Finance Explained

I WAS born in Germany. My parents divorced when I was 5 and I moved to the United States with my white mother and the black American soldier who became my stepfather. From first through fourth grade I attended school in South Carolina and then Florida. I didn’t know anything about racism, but I could feel people looking at us.

My mother divorced my stepfather when I was 11, and we moved back to Germany and lived with her parents.

I spent one year of high school, 1989-90, at the Hockaday School in Dallas, where my father, an anesthesiologist, had moved. In 1991, I served a high school internship with Eleanor Holmes Norton who is still the nonvoting delegate to Congress from the District of Columbia. When I arrived, a staff member said: “You’re in high school? And you’re from Germany?” But they let me stay.

I learned that politics is hard work. You walk halls of grandeur, but you learn that a lot goes on behind the scenes. There are a lot of constituents to answer to. I also had an internship in the German Parliament that year.

I received a degree in business administration from the University of St. Gallen, in Switzerland, just across the German border. I also started work on a law degree with a specialization in information technology at the University of Constance in Germany. That school didn’t allow dual matriculations at the time, but I ran my request all the way up to a governor and got permission to enroll.

At St. Gallen, I held several executive positions in the Studentenschaft, which is comparable to student government in American colleges. I turned the presidency into a full-time job with a salary and part-time secretary and led 5,000 students. In my last year of law school, I was a founder of Start, a group for college students interested in entrepreneurship.

In 2001 I started SVOX, a company in Switzerland, with several partners. My boyfriend, Andreas Goeldi, now my husband, was an early investor and board member. We developed text-to-speech software for automotive and mobile device applications. Last year, we sold the company for $ 125 million.

Andreas and I moved to Cambridge, Mass., in 2006, and I received a master’s degree in management of technology from M.I.T., where I was a Sloan Fellow. I saw the disruption that had occurred in video with the advent of YouTube, the Flip camera and tools like Final Cut Pro for video editing. I also heard Clayton Christensen, author of “The Innovator’s Dilemma,” speak on disruptive innovation.

Video was rapidly moving to the Web, and mobile devices were supplanting large, clunky camcorders with their digital video tapes. At the same time, the cost of video editing and computing power had decreased. I saw a business opportunity there. I wasn’t yet sure what it was, but I knew it would involve online video.

In 2008, I started Pixability, which provides video marketing software and services. Andreas was involved with another company, but I eventually recruited him as chief technology officer. Pixability gathers and analyzes data about online videos related to a client’s brand and then creates YouTube videos that are informative and interesting. We also place video ads.

Entrepreneurship defines me. At SVOX, I joined the global Entrepreneurs’ Organization and was a member until recently. In 2009, I started a networking organization for female entrepreneurs with Robin Chase, a Zipcar founder. There are 160 members in the Boston area, and a San Francisco chapter has started. We call ourselves the SheEO’s. .

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NEW YORK (AP) — Authorities in China have approved Google Inc.’s bid to buy phone maker Motorola Mobility, clearing the way for the $ 12.5 billion deal to close early next week.

But Chinese regulators attached a big condition: That Google’s Android operating system for mobile devices remain available to all at no cost for the next five years.

The approval brings the Internet search giant closer to sealing its biggest acquisition ever. Buying Motorola allows Google to expand into manufacturing phones, tablet computers and other consumer devices for the first time. The deal also gives Google access to more than 17,000 Motorola patents.

The Chinese government approved the deal on Saturday, Google spokeswoman Niki Fenwick said. “We look forward to closing the deal,” she said.

The deal was announced last August and had received all necessary regulatory approvals except in China, where Google’s government relations have been strained since it moved its search engine out of the country two years ago in a dispute over censorship and computer security.

Google’s Android software powers more than 250 million mobile devices made by a variety of manufacturers, including Motorola Mobility. The latest versions must be made available free of charge for the next five years, apparently in response to concerns that competition could be hurt if Google gives updated versions to Motorola Mobility and withholds them from others. Google doesn’t currently charge for Android.

