Investigation of their metals warehousing businesses. In other washingtonrelated news, president obama has a series of economic speeches planned for the week ahead of key budget deadlines this fall. Hes going to be delivering the first address on wednesday at a college in illinois. More from john harwood on that next hour. Corporate news, apples main website for developers was attacked. The company now saying that no customer information has been compromised, but they cant rule out stolen data on developers names and addresses. As a result, apple is overhauling its database and Server Software to prevent future breaches. Good morning to you, mr. Kernen. Oh, good morning. Good morning, andrew. Good morning. I was up late watchle mickelson. Right. I bet you were. But i recorded it because it was over early. I didnt talk to anyone, look at anything, go anywhere. You had no idea . No, i made sure i had no idea. I didnt look at twitter, didnt look at any of my i saw something from alerian. Hes from san diego. I dont know what that means, but it was about the reds. It wasnt about phil. I watched it unfold. I almost started crying like his caddie, like bones. Now to the latest, someone else who might be crying, probably not, the latest on the governments action against steve cohen. On a scale of one to ten, this is like a 0. 2. What hatppened here . Administrative action, not even a civil charge, so its a pretty weak charge. Toothless . I wouldnt say toothless. Wone tooth . Needless to say, this was a surprise that this hit on a summer friday afternoon. The culmination of a fourplusyear investigation into steve cohen, charges that steve cohen failed to supervise and failed to prevent Insider Trading by two Portfolio Managers. The 16page filing where he was allegedly aware that nonpublic information was being used. One was involving elan and wyeth where it was allegedly used to make 275 million. Another in which a manager allegedly traded on an inside tip on earnings. The s. E. C. Says cohen also sold his dell shares on that news. The analyst to that trade pleaded guilty to Insider Trading. An email from cohen after the trade said, quote, nice job on dell. Even with those specific emails and phone calls pinned down around those trades, the s. E. C. Didnt reach charges of willful blindness or conspiracy to commit fraud. In a statement to cnbc friday, dan kramer, an attorney said, quote, the press speculates about a lot of things in this case, but one of the possibilities that the press doesnt engage in is the possibility that steve cohen didnt do anything wrong. We believe the evidence will show he did nothing wrong. The firm has until august 8th to formally respond. Im told it will formally deny those allegations. The firm will also focus on retaining investor money and top trading talent in the meantime. The s. E. C. Is seeking to ban him from investor money and being associated with an investment adviser. It will be tried in front of an s. E. C. If appealed, it goes to a commissioner. The type of proceeding that this is means that its going to stay within the walls of the s. E. C. , which is interesting. So i dont think this is toothless at all, joe. No . No. I think this is actually its a lousy case in that its not as strong as people had expected in terms of what kind of charge youd bring. But the charge unto itself is actually pretty strong. If you go through the documents being able to prove the administrative action . And i think, by the way, the s. E. C. Has more than a decent chance of actually winning that and banning him from the industry. Its almost irrelevant at some level how toothless or tooth i dont know what the opposite of toothless would be the type of action that this is, i mean, i referred to it as a layup, but thats pretty much what it is because it stays within the s. E. C. It doesnt even go to an outside court. And therefore you win unless you are an s. E. C. Judge and youre willing to go against the recommendation of the s. E. C. Staff. But it reads, andrew, like a securities fraud case. When you read it, it looks like theyre going to eventually at the end come to the conclusion there was some sort of conspiracy to commit fraud. They have these exact emails, phone calls and actions that resulted from those communications. But then at the end when they said we believe that he failed to supervise, that is peculiar, to say the least. It may be peculiar, but its still a win, right . Youre saying ts a layup. I believe so. So if its a layup, then its over. The game is over. We started this conversation two minutes ago saying that its not such a bad thing. Hes not going to jail. Hes not going to jail, but the business may be over, right . S. A. C. May be finished . Have we just decided at 6 05 that s. A. C. Is over . Not necessarily. The other thing that could happen, you talk to a few people about whether this precludes anything from happening from the doj. I know in a lot of these cases you let doj, which is sometimes seen as the authority that can bring more grave type of charges in these situations, you let them lead, and then you sort of fall behind. But in this case, the doj might have a different statute of limitations. They might be able to use against cohen anything that he says in the testimony inside the s. E. C. s administrative proceedings to see if he slips, to see if he lets anything go. And then go from there. One other question i cant figure out. Ive been playing with this the whole weekend. He pays 616 million to the s. E. C. He settles with them. This is only four months ago. He gave over the money. I assume he thought when he gave over 616 million that he was in the clear at least from the s. E. C. s perspective. How is it possible that you hand over that this is like a i dont want to suggest this is a shakedown, but its like they give you the money and then you come back for more. Its interesting that would even happen. Its fascinating that would even happen. You have to wonder what the exact