Finance Analysis

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.

Jennifer S. Altman for The New York Times

Barrie Berg, the chief executive of American operations for What If, in one of the diner-style booths the firm installed in its Manhattan office. “There’s something very satisfying about a booth,” she said.

The walls have come tumbling down in offices everywhere, but the cubicle dwellers keep putting up new ones. They barricade themselves behind file cabinets. They fortify their partitions with towers of books and papers. Or they follow an “evolving law of technology etiquette,” as articulated by Raj Udeshi at the open office he shares with fellow software entrepreneurs in downtown Manhattan.

“Headphones are the new wall,” he said, pointing to the covered ears of his neighbors.

Cubicle culture is already something of a punch line — how many ways can we find to annoy one another all day? — but lately the complaints are being heard by the right people, including managers and social scientists. Companies are redesigning offices, piping in special background noise to improve the acoustics and bringing in engineers to solve volume issues. “Sound masking” has become a buzz phrase.

Scientists, for their part, are measuring the unhappiness and the lower productivity of distracted workers. After surveying 65,000 people over the past decade in North America, Europe, Africa and Australia, researchers at the University of California, Berkeley, report that more than half of office workers are dissatisfied with the level of “speech privacy,” making it the leading complaint in offices everywhere.

“In general, people do not like the acoustics in open offices,” said John Goins, the leader of the survey conducted by Berkeley’s Center for the Built Environment. “The noisemakers aren’t so bothered by the lack of privacy, but most people are not happy, and designers are finally starting to pay attention to the problem.”

When Autodesk, a software company, moved into a an open-plan building in Waltham, Mass., three years ago, it installed what is known as a pink-noise system: a soft whooshing emitted over loudspeakers that sounds like a ventilation system but is specially formulated to match the frequencies of human voices.

Autodesk ran the system for three months without telling the employees — and then, to gauge its impact, turned it off one day.

“We were surprised at how many complaints we got,” said Charles Rechtsteiner, Autodesk’s facilities manager. “People weren’t sure what was different, but they knew something was wrong. They were being distracted by conversations 60 feet away. When the system’s on, speech becomes unintelligible at a distance of about 20 feet.”

The original rationale for the open-plan office, aside from saving space and money, was to foster communication among workers, the better to coax them to collaborate and innovate. But it turned out that too much communication sometimes had the opposite effect: a loss of privacy, plus the urgent desire to throttle one’s neighbor.

“Many studies show that people have shorter and more superficial conversations in open offices because they’re self-conscious about being overheard,” said Anne-Laure Fayard, a professor of management at the Polytechnic Institute of New York University who has studied open offices. “Everyone is still experimenting with ways to balance the need for collaboration and the need for privacy.”

Take Mr. Udeshi’s office, at the N.Y.U.-Poly business incubator, a SoHo loft with dozens of start-up companies housed in low cubicles. The entrepreneurs there say they sometimes get useful ideas from overheard conversations but also find themselves retreating to a bathroom or a broom closet for private chats. When they have to discuss a delicate matter with someone sitting next to them, they often use e-mail or instant messaging.

“You talk to more people in an open office, but I think you have fewer meaningful conversations,” said Jonathan McClelland, an energy consultant working in the loft. “You end up getting interrupted a lot by people’s random thoughts.”

Despite complaints like this around the world, the open-plan design remains the norm, partly because it is cheaper and partly because many managers believe the plusses outweigh the minuses. It is especially popular in workplaces that require continual informal collaboration, like newsrooms, trading floors and political campaign offices.

At least one famous advocate of the open-plan office, Mayor Michael R. Bloomberg of New York, is not backing down, and it seems that the wall-free “bullpen” he set up in City Hall has won favor with many who use it.

“The bullpen really allowed free-flowing communication and efficiency,” said Edward Skyler, a former deputy mayor who sat several feet from Mr. Bloomberg. “It eliminated gatekeepers. You didn’t have to make an appointment to see someone.”

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.”

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.

The Facebook page for Katie Harbath, a public policy manager at Facebook and former Republican aide.The company has hired a stable of seasoned, well-connected insiders from both parties, stepped up its lobbying and set up a political action committee.

SAN FRANCISCO — For nearly five years, Facebook has quietly and deftly befriended the nation’s top lawmakers by giving them a little tech support.

Facebook

Representative Bob Goodlatte, center, with Joel Kaplan, left, and Roddy Lindsay, both of Facebook, at a conference last year to teach lawmakers methods for using the site for their work.

In a typical session behind closed doors on Capitol Hill, Facebook staff members have walked them through how best to use the site: what kinds of pictures to post on their profiles, how to distinguish between valuable constituents and the random gadfly, how to write compelling messages. Members of Congress have asked: How do I get more Facebook followers?

The answers have come from familiar faces: former political aides from both Republican and Democratic quarters, now employed by Facebook. Patrick Bell, an aide to Representative Cathy McMorris Rodgers, Republican from Washington, recalled a meeting last fall where a onetime Republican aide, Katie Harbath, counseled a room full of Republican lawmakers on how to use the site to communicate with voters. “We had a Republican from Facebook talking to Republicans. They love that,” he said.

Facebook, whose long-awaited Nasdaq debut on Friday left it with a market value of nearly $ 105 billion, does much more in Washington than this kind of in-person hand-holding. It has hired a stable of seasoned, well-connected insiders from both parties, stepped up its lobbying and set up a political action committee. Its lobbying budget — $ 1.35 million in 2011 and $ 650,000 so far this year, according to figures from the Center for Responsive Politics — still pales in comparison to major companies in more established industries, like military and pharmaceuticals. But Facebook stands out for having staked out a Washington strategy so early in its history.

This engagement with lawmakers is likely to matter much more to Facebook in coming months, as the company confronts the need to turn the data provided by its 901 million users into faster, greater returns for its new, hungry shareholders.

It is likely to do so mostly through targeted advertising, so any legislation that restricts how it collects and uses data will be potentially damaging — and now that Facebook is a public company, potentially infuriating to investors.

The training sessions, at least, seem to have been highly effective so far. A majority of lawmakers have embraced Facebook as a way to reach voters.

“It’s smart advocacy 101,” said Rey Ramsey, chief executive of TechNet, an industry group that includes Facebook and other Internet companies. “It starts with giving people an education. Then you start explaining more of your business model. What you ultimately want is for a legislator to understand the consequences of their actions.”

According to privacy advocates who follow Facebook’s lobbying efforts, the company will want to stave off legislation that could limit the use of location data from mobile devices, for instance, or restrict what information can be shared with advertisers. The company could be especially damaged by more aggressive scrutiny from the Federal Trade Commission, which has already subjected Facebook to a costly 20-year audit of its data use policies.

Facebook cites government policy as a risk factor to prospective shareholders. “Many of these laws and regulations are subject to change and uncertain interpretation and could harm our business,” it states in its offering document with the Securities and Exchange Commission.

A Democratic aide in the Senate, who did not want to be named because he was not authorized to speak to reporters, said Facebook realized it needed to engage with lawmakers to protect its business. “It reflects an increased awareness that what the people’s representatives in Washington think matters, as opposed to a sole focus on what their user base thinks, or a sole focus on innovation without explanation.”

Critics have questioned whether an embrace of Facebook as an increasingly vital political tool would make lawmakers go soft on the company on issues like privacy.

“That’s clearly something they do to curry favor with members of Congress,” said Bill Allison, editorial director at the Sunlight Foundation, a nonpartisan group that advocates for greater government transparency. “Clearly Facebook has something members of Congress want. They are taking advantage of a product they have to get closer to members of Congress.”

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