Prosecutors Want Time to Investigate Madoff Feeder Funds

Ken Feinberg has finally spoken. The Obama administration’s pay czar has capped at $500,000 the annual cash salaries of some 450 employees under his purview. The employees and their companies—Citigroup (C), AIG (AIG), GM, and GMAC—are subject to the rule because they still have TARP money left to repay. Feinberg, reports the Washington Post, hopes the new rules will extend beyond those companies into the financial world at large. “There are hundreds of banking and other institutions that I think will benefit from the approach that we’re taking,” he told the paper. The paper has a sidebar with exact details, but in general, cash salaries are strictly limited, and stock-based compensation comes with a holding period of one to three years, depending on the details. Indeed, Feinberg thinks that even before he released these rules, Goldman Sachs’ (GS) decision to pay its top 30 executives their bonuses solely in stock was “a good sign.”

Retail sales grew in November after all, the Post says. The aggregate figure was 1.3 percent growth, according to the Commerce Department. While some segments like electronics grew far more than others, and gas and car sales provided an overall statistical boost, industry watchers are happy with the end result. “This is a very encouraging response to all the steps that retailers have taken to earn consumers’ business,” one trade group executive told the paper. Earlier figures, focused on fewer sectors of retail, had suggested that the final tally might’ve been a smaller or even negative number. The New York Times adds a layer of analysis in its story by explaining that higher sales might lead retailers to begin growing their inventories again, leading to the creation or savings of American jobs.

Proctor & Gamble, the Times writes, has a plan for growth: “Add close to 548,000 new customers a day. Every day. For the next five years.” The company’s new CEO, Robert McDonald, is planning to try to grow aggressively into overseas markets currently dominated by rivals Unilever and Colgate, or even more remote markets untapped by any major personal products company. “The worldwide per-capita figure is $12. In Mexico, the number is $20; it’s less than $3 in China and less than $1 in India,” the paper writes. “The goal, these executives say, is to get the per-capita numbers in China and India to look like Mexico’s.” If P&G executives could figure out how to do that, their sales would grow by $40 billion.

Apple (AAPL) and Nokia’s legal battles are heating up, according to an Associated Press story in the Times. Apple is countersuing the Finnish cell phone maker over 13 patents it says Nokia violated to “copy the iPhone.” That’s in response to Nokia’s suit over 10 patents it claims Apple is infringing upon. Despite the increasing hostilities, the story says, “Countersuits are a staple of patent litigation, which often ends in cross-licensing agreements.”

Federal prosecutors are following the Madoff case all the way down into the rabbit hole, the Times writes. They are now investigating the “feeder funds” that invested with Madoff, and what the managers of those funds knew, and when they knew it. The earliest fund, for example, “the Lambeth Company, was formed in 1970, just a decade after Mr. Madoff, at age 22, set up the brokerage firm that was his legitimate face on Wall Street.” The motion at hand is actually a request to delay the civil litigation of the feeder funds—to allow time for a criminal investigation to be completed.

The Times writes that the president of the European Central bank said banks should be using their profits to “strengthen their capital positions, rather than to distribute a large part of their profits or to pay out unwarranted levels of compensation or bonuses.” The FDIC closes three more banks, the paper says. The Times also has a story saying that a Treasury Department auction of JPMorgan Chase (JPM) warrants on Friday earned the government nearly $1 billion. The auction also frees JPMorgan Chase from the last remaining vestige of government investment. And finally, in the obvious department, the paper says China’s economy is doing quite well.