Google earlier had pledged to make Android available to all its mobile partners. Even if Google were to discriminate, cellphone makers still could rely on mobile software from Microsoft Corp., Research in Motion and Hewlett-Packard Co., among others.

Google prizes Motorola Mobility Holdings Inc.’s patents as a crucial weapon in the intellectual arms race with Apple, Microsoft and other rivals maneuvering to gain more control over smartphones, tablets and other mobile devices.

Earlier, the U.S. Justice Department found no evidence that Google’s ownership of Motorola Mobility would lessen competition in a mobile device market that is becoming increasingly important as more people connect to the Internet on smartphones and tablet computers instead of desktop and laptop computers.

The union with Motorola Mobility will open new opportunities and pose potentially troublesome challenges for a management team that so far has concentrated on Internet search, ad sales and other software-driven online services.

Motorola Mobility’s expertise in mobile devices and set-top boxes for cable TV will allow Google to play an even more influential role in shaping the future of hand-held computing and home entertainment.

The $ 12.5 billion price paid by Google is more than the combined amount that Google has paid for the 185 other acquisitions that it has completed since going public in 2004.

Google is based in Mountain View, California, while Motorola Mobility has its headquarters in Libertyville, Illinois.

Lynsey Addario for The New York Times

Residents celebrating after receiving checks. As President Robert G. Mugabe pushes for new elections this year, the drive to put more wealth into the hands of black Zimbabweans is seen by allies as a politically popular path to victory.

BINGA, Zimbabwe — More than a decade after Zimbabwe’s government began seizing sprawling white-owned commercial farms, a new fight is brewing here over who will profit from the nation’s vast bounty of platinum, chromium, nickel and diamonds.

In a move rooted in politics, the party of the aging president, Robert G. Mugabe, has begun pressuring companies operating in the country to comply with a law requiring that black Zimbabweans own more than half their shares.

Mr. Mugabe has ruled the country since its independence in 1980 but has seen his popularity recede considerably in recent years. He won fewer votes than the opposition in the 2008 election and was forced into an awkward power-sharing government in the violent aftermath.

As Mr. Mugabe pushes for new elections this year, the drive to put more wealth into the hands of black Zimbabweans is seen by allies as a politically popular path to victory.

Senior officials of Mr. Mugabe’s party, ZANU-PF, say that foreigners operating inside the country must not be allowed to profit at the expense of indigenous, or black, Zimbabweans.

“Am I going to assign another man to make my wife pregnant and get a child?” asked Savior Kasukuwere, the ZANU-PF minister overseeing the process known as indigenization. “Zimbabweans must be masters of their own destiny. Indigenization is a core feature of the values of our party: freedom, equality, peace.”

The opposition Movement for Democratic Change, along with many independent economists and analysts, says that the law, which was passed in 2010, but only widely enforced in the last year, spells disaster for the country’s economy just as it is beginning to expand after years of withering.

“Our position is empowerment, yes,” said Morgan Tsvangirai, the prime minister and leader of the opposition. “But we are more concerned about the state of employment. How do we encourage creation of more jobs rather than destroying the few jobs we have?”

Zimbabwe’s economy has been making a slow recovery after more than a decade of political and economic crisis brought on by the seizure of commercial farms. The introduction of the United States dollar eliminated the hyperinflation that made life here impossible, and investors are slowly returning to a country that is richly endowed with natural wealth.

Much of that wealth is folded within a geological formation known as the Great Dyke: a 340-mile-long river of stone formed 2.5 billion years ago by molten rock that pushed up from the earth’s core through the Zimbabwe craton, an even more ancient chunk of continental crust. Over millenniums the rock folded and twisted back on itself, and within its layers lie rich deposits of valuable elements like platinum, nickel, copper and chromium.

