Gensler Said to Pledge to Stay in Administration

Gary Gensler, one of the top regulators of Wall Street, is assuring officials that he plans to remain in the Obama administration through at least December even as he weighs other options, according to three people briefed on the matter.

The White House approached Mr. Gensler in January about serving a second five-year term as chairman of the Commodity Futures Trading Commission, the people said. While Mr. Gensler has yet to commit to a second term, and has no deadline to respond, he has not ruled out the move.

But another corner of the Obama administration could draw him away from the tradig commission, a once sleepy agency that he overhauled in the wake of the financial crisis.

Mr. Gensler, the people briefed on the matter said, has discussed other senior financial roles with the White House. The jobs could include deputy Treasury secretary and head of the Commerce Department. Two people briefed on the matter said Mr. Gensler was once interested in running the Securities and Exchange Commission, though President Obama recently nominated Mary Jo White for that job.

A departure from the trading commission next year would come at a natural transition point for Mr. Gensler, ! who has run the agency since 2009. The agency has finalized 80 percent of the new rules for derivatives trading that it inherited under the Dodd-Frank Act, which Congress passed in response to the financial crisis. The most contentious rules are largely behind the agency, potentially pushing Mr. Gensler into a diminished role should he accept a second term.

In an interview on Tuesday, however, Mr. Gensler said his task was not yet complete.

“It’s an incredible privilege and there’s still a lot of work to be done here at the C.F.T.C.,” he said.

The Wall Street Journal earlier reported that the White House had invited Mr. Gensler to serve a second term.

Mr. Gensler’s tenure at the trading commission has coincided with the agency’s revival. The shakeup stems from the wave of new regulation under Dodd-Frank, which greatly expanded the responsibility of the agency, stretching its reach to the dark corners of the $300 trillion derivatives market at the center of the financialcrisis. Before that, the agency oversaw the $40 trillion futures business.

Mr. Gensler, a chief advocate of the law, lobbied lawmakers to close loopholes and has adopted a broad approach to rule-making. He also hired a new enforcement director, David Meister, who has sued some of the world’s biggest banks over manipulating interest-rates.

That stance has won him few friends on Wall Street banks, which argue that the trading commission is harming their bottom line without protecting the markets. He has also drawn the ire of Congressional Republicans, who say the agency is overstepping its authority.

Mr. Gensler joined the agency after a long career at Goldman Sachs and a stint in the Wall Street-friendly Clinton administration.

But he has vowed that whatever his next step, it won’t be a return to Wall Street.

â! €œThis st! age of my life is really about public service,” he said in a 2010 interview. “So no, I don’t have any interest to do that.”

In Herbalife ‘Short War,’ Hedge Funds Miss the Target

A star-studded battle among hedge fund titans over the nutritional supplements company Herbalife became the talk of Wall Street when it erupted. But when the barbs eventually fall silent and the klieg lights dim, how will the Herbalife war end And what truth will emerge

The arrival of the hedge fund billionaires â€" William A. Ackman, Daniel S. Loeb and Carl C. Icahn â€" spawned a media circus. And at times, some investors acted as if they were the stars of a reality-TV show. Yet blustering and bluffing are what traders do, after all.

In the beginning, the dispute was over how Herbalife sold its products and to whom. In December, Mr. Ackman made a presentation at an investorconference, saying that Herbalife was a pyramid scheme. Herbalife vehemently denied those claims, and put on its own investor day in January to rebut them.

The focus, however, soon turned to the hedge fund celebrities. A day after Herbalife’s presentation, Daniel S. Loeb’s hedge fund, Third Point, disclosed that it had acquired 8.24 percent of the company’s shares, giving Herbalife a huge show of support.

