they had warned the Algerians not to resort to force to free some 40 hostages taken by militants at a natural-gas complex. A1 The drama focuses interna- tional attention on al Qaeda in the Islamic Magh- reb and related groups. n The U.S. and EU agreed to provide new support for the fight against Malian rebels as French and Malian soldiers moved to confront militants. A8 n Somali militants said they executed a French hostage to “avenge” France’s rescue mis- sion and operations in Mali. A8 n Obama’s job approval is strong, but Americans re- main downbeat about the economy, a Wall Street Jour- nal/NBC News poll found. A6 n Most Americans favor stricter laws for firearm sales, but blame parents and a lack of mental-health care for recent shootings, the poll said. A6 n Armstrong admitted in an interview with Oprah Winfrey that he used performance-en- hancing drugs during his seven Tour de France title races. A3 n House Republicans are weighing a proposal to approve a short-term increase in the debt limit to give them time to later win spending cuts. A6 n Iraqi insurgents unleashed a string of bombings mainly targeting Shiite pilgrims, kill- ing at least 26 people. A9 n A top NATO officer said military commanders haven’t been asked to assess the im- pact of a complete pullout of troops from Afghanistan. A11 n Afghanistan detained sev- eral Western employees of the U.S. military’s main food supplier in a tax dispute. A11 n Pakistan reached a deal with a Muslim cleric to end four days of antigovernment protests by his supporters. A11 n Gadhafi’s son appeared in court on charges of harming state security and trying to es- cape, Libyan media said. A11 n A former ATF official who helped oversee an effort to stem gun trafficking is being probed for allegedly conduct- ing a private firearms trade. A4 n Tens of thousands of Kurds gathered in Turkey’s south- east for a tribute to three Kur- dish women killed in Paris. A9 n The Czech government survived a no-confidence vote over an amnesty for thousands of prisoners. A10 n Genetic information stored anonymously in databases doesn’t always stay that way, a new study revealed. A3 n Died: Pauline Phillips, 94, counseled millions of readers for decades as Dear Abby. A4 Business & Finance World-Wide Follow the news all day at WSJ.com TOMORROW IN WSJ WEEKEND THE MAGAZINE W D Rebecca Hall’s Worldly Charm A Culinary Empire in Lyon South Africa’s Untapped Wine Country Rediscovering Old Rangoon GOING PLACES winter escapes MANSION Renting— For $500,000 A Month What’s News– i i i i i i Algeria’s military launched a raid Thursday to free about 40 foreigners held by militants at a remote natural-gas complex— leaving some hostages dead, sur- prising and angering several gov- ernments and putting leaders across the world at a loss to de- termine the fate of their citizens. The U.S., U.K. and Japan, whose nationals were among those held, said they had urged the Algerians not to resort to force to free the hostages, who were taken Wednesday by mili- tants with suspected ties to al Qaeda’s regional affiliate. The U.S. and U.K. received no warning that the raid was beginning, offi- cials from the countries said. “Before the raid began, we urged the Algerians to be cau- tious and strongly encouraged them to make the safety of the hostages their top priority,” an Obama administration official told The Wall Street Journal. Some foreign hostages were killed when forces raided the southeast Algerian natural-gas fa- cility, called In Amenas, an Alge- rian government official con- firmed. He didn’t elaborate. Algerian officials have told their American and European counter- parts that news reports of the number of hostages killed at the site were vastly exaggerated, say- ing the number was likely close to 11 or 12, according to U.S. and Western officials. The Algerian official said only that at least four engineers had been freed. An Irish hostage is safe and has made contact with his family, the Irish government said. By late Thursday, with details sparse and often contradictory, most governments with citizens at the site said they were unable to offer casualty numbers or ac- count for their missing. U.S. officials said they believe as many as eight Americans were Please turn to page A8 By David Gauthier-Villars, Cassell Bryan-Low and Adam Entous Rescue Raid Turns Deadly Algeria Operation To Free Hostages Stuns U.S., U.K. By John W. Miller, Alex MacDonald and Robb M. Stewart Miner Rio Tinto Ousts CEO As Bad Bets Cost Billions IN SEARCH OF HIGH GROUND: Rains have led to extensive flooding in Jakarta, killing at least four people and forcing