According to Zimbabwe’s indigenization law, black Zimbabweans must own 51 percent of shares of foreign companies operating here. About 20 percent of the shares are supposed to go to community trust funds, which in theory will pay for local development projects, and company employees. The rest must go to black Zimbabweans.

But exactly how these aims are to be achieved is unclear. Many of these companies are publicly held, and their shares are not the companies’ to give or sell. On top of that, few black Zimbabweans have the means to buy large numbers of shares at market value.

Still, a handful of companies have already agreed to comply, under intense pressure from Mr. Kasukuwere, a 41-year-old former official of Zimbabwe’s fearsome Central Intelligence Organization.

In March, the South African mining company Implats — whose subsidiary, Zimplats, mines platinum in Zimbabwe — said it would give community organizations interest-free loans, to be repaid from dividends, for their shares, and do the same for employees.

But it said it expected full market value for the other 31 percent of shares required under the law, an amount few private investors in Zimbabwe could muster. Officials from Implats and other companies affected by the new law did not respond to requests for comment.

Government officials say that they will not pay a cent for those shares.

“Our contribution is the platinum they are taking from our soil,” said George Charamba, Mr. Mugabe’s spokesman. “They will get nothing more.”

Mr. Mugabe, at the age of 88, is rumored to be in poor health. In April, rumors spread in Harare that he was on his deathbed in Singapore, but he appeared at the country’s independence day celebration a few days later, looking fit as he walked around a soccer stadium under a blazing sun for 30 minutes unaided to review a military parade.

I’VE been looking at my wrist a lot lately — and not just to see what time it is.

I’ve been trying out some of the new watches that display caller IDs, text messages, Twitter and news feeds, and the weather, too — all beamed from a nearby companion smartphone.

The watches are intended for those times when it is inconvenient to pull a smartphone out of a backpack or a pocket to check messages. Instead, you just check your quietly vibrating wristwatch.

So if you’re riding your bike when your boss sends a text, or carrying a big bag of groceries when your mother-in-law fires off an e-mail, the snippet displayed on the watch face might help you decide whether to pay attention.

Some of these new watches are already on the market; others are in prototype. Sony’s SmartWatch, which sells for $ 149.99 at Sony stores and at the company Web site, is optimized to work with Sony’s Xperia line of phones, said Stephen Sneeden, the United States product marketing manager for Sony Mobile. But it is also compatible with most Android-based phones running version 2.1 and above, he said. A list of smartphone models that work with the watch will be posted at the Web site.

THE SmartWatch has a sleek color touch screen that works by way of swipes, taps and the occasional two-fingered pinch. There is only one actual button — the on/off one tucked discreetly into the side. A rubbery black band comes with the watch; bands in five other shades cost $ 19.99 each.

The Sony watch has its limitations. If you’ve wandered off on an errand and left your smartphone behind, don’t expect the phone to relay messages to your wrist from afar. The range for Bluetooth wireless communication between watch and phone is about 30 feet, Mr. Sneeden said.

The touch screen has deep, attractive colors indoors but fades in direct sunlight. The watch has no voice capabilities built into it, and you cannot type replies on it, though you can send canned, prewritten responses like “Busy now.” Gmail is the main e-mail program it uses; attachments can’t be read.

But you may find that the watch has advantages, too. Vibrations on your wrist to notify you of messages are far harder to miss than fainter ones coming from a phone stashed in a coat pocket. And there are many times — say, when you’re sitting in a meeting, supposedly paying attention — when the wrist is a discreet spot to check Facebook updates along with the time.

The SmartWatch requires two apps for setup — LiveWare Manager and SmartWatch — both free on Google Play. Most Xperia phones have LiveWare preloaded, Mr. Sneeden said.

Another Android-based smart watch, the WIMM One, was created primarily for developers who will incorporate it into mobile electronic products, said Tim Twerdahl, vice president for product marketing at WIMM Labs in Los Altos, Calif. The watch is also available on Amazon for $ 199.