communication was like at that time between cohen and the s. E. C. , whether, you know, he did he have legal advice . Whether indicated or implied that this situation was over from there, whether they believed some sort of fallout was still coming. Kernen, what do you thinks going on . So its administrative, and they can sort of do anything they want to him. He cant prevent it, but the worst they can do is ban him from the industry . Thats the worst. And you think thats okay for him . I dont know. I like what his attorney said. The only thing the media wont consider is that he hasnt done anything. It would get him out of the business, but hed just have his billions and hed have to go on with his life. He employs thousands of people, has this giant expansive trading floor. And the way that dodd frank is written, it doesnt just ban you from investing outside money, but you cant have the word adviser in your name. You cant be associated with an investment adviser. He has thousands of employees . Roughly 1,000. I think roughly 1,000 employees. Its a huge operation. And so the worry now, you know, i talked to people who have interviewed for jobs and they said they didnt take the jobs because they felt like there was such pressure to take the job because they want to be seen as hiring. They want to be seen as expanding in the face of some of these charges. The morale, as you can imagine, is low. Can he run a Family Office . He can but its unclear what the restrictions would be. A madoff operation . He cant be incorporated. Hes got 8 million to his name. Someones got to manage that money. Could he manage it himself with 500 or 600 other employees that work at something called s. A. C. 2 or s. A. C. 3 . Could you work in the same building, rename the place, get rid of all the outside investors and say, you know, im running a Family Office . Legally i think that would be a pretty involved operation to have to construct because you cant be incorporated. What sort of protections do those employees have if something goes belly up from there. You know, its interesting. Thank you, kayla. Not a whole lot in the journal today. Saturday. Were now on day three. It was beach reading for everyone. Well check back in throughout the morning. Then at 6 20 eastern, well talk to jacob frenkle, former s. E. C. Attorney. Hell join us to discuss the stakes of that case. Lets check on the markets. Futures indicated up about 35 points after a great week again last week. A lot of that fueled by General Electric, which is really interesting to watch. You were out, werent you . Yeah, you were out. Yeah, on friday. He had good numbers, but revenue was down from last year. And a little below expectations. But it was the order rate. I think Industrial Orders in the u. S. Being up 20 and some positive signs that honeywell, both of those Companies Got people excited with the article today in the journal. Growth outlook is stuck in neutral as corporate earnings have dashed hopes that the u. S. Was entering a phase of selfsustaining growth. Thats the headline there. I dont know. We dont know why the market trades up now. It has a lot to do with bernanke and company. Lets look at oil. Oil is continuing to be stubbornly high. Apparently people drive in the summer. Every year were kind of surprised. We enter the driving season, and we cant believe it. I did pay over 4 on the road yesterday. Easily over 4. But they kind of gouge you when youre out on the highway a lot of times. When youre out of new jersey . Is that what youre trying to say . Definitely when youre out of new jersey. But when you pull into one of those places where you dont really leave the road. Its sort of on the side, you know, and theres lots of people. You know, a couple of different kinds of fast food places. And youre sort of hostage to youre not driving off into where you can look at different prices. You dont pay much attention to that. Youre in the back and you have that thing up most of the time, right . Bicycle, a little windmill on the back. No. Youve got that thing up and god knows what youre doing back there. Soundproof. We dont have any music . Finally. Thank you. What time is it . Its kind of a goal of mine to get it in before we have a commercial, right, mack . An xrated hairdo today. God, i saw that from a distance. Huh . Whoo look at that. All right. High and tight, isnt it . Semper fi, dude. Wow. Tenyear whoo man. He wants to go back to the prompter, too. We need a special forces operation, weve got a guy to lead it right here. Tenyear note, take a quick look. 2. 47. The dollar lately hasnt been really that interesting. But we do have, for some reason, the euro. I saw on the cover of barrons, europe is going to bounce back, andrew. Its going to bounce back. Really . Thats what it says. I dont know. Every of barrons not quite the cover of businessweek or usa today. There is gold which is back above 1300 at this point. A little minirally yesterday. But look at the high there. You could draw a little line through those recent highs, couldnt you . And through the lows. Its still in a band. Well see if it breaks through, you know, on the high end of that band. That would indicate something. Still in a place where it could turn down. You know, we had the commodities super cycle. Super cycle is finished. That was on wednesday, remember . Talking about commodities, did you see this New York Times story that i was talking about yesterday . I saw i got the sunday times. I want to know what they say. I didnt read a lot of it, no. So these aluminum warehouses where Goldman Sachs which apparently owns the warehouses, they move the aluminum every day out of the warehouse and back into the warehouse simply to charge rent. And that that is apparently pushing up the price of aluminum across the world. Can you say the euro . Aluminum. Jacob frenkle says its not over for cohen and can go outside the agency in the appellate process. Were going to talk to him in just a moment. We are. So youve got