FT : BGC settles lawsuit with ex-partner over alleged $35mn fraud

BGC settles lawsuit with ex-partner over alleged $35mn fraud
New York-based group settles case that was due to go to trial in London

BGC Partners has reached a settlement with a former senior partner following allegations that he took part in a $35mn scheme to defraud the broker.

The New York-based broker, led by billionaire Howard Lutnick, had sued Xavier Alcan, who was a long-serving partner at the group’s London office, alongside a tax adviser called Michael Viney. BGC accused the pair of orchestrating a scheme to divert tax payments into their own pockets.

Court officials said BGC had reached a settlement with Alcan ahead of proceedings that were due to begin in London’s High Court this week. The group had previously discontinued proceedings against Viney.

BGC declined to comment. A person familiar with the matter said Alcan no longer works at BGC. Alcan could not be reached for comment.

The broker filed a lawsuit about three years ago, alleging Alcan had “encouraged” Viney to funnel millions of pounds of company money owed between the UK’s tax authority and BGC into the pair’s personal accounts instead. Viney was accused of using “doctored” documents replacing the tax authority’s bank details with the pair’s own information.

BGC claimed that some of the proceeds of the alleged fraud had been spent on 18 properties in England and luxury jewellery from Cartier and Bulgari.

BGC, spun out of Lutnick’s Cantor Fitzgerald in 2004, is one of the world’s biggest interdealer brokers, facilitating trades between investment banks.

The broker also alleged that Alcan had deleted text messages after the company launched an investigation.

In his defence filing in 2022, Alcan admitted to paying for extravagant gifts for Viney, including spending on holidays and expensive jewellery. However, he said he did so out of sympathy for Viney’s “smaller salary”.

Alcan denied any knowledge of frauds and said he had been an “unwitting dupe”. He said he regretted deleting text messages between him and Viney during a meeting with BGC lawyers, but said he had done so out of embarrassment rather than to destroy evidence. Viney had also filed a defence.

Lutnick said soon after the lawsuit was filed that it was “an unfortunate event” but told investors the loss was not material.

>>> US Research Calls

Research Calls
  • Upgrades:
    • Bank of America (BAC) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $41
    • BNY Mellon (BK) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $62
    • Citigroup (C) upgraded to Overweight from Underweight at Morgan Stanley; tgt raised to $65
    • Equinox Gold (EQX) upgraded to Buy from Hold at Desjardins
    • Goldman Sachs (GS) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $449
  • Downgrades:
    • Advanced Micro (AMD) downgraded to Outperform from Strong Buy at Raymond James; tgt raised to $195
    • Brookfield Infrastructure (BIP) downgraded to Sector Perform from Outperform at National Bank Financial
    • Enfusion (ENFN) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $9
    • Five Below (FIVE) downgraded to Perform from Outperform at Oppenheimer
    • IDEXX Labs (IDXX) downgraded to Neutral from Overweight at Piper Sandler; tgt $525
    • Int'l Consolidated Airlines (ICAGY) downgraded to Underweight from Equal-Weight at Morgan Stanley
  • Others:
    • ACADIA Pharmaceuticals (ACAD) initiated with an Outperform at Robert W. Baird; tgt $40
    • Accenture (ACN) initiated with a Buy at Mizuho; tgt $426
    • Alexandria RE (ARE) initiated with a Buy at Deutsche Bank; tgt $140
    • AvalonBay (AVB) initiated with a Buy at Deutsche Bank; tgt $206
    • Brandywine Realty (BDN) initiated with a Hold at Deutsche Bank; tgt $5.50
    • Brixmor Property (BRX) initiated with a Buy at Deutsche Bank; tgt $27
    • Boston Properties (BXP) initiated with a Hold at Deutsche Bank; tgt $74
    • Camden Property (CPT) initiated with a Hold at Deutsche Bank; tgt $90
    • CareTrust REIT (CTRE) initiated with a Hold at Deutsche Bank; tgt $23
    • Cognizant Tech (CTSH) initiated with a Neutral at Mizuho; tgt $82
    • Confluent (CFLT) initiated with a Hold at Loop Capital; tgt $23
    • CrowdStrike (CRWD) initiated with an Outperform at Raymond James; tgt $330
    • CubeSmart (CUBE) initiated with a Sell at Deutsche Bank; tgt $40
    • e.l.f. Beauty (ELF) initiated with a Neutral at Robert W. Baird; tgt $185
    • EPAM Systems (EPAM) initiated with a Buy at Mizuho; tgt $340
    • Equity Lifestyle Properties (ELS) initiated with a Hold at Deutsche Bank; tgt $64
    • Equity Residential (EQR) initiated with a Hold at Deutsche Bank; tgt $64
    • Essex Property (ESS) initiated with a Hold at Deutsche Bank; tgt $240
    • Extra Space Storage (EXR) initiated with a Hold at Deutsche Bank; tgt $141
    • Federal Realty (FRT) initiated with a Hold at Deutsche Bank; tgt $109
    • Genpact (G) initiated with a Neutral at Mizuho; tgt $40
    • Globant (GLOB) initiated with a Buy at Mizuho; tgt $283
    • Healthcare Realty (HR) initiated with a Hold at Deutsche Bank; tgt $18
    • Highwoods Prop (HIW) initiated with a Buy at Deutsche Bank; tgt $28
    • Independence Realty Trust (IRT) initiated with a Buy at Deutsche Bank; tgt $18
    • Instacart (CART) initiated with an Equal-Weight at Morgan Stanley; tgt $28
    • Invitation Homes (INVH) initiated with a Hold at Deutsche Bank; tgt $35
    • Kilroy Realty (KRC) initiated with a Hold at Deutsche Bank; tgt $40
    • Kimbell Royalty Partners (KRP) initiated with a Buy at Truist; tgt $22
    • Kimco Realty (KIM) initiated with a Hold at Deutsche Bank; tgt $23
    • Light & Wonder (LNW) initiated with an Overweight at JP Morgan; tgt $98
    • LTC Properties (LTC) initiated with a Hold at Deutsche Bank; tgt $34

