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The Morning Brief: SEC JOBS Act Inaction Riles Business Owners

The Securities and Exchange Commission is starting to feel the heat for not yet implementing the Jumpstart Our Business Startups, or JOBS, Act, which would enable some hedge funds to advertise and make it easier for many small companies to issue securities. In the past few days, at least two individuals have submitted comment letters even though it is way past the deadline. “The SEC and its commissioners do not have the right to oppose nor to alter the JOBS Act in any way,” states Jason Coombs, co-founder and CEO of Public Startup Company, Inc. An anonymous writer asserted earlier in the week: “The SEC is leaving…business owners and their employees in limbo by refusing to implement the laws imposed by Congress.” President Obama signed the JOBS Act into law on April 5. On August 29, the SEC proposed rules to eliminate the ban on soliciting and advertising in certain securities offerings and sought comments on the rules for 30 days. But so far, it has not followed up with revised rule proposals. An SEC spokesman says in an e-mail message: “The Commission and staff are working hard to write effective rules as soon as possible, with the emphasis on effective.” Ken Griffin’s Citadel Advisors disclosed it took an initial stake of 1.2 million shares or so of The WhiteWave Foods Co., or 5.4 percent of the total outstanding, as a passive investment. The company sells organic foods. Citadel also said it owns more than 5.8 million shares of Fairchild Semiconductor International, or 4.6 percent of the total outstanding, also as a passive investment. Kyle Bass’ Hayman Capital Management, L.P., disclosed a 9.95 percent stake in Dex One Corp., a marketing services company. This too is a passive investment. Separately, Hayman disclosed a 9.96 position in Supermedia, a yellow pages directory publisher. Shareholder activist hedge-fund firm Starboard Value raised its stake in Regis Corp. to 6.9 percent. In late October Starboard won three seats on the hair salon chain’s seven-member board of directors. In late November, Regis CFO Brent Moen said he will leave the company in January. He is being replaced by Steven Spiegel, a former executive with Unilever Group and Alberto Culver.

These have been tough times for commodity hedge funds, with the average commodity fund down 3 percent through November, according to the Newedge index that tracks these funds. London-based Clive Capital’s $2 billion fund is down more than 8 percent through December after losing money in 2011. However, at least two funds, both operated by commodity industry giants, are making money this year: The Louis Dreyfus Commodities Alpha Fund is up about 7 percent through November, while Black River Asset Management’s Commodity Trading Fund, owned by Cargill, climbed 9.2 percent through November.

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