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 4/10 Good --- dealscape.thedealblogs.com http://www.thedeal.com/dealscape/atom.xml
Wednesday, June 18, 2008 --- 63 days ago http://www.thedeal.com/dealscape/2008/06/schumer_may_propose_bill_conce.php
 A battle over whether some activist hedge fund managers will be able to continue to sneak up on certain target corporations is being waged in the courts, the Securities and Exchange Commission and now even on Capitol Hill. Sen. Charles Schumer, D-N.Y., sent a letter Tuesday to SEC Chairman Christopher Cox expressing his concern that no penalties or injunctions were connected to a district judge's ruling on June 11 that activist investor, The Children's Investment Fund, violated securities laws by forming a group with another investor, 3G Capital Partners, and not disclosing that partnership when it was required by SEC rules (Schedule 13D rules). The court also ruled that TCI used so-called "cash settled equity swaps," to get around SEC disclosure rules. Railroad operator CSX Corp., TCI's target, argues that the violations did not give executives sufficient time to prepare for the incoming TCI campaign. CSX, frustrated with the court's decision not to issue a substantive penalty, is appealing it to the 2nd Circuit Court of Appeals. The railroad operator is seeking to have TCI's 8.7% equity stake "sterilized," so these shares can't be voted in the proxy contest. The district court argues that it was hamstrung from giving CSX the relief it sought, leaving the issue of penalties to the SEC, which may not provide that relief. Seeing that the SEC may remain mum, Schumer has decided to prod the agency a bit -- it seems writing letters ... |
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