Category: Business News (Page 2 of 44)

The Securities and Exchange Commission (SEC) is answering to denying a whistleblower award in a new court session.

An appeals court upheld the U.S. Securities and Exchange Commission’s decision to deny a whistleblower award in a case involving short seller Carson Block, while at the same time broadly questioning how the agency decides who receives awards from its cash-for-tips program. 

Last year, the Justice Department targeted Muddy Waters for flooding the market with fake orders, also known as ‘spoofing’.

Founder of Muddy Waters, Carson Block was served with a search warrant by an FBI agent.

The ongoing investigation was one of the many probes targeting hedge funds for illegal short selling strategies at the time.

Claimant Jamie Doe filed a whistleblower award application with the SEC, claiming to be a principal author of a 2011 report published by equity research firm Muddy Waters that contained information of the alleged misconduct.

His application was denied by the agency even though the SEC order cited the report in its investigation and settlement and credited Doe as an author of the report.

The SEC said Doe failed to provide the information directly to the SEC as the staff found the public report themselves, disqualifying Doe as a whistleblower. 

The Third Circuit decision on Friday agreed with the SEC’s decision, saying the appellant failed to demonstrate the SEC acted arbitrarily in concluding his application failed to meet the whistleblower requirements.

The award was instead given to Kevin Barnes, the direct informant in the case.

Hedge Fund Planned Whistleblower Scheme

To complicate matters, Muddy Waters’ CEO planned this whistleblower event only to get sued by his accomplice in the end.

Kevin Barnes, a private investor, last year sued Carson Block in New York federal court, saying that the two men worked together in producing the research that ultimately led to the SEC award and that they agreed to share proceeds from legal or regulatory actions stemming from their research, The Wall Street Journal previously reported.

Barnes is seeking $7 million from Block.

Cason Block is suing Barnes for defamation claiming he has suffered damages of more than $75,000.

A magistrate judge in the Texas case suggested in March the case be dismissed, to which Block objected.

The New York case is pending.

“Mr. Barnes looks forward to continuing his meritorious claims against Mr. Block for breach of their partnership agreement in the ongoing Southern District of New York matter.

Mr. Barnes will not be dissuaded by spurious accusations in improper venues,” Evan Fried, an attorney at law firm Slarskey who is representing Barnes, said in an email. 

Read: Citadel Draws Fresh Scrutiny from SEC in New Risky Bets

Other SEC News Today

Bankers are urging the SEC to looking into manipulative trading, particularly into abusive short selling.

Earlier this month, Reuters reported that the White House had vowed to monitor the possibility of illegal short selling as shares in the banking sector plunged.

Now The American Bankers Association on is urging federal regulators to investigate significant short sales of publicly traded banking equities that it said were “disconnected from the underlying financial realities.”

Retail investors are raising concerns over the banking sector’s requests, stating that the SEC should address manipulative trading practices in individual company stocks too, not just within the banking sector.

“We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence,” the banking group said.

“These measures include, at a minimum, a clear message and appropriate enforcement actions against market manipulation and other abusive short selling practices.”

Days after White House press secretary Karine Jean-Pierre said President Biden’s administration was looking into short seller activity around bank shares in the United States, triggering predictions of a possible ban, JPMorgan CEO has expressed his view that short-selling of bank stocks should, indeed, be prohibited.

Specifically, Jamie Dimon believes that regulators “vigorously” go after unscrupulous short-sellers, or anyone doing anything wrong in terms of stock options, derivatives, and short-sales, as he told Bloomberg TV anchor Francine Lacqua in an interview published on May 11.

You can read his entire take here.

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AMC Entertainment (NYSE:AMC) CEO Adam Aron announced that 1 million investors have now enrolled in AMC’s Investor Connect.

Launched in 2021, Investor Connect lets AMC shareholders self-identify through the company’s website to receive special offers and company updates.

“ONE MILLION PEOPLE have now enrolled as members. While I get a few hate messages, AMC is SO fortunate to have passionate retail investors with us. TY, TY, TY!” said Adam Aron on Twitter.

AMC Entertainment announced in early May the movie theatre chain beat Wall Street expectations for its first quarter results.

“Our results for the first quarter of 2023 represent AMC’s strongest first quarter in four full years.

We kicked off 2023 by continuing on our positive glide path to recovery, with more than a 21% growth in total revenues and a $69 million improvement in Adjusted EBITDA compared to the previous year.

The first quarter of 2023 and fourth quarter of 2022 mark the first two consecutive quarters of EBITDA since March of 2020.

This progress is a testament to the ongoing recovery in the industrywide box office, as well as AMC’s enduring commitment to the excellence and innovation as our guests enjoy a superb movie-going experience at our theatres,” said AMC CEO Adam Aron.

AMC Entertainment stock is currently up more than +18% this year-to-date.

Macquarie Analyst Expects to See Big Growth In AMC

Macquarie Analyst Chad Beynon expects to see big growth in AMC Entertainment.

“We expect AMC’s business to grow with the market and benefit from strong flow-through given significant fixed costs in the business,” the analyst predicted.

The analysts with Macquarie Research anticipate that domestic industry box-office revenue will reach $8.7 billion in 2023.

If that happens, it will represent a 19% year-over-year improvement. 

“Road to recovery getting better with box-office strength,” said Macquarie Research analyst Chad Beynon.

“Overall, AMC is highly optimistic about film volumes recovering to pre-pandemic levels over the next few years, supported by growing theatrical aspirations from the likes of Amazon and Apple,” he continued.

The analyst firm also pointed to concession spending at AMC, with first-quarter food and beverage spending per person hitting an all-time high of $7.99, a 50% increase over 2019.

Also Read: Hedge Fund Opposes AMC Proposals in New Letter to Court

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

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• Gain access to EXCLUSIVE FrankNez articles you won’t find here.
• Become part of a private and safe Discord community, just for retail investors.
• Get drawn at the end of the year for holiday giveaways.

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