thousands from their homes. Many of the capital’s roads and railways turned into rivers Thursday. A11 Xinhua/Zuma Press Wardrobe Dysfunction: Inaugural Puts Button-Down Town in Tizzy i i i Soirees Renew Quadrennial Quandary In Washington; Bow Ties, Botox WASHINGTON—Lobbyists Lena Moffitt and Dalal Aboul- hosn worked the racks last Fri- day at a temporary boutique set up by Rent the Runway, a New York-based fashion- rental firm. Their mis- sion: Find inaugural ball gowns that defied Washington’s button- down standard. Sipping complimen- tary wine, they perused strappy, spangly and sexy. They considered super-short, a risk rec- ommended by their of- fice’s sole fashionista. The two women, who work for the Sierra Club, an environmental group, wound up in solid-color, floor- sweeping gowns—in other words, stolid political assets that gave away nothing. After all, sighed Ms. Moffitt, D.C. style is “less skin…more blazers.” Many in Washington, the epi- center of political power, see high fashion as not only irrele- vant, but downright suspect. Workaholics take a certain pride in looking like they slept in their clothes. A rakish fedora and cape, by contrast, recalls Jack Abramoff, the dis- graced lobbyist. A dar- ing dress means D.C. Madam. Yet every four years it’s Inauguration Day, when posh receptions and black-tie balls set the city’s gray suits at war with themselves. Do stripes convey suffi- cient solidity? To sequin or not to sequin? Is hair gel only for the shallow? “The beauty of D.C. is the cul- ture,” said makeup artist Erwin Please turn to page A12 Stylist April Yvonne BY ELIZABETH WILLIAMSON Floods Swamp Indonesia’s Capital When Edward Kennedy Jr. launched Marwood Group more than a decade ago, he named it after the Maryland estate his grandfather, Joseph Kennedy, lived in when he was the first chairman of the Securities and Exchange Commission in the 1930s. Now, the SEC has issued subpoenas to Mar- wood, asking for emails and other documents that show how the political research firm was able to warn its Wall Street clients that regulators might delay approving a promising drug in the fall of 2010. The scrutiny doesn’t mean any accusations of impropriety will follow, against Marwood or any- one else. But emails subpoenaed in the inquiry, some of them reviewed by The Wall Street Jour- nal, open a rare window into a burgeoning busi- ness known as political intelligence, in which firms gather information and analysis about activ- ities in Congress, the White House and federal agencies and sell these insights to investors look- ing for an edge. A look at Marwood shows how one leading player in this field—an industry that operates with little regulatory oversight—managed to dis- tribute prescient information about a future gov- ernment decision that ended up sharply moving a stock. Food and Drug Administration approval of the drug at issue, one for diabetes, was widely ex- pected in 2010. But Marwood, after weighing the Please turn to page A12 BY BRODY MULLINS AND SUSAN PULLIAM Buying ‘Political Intelligence’ Can Pay Off Big for Wall Street Attacks in Africa U.S. and Europe pledge new support in Mali fight......... A8 ‘The One-Eyed’: Jihadist suspected in kidnappings... A8 Heard on the Street: Rio has $14 billion reasons to change... C8 4G speeds not available everywhere. ©2013 AT&T Intellectual Property. Service provided by AT&T Mobility. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. All other marks contained herein are the property of their respective owners. 1.866.MOBILITY – ATT.COM/NETWORK – VISIT A STORE What’s more? It’s not complicated. More is beer. The nation’s largest network. C M Y K Composite Composite MAGENTA CYAN BLACK P2JW018000-6-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BGN,BMT,BRX,CCA,CHR,CKP,CPD,CXT,DNV,DRG,HAW,HLD,KCS,LAG,LAT,LKD,MIA,MLJ,NMX,PAL,PHI,PVN,SEA,TDM,TUS,UTA,WOK P2JW018000-6-A00100-1--------XA
Transcript of 2013 01 18 cmyk NA 04 - The Wall Street...
YELLOW
* * * * * * FRIDAY, JANUARY 18, 2013 ~ VOL. CCLXI NO. 15 WSJ.com HHHH $ 2 .0 0
ceptable,” Chairman Jan du Ples-sis said. “We are also deeply dis-appointed to have to take afurther substantial write-down inour aluminum businesses.” RioTinto’s shares fell 1.5% to close at64.60 Australian dollars(US$68.29) in Sydney.
At least 20 mining CEOs havestepped down in the past year un-der mounting pressure from in-vestors and boards, who blamethe executives for costly miningprojects that were conceived dur-ing the commodities boom and
Please turn to the next page
countability for all aspects of thebusiness rests with the CEO,” saidthe 55-year-old engineer.
