Wall Street’s ultimate Game of Thrones

Some very big legal fees to start: Delaware’s top court has approved $267mn in fees for lawyers representing shareholders who secured $1bn in a lawsuit over an acquisition involving Dell Technologies, rejecting claims that the award was excessive.

And a scoop: Barclays drew up plans to pull out of future Israeli government bond auctions as it reviewed its exposure to the country under pressure from pro-Palestinian activists, said people familiar with the matter.

In today’s newsletter:

• JPMorgan’s successor shake-up

• Hedge funds fight back in court

• Mars and Kellanova reach $36bn deal

King Jamie’s potential JPMorgan successors

On Wall Street, things can change fast.

Twelve months ago, the view inside JPMorgan Chase was that a small group of executives close to bank president Daniel Pinto was ascendant and being lined up for senior positions.

Fast forward and many of Pinto’s protégés are heading for the exits.

The flashpoint was senior management changes announced by Jamie Dimon at the start of the year that gave new or expanded roles to leading candidates to one day take over from him as chief executive.

Top jobs and expanded roles went to the likes of Jennifer Piepszak, Troy Rohrbaugh and Marianne Lake, now the frontrunners to be the bank’s next CEO.

But behind the scenes Pinto was pushing for an alternate organisational structure that would have granted bigger roles to his allies including Marc Badrichani, Takis Georgakopoulos and Viswas Raghavan, said people familiar with the matter.

However, this idea was scrapped late in the process.

The upshot has been that Badrichani, Georgakopoulos and Raghavan have all since left the bank. One JPMorgan executive’s characterisation of the situation for Pinto: “A lot of his power base has been dismantled.”

This has fed speculation inside JPMorgan that Pinto, 61, Dimon’s top deputy, president since 2018 and longtime head of the juggernaut corporate and investment bank, may leave in the not too distant future. However, a person familiar with Pinto’s thinking said he had no immediate plans to retire.

But Pinto does have an incentive to stick around — he stands to earn a retention bonus expected to be worth about $25mn if he’s still with JPMorgan by the end of 2026.

Inside hedge funds’ fight against the SEC

A little over two years ago, the chief legal officer of hedge fund Citadel, Shawn Fagan, called Eugene Scalia, a top lawyer who’s made a career of taking on US regulators.

Hedge funds and private equity groups were under pressure. Under chair Gary Gensler, the Securities and Exchange Commission was looking to crack down on the rapid growth of “shadow banking” — financial firms that flew below bank regulations.

The agency had proposed new rules to boost supervision of these firms. The so-called private funds rules aimed to require groups to be more transparent with their clients about earnings, expenses and side deals with large investors.

But instead of arguing over specifics, Citadel and others teamed up to challenge the SEC’s authority to introduce the regulation at all. They went for the jugular.

“This is not just an attack on the private funds rule and it’s not just an attack on the SEC, but it’s part of a broader attack on the scope of agency rulemaking and the scope of their power,” said Jill Fisch, professor at University of Pennsylvania’s law school.

The group brought their case to the conservative New Orleans-based Fifth Circuit Court of Appeals, a venue known for its pro-business tilt. In June, the court threw out the private funds rule, saying the agency had overstepped its authority.

While the SEC allowed a deadline to rehear the court’s decision to lapse last month, it could still take the issue up to the US Supreme Court.

But in June, the highest court in the US overturned a landmark legal doctrine known as “Chevron deference”, which had for decades given federal agencies significant latitude when it came to crafting rules.

That’s not a good sign for Gensler — or his hopes of finally getting the private funds rules enacted.

Mars seals $36bn deal for Kellanova

Mars is already a giant among snacks, food and petcare. It will very soon become even bigger.

The privately held company has reached a deal to buy Pringles and Pop-Tarts maker Kellanova — formerly part of Kellogg — for a total of $36bn, making it one of the biggest deals this year.

Mars is perhaps best known for sugary snacks like M&M’s, Snickers and Skittles. By acquiring Kellanova, it will be able to diversify those offerings with saltier options like Cheez-It crackers.

The offer is generous, representing a premium of more than 69 per cent over where Kellanova’s stock was trading just a few months ago. Mars offered $83.50 per share in an all-cash transaction that will also take on more than $6bn in net debt.

It is an unusually high price for the consumer sector, especially at a time when shoppers seem to be opting for kale salads instead of high-sugar or salt-loaded treats.

The deal is also coming at an uncertain time for the economy. Consumers have recently pulled back following years of inflation that pushed prices for many staples — including grocery staples — to new highs.

Then, of course, there are the regulatory hurdles. Even companies with relatively different businesses have had a tough time making it past the US Federal Trade Commission these last couple of years.

“We really don’t sell the same products. They are even in different aisles in the supermarket,” said Mars chief executive Poul Weihrauch.

We’ll be watching to see if FTC chair Lina Khan agrees with that argument.

Job moves

• Citadel has hired Josh King as the head of corporate affairs, in which he will be overseeing communications and marketing, according to two people familiar with the matter. He previously worked as chief communications officer for the Intercontinental Exchange and head of corporate affairs for the New York Stock Exchange.

• Chipotle has named Scott Boatwright as interim chief executive as it looks for a permanent replacement for Brian Niccol, who is leaving the company to lead Starbucks. Boatwright currently works as chief operating officer.

Smart reads

Big poaches Some of the biggest tech companies are gutting AI start-ups of their top talent, threatening to put their venture capital backers on the sidelines, the FT writes.

True cost Companies cut staff to trim down on expenses. But lay-offs can come with a whole host of other costs, which Bloomberg set out to calculate with exceptional graphics.

Millennials’ fortunes The financial picture looked bleak for Millennials even a few years ago. But soaring home prices and lucrative investments have helped turn their fortunes, The Wall Street Journal reports.

News round-up

Hedge fund Caxton makes $270mn in market turmoil (FT)

Radical Ventures raises nearly $800mn to focus on AI (FT)

Flutter in talks to buy Playtech’s Italian business for £2bn (FT)

Shareholders’ lawyers in $1bn Dell case clinch $267mn in fees (FT)

Berkshire Hathaway cut stakes in Capital One, Chevron and Snowflake (FT)

Bill Ackman’s Pershing Square reports stake in Nike (FT)

Apple to open up tap-to-pay technology to other developers (FT)