>>> Johnson Controls misses by $0.27, misses on revs; guides Q2 EPS below consen

Johnson Controls misses by $0.27, misses on revs; guides Q2 EPS below consensus; lowers FY24 EPS in-line; pursuing strategic alternatives for non-commercial businesses (56.65)
  • Reports Q1 (Mar) earnings of $0.51 per share, excluding non-recurring items, $0.27 worse than the FactSet Consensus of $0.78; revenues rose 0.4% year/year to $6.09 bln vs the $6.94 bln FactSet Consensus.
    • Q1 Orders +1% organically year-over-year.
  • Co issues downside guidance for Q2, sees EPS of ~$0.74-0.78, excluding non-recurring items, vs. $1.17 FactSet Consensus. Expects Q2 Organic revenue ~flat year-over-year.
  • Co issues in-line guidance for FY24, sees EPS of ~$3.60-3.75, excluding non-recurring items, vs. $3.66 FactSet Consensus and prior guidance of ~$3.65-3.80. Expects FY24 Organic revenue growth up ~MSD year-over year.
  • "We are in the early stages of pursuing strategic alternatives of our non-commercial businesses, in line with our objective to maximize value to our shareholders."

>>> Pfizer beats by $0.28, reports revs in-line; reiterates FY24 EPS below conse

Pfizer beats by $0.28, reports revs in-line; reiterates FY24 EPS below consensus, revs in-line (27.48)
  • Reports Q4 (Dec) earnings of $0.10 per share, excluding non-recurring items, $0.28 better than the FactSet Consensus of ($0.18); revenues fell 41.3% year/year to $14.25 bln vs the $14.37 bln FactSet Consensus.
    • Excluding Contributions from Comirnaty and Paxlovid, Revenues Grew 8% Operationally.
  • Co issues guidance for FY24, sees EPS of $2.05-2.25, excluding non-recurring items, vs. $2.27 FactSet Consensus; sees FY24 revs of $58.5-61.5 bln vs. $60.46 bln FactSet Consensus.
    • On Track to Deliver at Least $4 Billion in Annual Net Cost Savings by End of 2024 from Previously Announced Cost Realignment Program.
  • No share repurchases were completed in 2023. As of January 30, 2024, Pfizer's remaining share repurchase authorization is $3.3 billion. Current financial guidance does not anticipate any share repurchases in 2024.

