‘Frontline’ documentary abruptly rescheduled
Investor James Chanos, head of New York hedge fund Kynikos Associates, said in April that he is increasingly concerned about bribery and corruption in Macau, according to a new profile in Newsweek. That’s prompted a lawsuit from Steve Wynn, who says Chanos’s comments amount to slander.
“I got a little nervous the deeper we dug into Macau,” Chanos told a conference of journalism students at an invitation-only event at the University of California at Berkeley in April. “Although I was long on the U.S. casino operators like Mr. Adelson and Mr. Wynn, I began to really get concerned about the risk I was taking with clients’ money under the Foreign Corrupt Practices Act.”
The term “long” expresses optimism about the growth of share values. Steve Wynn’s Wynn Resorts and Sheldon Adelson’s Las Vegas Sands are both firmly established in Macau’s casino landscape.
According to Newsweek, Chanos’ comments “effectively amounted to an indictment of the Chinese financial and economic system,” in which “so-called junket companies recruit wealthy mainland Chinese gamblers to come to Macau.” Chanos said the culture there is one of “legalized fraud.”
“We’re looking at the Macau situation as a wholesale conduit for capital flight out of China, which has implications for the banking sector and the credit system,” he said.
In his lawsuit, Wynn said gaming regulators in Nevada and Massachusetts, the SEC, and other U.S. government agencies have “thoroughly investigated” him and his company and found no reliable evidence of a FCPA violation, according to Business Insider.
Coincidentally, Chanos participated in a documentary on gaming that was to have appeared last month on the PBS investigative documentary series Frontline. The episode was cancelled at the last minute; a look at the recent scandals in the NFL took its place. Sources said that Chanos partially funded the episode, with a goal of selling Wynn stock short.
The program Twitter account explained that the broadcast was “delayed until investigation is finished.”
But Wynn had a different take. He said the episode was pulled because it was “so embarrassing.” Wynn is seeking unspecified compensatory and punitive damages in his lawsuit.