After Mr. Loeb, Mr. Icahn â€" who is worth some $15 billion, according to Forbes â€" entered the fray. Yet the fight first appeared to be about something other than Herbalife last month, when Mr. Icahn and Mr. Ackman duked it out on CNBC over real and imagined insults dating back a decade. At the time, Mr. Icahn did not disclose a position but noted that if someone tried to acquire Herbalife, it would spell trouble for Mr. Ackman because “if that happens, t! hat stock could rush to $100.”

It was perhaps no surprise when Mr. Icahn announced later that week that he had acquired an almost 13 percent interest in Herbalife. Mr. Icahn topped that off with an announcement last week that he had cut a deal to put two of his people on the Herbalife board and acquire as much as 25 percent of the company.

As a result, the debate over Herbalife has been reduced to the level of a junior high school feud as it becomes about traders trash-talking each other. Hedge fund billionaires may have huge egos and not like each other Really As Gordon Gekko says in the 1987 film “Wall Street,” “If you need a friend, get a dog.”

To employ another movie reference, what’s happening with the hedge fund battle is the reverse of a famous “Godfather” quotation: It’s not business, it’s personal.

A recent exchange on CNBCâ™s “Fast Money” program says it all. Under the heading “The Ackman Pain Trade,” one of the hosts talked about why Mr. Ackman’s claims were wrong. He stated, “The reason I think Herbalife is not a fraud is, No. 1, I have a very close personal relationship with Dan Loeb, who doesn’t believe this is a fraud.” Right.

So no one appears to be doing an actual investigation or asking the right questions. The central issue, in case you need reminding, is whether Herbalife is a pyramid scheme, in light of some of the questions that Mr. Ackman has raised. This is important, as not just billions are at stake, but an entire company and the tens of thousands of people who are affiliated with it.

And for all the talk of a “short war,” the finance people are not likely to dictate the ending here. David Einhorn was reportedly short on Herbalife but has already closed his position. Mr. Loeb is said to have sold at least part of his stake at least, and may have sold it all. Mr. Loeb is r! equired o! nly to disclose the position in his quarterly reports to the Securities and Exchange Commission in May. (Mr. Loeb declined to comment, and Mr. Einhorn did not respond to requests for comment made to his representative)

Hedge fund traders are in it for the short-term profit. And that’s yet another reason the focus should be on the actual claims here instead of finance.

With the hedge fund titans exiting for a quick profit, the talk of a “short war” will die down. But this still leaves Mr. Icahn and Mr. Ackman. It also leaves the specter of another financial trick, a short squeeze.

If a short squeeze occurs, Mr. Icahn’s purchase of Herbalife shares, along with other purchases, will force Mr. Ackman to return the shares he had borrowed at a much higher prce. This would be deadly â€" the 2008 short squeeze around Porsche’s acquisition of Volkswagen sent VW’s shares skyrocketing, briefly making it the most valuable company in the world. Mr. Ackman could lose more than a billion dollars if a similar situation were to happen at Herbalife.

But this is not likely to happen. Mr. Ackman probably didn’t borrow his shares to short from hedge funds, but rather through Goldman Sachs, his prime broker, using Herbalife shares held by index and other “safe” institutional investor funds like Fidelity. It is unlikely that these institutions will sell their shares or call them back. And shares available to short are likely to remain plentiful eve! n after M! r. Icahn takes his full position.

Herbalife is not even among the 50 most-shorted companies, and about half of Mr. Ackman’s position is traded every day on average, meaning that there is still a lot of stock out there.

So, it’s unlikely that Mr. Ackman will be forced into a short squeeze without someone buying the entire company. Except for Mr. Icahn, it is hard to see anyone making a bid, given the uncertainty and the unwillingness of a bank to finance an offer. Certainly, a private equity firm would not want to take the risk.

As for Mr. Icahn, he is taking two board seats and apparently entering into an agreement that he won’t sell his shares for a year unless he price is above $73 a share. And Mr. Icahn has signed a standstill, agreeing not to make a bid unless someone else goes first.