The bulk of the write-down,between $10 billion and $11 bil-lion, relates to aluminum assetsacquired in 2007 that have sockedthe Anglo-Australian company be-fore. The remaining $3 billion isfor Mozambique coal operationsacquired only two years ago.
“A write-down of this scale inrelation to the relatively recentMozambique acquisition is unac-
Rio Tinto Chief Executive TomAlbanese agreed to step downThursday, the latest in a string ofleaders toppled by shifting for-tunes at the world’s biggest min-ing companies.
The New Jersey native endedhis six-year tenure as the com-pany said it would write offroughly $14 billion in the value ofvarious assets—among the largestcharges ever in an industry in-creasingly rocked by runawaycosts.
Mr. Albanese, who was behindtwo large, ill-timed acquisitions atthe world’s second-biggest miningcompany, took responsibility forthe hit. “I fully recognize that ac-
CONTENTSBooks............................... D7Corporate News... B2-7Global Finance........... C3Heard on the Street C8In the Markets.......... C4Movies............................. D5
Opinion.................. A13-15Sports........................... D10Television...................... D6Theater........................... D8U.S. News................. A2-6Weather Watch........ B7World News.......... A8-11
DJIA 13596.02 À 84.79 0.6% NASDAQ 3136.00 À 0.6% NIKKEI 10609.64 À 0.1% STOXX 600 287.35 À 0.5% 10-YR. TREAS. g 14/32 , yield 1.873% OIL $95.49 À $1.25 GOLD $1,690.40 À $7.70 EURO $1.3377 YEN 89.87
s Copyright 2013 Dow Jones & Company. All Rights Reserved
Vital Signs
Builders broke groundfor more new houses inDecember. Residentialconstruction rose 12% fromNovember and 37% from ayear ago to an annual rateof 954,000 units. That is thehighest level since 2008, butbelow the 1.4 million-unitpace seen before therecession. The number ofbuilding permits issued alsorose, indicating future gainsin construction. A2
Housing starts, seasonallyadjusted at an annual rate(in millions)
Source: Commerce Department
'09 '10 '11 '12’08’070
0.3
0.6
0.9
1.2
>
The FAA approved theDreamliner for service in
2011 partly based on data gen-erated by Boeing that indicatedthe plane’s novel battery sys-tems had safeguards that ren-dered them nearly foolproof. B1
n BofA and Citigroup postedearnings that underscored thelingering illnesses afflictingsome large U.S. banks, whileresults from regional lendersshowed comparative health. C1n Wells Fargo plans to startits own aircraft-leasing firm,the latest bid by a big bank toseek new revenue sources. C3
n China’s economic growthaccelerated in the fourth quar-ter, GDP data showed, confirm-ing a rebound after a morethan two-year slowdown. A9
n Rio Tinto CEO Tom Alba-nese agreed to step down, asthe world’s No. 2 mining com-pany said it would take roughly$14 billion in charges. A1
n Financial markets are sig-naling that they think the eurozone’s debt crisis is fading, eventhough Europe’s economiesshow few signs of recovery. C1
n Stocks rallied amid encour-aging news on the U.S. econ-omy and potential progresson the debt ceiling, with theDow gaining 84.79 points. C4
n Intel’s quarterly profit fell27%, the latest sign that per-sonal-computer demand re-mains weak despite new hard-ware and software offerings. B3
n A potential $23 billion dealfor Dell is spurring hope amongbanks, private-equity firms andinvestors that the LBO machinewill get cranking again. C1
n BlackRock marked its bestquarter ever, reporting net in-come of $690 million, as in-vestors continued to pileinto exchange-traded funds. C3
n AT&T warned that it wouldrecord a $10 billion charge onan accounting shift relatedto its pension- and postre-tirement-benefit plans. B2
n Geithner, in his final daysas Treasury secretary, saidthe U.S. economy is “resil-ient” and defended the re-sponse to the financial crisis. A2
n Chrysler is close to strik-ing a deal with Spanish lenderBanco Santander to set upan in-house financing armthrough a joint venture. B2
n GE Capital is expected toaccount for nearly half of itsparent’s 2012 profit, despiteGE’s promise to reduce reli-ance on the finance unit. B1
n American Express andCapital One said provisionsfor loan losses and expensesincreased in the fourth quar-ter, weighing on earnings. C2
n A former superintendentat the Massey coal mine thatwas the site of a deadly 2010explosion was sentenced to21 months in prison. A4
n Moody’s said it wouldprobably rate securitiesbacked by rental paymentson single-family homes atjust above “junk” status. C3
n An Algerian raid to free for-eign hostages left some dead.Most governments with citi-zens at the site said they wereunable to offer fatality num-bers or account for their miss-ing, including what U.S. offi-cials said could be as many aseight Americans. The U.S., U.K.and Japan said they hadwarned the Algerians not toresort to force to free some 40hostages taken by militants ata natural-gas complex. A1
The drama focuses interna-tional attention on alQaeda in the Islamic Magh-reb and related groups.