The WIMM One, a bit chunkier than the Sony SmartWatch, has a lot of built-in processing power, and two wireless communication modes — Bluetooth and Wi-Fi — so that it can work through a home network.

“It will sync via Wi-Fi to your home office network and run all the apps without being paired to a phone,” Mr. Twerdahl said. This allows a user to read news feeds and to check messages on the watch face even if the phone isn’t near.

The watch has a touch screen with two display modes. A power-saving black-and-white display turns the backlight off and uses ambient light to illuminate the screen. But holding a finger down on the watch face for a second brings a full-color screen to life.

WIMM One typically lasts about 30 hours on a single charge, Mr. Twerdahl said.

The watch comes preloaded with six apps. Other apps, all free, are at the WIMM Micro App Store Beta.

More smart watches are on the way, including the Pebble, now in prototype, which will display information from Android phones and iPhones. It has a black-and-white e-paper display and buttons, rather than a touch screen.

Many apps for the new watches can help owners with a range of practical tasks. One coming app for WINN One, Mr. Twerdahl said, will let a user draw a finger forward or back across the watch to change slides during a presentation.

Another app may be handy in shopping. With a few swipes,” he said, “you can check your credit card balance” to see if you are exceeding your limit.

EVEN before the news was official, it filtered out — unofficially — to Wall Street.

On a trading floor in Midtown Manhattan, the squawk boxes were set to relay a market-moving bulletin at 10 a.m. This was the news: An analyst at the investment house was raising his assessment of Amkor Technology, a big name in computer chips.

But it was only 9:30, and Amkor’s share price was already rising. By the time the announcement came, it was up 4 percent. “It was clear that my research had been leaked,” the analyst, Ted Parmigiani, recalls.

But leaked how, and by whom? To Mr. Parmigiani, there was only one explanation: someone inside his own research department had tipped off the firm’s traders, as well as some fast-money hedge funds.

Nearly seven years later, the events of that June day — and countless others like it, up and down Wall Street — still rankle him. The fallout effectively ended his career. The firm he worked for, Lehman Brothers, was eventually undone by greed and hubris, its spectacular collapse in September 2008 a symbol of an age of financial excess.

Against the sweeping morality tale of Lehman, the story of one analyst may seem trivial. But it’s a story central to post-crisis Wall Street, and to the regulators watching over it. Federal authorities today are trumpeting efforts to root out insider trading, and they’ve caught some big fish. Yet many on Wall Street suspect that the sort of chicanery that Mr. Parmigiani says he witnessed at Lehman may be as common as ever.

More worrying, from his perspective, is that he provided the Securities and Exchange Commission with evidence pointing to frequent insider trading involving analyst research at Lehman, but the S.E.C. ultimately did not bring a case. Mr. Parmigiani spent two and a half years giving information to the S.E.C. He produced materials indicating that Lehman sales representatives were tipped off to upcoming research changes; data showing suspicious trades in dozens of stocks; organizational charts and floor plans showing that some Lehman executives who were part of the research department were located near sales and trading desks. These departments are supposed to be separated.

With that ammunition, the S.E.C. opened an investigation, case HO-10864. Officials told him that his evidence was credible.

Then the case died. And after Lehman’s collapse its employees have scattered across Wall Street.

Since the financial crisis, the S.E.C. has spent a lot of time and money trying to plug leaks. In a case worthy of “Law & Order,” prosecutors used wiretaps to ensnare Raj Rajaratnam, the billionaire Galleon hedge fund manager whose web of tipsters stretched from Wall Street to some of the mightiest corporations in the land. For his crimes, Mr. Rajaratnam, whom prosecutors called “the modern face of illegal insider trading,” was sentenced last October to 11 years in prison.

Mr. Rajaratnam’s conviction, in the largest insider-trading scandal in a generation, handed a much-needed win to the beleaguered S.E.C. Only two years earlier, the commission had been lambasted for missing glaring evidence of Bernard L. Madoff’s vast Ponzi scheme.