So how will this end It’s not likely to end soon. Neither Mr. Ackman nor Mr. Icahn is going anywhere, and the rest of the hedge funds are just trading in and out, riding the waves. And while Mr. Ackman is hoping that regulators will step in and end it all, it is hard to see them acting without a very thorough and lengthy investigation.

And while Wall Street’s focus, and everyone else’s for that matter, has turned to the drama of two financiers who don’t like each other (what’s new), it ignores what actually matters. In the absence of anyone looking at the facts, Herbalife will be under great pressure to keep its earnings up while Mr. Ackman continues to push the company to change how it reports those earnings.

Without someone buying the company, it is essentially a stalemate. The only way out appears to be over time as each quarter unfolds and He! rbalifeâ€! ™s model holds up under Mr. Ackman’s scrutiny â€" or doesn’t. Let’s face it, without something to stop the attacks, the company is going to undergo strain as time goes on and the questions and suspicions persist. But this could take years.

In other words, take a seat, folks, as this “short war” may take something that Wall Street hates almost as much as it likes a good cat fight: patience.

Ex-SAC Trader Gets More Time to Prepare Defense

A federal judge on Monday granted a former employee of the hedge fund SAC Capital Advisors additional time to review the government’s evidence in an insider trading case brought against him.

Mathew Martoma, a former SAC portfolio manager, was given 90 days to examine millions of pages of documents related to the case. Judge Paul Gardephe scheduled another hearing for June 5, and said that he then will set a trial date.

The government has placed Mr. Martoma at the center of what it calls the most lucrative insider-trading scheme ever charged. He was arrested in November and accused of corrupting a doctor who had access to secret drug data, and then using that information to help SAC gain profits and avert losses totaling $276 million.

Mr. Martoma’s case has received heightened interested because he collaborated with Mr. Cohen on the questionable trades, prosecutors said. Mr. Cohen, 56, has not been charged, and there is no allegation that he knew the information was confidential. He hs said that he had at all times acted appropriately.

The prosecution of Mr. Martoma is the latest criminal case involving SAC, which manages about $15 billion, boasts one of the best investment track records on Wall Street. At least eight current or former SAC employees have been linked to insider trading while working at the fund, four of whom have pleaded guilty. And investors have grown concerned as the fund’s legal problems have intensified â€" SAC clients asked to withdraw $1.7 billion from the fund last month.

During Tuesday’s hearing, Mr. Martoma’s lawyer, Charles Stillman, said that the government had turned over four million documents, including 17,000 alone in recent days.

“I’d like to propose you give us 90 days to finish our analysis,” Mr. Stillman said to Judge Gardephe, according to Bloomberg News. “The case was announced as the biggest insider trading case in history. If it is the biggest case, I want to be able to defend it.”

Wells Fargo Ex-Broker Is Sentenced to 2 Years

A federal judge in California has sentenced Philip Horn, a former Wells Fargo broker who pleaded guilty to defrauding more than a dozen clients, to two years in jail.

The judge, Gary A. Feess, on Monday noted in handing down the sentence that Mr. Horn had already paid more than $1 million in restitution, according to a news release issued by André Birotte Jr.,United States attorney for the central district of California.

Mr. Horn was a broker for Wells Fargo in Los Angeles. For more than two years, he executed and canceled trades in clients’ portfolios, pocketing the profits. Wells Fargo uncovered the fraud in the fall of 2011. Last year, Mr. Horn pleaded guilty to two counts of wire fraud.

In article inJanuary, The New York Times highlighted how his actions point to persistent problems with policing the brokerage industry, even after the wave of rules enacted since the collapse of Bernard L. Madoff’s giant Ponzi scheme in 2008.

The two-year sentence is longer than the 18 months the United States attorney’s office had recommended. A spokeswoman for Wells Fargo said the bank believed that the court “acted appropriately in the resolution of the issues presented to it.”

Mark Cuban May Face S.E.C. Insider Trading Trial

With the Dallas Mavericks having a subpar season, it is unlikely that the basketball team’s charismatic owner, Mark Cuban, will find himself court side during the N.B.A. finals in June.