n The U.S. and EU agreed toprovide new support for thefight against Malian rebels asFrench and Malian soldiersmoved to confront militants. A8n Somali militants said theyexecuted a French hostage to“avenge” France’s rescue mis-sion and operations in Mali. A8
n Obama’s job approval isstrong, but Americans re-main downbeat about theeconomy, a Wall Street Jour-nal/NBC News poll found. A6n Most Americans favorstricter laws for firearm sales,but blame parents and a lack ofmental-health care for recentshootings, the poll said. A6
n Armstrong admitted in aninterview with Oprah Winfreythat he used performance-en-hancing drugs during his sevenTour de France title races. A3
n House Republicans areweighing a proposal to approvea short-term increase in thedebt limit to give them time tolater win spending cuts. A6
n Iraqi insurgents unleasheda string of bombings mainlytargeting Shiite pilgrims, kill-ing at least 26 people. A9
n A top NATO officer saidmilitary commanders haven’tbeen asked to assess the im-pact of a complete pullout oftroops from Afghanistan. A11n Afghanistan detained sev-eral Western employees ofthe U.S. military’s main foodsupplier in a tax dispute. A11
n Pakistan reached a dealwith a Muslim cleric to endfour days of antigovernmentprotests by his supporters. A11
n Gadhafi’s son appeared incourt on charges of harmingstate security and trying to es-cape, Libyan media said. A11
n A former ATF official whohelped oversee an effort tostem gun trafficking is beingprobed for allegedly conduct-ing a private firearms trade. A4
n Tens of thousands of Kurdsgathered in Turkey’s south-east for a tribute to three Kur-dish women killed in Paris. A9
n The Czech governmentsurvived a no-confidencevote over an amnesty forthousands of prisoners. A10
n Genetic information storedanonymously in databasesdoesn’t always stay that way,a new study revealed. A3
n Died: Pauline Phillips, 94,counseled millions of readersfor decades as Dear Abby. A4
Business & Finance World-Wide
Follow the news all day at WSJ.com
TOMORROWIN
WSJWEEKEND
THEMAGAZINE
W
DRebecca Hall’s Worldly Charm
ACulinary Empire in Lyon
South Africa’s UntappedWine Country
Rediscovering Old Rangoon
GOINGPLACES
winter escapes
MANSIONRenting—
For $500,000A Month
What’s News–i i i i i i
Algeria’s military launched araid Thursday to free about 40foreigners held by militants at aremote natural-gas complex—leaving some hostages dead, sur-prising and angering several gov-ernments and putting leadersacross the world at a loss to de-termine the fate of their citizens.
The U.S., U.K. and Japan,whose nationals were amongthose held, said they had urgedthe Algerians not to resort toforce to free the hostages, whowere taken Wednesday by mili-tants with suspected ties to alQaeda’s regional affiliate. TheU.S. and U.K. received no warningthat the raid was beginning, offi-cials from the countries said.
“Before the raid began, weurged the Algerians to be cau-tious and strongly encouragedthem to make the safety of thehostages their top priority,” anObama administration officialtold The Wall Street Journal.
Some foreign hostages werekilled when forces raided thesoutheast Algerian natural-gas fa-cility, called In Amenas, an Alge-rian government official con-firmed. He didn’t elaborate.Algerian officials have told theirAmerican and European counter-parts that news reports of thenumber of hostages killed at thesite were vastly exaggerated, say-ing the number was likely closeto 11 or 12, according to U.S. andWestern officials.
The Algerian official said onlythat at least four engineers hadbeen freed. An Irish hostage issafe and has made contact withhis family, the Irish governmentsaid.
By late Thursday, with detailssparse and often contradictory,most governments with citizensat the site said they were unableto offer casualty numbers or ac-count for their missing.
U.S. officials said they believeas many as eight Americans were
Please turn to page A8
By David Gauthier-Villars,Cassell Bryan-Lowand Adam Entous
RescueRaidTurnsDeadlyAlgeria OperationTo Free HostagesStuns U.S., U.K.
