Ackman naming names in new attack on Herbalife (NYP)
The hedge-fund activist called out a second high-level Herbalife distributor on Thursday for alleged actions he claims create the company’s pyramid scheme. The distributor, Doran Andry, a 22-year Herbalife distributor and member of the Chairman’s Club, “victimized thousands of recruits,” Ackman’s hedge fund, Pershing Square, claimed in a statement…Andry, who Ackman claims was the No. 1 Herbalife distributor in recent years, runs a so-called lead-generation business named Financial Success System (FSS). Andry created FSS after a similar business was sued for fraud in 2002, along with Herbalife and Andry, Pershing Square said. The case was settled for $6 million, according to the statement…Ackman’s profile on Andry is the second in a series. On Feb. 3, the hedgie profiled Shawn Dahl, another high-level distributor.
Ex-SAC Trader Found Guilty (WSJ)
New details emerged during the trial about SAC’s inner workings. Several SAC employees testified that Mr. Cohen had ultimate control over trades in firmwide accounts but kept the advice he was receiving close to the vest. Some of the testimony could prove useful to the SEC in its case, with regulators getting an advance look at what SAC employees could say if they are put on the stand, legal observers said. The SEC’s civil lawsuit targets Mr. Cohen directly and seeks to bar him for life from the securities industry, according to people familiar with the case. The SEC case isn’t expected to resume until next month at the earliest, after a federal judge decides whether to accept SAC’s guilty plea in the criminal case. Once the SEC case resumes, Mr. Cohen’s administrative hearing could happen within months. Such SEC actions usually operate on much faster deadlines than do federal court cases.
Speed Traders Get An Edge (WSJ)
The traders are getting news releases from Business Wire, which distributes corporate-earnings releases and economic reports such as the Philadelphia Federal Reserve’s monthly manufacturing survey, and from Marketwired, a Toronto company that distributes earnings releases and the ADP monthly employment report. Such direct access isn’t illegal. By paying for direct feeds from the distributors and using high-speed algorithms to crunch data and enter orders, traders can get a fleeting—but lucrative—edge over other investors, according to traders and people familiar with the practice. The reason: tiny lags between the time the distributors release the news and when media outlets send them out to the public, including other investors.
Investors Shift Record Amounts From U.S. Stocks to Bonds (Bloomberg)
U.S. equity funds had $24 billion of outflows in the week to Feb. 5, according to a report today from the research unit of the third-largest U.S. bank. Withdrawals from stock funds worldwide totaled $28.3 billion, the report said, citing data from EPFR Global, a fund research company in Cambridge, Massachusetts. Money managers plowed $13 billion into U.S. bond funds, accounting for most of the $14.8 billion that flowed into debt worldwide. All the figures for the period are record highs.
Biden says NY airport like a ‘third-world country’ (AP)
Biden says if he blindfolded someone and took him to LaGuardia Airport he’d think he was in “some third-world country.” Biden made the LaGuardia comment as part of a comparison with the Hong Kong airport. He says Hong Kong has the type of modern facility travelers would expect to see in the United States. His remarks came during an event Thursday in Philadelphia in which he stressed the need for infrastructure improvement. Biden focused mainly on Amtrak, which just unveiled its new Cities Sprinter electric locomotive. But he says the nation’s ports and airports also need to be upgraded. The Port Authority of New York and New Jersey operates LaGuardia. It hasn’t responded to a request for comment.
No Mercy: Nuns Feel Spanish Bank’s Cutbacks (WSJ)
Spain’s financial distress has trickled down to a secluded back office of one of its largest banks—the convent where Sister Mariuca Mesones sorts and labels the lender’s outgoing mail. After Mass most mornings, she and 10 other cloistered members of the Order of St. Clare file into an L-shaped office of the Roman Catholic retreat and become bank employees. They enter data into the bank’s computer network on flat-screen terminals, store documents or process refunds on unused airline tickets bought with the bank’s credit cards. Their clerical jobs are part of an unusual, little-known pairing of Spanish institutions. Banco Popular Español SA, the country’s fifth-largest bank by assets, has long relied on the Convent of San Juan of Penitencia, home of the St. Clare order’s nuns, and about 20 other Spanish nunneries to handle routine administrative tasks. Both partners in that relationship are hurting these days. Six years after Spain’s real-estate bust shredded their loan portfolios, Banco Popular and some other lenders are still shuttering offices and shedding employees. That means less pay-by-the-hour work for the nuns, according to Banco Popular and nuns at some of the convents.
Hedge funds bet on US gas shortage as cold boosts demand (FT)
An unexpected fear haunts the land of the shale bonanza story: running low on natural gas. Furnaces, utilities and power plants have guzzled trillions of cubic feet of the fuel as the U.S. slogs through what may be recorded as the coldest winter since the invention of gas futures in 1990. Hedge funds are now betting the country will face a critical shortage before spring. The wager comes with long odds but a huge possible payout. “It’s been a relentless cold,” says Eric Bass, managing partner at Velite Benchmark Capital Management, a Houston gas hedge fund. “This market has slowly started to realize there could potentially be an inventory problem.”
Legal Troubles Barely Subdue a Bitcoin Evangelist’s Sermons (Dealbook)
These days, though, Mr. Shrem’s exploits in Bitcoin have him restricted to his parents’ home in Brooklyn, where he awaits trial on federal charges that he smoothed the way for drug transactions online. Mr. Shrem was also accused of buying marijuana himself. He has pleaded not guilty…”Given the opportunity, I will get back on the speaking circuit and be an evangelizer for Bitcoin,” he said on Thursday. “At the same time, the more high-profile you are, the more careful you have to be. It’s scary.”
Toronto Mayor Rob Ford launching YouTube show (AP)
Ford and his brother, a city councilor, are launching a YouTube series called ‘‘Ford Nation’’ that will debut Feb. 10. The mayor of Canada’s largest city asks people to ‘‘please judge me on my record, not my personal life’’ in a preview posted Thursday. Ford last year made international headlines when he admitted to having smoked crack cocaine while in a drunken stupor. He continues to draw attention for erratic behavior, but he has resisted pressure to step down and is seeking re-election. A news release from the mayor’s office promises ‘‘unfiltered’’ talk and asks viewers to submit questions to an email address. Last November the tabloid Sun News Network cancelled a ‘‘Ford Nation’’ television show after only one episode after complaining it took five hours to shoot and over 10 hours to edit. A ‘‘Ford Nation’’ radio show was also canceled. The promotion clip for the new ‘‘Ford Nation’’ show starts off with Rob asking his brother about his favorite food. ‘‘What do you eat? You’ve got a big belly on you. You must be eating something. What’s your favorite food?’’ Rob asks Doug.