Casino Mogul Steve Wynn Sues ‘Short Seller’ Chanos for Slander
(Reuters) - Steve Wynn, the billionaire casino mogul, has filed a lawsuit accusing prominent short-seller Jim Chanos of slander over an alleged statement that Wynn violated a U.S. anti-bribery law.
Wynn, 72, and his company Wynn Resorts Ltd filed suit against Chanos, founder of New York-based hedge fund Kynikos Associates LP, in federal court in San Francisco.
The lawsuit accused Chanos of telling several people at a private "invitation-only" event in Berkeley, California, on or about April 25 that Wynn and Las Vegas-based Wynn Resorts had violated the federal Foreign Corrupt Practices Act.
Wynn said the statement was false and defamatory, that Chanos made it with reckless disregard of the truth, and that the statement wrongly suggested that he violated a criminal law.
The lawsuit is seeking unspecified compensatory and punitive damages.
Chanos and Kynikos Associates LP did not immediately respond on Friday to requests for comment.
In the complaint, Wynn also said that he and Wynn Resorts have been "thoroughly investigated" on numerous occasions by gaming regulators in Nevada and Massachusetts, the U.S. Securities and Exchange Commission and other government agencies, and that no official agency has identified reliable evidence of an FCPA violation.
The complaint did not quote from the alleged slander or provide any surrounding context.
"When untrue statements about our company are made, we are vigilant in defending our reputation," Wynn Resorts spokesman Michael Weaver said in a statement. "We have no further comment about our legal strategy."
Wynn's lawyer declined to comment.
In July 2013, Wynn Resorts said the SEC decided to take no enforcement action after probing an allegation by Japanese billionaire Kazuo Okada that the company may have violated the FCPA by donating $135 million to a university in Macau, a major gambling hub where Wynn Resorts operates.
Wynn Resorts forcibly redeemed Okada's 20 percent stake in the company in February 2012, accusing Okada of making improper payments to Philippine officials to advance a $2 billion casino project there. Okada and Wynn have traded allegations of illegal conduct in more than two years of U.S. litigation.
On May 15, Chanos told CNBC television that he would "no longer be long the Macau casinos,” but declined to say whether he was conducting short sales related to Macau.
Short-selling, which involves the sale of borrowed shares and subsequent repurchase, is a bet that a stock's price will go down.
Chanos is known for having shorted Enron Corp stock many months before the energy trader's December 2001 bankruptcy.
Wynn is worth $3.5 billion, Forbes magazine said on Friday.
The case is Wynn et al v. Chanos, U.S. District Court, Northern District of California, No. 14-04329. (Reporting by Jonathan Stempel in New York; Editing by Lisa Von Ahn and Leslie Adler)
