Robert Bou-Simon–who sued BGC Partners last year over hazing rituals that included a bizarre wet-tee shirt contest and the fallout from refusing to participate in it– learned this the hard way. Read more »
Guess Which Of The ‘Largest Hedge Funds’ Are Getting An Especially Close Look In SEC Insider-Trading Probe?By Jon Shazar
Hint: One’s run by a hot-dog enthusiast and starts with a “P” and ends with an “oint72.” Read more »
SEC Targets Timing of Insiders’ Trade Notices (WSJ)
The Securities and Exchange Commission is stepping up its scrutiny of corporate executives who sell shares in their own companies, announcing a raft of cases Wednesday against insiders for allegedly breaking rules on disclosing stockholdings and trades. The action, on an unprecedented scale for such offenses, is part of the “broken windows” strategy SEC Chairman Mary Jo White announced almost a year ago. She said the strategy—named for policing tactics used in New York that sought to reduce serious crime by not tolerating minor violations—will mean “even the smallest infractions” are pursued. SEC investigators decided to step up their focus on insider transactions because of concerns about poor levels of compliance, enforcement chief Andrew Ceresney said. The agency filed civil charges Wednesday against 36 individuals and companies, with none of them involving a penalty of more than $375,000.
Senators urge Burger King to ditch move to Canada (Reuters)
Dick Durbin, the No. 2 Senate Democrat, and four other lawmakers argue that move is unfair because many Burger King workers count on programs such as Medicaid and food stamps that rely on taxpayer funding. They also said, in a letter to Burger King Chief Executive Officer Daniel Schwartz that was dated Thursday, that the burger chain uses taxpayer-supported roads, food safety inspectors and other perks of doing business in the United States. “Now, after profiting from these taxpayer-funded benefits, Burger King intends to move its tax address overseas to avoid paying its fair share for these benefits,” the group said in the letter, which was viewed by Reuters. “Many of your loyal customers may choose to spend their hard-earned money at one of your many competitors, instead of supporting a company that wants all the benefits of America but refuses to pay its fair share to support our nation,” they said. In addition to Durbin, Senate Democrats Jack Reed, Sherrod Brown, Carl Levin, and Independent Bernie Sanders signed on. At least nine U.S. companies are in the final stages of inversions, which involve buying a competitor in a lower-tax country and basing the combined business there. Democrats, worried the moves will erode the U.S. corporate tax base, have called the deals “unpatriotic” and floated a number of proposals to crack down on them.
Berkshire Official Calls Those Seeing Burger King Move as a Tax Inversion ‘Mad’ (WSJ)
Charles T. Munger defended recent decisions by his business partner, Berkshire Hathaway Inc. Chairman Warren Buffett, and predicted that Berkshire would grow robustly. Mr. Munger, 90 years old and known for his bluntness, took on critics of the so-called tax-inversion deal, partly financed by Berkshire, in which Burger King Worldwide Inc. is planning to relocate to Canada in the wake of its proposed merger with Tim Hortons Inc. Mr. Munger, who is Berkshire’s vice chairman, said that Ontario-based Tim Hortons is the larger of the two companies and, because “the bigger company should get the headquarters,” anyone who thinks the deal is motivated purely by tax considerations is “stark raving mad.”
Twitter Seeks Up to $1.5 Billion in Debt Offering (Bloomberg)
The San Francisco-based microblogging company is selling the convertible bonds in two $650 million pieces, one maturing in five years and one coming due in seven years, according to a regulatory filing today. The offering size may increase to $1.5 billion if the banks involved exercise an overallotment option. Twitter, which isn’t projected to be profitable this year, has been investing to build up its advertising business and add engineers who can help tweak its product to appeal to a broader audience. Executives see an opportunity in the debt market to raise more cash cheaply with little immediate dilution of their shareholders’ ownership, according to a person familiar with the matter. The company was inspired by technology leaders, including Google Inc. and Netflix Inc., successfully offering debt while borrowing remains inexpensive, the person said.
Chipotle Near Penn State Closes After Workers Quit (Bloomberg)
A Chipotle restaurant near Pennsylvania State University temporarily closed after workers quit, citing “borderline sweatshop conditions.” A sign in front of the restaurant, which was posted on Twitter, blamed the walkout on Chipotle’s pursuit of profit over people. While the sign said almost all of the management and crew resigned, the Denver-based company said that it was a minority of the staff. “Our Penn State restaurant was closed when a few employees quit, locking out a majority of others who are enthusiastic to return to work,” Chris Arnold, a spokesman for Chipotle Mexican Grill Inc., said in an e-mail. The store reopened this afternoon, he said.