By John W. Miller,Alex MacDonald
and Robb M. Stewart
Miner Rio Tinto Ousts CEOAs Bad Bets Cost Billions
IN SEARCH OF HIGH GROUND: Rains have led to extensive flooding in Jakarta, killing at least four people andforcing thousands from their homes. Many of the capital’s roads and railways turned into rivers Thursday. A11
Xinh
ua/Z
uma
Pres
s
Wardrobe Dysfunction: InauguralPuts Button-Down Town in Tizzy
i i i
Soirees Renew Quadrennial QuandaryIn Washington; Bow Ties, Botox
WASHINGTON—LobbyistsLena Moffitt and Dalal Aboul-hosn worked the racks last Fri-day at a temporary boutique setup by Rent the Runway, a NewYork-based fashion-rental firm. Their mis-sion: Find inauguralball gowns that defiedWashington’s button-down standard.
Sipping complimen-tary wine, they perusedstrappy, spangly andsexy. They consideredsuper-short, a risk rec-ommended by their of-fice’s sole fashionista.The two women, whowork for the SierraClub, an environmental group,wound up in solid-color, floor-sweeping gowns—in otherwords, stolid political assets thatgave away nothing.
After all, sighed Ms. Moffitt,
D.C. style is “less skin…moreblazers.”
Many in Washington, the epi-center of political power, seehigh fashion as not only irrele-vant, but downright suspect.Workaholics take a certain pride
in looking like theyslept in their clothes. Arakish fedora and cape,by contrast, recallsJack Abramoff, the dis-graced lobbyist. A dar-ing dress means D.C.Madam.
Yet every four yearsit’s Inauguration Day,when posh receptionsand black-tie balls setthe city’s gray suits atwar with themselves.Do stripes convey suffi-
cient solidity? To sequin or notto sequin? Is hair gel only forthe shallow?
“The beauty of D.C. is the cul-ture,” said makeup artist Erwin
Please turn to page A12
Stylist April Yvonne
BY ELIZABETH WILLIAMSON
Floods Swamp Indonesia’s Capital
When Edward Kennedy Jr. launched MarwoodGroup more than a decade ago, he named it afterthe Maryland estate his grandfather, JosephKennedy, lived in when he was the first chairmanof the Securities and Exchange Commission in the1930s.
Now, the SEC has issued subpoenas to Mar-wood, asking for emails and other documents thatshow how the political research firm was able towarn its Wall Street clients that regulators mightdelay approving a promising drug in the fall of2010.
The scrutiny doesn’t mean any accusations ofimpropriety will follow, against Marwood or any-one else. But emails subpoenaed in the inquiry,
some of them reviewed by The Wall Street Jour-nal, open a rare window into a burgeoning busi-ness known as political intelligence, in whichfirms gather information and analysis about activ-ities in Congress, the White House and federalagencies and sell these insights to investors look-ing for an edge.
A look at Marwood shows how one leadingplayer in this field—an industry that operateswith little regulatory oversight—managed to dis-tribute prescient information about a future gov-ernment decision that ended up sharply moving astock.
Food and Drug Administration approval of thedrug at issue, one for diabetes, was widely ex-pected in 2010. But Marwood, after weighing the
Please turn to page A12
BY BRODY MULLINS AND SUSAN PULLIAM
Buying ‘Political Intelligence’Can Pay Off Big for Wall Street
Attacks in Africa U.S. and Europe pledge new
support in Mali fight......... A8 ‘The One-Eyed’: Jihadist
suspected in kidnappings... A8
Heard on the Street: Rio has$14 billion reasons to change... C8
4G speeds not available everywhere. ©2013 AT&T Intellectual Property. Service provided by AT&T Mobility.All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. All other marks containedherein are the property of their respective owners.
1 . 866 .MOB I L I T Y – ATT.COM/NETWORK – V I S I T A STORE
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It’s not complicated.More is better.
Thenation’slargest network.
C M Y K CompositeCompositeMAGENTA CYAN BLACK
P2JW018000-6-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WEBGN,BMT,BRX,CCA,CHR,CKP,CPD,CXT,DNV,DRG,HAW,HLD,KCS,LAG,LAT,LKD,MIA,MLJ,NMX,PAL,PHI,PVN,SEA,TDM,TUS,UTA,WOK
P2JW018000-6-A00100-1--------XA
