bloggingbuyouts

Clear Channel Communications Inc. (NYSE: CCU) is going on the offensive. Affiliates of Bain Capital and Thomas H. Lee are filing breach of contract suit against the banks in the buyout deal, and Clear Channel itself joined in the complaint.

The firms are filing suit against against Citigroup, Morgan Stanley, Credit Suisse, The Royal Bank of Scotland, Deutsche Bank and Wachovia.

Some of the allegations are that banks inserted poison provisions, pretext and misdirection, and even a re-cut of the deal as they faced $2.65 billion in losses (that figure according to WSJ).

This one may be a done deal for sure now. When buyers and sellers have to start suing lenders, it is not all that frequent that those providing the leverage get forced into it.

But on the flip side, those banks should have to pay severe business penalties via a break-up fee for backing away.

Some scandals wreck public figures on Wall Street, while others act as mere speed bumps. It looks like the latter is true for Frank Quattrone, one of the most influential investment bankers in the 1990's who was also the head of the Credits Suisse (NYSE: CS) technology banking group.

Frank Quattrone has just announced that he and some former colleagues are launching a new financial services venture called Qatalyst Group. Qatalyst will be a technology-focused merchant banking boutique headquartered in San Francisco, CA.

Qatalyst Partners, its investment banking business, will provide high-end merger & acquisition and corporate finance advice to technology companies. Its investing business, Qatalyst Capital Partners, will make selective principal investments, typically alongside leading venture capital and private equity firms.

Qatalyst Partners notes in its release that it will provide "high quality, independent advice to the senior management teams and boards of the technology industry's established and emerging leaders on strategic matters crucial to their growth and success."

Qatalyst will combine a broad network of relationships with deep sector knowledge and seasoned M&A expertise. In addition to merger & acquisition advice, Qatalyst Partners will also advise companies on capital structure and capital raising alternatives, and will selectively raise private capital for clients.

While it will not engage in public securities research, sales, trading or brokerage, Qatalyst Partners may participate as advisor or underwriter in clients' public offerings.

It looks like Wall Street just got a new technology boutique that will be involved in venture capital, private equity, and bringing companies public.

Back in late February, I wrote a piece on BloggingStocks.com about unusual trading in TXU's (NYSE: TXU) stock options before the announcement of its leveraged buyout.

Well, as should probably not be a surprise, it looks like there was foul play. This is according to a story in The Wall Street Journal (subscription required).

The SEC has brought charges for leaking confidential information on the TXU deal. The unlucky target? His name is Hafiz Naseem and he was hired as an investment banker at Credit Suisse (NYSE: CS) in March 2006. Apparently, he provided the information to a Pakistani banker.

And, according to the SEC, it looks like more charges will be brought (so I think Naseem is talking it up).

All of this seems inevitable. With the boom in buyouts, it gets very temping to make some extra millions. Hey, isn't the SEC too busy to worry about such things?

Right now, it looks like the SEC is getting very busy and we may have a new scandal brewing.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.