Platinum Partners’ Executives Charged With $1 Billion Securities Fraud (The Wall Street Journal)
Top executives of hedge fund Platinum Partners were arrested Monday morning and charged with defrauding investors in one of the biggest such cases since Bernard L. Madoff’s Ponzi scheme. As recently as this fall, Platinum told investors it oversaw more than $1 billion scattered in eclectic investments like loans to bankrupt companies and thinly-traded pharmaceutical stocks. It boasted one of the steadiest performance track records in the hedge-fund industry, with no down years for its funds. The indictment unsealed Monday in federal court in Brooklyn charges Platinum founder and Chief Investment Officer Mark Nordlicht, co-chief investment officer David Levy, and former president Uri Landesman with counts of securities fraud, investment adviser fraud and conspiracy.
Pushed By Investor Ackman, Chipotle Adds Four New Directors (Reuters)
Chipotle Mexican Grill Inc (CMG.N), under pressure from activist investor Bill Ackman, named four new board members on Friday, paving the way for a reunion of sorts between its chief executive and a former top executive at McDonald’s, which once owned the burrito chain. Matthew Paull, a former McDonald’s Corp (MCD.N) chief financial officer, will join the Chipotle board. Media executives Paul Cappuccio and Robin Hickenlooper, as well as Ali Namvar, a partner at Ackman’s hedge fund Pershing Square Capital Management, round out the additions. Ackman, Chipotle’s largest single investor with a nearly 10-percent stake, sought to end the company’s co-CEO arrangement and replace some long-serving directors with fresh blood, especially in marketing and food safety, according to people familiar with his thinking.
Paulson Advantage Said Paring Loss With Fannie-Freddie (Bloomberg)
John Paulson trimmed the double-digit losses in one of his main hedge funds last month thanks to a stake in government-sponsored entities Fannie Mae and Freddie Mac that surged on the back of the U.S. presidential election. Paulson & Co.’s Advantage fund, which wagers on companies going through corporate events, climbed 9 percent in November, paring this year’s loss to 16 percent from more than 20 percent as of October, according to a person with knowledge of the matter. Paulson’s Partners merger strategy rose slightly, bringing losses for the year to about 27 percent, said the person, who asked not to be named because results are private.
Greenlight Capital Re CEO Barton Hedges To Leave (The Wall Street Journal)
Greenlight Capital Re Ltd. on Monday said Barton Hedges is stepping down as chief executive and a director of the property-and-casualty reinsurance company, effective March 31. Former chief executive and current board member Leonard Goldberg will serve as interim CEO until a successor is found, the reinsurer said. Greenlight, which is closely associated with its chairman, hedge-fund manager David Einhorn, also said it wasn’t aware “of any circumstance or event that will have a material adverse impact” on its operations or financial positions.
Whitney Tilson Doesn’t Trust ‘Trump Rally,’ Expects Volatility (Bloomberg)
Kase Capital Management founder Whitney Tilson says about 60 percent of his assets are sitting in cash amid a rally that has added about $1.6 trillion to U.S. share prices since Election Day. “A lot of volatility” is in store for the market when President-elect Donald Trump takes office in January, he said. “I am highly skeptical of this Trump rally,” the hedge fund manager wrote Saturday in an e-mail. Tilson, who supported Democrat Hillary Clinton in the election, said Trump had exhibited “reckless behavior” and shown a disdain for “experts.” Since the Nov. 8 election the Dow Jones industrial average has risen 8.2 percent, the biggest gain in the period that’s greeted any U.S. president since 1900.
Chipotle Deal With Pershing Provides No Reason To Buy Its Shares (TheStreet)
Shares of fast-casual restaurant chain Chipotle Mexican Grill (CMG) rose Friday, spurred by the announcement that the company has reached a settlement with its second-largest shareholder, activist investor Bill Ackman‘s Pershing Square Capital. But the news is unlikely to have any larger impact on investors. Ackman is well known for forcing big shakeups in the companies that his fund acquires. So it shouldn’t have been surprising that his first big change at Chipotle Mexican Grill was to install four new board members.
Shanda Group To Increase Stake In Legg Mason To Up To 15 Percent (Reuters)
Asset manager Legg Mason Inc (LM.N) said on Monday its largest shareholder, Chinese billionaire Tianqiao Chen’s Shanda Group, plans to increase its stake in the company to up to 15 percent. Shanda, which bought a 10 percent stake in Legg Mason from activist investor Trian Fund Management LP in April, had a 10.4 percent stake as of July 6. The company also said two Shanda executives, including CEO Chen, would join its board by June 1. The Singapore-based private investment firm also became the biggest shareholder in online lender LendingClub Corp (LC.N) after raising its stake to 15.13 percent earlier this year.
Scaramucci Says Greg Fleming Advising On Possible SkyBridge Sale (Bloomberg)
Anthony Scaramucci, founder of SkyBridge Capital, says he has a team in place to explore the sale of his firm and discussions with possible buyers are underway. Scaramucci, who serves on President-elect Donald Trump’s transition team, told Bloomberg Television Friday that Greg Fleming, who previously led Morgan Stanley’s retail brokerage, is helping with the sale. Scaramucci is exploring a sale of his fund of hedge funds firm in the event that he takes a job with the incoming administration. He has expressed interest in a post on the Council of Economic Advisers and as finance chairman of the Republican National Committee, according to a person familiar with the matter.
Marathon Petroleum Extends Director Deadline Amid Elliott Pressure (Reuters)
Marathon Petroleum Corp. (MPC.N) extended its board director nomination deadline on Friday amid break-up pressure from hedge fund Elliott Management LP. In a securities filing disclosed on Friday, Marathon said it amended its bylaws to move the deadline for shareholders to nominate board directors to Jan. 9. The original deadline expired on Thursday. New York-based Elliott unveiled a 4 percent stake in the company last month and issued a set of demands it wants Marathon to follow, including spinning off its gas station retail business known as Speedway. Elliott also said the company needs to speed up its so-called “drop down” plan related to its master limited partnership, MPLX Inc. (MPLX.N).