But with a judge’s ruling on Tuesday, Mr. Cuban will have his hands full during the playoffs.

A federal judge in Dallas denied a request by Mr. Cuban to dismiss a nearly five-year-old insider-trading lawsuit brought against him by federal securities regulators. A trial is scheduled for June.

Judge Sidney Fitzwater decided that the Securities and Exchange Commission‘s civil action against Mr. Cuban could proceed to trial. Mr. Cuban has maintained that he has done nothing wrong.

The S.E.C. filed a civil lawsuit against Mr. Cuban in 2008, accusing him of trading on confidential information when he sold his stake in Mamma.com, a small Internet search company, in June 2004, just before it announced news that caused its stock price to plummet.

Mamma.com’s chief executive had asked Mr. Cuban, who already owned about 6 percent of the company, if he was interested in participating in a new share offering. Mr. Cuban, according to the S.E.C., declined. The commission says that the next day, Mr. Cuban dumped all of his shares, avoiding a $750,000 loss.

The S.E.C. said that Mr. Cuban knew or was reckless in not knowing that he had received confidential information about Mamm! a.com. (Mamma.com, based in Canada, has since change its name to Copernic.)

Mr. Cuban, famous for mixing it up with referees during Mavericks games, mounted an aggressive defense. His lawyers have argued, among other things, that the insider trading laws did not prohibit him from selling his stock.

Mr. Cuban also accused the S.E.C. of acting with bias in bringing the case against him. But last year, the S.E.C. inspector general â€" an internal watchdog for the agency â€" cleared the agency of any misconduct.

Judge Fitzwater originally threw out the lawsuit in 2009, but a federal appeals court reversed and sent the case back down to him. In his decision issued Tuesday, Judge Fitzwater said the case was “in some respects a close one,” but that the S.E.C. was entitled to present its case to a jury.

“We respect Judge Fitzwater’s decision,” wrote Christopher J. Clark of Latham & Watkins and Stephen Best of Brownstein Hyatt Farber Schreck, in an e-mailed statement. “Judge Fitzwter was constrained by governing law to accept as true, evidence that the Judge himself explained is incomplete and flawed, and we very much look forward to trial where we will demonstrate that the S.E.C.’s ‘evidence’ is nothing but fabrication and speculation.”

This summer is shaping up to be a busy one for the S.E.C. Already on the docket for mid-July is the trial of Fabrice Tourre, the former Goldman Sachs Group executive facing civil charges brought by the commission that relate to the bank’s sale of a complex mortgage-backed security called Abacus.

Cuban O! pinion by

Private Equity and Venture Capital Investments Rise in Latin America

RIO DE JANEIRO - Private equity and venture capital firms last year committed $7.9 billion to invest in Latin America, a substantial jump of 21 percent over the previous year, the Latin American Private Equity and Venture Capital Association said Tuesday.

The number of investments in 2012 also grew to 237, a 37 percent increase over 2011, according to an annual report released by the association during the SuperReturn Latin America Conference, being held here.

Many of the firms are flocking to consumer and retail companies, as those sectors accounted for 40 percent of the total. Deals in information technology more than doubled in both quantity and value.

On the flip side, fundraising was cut in half, coming in at $5.6 billion compared to $10.3 billion in 2011. But the association cautioned that the decrease did not reflect a lck of appetite of international investors to commit capital to Latin America.

Rather, it indicated that money is going toward smaller funds rather than large ones, the association said. In addition, larger investors like Advent International, Southern Cross, the Carlyle Group and Gávea spent the year putting to use the capital they had raised over the last two years rather than seeking out new money.

“We do not have this phenomena in Latin America of large investors raising new funds every year as often occurs in the United States,” Patrice Etlin, Advent International’s managing partner based in São Paulo, said in an interview with DealBook.

