Editor’s Note: Related tickers: BlackRock, Inc. (NYSE:BLK), J.C. Penney Company, Inc. (NYSE:JCP), Herbalife Ltd. (NYSE:HLF), Harbinger Group Inc (NYSE:HRG), Dell Inc. (NASDAQ:DELL)
Falcone Agrees to Five-Year Ban in Stiffer Deal With SEC (BusinessWeek)
For Philip Falcone, the price of hanging on to his dream of building a wireless broadband network is a new, tougher settlement with U.S. regulators that requires him to admit wrongdoing and bans him from the hedge-fund industry that made him a billionaire. Falcone will be barred from the industry for at least five years, up from two years under a proposed deal rejected by the U.S. Securities and Exchange Commission in July, the regulator said yesterday. The earlier settlement didn’t force him or Harbinger Capital Partners LLC, his $3 billion firm, to admit any wrongdoing. In return, the agency is allowing him to continue running Harbinger Group Inc (NYSE:HRG), a publicly traded company, as well as LightSquared Inc., a venture that is seeking to build a wireless broadband network.
Kyle Bass Said to Bet on J.C. Penney Comeback With Loan Deal (BusinessWeek)
Hedge-fund manager J. Kyle Bass is betting on a comeback by J.C. Penney Company, Inc. (NYSE:JCP), the retailer roiled by falling sales and a dispute with investor William Ackman, according to a person familiar with the matter. Bass, who focuses on corporate turnarounds, has accumulated a long position in J.C. Penney Company, Inc. (NYSE:JCP) over the past two weeks by buying the company’s secured loans, said the person, who asked not to be named because the information is private. He has also sold a type of insurance called credit-default swaps to other investors that pays off only if the Plano, Texas-based company defaults on its debts, an event he considers unlikely, said the person.
BlackRock poaches NewSmith manager for underperforming UK Income fund (MoneyMarketing)
BlackRock, Inc. (NYSE:BLK) has hired NewSmith’s Mark Wharrier to work with Adam Avigdori on the £583m BlackRock UK Income fund. Wharrier, who joins BlackRock, Inc. (NYSE:BLK) in mid-September, is a co-manager of the flagship NewSmith UK Hedge fund, which invests in the FTSE 350. He is also co-manager on the NewSmith UK Equity fund, which is a Ucits IV vehicle. Avigdori, who has worked as co-manager on the BlackRock, Inc. (NYSE:BLK) UK Income since 2009, has experienced poor performance with the fund, which is fourth quartile in the IMA UK Equity Income sector over three years to 19 August 2013.
InterOil fiasco scorches Paulson (NYPost)
A small oil and gas exploration company burned its investors yesterday — including hedge-fund titan John Paulson. The controversial InterOil Corp. said its months-long exclusive talks with a unit of ExxonMobil Corp. to develop gas fields in Papua New Guinea had ended without a deal. Non-exclusive talks continue, InterOil said. Reports by the company earlier this year of interest from several bidders in developing the gas fields pumped the stock from the mid-$50s to an intra-day high of $106 in May — and attracted the interest of the well-known Paulson & Co.
Cash-Poor Companies Feed Investor Hunger for ‘Happy Meals’ (WSJ)
When Energy Conversion Devices Inc. needed cash, the struggling solar-panel maker turned itself into what Wall Street likes to call a “Happy Meal.” To make $316 million in bonds more appetizing, the company agreed to lend millions of its shares to hedge funds buying the bonds so they could simultaneously sell the stock in a bet against Energy Conversion’s success. A subsequent crisis in the solar-power industry hit Energy Conversion hard. The bonds, issued in 2008, plunged in value, and last year the company filed for bankruptcy protection, wiping out shareholders.
Executive Edge: Guardian forced to destroy Snowden documents (CNBC)
The boat people of Stamford vs. Ray Dalio’s hedge fund (CNBC)
It was around 9:38 at night when James Cutler realized that things were not going well. Cutler was standing in front of a stage in the auditorium of the Westover Magnet Elementary School in Stamford, Conn. On the stage, sitting on folding chairs behind uneven tables, sat the planning board of the city of Stamford. Packed into the auditorium were 150 or so Stamford residents. Most of them it seemed, hated Cutler. “Can I please take a few moments to explain?” Cutler asked. “NO!” the folks in the auditorium chairs shouted. Cutler was just a few minutes into explaining to the planning board the designs to build a mammoth headquarters for Bridgewater Associates, “the world’s richest and strangest hedge fund” founded by Ray Dalio…
Hedge funds follow Carl Icahn into Dell (BayouBuzz)
Half of the world’s 50 largest hedge funds followed Carl Icahn into Dell Inc. (NASDAQ:DELL) in the second quarter of 2013, according to research from FactSet. Icahn owns roughly 9% of the PC maker and has been battling its founder Michael Dell and the private equity firm Silver Lake to keep the company public. Although Michael Dell and Silver Lake have vowed to go forward with their plan, Icahn’s agitating is one reason that Dell Inc. (NASDAQ:DELL) and Silver Lake increased their takeover offer.
George Soros, Carl Icahn buy shares in Herbalife (JournalNow)
Billionaires George Soros and Carl Icahn bought a combined 5.65 million shares in Herbalife Ltd. (NYSE:HLF). in the second quarter in a bet that hedge-fund manager Bill Ackman is wrong about the nutrition and weight-loss supplement company. Soros Fund Management LLC, the investor’s family office, bought a 4.9 percent stake in Herbalife valued at $227.5 million at the end of the quarter, according to a filing. The company was Soros’s third-largest U.S. stock-listed holding as of June 30. Icahn added 611,354 shares of Herbalife Ltd. (NYSE:HLF), bringing his stake to 17 million shares, valued at $765.9 million at the end of the second quarter, according to a separate filing.
Finance Pros Are Going Nuts Over A New Database That Lets Them Compare Their Compensation Anonymously (BusinessInsider)
This morning SumZero, a networking site for financial professionals, launched a new service — a compensation database where members can submit their pay and compare it to others submitted to the site. As you can imagine, in a matter of minutes the service, SZ Compensation, was going completely nuts. It’s not hard to see why — who doesn’t like a little “I’ll show you mine if you show me yours?” especially in an industry as secretive about pay as finance. In 30 minutes, SumZero members (who are all vetted buy-side professionals at private equity firms, hedge funds and mutual funds) had already sent in over 100 submissions.
Narula’s Metacapital Mortgage Fund gains in July after first-half loss (Reuters)
After four months of losses, hedge fund manager Deepak Narula’s flagship fund posted its biggest gain of the year last month. Narula’s Metacapital Mortgage Opportunities Fund, which boasted double digit gains in the last three years but fell on tough market conditions this year, climbed 1.58 percent in July, according to a monthly fund summary reviewed by Reuters.
Icahn Still Firm on Herbalife (HLF); Seeks to Dismiss Short-Seller Suit (StreetInsider)
Activist investor Carl Icahn has made a nice gain on his long position in Herbalife Ltd. (NYSE:HLF), a position he took following allegations late last year by Pershing Square’s Bill Ackman that the company was nothing more than a pyramid scheme. Ackman, it seems, isn’t the only one irked by Icahn’s actions. Reports out late Monday had Icahn looking to dismiss a lawsuit filed by Florida lawyer Daniel Ravicher, who accused Icahn of perpetuating a pyramid scheme.
