DealBook Briefing: Did Someone Manipulate Wall Street’s Fear Gauge?

Good Wednesday morning. Finra is looking into potential misconduct involving the VIX. The Justice Department’s antitrust chief may be called as a witness in the Time Warner lawsuit. And Blackstone finally acknowledged that Jon Gray may be its next C.E.O.

Finra, Wall Street’s self-regulatory agency, is looking into it. It’s unclear whether this is a formal investigation, but the discovery of any misconduct would be a black eye for the CBOE, which runs the Volatility Index.

One theory is that someone could have swayed the VIX through bets on S. & P. 500 options.

More from Gunjan Banerji of the WSJ:

The markets flyaround

• The recent volatility helped Credit Suisse’s trading results, while Lloyd Blankfein is embracing it as a way to bolster Goldman Sachs’s trading unit.

• An Uber driver convinced the hedge fund manager Paul Britton that the “Goldilocks” bet on market calm was poised to unravel. (Bloomberg)

• Pierre-Henri Flamand, chief investment officer of the Man Group, warned against buying stocks in market dips for now. (Bloomberg)


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.


The telecom giant wants to call Makan Delrahim, the Justice Department’s antitrust chief, as a witness in the government’s lawsuit seeking to block the deal. The goal: to probe for political motivations.

More from our colleague Cecilia Kang, who broke the story:

The strategy isn’t without risks. “It could blow up in their face if the assistant attorney general is a credible witness for the legitimate challenge of the merger,” Gene Kimmelman, a former Justice Department official who has been critical of the deal, said.

The deal flyaround

•Mini-I.P.O.s allowed under the JOBS Act haven’t performed well. (Barron’s)

• Broadcom is now seeking six seats on Qualcomm’s board, rather than the full 11. (NYT)

• Darwin Deason, one of Xerox’s top investors, has sued to block its deal with Fujifilm. (FT)

• SkyBridge Capital, Anthony Scaramucci’s investment firm, expects regulators to tell it by the end of the month whether they’ll block its sale to the HNA Group. (Reuters)

• of China will raise about $2.5 billion by selling a stake in its logistics unit to Hillhouse Capital, Tencent and other investment firms. (Bloomberg)

• Danone agreed to sell some of its stake in the Japanese yogurt maker Yakult for about $1.8 billion, amid pressure from Corvex Capital Management. (Bloomberg)

In naming Jon Gray as its president and C.O.O., the giant investment firm joined a trend toward public succession planning in private equity. K.K.R., Apollo Global Management and the Carlyle Group all recently promoted their next generation of leadership to more visible roles.

Mr. Gray, who has long headed Blackstone’s real estate arm, has long been seen as Steve Schwarzman’s likeliest eventual replacement.

Mr. Gray is 48. Mr. Schwarzman is 71, while Blackstone’s longtime president, Tony James, is 67. (He will become executive vice president.) For now, Mr. Schwarzman will still take the biggest decisions, while Mr. Gray will run day-to-day operations.

The critical take: “Blackstone isn’t run for outsiders’ benefit, and the gradual approach to change shows it,” Tom Buerkle of Breakingviews writes.

The alternative assets flyaround

• Hillhouse Capital Management of China is raising a $6 billion fund, unnamed sources say. (Bloomberg)

• Meet Scott Ferguson, Keith Meister, Alex Denner, Quentin Koffey and other members of the next generation of activist hedge fund managers. (FT)

• The White House shifted its story about Rob Porter’s background check after public testimony from the F.B.I. director, Christopher Wray. (NYT)

• Top American intelligence officials warned that Russia is already meddling in this year’s midterm elections, spreading disinformation through social media. But the Upshot says that the impact of fake news and bots is overblown.

• Lawmakers have until March 5 to replace DACA. So far, there’s no progress. And the president is now threatening to veto any bill that omits his proposals.