Argentina says U.N. vote vindicates its debt fight against ‘vultures’ (Reuters)
The Argentine government said on Wednesday that its refusal to repay a group of U.S. hedge funds that stand to profit on the country’s defaulted debt was vindicated by the United Nations’ support for a multilateral plan handling bond restructurings. The lengthy legal battle between Argentina and the funds that snapped up its bonds on the cheap after its record 2002 default and are suing for 100 cents on the dollar led to the Buenos Aires government defaulting again in July. Cabinet Chief Jorge Capitanich’s comments came on the same day the lower house of Congress held a marathon debate over a draft law proposing to remodel the country’s debt to enable it to skirt U.S. court rulings in support of the hedge funds. The lower house is expected to vote in favor of the bill in the early hours of Thursday. But the law may not achieve much if legal hurdles and investor scepticism prevent the proposed restructuring measures from being implemented. President Cristina Fernandez says her country is the victim of “vulture funds” that are prepared to wreck its finances in their pursuit of huge profits. She wants a global framework that would prevent a minority of investors from scuppering debt restructuring agreements. Prompted by Argentina and its ally Bolivia, the U.N. General Assembly voted overwhelmingly in favor of such a convention. “If 124 countries in the United Nations support the Republic of Argentina, it means that Argentina is right in its claims,” Capitanich told reporters in Buenos Aires.
Naked Satan Statue Has Vancouver Locals Asking, ‘What The Devil?’ (HP)
The 9-foot-tall statue was a representation of the devil, complete with red skin, a pointed tail and horns atop his head. The statue also holds one hand up in a devil-horn salute familiar to heavy metal fans the world over. But what has aroused controversy is the statue’s prominent, erect phallus, CTV News reports…The satanic statue was erected on Tuesday on a pedestal that previously was home to a bronzed — and clothed — Christopher Columbus commemorative statue installed in 1986, according to Straight.com. The statue was moved to the Italian Garden in Hastings Park 10 years ago. No one has claimed responsibility for the naked Satan, according to CTV News. But the bulging Beelzebub was quickly removed because city officials weren’t exactly nuts about it. “The statue was not a piece of city commissioned artwork and consequently it has been removed,” Sara Couper, a City of Vancouver spokeswoman, told GlobalNews.ca. City officials haven’t said what they plan to do, but a man named Mike Granger has started a petition on Change.org asking it be given to him for inclusion in an “Odditorium” he runs, according to the Winnipeg Sun. One of the lines in the petition warns the city: “By removing the statue of Penis Satan, you are taking from us our freedom of expression, restricting our sexuality, and stigmatizing our religious beliefs. Please return him immediately.” Read more »
$$$ Twitter to raise $1.3 billion through debt offerings [Reuters]
Also, he’s a very hands on investor, so. Read more »
Noted Short-Seller Not Saying Alibaba Is A Fraud, Just Saying Alibaba *Could* Be A Fraud, If It So ChoseBy Bess Levin
“If Alibaba wanted to defraud investors, it absolutely could,” Mr. Block, the founder of Muddy Waters Research, told an audience of accounting students and aspiring investors at Baruch College in Manhattan on Wednesday. Mr. Block, 38, belongs to a small group of short-sellers who cut their teeth digging up corporate misdeeds on Chinese companies listed in the United States. “China is to stock fraud as Silicon Valley is to technology,” Mr. Block said, adding that this reality should weigh on Alibaba’s stock price when it lists in New York next week, in what could be the largest stock debut ever in the United States. Mr. Block didn’t offer any evidence of fraud at Alibaba, but was using the company to illustrate a broader point. [Dealbook]
Among the many things Warren Buffett is known for– being an extremely successful investor, (supposedly!) loving Cherry Coke, living in the same house he bought in 1957 for $31,500– one stands out from the crowd: his penchant for mixing folksy business wisdom with aberrant sex fetish. A short list of topics on which Buffett has injected his trademark style include: undervalued stocks (“I like an oversexed guy in a whorehouse“), Bear Stearns (“It’s like a woman taking off half her clothes and asking, ‘Should I continue?’ Even if you’re a 90-year-old eunuch, you let ‘em finish.“), the stimulus package (“First stimulus package was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in“), why people sell companies to Berkshire (“You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever. Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.“) and bridge (“If I’m playing bridge and a naked woman walks by, I don’t ever see her…don’t test me on that!“). So it was probably only a matter of time until it rubbed off on his business partner, Charlie Munger, and yet this still sort of feels like someone is stepping on someone else’s toes: Read more »
Back in August, we learned that bond guru Jeffery Gundlach was “preparing a possible bid” for the Buffalo Bills, his hometown team. When yesterday it was reported that the organization had reached an agreement with Sabres owners Terry and Kim Pegula who offered $1.4 billion to become the new owners, we wondered how Gundlach would take the news. After all, this is a man known for getting what he wants, be it his art back from the crooks who stole it, for people to address him as the Pope, the satisfaction of throwing a party specifically designed to tell his former employer to suck it, or a vintage edition copy of Ass Traffic Vol. 49. To that end, he has never bit his tongue when commenting on a situation in which he felt he was done dirty or that others were in the wrong. So it was surprising to read the statement he released today, in which he sounded curiously upbeat about losing out on the team. Read more »