Fannie, Freddie Investors Lose Suits Over Lost Dividends (Bloomberg)
The lawsuits, among the first of almost 20 related cases to be decided, were filed by investors including Bruce Berkowitz, the head of Fairholme Capital Management LLC, who was named Morningstar Inc.’s domestic stock manager of the decade for the 2000s, and billionaire hedge-fund manager Richard Perry’s Perry Capital LLC. The investors sued for breach of contract over allegedly promised dividends and liquidation preferences, and what they called an illegal “taking” under the U.S. Constitution. U.S. District Judge Royce Lamberth rejected their claims today, finding that the government is allowed under a 2012 amendment to the companies’ bailout agreements to sweep “nearly all” profits from Fannie Mae and Freddie Mac to the U.S. Treasury. The U.S. is facing almost 20 federal actions brought by investors claiming they’ve been barred from participating in post-bailout profits earned by Fannie Mae and Freddie Mac. At least $33 billion -- the face value of potentially worthless preferred shares in the companies -- is at stake in the cases, as well as investors’ efforts to win congressional support for the idea of reviving Fannie Mae and Freddie Mac.
American Apparel’s Board Said to Be Open to Letting Charney Stay (Bloomberg)
The retailer, which ousted Charney as CEO almost four months ago in an acrimonious split, is considering giving him a new role, said the people, who asked not to be identified because the deliberations are private. In the meantime, Charney is serving as a paid strategic consultant. Reaching an agreement with Charney would help stave off a legal fight and preserve continuity at the company, which he founded in 1998. His cause has been helped by Standard General LP, a hedge fund that shook up the board in July and spurred the retail chain to take a second look at the executive.
Snoop Dogg joins Reddit funding round (FT)
Snoop Dogg, the hip-hop star, Silicon Valley investor Marc Andreessen and the Oscar-winning actor Jared Leto have joined a $50m funding round for Reddit, the online discussion forum. The fundraising for the site, which describes itself as “front page of the internet”, was led by Sam Altman, president of Y Combinator, the start-up incubator that helped launch Reddit in 2004. Other investors included Alfred Lin of Sequoia Capital and PayPal founder Peter Thiel.
Critical Time for Pimco, as Pensions Consider Removing Funds in Wake of Bill Gross Departure (Dealbook)
The next few days and weeks could be critical for the bond giant as it tries to stem a wave of money flowing out after the abrupt departure of its co-founder last Friday. For years, Mr. Gross, 70, was the public face of Pimco and one of Wall Street’s most successful bond investors.
New Pimco Captain's Style: More Teamwork, Fewer TV Cameras (WSJ)
...while Mr. Ivascyn (pronounced eye-vuh-sun) is making the media rounds this week to reassure clients after Mr. Gross left to take a post at Janus Capital Group Inc., he prefers not to appear on television. In an interview with The Wall Street Journal Tuesday, Mr. Ivascyn, 45 years old, said the shifts underscore the team focus at Pimco following the departure of Mr. Gross, its 70-year-old co-founder, investment chief and public face. "The new structure is based on shared responsibility," Mr. Ivascyn says. "We're shifting from a founder-driven management structure to one that, in short, emphasizes teamwork."
Poker-Playing Hedge Fund Manager Sued Over Premature Bet (Bloomberg)
If a U.S. regulator has its way, Daniel Shak will soon have more time to focus on gambling at poker tables and none at all to spend betting on derivatives. Shak, founder of SHK Management LLC and a competitor in the World Series of Poker, has been sued by the Commodity Futures Trading Commission over allegations that he violated a two-year ban from some trading included in a 2013 accord settling claims that he tried to manipulate oil futures prices. Six months after the settlement, the hedge fund manager traded two gold contracts that were “the exact type of commodity futures trading that he agreed to be banned from trading,” the CFTC said in a complaint in federal court in Washington today.
Wearable Futons: Clothing Of The Future? (HP)
Japan, the country that gave the world condom cookbooks, burgers that are completely black and men who eat their own genitals in the name of art is giving the world something almost as weird: suits that double as futon mattresses. King Jim, a Japanese company specializing in office equipment and supplies, recently started selling something called the Wearable Futon Air Mat Set. It's a jumpsuit made of nylon, polyethylene and polyester that can double between as an overcoat and a bed, for those times when you're not sure where you're going to sleep. The product is available in Japan for about $40 from supplier King Jim -- and that includes an air mattress, according to the Daily Mail.
SEC Grants Citigroup Waivers, Easing Hedge-Fund Curbs (WSJ)
Citigroup is no longer a "bad actor" in the eyes of U.S. securities regulators. The Securities and Exchange Commission quietly granted the bank waivers on restrictions that crimped a range of its activities, including selling investments in hedge funds to individuals, following a recent securities-fraud settlement. The SEC, which in August completed a $285 million settlement with Citigroup over allegations related to complex debt instruments, granted the waivers late Friday, according to notices on its website. The relief allows Citigroup to resume selling investments in hedge funds and private-equity funds to wealthy clients. The bank also retains its special status as a "well-known seasoned issuer," or WKSI, which allows large companies to quickly issue stocks or bonds without the speed bump of an SEC review of their offerings.
BNY Mellon to shut derivatives sales, trading business (Reuters)
Bank of New York Mellon Corp (BK.N) will exit the derivatives sales and trading business that operates as part of the company's global markets group. "Global Markets will offer a modified version of its cash rates offering to support BNY Mellon's investment services clients," company spokesman Ron Summer said in an email. The decision affects about 50 people, almost all in New York, Bloomberg said, citing a person familiar with the matter.
Property Tycoon Reveals $20 Billion Solar-Led Portfolio (Bloomberg)
The Hong Kong property tycoon who amassed about $20 billion in Chinese solar manufacturing assets is expanding his energy technology holdings and may seek the help of Wall Street to do it. Zheng Jianming, chairman and founder of Asia Pacific Resources Development Investment Ltd., is considering a public listing for the holding company he created to manage what may be the biggest collection of solar-manufacturing businesses.
Puerto Rico Bond Plans Slip Out (WSJ)
Investors got an early peek Tuesday at Puerto Rico's plan to raise $900 million in its first bond sale since March, with the publication of some bond information on a website run by a Wall Street self-regulator. The tax-and-revenue-anticipation notes will mature in June 2015 and have an interest rate of 7.75%, according to a notice posted on the Electronic Municipal Market Access website, which didn't include an official statement, an amount being borrowed or any price information. The posting of the planned bonds' so-called Cusip numbers surprised some investors still waiting for the island's lawmakers to approve the deal. It was the latest twist in the saga of the financially troubled commonwealth, which has $73 billion in debt outstanding and in June passed a law allowing some public agencies to restructure their debts, leading investors to fear losses.
Motivated Cops Chase Down Oregon Man Who Stole Pastry-Packed Donut Land Delivery Van (TSG)
After leading police on a two-mile chase, an Oregon man who stole a delivery van packed with doughnuts pulled the vehicle over and placed his hands out the window as a pastry fell from his grip, according to cops. The 2004 Chevrolet Astro van was stolen around 2 AM today when its driver stopped to make a delivery in Portland. The vehicle is owned by Donut Land, a business headquarted in Tualatin, a Portland suburb. Investigators allege that Peter Leon Johansen, 34, got into the unlocked vehicle and drove off. But soon after the van was boosted, a cop spotted the vehicle and gave chase. Johansen eventually pulled over and complied with an officer’s demands to put his hands out the van’s window. “The suspect put his hands out the window and the officer observed a pastry fall from the suspect’s hand,” according to a Portland Police Bureau report.