Archive for November, 2008

New Jersey drawing heat for hedge-fund foray: report (Reuters)

Monday, November 24th, 2008 | Finance News

(Reuters) –
New Jersey's pension fund is under fire over a series of hedge-fund investments, the Wall Street Journal said.

New Jersey made the investments last month, to funds run by BlackRock Inc (BLK.N), Canyon Capital Advisors LLC and GoldenTree Asset Management LP, as they were "facing the equivalent of margin calls," William Clark, director of the New Jersey Division of Investment, told the paper in an interview.

In effect, the funds, which had borrowed money for investments, either faced or anticipated facing demands from lenders for cash as the value of those investments fell, the paper said.

State legislators, upon learning of the investments, are questioning both the wisdom of the decisions as well as the process, according to the paper.

At $49.5 million each, the investments came just below the $50 million threshold that requires the fund to explain an investment to an oversight board before moving forward, the paper said.

Clark maintained to legislators at a public hearing on Monday that they needed to get the money to the hedge funds quickly and nothing was improper, the paper said.

He noted that hedge-fund investments are disclosed on a monthly basis at regularly scheduled board meetings, where news of two of these investments emerged last week, according to the paper.

The New Jersey pension fund said that, effective immediately, all alternative fund investments, such as in hedge funds, private equity and real estate, under $50 million will be posted right away on its website, according to the paper.

Rather than dump assets in falling or dysfunctional markets to meet cash demands, some hedge funds have turned to their deep-pocketed investors to bail them out and at the same time help those investors preserve their initial investments, even if that is at the expense of new cash, the paper said.

The New Jersey Division of Investment could not be immediately reached for comment.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Alex Richardson)

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Philippine stock index jumps 6 percent (AP)

Monday, November 24th, 2008 | Finance News

MANILA, Philippines – Philippine shares jumped Tuesday, led by banks as investors cheered the U.S. government's bailout of troubled banking giant Citigroup.

The Philippine Stock Exchange index surged 108.56 points, or 6 percent, to 1,908.18, extending Monday's 1.9 percent rise. The index lost 10.7 percent last week.

Investors who reacted to Citigroup's troubles by selling shares in local banks like Rizal Commercial Banking Corp., Metropolitan Bank and Trust Company and Banco De Oro Unibank Inc. were now buying back at bargain prices, traders said.

Ayala Corp., the country's largest conglomerate, rose 7.9 percent to 191 pesos. Its unit Bank of the Philippine Islands surged 9.3 percent to 41 pesos, and rival Metrobank was up 7.7 percent at 24.25 pesos.

Philippine Long Distance Telephone Co. was higher by 6.5 percent at 2,275 pesos, in line with the overnight advance of its American depository receipts in New York.

Property developer Megaworld Corp. bucked the trend, shedding 3.7 percent to 0.51 peso on concern that the prolonged global financial crisis may hurt the local real estate sector.

Gainers outnumbered decliners 77 to 26, while 24 issues were unchanged.

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Humane Society sues retailers, designers over fur (AP)

Monday, November 24th, 2008 | Finance News

WASHINGTON – The Humane Society of the United States filed a lawsuit Monday against six major retailers and fashion designers alleging they falsely advertise and label fur garments.

The suit claims that Dillard's, Lord & Taylor, Macy's, Neiman Marcus, Saks Fifth Avenue and designer Andrew Marc misrepresent fur products by labeling and marketing them as "faux fur," when they are not; or by advertising and labeling products as common raccoon, fox or rabbit fur, when they are really made from raccoon dog, a canine species from Asia.

The complaint also alleges that the retailers are in violation of the federal Fur Products Labeling Act and Federal Trade Commission Act, which prohibit mislabeling of fur products.

Rebecca Judd, senior attorney with the Humane Society, said the group is seeking a court order to halt to what she called deceptive business practices by retailers.

"We filed this after we tried now for several years to have the fur industry stop their widespread false advertising and labeling," Judd said.

She added the group wants to alert consumers, especially those concerned about animal welfare, that fur garments are "best left out of the shopping bag."

Representatives from Macy's and Neiman Marcus said they don't comment on pending litigation. Dillard's, Lord & Taylor and Andrew Marc did not return telephone calls for comment. A representative from Saks could not be immediately reached by The Associated Press after calls seeking comment.

Judd said the suit was filed in D.C. under its Consumer Protection Procedures Act because the Humane Society focused much of its investigation in the Washington region. All the retailers named in the suit have stores in the area. Andrew Marc sells his brands online and in retail stores around Washington.

Since it began investigating in 2005, Judd said the Humane Society has sent dozens of letters to retailers — including those named in Monday's suit — informing them of their findings.

Some companies, including Calvin Klein and Tommy Hilfiger stopped selling fur products, Judd said. Others, such as rap artist Sean "Diddy" Combs, quit producing coats from his Sean John line that had raccoon dog fur; and rapper Jay-Z pulled coats with raccoon dog from his Rocawear label.

Raccoon dogs resemble oversized, fluffy raccoons and aren't kept as pets. According to the suit, more than 1.5 million of them are being raised for their fur in China, and have been documented to be skinned alive. Importing raccoon dog fur isn't illegal.

The Humane Society never received a "written commitment to stop selling mislabeled fur" from the six defendants after alerting them to the group's findings, Judd said.

The defendants are also among more than 20 companies named in two legal petitions the Humane Society filed earlier this year and in 2007 with the Federal Trade Commission, which enforces the federal fur labeling act.

In the petitions, the animal rights group ask the commission to fine the high-end retailers and designers of clothing that contains mislabeled fur. The group also would like inventories seized and, possibly, charges filed.

In 2007, Charles Jayson, chief executive of Andrew Marc, disputed the Humane Society and insisted in a statement that all fur on his coats labeled as raccoon contains "only farm-bred raccoon fur from Finland, and our items labeled 'faux fur' are a 100 percent synthetic fabric."

Mislabeling fur is a misdemeanor punishable by up to a $5,000 fine or a year in prison. Fur valued at less than $150 doesn't have to be labeled.

The petitions are still pending.

The Humane Society said it began investigating mislabeled fur claims after the society got a tip from someone who bought a coat with trim labeled as faux fur that felt real. At the time, teams bought coats from popular retailers and then had the coats tested by mass spectrometry, which measures the mass and sequence of proteins.

The society said most of the fur came from China.

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Associated Press writer Sarah Skidmore contributed to this report.

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