>>> Marathon Petroleum beats by $1.77, beats on revs (160.14)

Marathon Petroleum beats by $1.77, beats on revs (160.14)
  • Reports Q4 (Dec) earnings of $3.98 per share, excluding non-recurring items, $1.77 better than the FactSet Consensus of $2.21; revenues fell 8.9% year/year to $36.26 bln vs the $34.9 bln FactSet Consensus.
  • The fourth quarter of 2023 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.5 billion, compared with $5.8 billion for the fourth quarter of 2022. Adjustments are shown in the accompanying release tables.
  • Co sees Q1 crude oil refined of 2,685 mbpd.

>>> UPS beats by $0.01, misses on revs; guides FY24 revs below consensus; raises

UPS beats by $0.01, misses on revs; guides FY24 revs below consensus; raises dividend (158.02)
  • Reports Q4 (Dec) earnings of $2.47 per share, excluding non-recurring items, $0.01 better than the FactSet Consensus of $2.46; revenues fell 7.8% year/year to $24.92 bln vs the $25.4 bln FactSet Consensus.
    • Consolidated adjusted operating margin to range from approximately 10.0% to 10.6%.
    • U.S. Domestic Segment Revenue decreased 7.3%, driven by a 7.4% decrease in average daily volume.
    • International Segment Revenue decreased 6.9%, driven by an 8.3% decrease in average daily volume primarily due to softness in Europe.
    • Supply Chain Solutions Revenue decreased 11.4% due primarily to market rate declines and excess market capacity in forwarding.
  • Co issues downside guidance for FY24, sees FY24 revs of $92.0-94.5 bln vs. $95.51 bln FactSet Consensus.
    • The company is planning capital expenditures of about $4.5 billion and dividend payments of around $5.4 billion, subject to board approval.
  • For the 15th consecutive year, the UPS Board of Directors has approved an increase to the company's quarterly dividend. UPS will pay a first-quarter 2024 dividend of $1.63 per share on all outstanding Class A and Class B shares. The dividend is payable March 8, 2024 to shareowners of record on February 20, 2024.

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • RCUS +15.2%, SANM +15%, SMCI +10.4%, FFIV +10.3%, CLS +8.5%, NBTX +6.5%, WWD +5.8%, BCAL +5%, HP +4.4%, BIGC +3.9%, BBVA +3.7%, ATXS +3.4%, B +2.3%, ELS +2%, OPI +1.6%, BEEM +1.6%, NUE +1.5%, HALO +1.4%, JBL +0.9%, FLEX +0.9%, WPP +0.8%, CSWC +0.8%
  • Gapping down:
    • CALX -21.2%, IMCR -5.9%, HLIT -5.5%, FEAM -5.4%, PCH -5%, UPS -4.4%, WHR -4.1%, DEO -3.4%, SFBS -3.2%, CLF -3.1%, TAK -2.4%, LDOS -1.8%, SLAB -1.6%, CALB -1.6%, HOPE -1.5%, GM -0.8%, DHR -0.8%, CDE -0.7%, AAL -0.7%

>>> General Motors beats by $0.08, beats on revs; guides FY24 EPS above consensu

General Motors beats by $0.08, beats on revs; guides FY24 EPS above consensus (35.39)
  • Reports Q4 (Dec) earnings of $1.24 per share, excluding non-recurring items, $0.08 better than the FactSet Consensus of $1.16; revenues fell 0.3% year/year to $42.98 bln vs the $38.81 bln FactSet Consensus.
  • EBIT-adjusted of $1.76 bln.
  • Automotive operating cash flow of $1.3 bln.
  • Co issues upside guidance for FY24, sees EPS of $8.50-$9.50 vs. $7.75 FactSet Consensus. Sees EBIT-adj of $12-$14 bln and Adj. Auto free cash flow of $8-$10 bln. Expects Market share gains primarily from higher EV penetration driving revenue growth.