him, you know you think ive got him dead to right . Yeah. I think youve got him no, i think this is going to be tough. By the way, if you look at some of those messages, its tough. For him. Yeah. Its not good. So he kind of knew. You know, i still have a problem with you hire these research people. I dont know whats inside trading and whats hard work sometimes, you know. I dont want to when youre checking channels and stuff like that, is that inside info, or is that really working hard to find stuff out about . Its a gray area. Depends . It depends. If i told you that the information was coming from somebody at the company, then what do you do with that . Lets pretend, youre steve cohen. Do i get caught . Its like that study. Its like that study. Are you telling me im definitely not going to get caught . I cant even i cant even trade im barely allowed to have a money market at this place. We should go across the pond to europe. You were trying to have me do aluminum . Talk about the british open. Standing by in london. Can you say it . Can you say aluminum . Shes not english. I say aluminum, but i can probably say aluminum. But personally, i would say aluminum. Because i went to school in the states. But i think a lot of people here would actually say aluminum. Guys, as were waiting for the royal baby to be born, could be hours, hopefully not days, but over the next hours, lets just take a look at how european markets are faring. Currently were pretty evenly split between gainers and losing. The 600 is very much flat, just over the last minutes or so, getting a little bit of a negative bias here. I do want to show you the markets one by one because were now actually seeing the xetra dax in germany move just a touch lower. The ftse 100 now moving lower to the tune of around 1. 25 . There is one big outperformer, and thats the portuguese market. Off the session highs but still higher by 1. 6 . This is after we actually averted snap elections. So we are seeing a little bit of a relief rally. Now, elsewhere, we are yes, were also driven by corporate earnings today. Philips in the netherlands up by 3. 7 , Second Quarter numbers beat expectations. Ubs in switzerland surprisingly prereleasing numbers because it also settled a u. S. Mortgage probe, and numbers were better than expected. Thats why were seeing a pop in the share price. Julius baer also rising by 5. 5 . And i want to show you shares of astrazeneca. Lower by around 0. 5 after police visited its china offices. Of course, this is related to the gsk bribery investigation. Guys, back over to you. Okay. Carolin, thank you. I made the mistake of hitting up tv newser. Coming up, japanese Prime Minister shinzo abe vowing to keep the focus on the economy after a big election win during the weekend. Well have a live report from tokyo next. Are you doing that right now . Dont. Do not go there. I didnt know what you were talking about. Dont go there. Theres one story everyone will be talking about today, and not the one i just talked about. Apparently duchess kate is in labor. Wow prince williams wife was admitted to a London Hospital in the early stages of labor. We should know whether its a boy or a girl. They should have told us at this point because it matters. Actually, it doesnt because queens become queens over there. Things are progressing as normal. And in squawk sports news, what a great weekend of golf. Phil mickelson winning the british open, birdied 4 of the final 6 holes. He finished, you know, three strokes ahead. Nobody else was even under par. Its so fitting. The only guy under par, called it the best round of his career. You want to see a special relationship, i mean, obviously with amy and his kids, but between him and jim macay. Bones. I played three rounds out at pebble. Great guys. Its so good to see. Awesome. Awesome. Ury link provides reliae it Services Like multilayered Security Solution to keep your Information Safe secure. Century link. Your link with whats next. Help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, where experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. And experience the connectivity of the available lexus enform, including the es and rx. This is the pursuit of perfection. In global news, japanese Prime Minister shinzo abe claiming victory in parliaments upper house election yesterday. The win cements his hold on power and gives him a stronger mandate for his economic reforms. Cnbcs tokyo bureau chief joins us with the full story. Good afternoon. Kaori, good morning, good day. Good evening. Hi, good evening. Hello. Yeah, okay. Good day. Is it the same day . It is the same day. Its the evening. Good morning to you. Yeah. Give us the story. Well, you know, this means that japanese Prime Minister shinzo abe is probably the most powerful Prime Minister that japan has had in about a decade. And it completes the comeback story from him because this is his Second Time Around as Prime Minister. Another big election in this weekends upper house election after a big victory seven months ago that put him back in office. What this means is that you have a parliament where there are two chambers and that his party is controlling both of these chambers. So what it means is that if he wants to pass any kind of legislation, he can do so without any obstacle. There has been a little bit of concern about whether or not hes going to backtrack on some of the economic reforms, particularly the Structural Reforms especially because that socalled third arrow seemed to have missed the point back in june. But shinzo abe, in his press conference last night, and also this afternoon here in tokyo said that he is going to stick on course on economic reform, even suggesting that first on the agenda when Parliament Reconvenes the fall of this year will be to discuss the Corporate Tax rate. Corporate taxes in japan are notoriously high. And many foreign Institutional Investors have wanted a cut on the Corporate Tax as a way to signal its commitment to st