Despite the drop in fundraising, 42 funds were raised in 2012, compared with 35 in 2011, suggesting that the smaller funds were gaining prominence.

Mr. Etlin, who is also the assoc! iation’s chairman, said that he expected a similar pattern this year, where Latin America would have an increase in new investments but not in fundraising.

Despite the economic malaise in Brazil, the country attracted the most money, accounting for $5.7 billion of the total amount.

Brazil, as it has in past years, lead the region in receiving investments, 72 percent of the total amount invested and 62 percent of the number of deals.

Mexico had no appreciable increase in number of deals but total dollars committed grew by 50 percent. Still, by comparison, Brazil accounted for 147 deals representing $5.7 billion in investments, while Mexico had only 21 deals for $684 million.

Mr. Etlin seems many positive developments in Mexico, but said that he still expected that this year, “Brazil will be the main destination for investments.”

“It will be a very strong year for Brazil, particularly if valuations start to get more reasonable with a deteriorating macroeconomic condition,€ he added.

Relational Urges Hess to Talk With Elliott

The Hess Corporation‘s big proposals to shake itself up haven’t much impressed the other activist investor eager to see bigger changes at the oil company.

Relational Investors wrote in a letter to Hess’ board on Tuesday that, like Elliott Management, it has found the company’s response lacking.

David H. Batchelder, a Relational executive, wrote that while he was pleased that the oil driller was beginning to replace directors â€" it has named six new candidates â€" more change is needed. If shareholders were asked to choose between the new Hess nominees and the five that Elliott has nominated, Mr. Batchelder added, he believed that the activist investor’s slate would prevail.

“Given the inconsistencies in many of your recentcommunications, we expect that the shareholders would welcome Elliott’s nominees to the board to ensure proper and timely execution and to avoid the risk of backsliding,” Mr. Batchelder wrote.

He also took issue with what he implied was Hess’ mischaracterizing of the company’s interactions with him. While John B. Hess, the energy producer’s chairman, has said that he last heard from Relational in December, Mr. Batchelder mentioned meetings in December and in January, as well as a Jan. 30 letter urging a resolution with Elliott.

Relational Letter to Hess Over Response to Elliott by

In Video Series, Wall St. Leaders Reflect on Their Careers

Hamilton James, president of the private equity giant Blackstone Group.

Hamilton E. James, the president and chief operating officer of the Blackstone Group, is one of the most powerful figures on Wall Street, overseeing an alternative investment empire from offices on Park Avenue on Manhattan. But it was not always so.

In his junior year at Harvard, Mr. James, who is known as Tony, determined that he was “unemployable, since I applied to 300 jobs and didn’t get any of them,” he says in an interview with OneWire, a financial services recruitment firm.

The interview, which was published on Monday evening, is the latest installment in OneWire’s video series, “Open Door,” which showcases top financial professionals offering career advice. In addition to Mr. James, the series has featured interviews with James J. Dunne III of Sandler O’Neill & Partners; Jeffrey T. Leeds of Leeds Equity Patners; and Bill Comfort, a former chairman of Citigroup Venture Capital.

The video series lends some sheen to OneWire, founded in 2008 by Skiddy von Stade, an executive search specialist who started his career in the insurance industry. OneWire allows financial professionals (or aspiring professionals) to build a career profile, upload a résumé and apply to jobs in the site’s catalog of listings.

Mr. von Stade plans to release a new video every other week, with Glenn Hutchins of the private equity firm Silver Lake and Deborah C. Wright, chief executive of Carver Bancorp, among the upcoming interviewees.

“The purpose of this video series is to help young people better understand how these highly successful people went from grade school to where they are today,” Mr. von Stade said in an interview. “But it’s helpful for anyone of any level.”

The videos also show the human side of some well-known Wall Street figures.

Mr. James, who spoke to Mr. von Stade the d! ay after Hurricane Sandy hit New York last fall, describes his upbringing in rural Massachusetts. “It was a very simple existence of a country kid spending most of his time in the woods or building tree houses,” Mr. James says in the video.

