Hedge Fund Manager Chanos Accused in Wynn Slander SuitEdvard Pettersson and Christopher Palmeri
Wynn Resorts Ltd. sued hedge fund short-seller Jim Chanos for slander, claiming that he falsely alleged the casino operator had violated a U.S. anti-bribery law.
Chanos, president and founder of New York-based Kynikos Associates LP, told an audience at an invitation-only event in Berkeley, California, that Wynn and its Chairman Steve Wynn had violated the U.S. Foreign Corrupt Practices Act, according to a complaint the company filed yesterday in federal court in San Francisco.
“Wynn and Wynn Resorts have been thoroughly investigated in a public manner on numerous occasions by entities such as the Nevada Gaming Control Board, the Massachusetts Gaming Commission, the Securities and Exchange Commission, and other government agencies,” the company said in the complaint.
“At no time has any official agency suggested that there is any reliable evidence that plaintiffs, or either of them, have violated the Foreign Corrupt Practices Act,” according to the complaint.
The plaintiffs seek unspecified compensatory and punitive damages, according to the complaint.
Chanos, whose hedge fund specializes in short selling, has been arguing that China’s economy is overheated due to its dependence on property development for growth.
Chanos declined to comment on the lawsuit.
The U.S. Justice Department has been investigating Kazuo Okada, a former director of Wynn Resorts who the company removed as a controlling shareholder over allegations he made improper payments to gaming regulators in the Philippines. Okada has questioned the propriety of Wynn’s $135 million donation to a university in Macau as part of a long-running legal spat between the former partners.
Gross gaming revenue in Macau, the only place in China where casinos are legal, fell a third straight month in August as China’s anti-corruption campaign prompted high-rollers to avoid its gambling halls, hurting casinos’ earnings including at Wynn Macau.
The case is Wynn v. Chanos, 14-cv-04329, U.S. District Court, Northern District of California (San Francisco).