Bloomberg – The U.S. Securities and Exchange Commission extended a rule forcing hedge funds to tell the agency about short-sale positions amid concerns investors bet against companies after spreading false rumors they will fail.

Investment managers who oversee more than $100 million must to disclose to the SEC the stocks they’ve bet will fall in price until Aug. 1, the agency said in a statement on its Web site today. Those positions won’t be made public, the SEC said.

The SEC said it’s concerned “about the possible unnecessary or artificial price movements” in stocks “that may be based on unfounded rumors and may be exacerbated by short selling.”

The SEC is investigating hedge funds and cracking down on short-selling after lawmakers questioned whether traders spread misinformation and used abusive tactics to attack companies. The collapse of Bear Stearns Cos. in March and Lehman Brothers Holdings Inc.’s September bankruptcy fueled concerns that investors were manipulating financial markets.

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New York Post- Wall Streeters who suspect that hedge funds are behind false rumors about Lehman Brothers and other banks say they’re skeptical that regulators will be able to find and punish those responsible.

"I would love to have someone pinned and pilloried for doing this stuff," said one investment pro who says he is constantly battling merger rumors. "But it’s hard to believe it’s going to be effective."

The doubtful commentary refers to the Securities and Exchange Commission’s oddly timed announcement Sunday that it plans to crack down on false rumors spread by broker-dealers and financial advisers.

The SEC said it will examine controls and procedures at these outfits to ensure they’re doing what they can to prevent a practice that, legally speaking, counts as market manipulation.

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New York (HedgeCo.Net) – Budweiser maker Anheuser-Busch is suing InBev after declaring that their “bargain price” offer of $65 a share is illegal.  Anheuser-Busch accuses InBev of using “deceptive conduct” to try to win control of the company.  

InBev recently filed a consent solicitation statement with regulators in an attempt to take over Anheuser-Busch’s board.  In the new suit, Anheuser-Busch is seeking an injunction against them, in hopes of quelling any form of takeover. 

They also claim that InBev was spewing false rumors of an acquisition last month and their attempts to take over the board is a "self-serving effort" to try to purchase the company at a lowered price.      

"To date, Anheuser-Busch has been unwilling to engage with InBev in a dialogue to achieve a friendly combination. As such, InBev believes it is time to take action to ensure Anheuser-Busch shareholders are provided the opportunity to have a direct voice in the process and a say in the future direction of the company," according to a recent statement by InBev.

Anheuser-Busch also claims in the suit that InBev does not have sufficient financing to facilitate the $46 billion takeover bid stating, "Given the state of the credit markets today, no group of financial institutions would unconditionally commit $40 billion to a borrower to pursue a hostile acquisition."

With St. Louis serving as the battlefield for the case, InBev placed a full-page ad in yesterday’s St. Louis Post-Dispatch.  The ad stated that Budweiser would be expanded globally and the takeover would make for a stronger, more competitive global company.

Anheuser-Busch shares closed at $61.76 at a share on Tuesday.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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