Mickelson Role Said to Be Overstated in Insider Inquiry (Dealbook)
Phil Mickelson, the famed golfer, did not trade in the shares of Clorox just as the billionaire investor Carl C. Icahn was mounting an unsolicited takeover bid for the company in 2011, say four people briefed on the matter. Recent reports in The New York Times and other news organizations said that Clorox was among the stocks that federal authorities were examining as part of a two-year investigation into well-timed trades made by Mr. Mickelson and the sports gambler William T. Walters. Initially, authorities pursued a theory that Mr. Icahn shared private details of his Clorox bid with Mr. Walters, who then traded on the information and passed on the tip to Mr. Mickelson. Although Mr. Icahn and Mr. Walters remain under investigation over Clorox, the F.B.I. and the Securities and Exchange Commission have found no evidence that Mr. Mickelson traded Clorox shares. The overstated scope of the investigation came from information provided to The Times by other people briefed on the matter who have since acknowledged making a mistake.
Activist Funds Dust Off ‘Greenmail’ Playbook (WSJ)
More companies are resorting to an old tactic to get rid of activist investors: Pay them to go away. The practice, which involves buying back shares from activist hedge funds, has raised concerns among some investors because it bears similarities to “greenmail,” a controversial strategy popular in the 1980s. Back then, aggressive investors such as Carl Icahn and the late Saul Steinberg bought company shares and threatened a hostile takeover. Eager to avoid a battle, companies including Walt Disney Co. and Goodyear Tire & Rubber Co. bought back their stakes above market price, giving the activists a quick profit. The practice, widely criticized as corporate blackmail, largely died out by the early 1990s as companies beefed up defenses and lawmakers took steps to discourage it. But in the past 12 months, at least 10 companies have repurchased blocks of shares from activist investors, including Daniel Loeb and William Ackman, according to FactSet SharkWatch. That is more than in the previous six years combined. The practice differs from greenmail in two crucial aspects. The share buybacks aren’t at a premium to the market but typically at or slightly below the last trading price. They also don’t follow threats of hostile takeovers.
Europe Bankers Cringe at Rising U.S. Fines Amid BNP Probe (Bloomberg)
HSBC Holdings Plc (HSBA) Chairman Douglas Flint had some advice for bank executives meeting in London last week: Read up on how the U.S. uses financial warfare against its enemies in a foreign-policy shift that’s entangling lenders…At a June 4 meeting of the Institute of International Finance’s board, Flint, 58, advised participants including Barclays Plc Chief Executive Officer Antony Jenkins to read former U.S. deputy national security adviser Juan Zarate’s “Treasury’s War: The Unleashing of a New Era of Financial Warfare,” according to two people who were present. In his book, Zarate recounts how U.S. foreign policy is increasingly targeting financial activity by criminals, enemy states and individuals in sanctioned regimes. Caught in the middle are international lenders, whose desire to avoid business and reputational risk assures their cooperation.
Treasury Secretary Lew Warns of Lower Potential Economic Growth (WSJ)
In a speech to the Economic Club of New York, Mr. Lew said the U.S. growth rate is now projected to run a little above 2% a year, down from a 3.4% average from the end of World War II until 2007. If America can’t maintain stronger growth, the country could face deepening challenges from sluggish labor market and widening inequality, he said. “The choices we make over the years to come can alter this projection,” he said.
SEC Says Investor Accused of Fake Gold Bid Fled to China (Bloomberg)
The U.S. Securities and Exchange Commission said the man behind a fake $750 million bid for Allied Nevada Gold Corp. (ANV) profited from selling an undisclosed stake in the mining company and has fled the country. Luis Chang and Everbright Development Overseas Ltd., a company he controls, “furtively” bought Allied Nevada stock while disseminating false information about the company, the SEC said in a complaint filed June 9 in federal court in New York. Everbright then sold the shares into a “falsely inflated market” for a profit of more than $7 million, the SEC said.
Florida John Offered Salad In Return For Sex (TSG)
Liverman was arrested Monday morning during a reverse sting that netted nine other men for soliciting a prostitute. The hookers in question were actually undercover Daytona Beach Police Department officers. While negotiating a liaison with a female officer, Liverman–who was “operating a bicycle”–revealed that he did not have any money. “I’m hungry, you got food?” the undercover asked. Liverman replied, “I got a salad,” according to a booking affidavit. “I’ll give you a bl0w j0b for a salad,” the cop declared. Liverman replied, “You ready to go?” The document does not detail the location of Liverman’s salad (or its street value). Liverman was busted because he and the cop “agreed upon the sexual act in exchange for food,” investigators reported. Read more »