Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

HEDGE FUNDS


NASD INVESTIGATES RETAIL SALES OF HEDGE FUND PRODUCTS


The NASD, concerned brokers may be seizing on the popularity of hedge funds to take advantage of nonprofessional customers, is investigating the sales practices at some of Wall Street’s biggest firms.


The regulator, which polices 5,200 brokerages, sent letters in June to about 10 firms, including Citigroup, Merrill Lynch & Company, and UBS AG, people familiar with the probe said.


The NASD asked the firms what warnings they gave investors when selling hedge fund products with minimum investments of $50,000 or less and whether they paid brokers sales incentives. The NASD said in its letter that the probe “should not be construed” as a sign that investigators have concluded that the firms violated rules or securities laws. Bloomberg News obtained a copy of the June 22 letter.


The investigators are looking for evidence that the firms preyed on nonprofessional customers by inducing them to make unsuitably risky or expensive investments. Most hedge funds, private partnerships that bet on rising and falling prices and often use borrowed money to boost returns, are limited to the wealthy or institutions and require investments of at least $1 million.


“These are not very sophisticated investors and these are very complex investment pools, so you’d really want to know whether the disclosures were sufficient,” the chairman of MFS Investment Management in Boston, a mutual fund manager with about $150 billion in assets, Robert Pozen, said.


– Bloomberg News


TRADE


NEGOTIATORS CLOSE TO DECIDING LIMIT OF CHINESE TEX TILE IMPORTS


WASHINGTON – Negotiators are close to a comprehensive agreement to limit imports of Chinese clothing and textiles into America, but another meeting will be required to complete a deal, American officials said yesterday.


The administration’s special textiles negotiator, David Spooner, said during a conference call that two days of talks in San Francisco had allowed both sides to narrow their differences.


“We have had extremely productive discussions over the last two days,” Mr. Spooner said during a break in the discussions.


While Mr. Spooner had expressed some hope that a deal could be reached yesterday, the talks wrapped up later in the day with American officials saying another meeting would be required.


“We have just completed two days of productive talks with China on a broad textiles agreement and we plan to meet again soon,” a spokesman for U.S. Trade Representative Rob Portman, John Stubbs, said.


– Associated Press


COMMERCE DEPARTMENT ISSUES RULING ON ORANGE JUICE TARIFFS


WASHINGTON – The Commerce Department issued a preliminary ruling yesterday ordering penalty tariffs of up to 60% on orange juice from Brazil that it says is being sold in America at unfairly low prices.


The department acted in response to a complaint filed last December by Florida Citrus Mutual and other Florida citrus growers. The Florida growers argued that Brazilian companies were selling orange juice, including frozen concentrate, at prices that did not reflect fair market values, a practice known as dumping.


After an investigation, the department’s International Trade Administration agreed with the complaint and announced the anti-dumping duties to raise prices to what the government considers fair values.


Those tariffs ranged from 24.62% to a high of 60.29%. The highest tariff was imposed on Montecitrus Industria e Comerico Limitada, which Commerce said stopped cooperating with its tariff-setting investigation.


With yesterday’s announcement, U.S. Customs and Border Protection agents will begin collecting the penalty tariffs on orange juice shipments from Brazil, pending final rulings in the case.


– Associated Press


WALL STREET


GRASSO SAYS NYSE SHOULD PAY HIM TO SETTLE Richard Grasso, the former New York Stock Exchange Chief Executive being sued for the return of at least $100 million of his compensation, said the exchange should pay him to settle the case, not the other way around.


New York Attorney General Eliot Spitzer brought the suit against Mr. Grasso last year on behalf of the Big Board. NYSE Chief Executive John Thain is willing to settle if the former chairman gives back $25 million, Newsweek reported on its Web site on Tuesday.


“I have no interest in any settlement where I would give any money back to the exchange,” Mr. Grasso said yesterday in an interview. “A nickel is an admission on my part that I did something wrong. I will never do that.”


– Bloomberg News


CLOTHING


J. CREW FILES FOR IPO


Apparel retailer J. Crew Group filed for an initial public offering yesterday of up to $200 million in common stock, according to a Form S-1 filed with the Securities and Exchange Commission.


Details about the number of shares to be offered or an estimated price range for the IPO weren’t disclosed in yesterday’s registration.


The New York-based company said it plans to list its common stock on the New York Stock Exchange under the symbol JCG. Goldman Sachs and Bear Stearns were listed as underwriters for the offering. The company intends to use the net proceeds from the IPO to redeem preferred stock and some of its debt and to pay related costs. For the fiscal year ended January 29, the company posted a loss of $100.3 million, wider from the $50.2 million for the previous fiscal year. The latest fiscal year included a $49.8 million charge for debt refinancing, compared with a gain of $41.1 million in the previous year.


– Dow Jones Newswires


AIRLINES


UPS ORDERS EIGHT 747s WORTH $1.9 BILLION


United Parcel Service, the world’s largest package-shipping company, said it ordered eight Boeing Co. 747-400 aircraft as international deliveries grow.


UPS, based in Atlanta, didn’t disclose terms of the order. Based on list prices that don’t include customer discounts, the order may be valued at as much as $1.9 billion. The planes will be delivered starting in June 2007, with the last arriving in 2008, a UPS spokesman, Mark Giuffre, said yesterday.


UPS is buying the planes following an 18% rise in shipments between countries in the second quarter, led by 99% growth from China. The Boeing planes will be used on flights between the company’s hubs in Asia, Europe, and North America, Mr. Giuffre said.


“It’s definitely smart for UPS to be ramping up their international capacity now, as opposed to later,” a Standard & Poor’s equity analyst, James Corridore, said. “Demand is there now and growing.”


– Bloomberg News


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