But Mr. Parmigiani and others suspect that the P.R. of the Galleon case glosses over risks that insider trading can and does occur regularly at many Wall Street firms. In their view, it has become institutionalized. The flow of information between a firm’s analysts, its traders and its clients — a lucrative heads-up on stock upgrades and downgrades, for instance — can bolster trading profits, brokerage commissions and, ultimately, Wall Street paydays. Those in the know can get rich before the rest of us know what happened.

“Prosecutors say insider trading won’t be tolerated, that this is justice,” Mr. Parmigiani says of the Galleon case. “But they refuse to acknowledge that their widespread net has a very big hole in it.”

What exactly happened at Lehman? Mr. Parmigiani says traders there were routinely advised of changes in analysts’ company ratings before those changes were made public. That way, Lehman could profit on subsequent market moves. Here is how he describes it: First, research officials tipped off the traders; then Lehman’s proprietary trading desk, which cast bets with the firm’s own money, positioned itself accordingly. Lehman salespeople also alerted favored hedge funds. Only later, he says, were ratings changes made public.

Blowing the whistle on any big corporation, as Mr. Parmigiani tried to do in the case of Lehman, is almost always perilous. Shortly after noting the suspicious trading in Amkor, Mr. Parmigiani says, he was fired for not being a team player. He has since been unable to find work on Wall Street.

John Nester, a spokesman for the S.E.C., said it conducted a careful, thorough investigation of Mr. Parmigiani’s allegations.

IT’S an old line on Wall Street: If you can get your hands on a hot new stock, you probably don’t want it.

This bit of Street wisdom came to mind last week, as Facebook went public amid so much fanfare.

The stock eked out a 23-cent gain on its Day 1, to $ 38.23. This suggests that many professional money managers viewed all the hype as just that. Whatever the long-term prospects of this company — an issue over which reasonable people reasonably disagree — the idea that small-time investors might get rich fast struck the pros as absurd.

It is true that initial public offerings have increasingly become a game for early investors and their Wall Street enablers. Since the 1980s, average first-day gains on new stock issues have risen steadily. According to one 2006 study, the average first-day return on I.P.O.’s in the 1980s was 7 percent. By the mid-1990s, it was 15 percent. In the 1999-2000 dot-com boom, it was 65 percent.

We all know how that last one turned out.

It’s no coincidence that as those averages were rising, individual investors were becoming more enamored with the stock market. The great democratization of the equity market, which began in the 1980s, lured small investors into the game.

A lot of these people got burned. Academics at the Warrington College of Business Administration at the University of Florida recently compiled a list of about 250 companies that doubled — at least — in price on their first trading day. Many quickly fell back to earth.

Going back to 1975, the list provides some of the greatest hits in I.P.O. land. The top 10 first-day gainers all went public in the Internet boom. They included VA Linux, which rose almost 700 percent, to a market capitalization of more than $ 1 billion, and The Globe.com, which produced a gain of 606 percent on its first day as a public company. Foundry Networks and WebMethods soared more than 500 percent.

Some of the companies on the list have disappeared or have been acquired. Others are still around, to lesser and greater degrees. TheGlobe.com trades at less than a penny a share. VA Linux is now called Geeknet and, as of Friday, had a market value of $ 94 million.

Why did Facebook get a relatively slow start out of the trading gate? One possibility is that the investment bankers who priced the stock considered the history of private trading in the shares before the offering. Facebook was unusual in this way, Laszlo Birinyi of Birinyi Associates pointed out last week.

“There was trading before the I.P.O., so many investors have some feel, some idea of pricing,” he noted. Most offerings are priced based upon what the company and its bankers guess the stock will fetch.

Indications are that Facebook was bought primarily by individual investors, not institutions. Indeed, institutions that had invested early were big sellers in the I.P.O. To many market veterans, this showed that the smart money was getting out while the getting was good.