• The White House is considering Loretta Meester, the president of the Cleveland Fed, for the Federal Reserve’s No. 2 position. (WSJ)

• Michael Cohen, President Trump’s longtime personal lawyer, said he had paid $130,000 out of his own pocket to the pornographic-film actress Stormy Daniel. (NYT)

• BuzzFeed has sued the Democratic National Committee, seeking any information that would help its defense against a libel lawsuit by a Russian business magnate tied to its publication of the Russia dossier. (Vanity Fair)

• Mr. Trump suggested that the U.S. might restrict metal imports. (NYT)

• A much-criticized plan to replace the SNAP food stamp program with meal kits was meant more as a signal of the administration’s intent than as a proposal for implementation. (NYT)

The ride-hailing giant is still losing money — $1.1 billion in the fourth quarter, Dara Khosrowshahi’s first as C.E.O. But that’s down 25 percent from a year ago.

One reason is that Mr. Khosrowshahi is clamping down on costs as the company heads toward an I.P.O. as soon as next year. More from Amir Efrati of The Information:

The tech flyaround

• Netflix poached Ryan Murphy, the producer behind “Glee,” from 21st Century Fox in a five-year deal worth as much as $300 million. (NYT)

• Autonomous selfie drones are here. Farhad Manjoo has an escape plan. (NYT)

• Amazon has invited hospital executives to Seattle to discuss expanding its business-to-business marketplace. (WSJ)

• Tim Cook talked up Apple’s health care ambitions, hinting at a move beyond wellness apps and devices. (CNBC)

• Fitbit is buying Twine Health, a start-up that helps people manage chronic diseases like diabetes and hypertension. (Axios)

• Baidu confirmed that it plans to list its video streaming unit in the U.S. (FT)

The government will focus on transparency instead — a relief for one of the world’s biggest virtual currency markets. A petition against a ban was backed by more than 200,000 Koreans.

Where Bitcoin is today: Around $8,854, says CoinMarketCap.

Elsewhere in virtual currencies: Western Union is joining MoneyGram in testing Ripple. Just a fraction of Americans have reported virtual currency transactions to the I.R.S. Six investors have sued BitConnect, alleging fraud. They’re also offering a bounty, in JusticeCoins.

Blue Apron gained notoriety when its stock sank after its I.P.O. last year, spurring talk that the meal kit industry was a flash in the pan. But its latest results showed signs of life — and those of its biggest rival, HelloFresh of Germany, suggest it’s unwise to write the sector off right now.

What happened at Blue Apron: The company’s $39 million quarterly loss was less than expected, and its marketing expenses dropped (in part because management was more focused on operational improvements in its distribution center). But subscriber rolls dropped 15 percent from a year ago, to 746,000.

And at HelloFresh: The company’s preliminary sales numbers, released last month, beat analyst expectations. Its stock has risen 24 percent since its I.P.O. And its C.E.O., Dominik Richter, told Michael that the industry shouldn’t fear competition from Amazon or other supermarket owners. “We have more in common with Chipotle or a fast-casual chain,” he said.

• Nelson Peltz is stepping down from Mondelez International’s board, to be replaced by Peter May, the president of his investment firm, Trian. (Mondelez)

• Chipotle has hired Brian Niccol, the chief executive of Taco Bell, as its C.E.O., replacing its founder, Steve Ells. (NYT)

• Sam’s Club is shifting toward e-commerce and imitating Amazon Prime. (NYT)

• Police in Johannesburg raided the home of the Guptas, a powerful business family with close ties to President Jacob Zuma. (FT)

• Shell and Eni paid $1.3 billion for oil rights in Nigeria — but was that a bribe? (WSJ)

• The Israeli police recommended on Tuesday that Prime Minister Benjamin Netanyahu be charged with bribery, fraud and breach of trust. They said one of his patrons was James Packer, an Australian billionaire. (NYT)

• A former employee sued Vice Media, saying it systematically paid women less than men for similar work. (NYT)

• The U.S. is on track for huge economic expansion, but in California — which accounts for a fifth of the country’s growth — the governor is preparing for doom. (NYT)

• Inflated stock prices could discourage capital investments and promote inequality. (NYT)

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