With investors still believing the advice of Peter Lynch, the former Fidelity fund manager who told individuals to buy stocks of companies they knew as consumers, it is easy to see why Facebook’s offering resonated with the public. But now comes the hard part: operating as a company that returns its investors’ favors with actual earnings.

Mark Lennihan/Associated Press

JPMorgan Chase’s trading loss is now said to equal at least $ 3 billion, and could rise further.

Ever since JPMorgan Chase disclosed a multibillion-dollar trading loss this month, the central mystery has been how a bank known for its skill at risk management could err so badly.

As early as 2010, the senior banker who has been blamed for the debacle, Ina Drew, began to lose her grip on the bank’s chief investment office, according to current and former traders. She had guided the bank through some of the most rugged moments of the 2008 financial crisis, earning the trust of Jamie Dimon, JPMorgan’s chief executive, in the process.

But after contracting Lyme disease in 2010, she was frequently out of the office for a critical period, when her unit was taking riskier positions, and her absences allowed long-simmering internal divisions and clashing egos to come to the fore, the traders said.

The morning conference calls Ms. Drew had presided over devolved into shouting matches between her deputies in New York and London, the traders said. That discord in 2010 and 2011 contributed to the chief investment office’s losing trades in 2012, the current and former bankers said.

“The strife distracted everyone because no one could push back,” said one current trader in the office who insisted on anonymity because of the sensitivity of the issue. “I think everything spiraled because of the personality issues.”

Mr. Dimon has described the trades as “sloppy” and “stupid,” but has not identified the specific mistakes.

The trading loss, initially estimated at $ 2 billion but now said to equal at least $ 3 billion, is the most embarrassing misstep of Mr. Dimon’s seven-year tenure, and it has also strengthened the hand of regulators in Washington who are in the final stages of writing new rules that could reshape the banking industry.

JPMorgan and Ms. Drew declined to comment. Mr. Dimon is due to make a presentation Monday at an investor conference in Manhattan sponsored by Deutsche Bank. While JPMorgan’s stock has suffered since the disclosure of the loss, the bank’s overall health remains strong, and the company is expected to post a significant profit in the second quarter.

Ms. Drew, 55, resigned as chief investment officer last week. In 2011, she earned roughly $ 14 million, making her the bank’s fourth-highest-paid officer.

But when the losses were mounting in recent weeks, Ms. Drew’s command of the chief investment office was far different from what it had been during her stellar performance of 2008, according to interviews with more than a dozen current and former traders, bankers and executives at JPMorgan Chase. All insisted on anonymity because the losses were being examined by a host of regulators, as well as the Federal Bureau of Investigation.

In the midst of the financial crisis, for example, Ms. Drew attended the regular morning huddle with traders and forced them to defend positions and outline the risks they would face during the approaching trading day.

“I always thought she was coolheaded and an excellent manager,” said Petros Sabatacakis, a former senior executive at Citigroup who worked with Ms. Drew at Chemical Bank.

Senior executives at JPMorgan said that her success in 2008, even as other banks were sustaining crippling losses, helped forge a sense of implicit trust between Ms. Drew and Mr. Dimon, one reason that he believed her initial assurances last month that the trades were not something to be seriously concerned about.

Ms. Drew also enjoyed the confidence of her subordinates, according to former employees. Part of her skill, they said, was her steely resolve. One former trader recalled that Ms. Drew counseled a credit trader who had a large position in bank-preferred securities, which began to lose money during 2009. Instead of folding, Ms. Drew supported the trader who wanted to hold on, ultimately generating $ 1 billion in profits.

Ms. Drew’s success during the market crisis in 2008 also left the chief investment office feeling much more confident — too confident, in the eyes of some former employees there.

“When Ina was there, things ran smoothly,” one former trader there said.

But Ms. Drew’s firm hand began to weaken after she contracted Lyme disease. Her absences opened the door for tensions among her deputies to flare into the open. “Look,” one current trader added, “it is a tough place to work.”