After failing to find a job, Mr. James went to Harvard Business School, and then in 1975 to the investment bank Donaldson, Lufkin & Jenrette, which at the time was a “creative, growing place.” Once there, he rose to become co-head of mergers and acquisitions, and then built the firm’s merchant banking business. He stuck with the firm for two years after its merger with Credit Suisse First Boston in 2000.

Those experiences provided valuable lessons to Mr. James.

“It’s a hell of a lot more fun to be at a young company where you’re building something than a big company where you’re trying to defend and hold your own against the inroads that the young companies make,” he says in the video.

After the merger with Credit Suisse, he sas, staff departures made the experience “like holding onto an ice cube that kept melting in your hands.”

HSBC Sells U.S. Loan Portfolio for $3.2 Billion

LONDON - HSBC made some progress Tuesday in shrinking its consumer loan portfolio in the United States, which has been a drag on its earnings.

The British bank agreed to sell a portfolio of personal unsecured loans and mortgages to Springleaf Finance and Newcastle Investment Corporation for $3.2 billion in cash. HSBC is also selling its loan servicing facility in London, Kentucky, to Springleaf, it said.

Reducing the loan book in the United States, which it acquired through the takeover of the former Household International subprime lender, has been a priority for HSBC’s management. The bank started to wind down the U.S. loan portfolio about five years ago after huge loan loses at the business had forced the management to admit the 2003 acquisition was a mistake.

If successful, the most recent sale would reduce the old Household portfolio to about $39 billion of assets, according to HSBC. The sale to Springleaf and Newcastle is expected to be completed before the end of this year.

The portfolio includes about 400,000 loans, which will be managed by Indiana-based Springleaf, Newcastle said in a statement.

Paying Bonuses From His Own Pockets

Based on your reading history you may be interested in:

"; var reco_tab = "

Based on your reading history you may be interested in:

"; var enabled = BLOOMBERG.global_var.enable_xlike; var default_tabs = { 'most_popular':{'header':most_pop_header, 'content': most_pop_tab}, 'recommended':{'header':reco_header, 'content': reco_tab} }; if(/control/.test(cookie_val) || cookie_val == '' || enabled == false){ render_default_tabs(default_tabs); BLOOMBERG.right_rails_tabbed_module.recommended_click_event("6", "http://recommendations.bloomberg.com/", "") }else if(/reco/.test(cookie_val)){ var valid_countries = ["DE","AT","CH","ES","FR","IT"]; if(valid_countries.indexOf(cookie_val.substr(-2)) > -1 ){ var xlike_story_limit = "6"; init_xlike(xlike_story_limit, cookie_val, default_tabs); } else { render_default_tabs(default_tabs); BLOOMBERG.right_rails_tabbed_module.recommended_click_event("6", "http://recommendations.bloomberg.com/", "") } } //]]>

British Regulators Slow to Respond to Libor Scandal, Audit Says

LONDON - British authorities failed to spot interest-rate manipulation by big banks because they were narrowly focused on responding to the financial crisis, according to an internal review by the country’s financial watchdog released on Tuesday.

The audit followed widespread criticism from politicians and some of the banks caught up in the scandal involving benchmark interest rates. Critics said regulators did not respond to warnings that employees at certain banks were attempting to alter rates for financial gain.

The review published by the Financial Services Authority, the British regulator, said that there had not been a major failure of oversight by local authorities, but added that officials had become too focused on containing the financial crisis to analyze information connected to the potential rate-rigging.

The British authority also conceded that it had failed to respond quickly to allegations of so-called low-balling, in which managers altered submissions to the London interbank offered rate, or Libor, to portray their firms in a healthier financial position. The watchdog added that Libor had been an unregulated area of the financial markets, which had not received close attention from regulators.

“The F.S.A. did not respond rapidly to clues that low-balling might be occurring,” Adair Turner, the chairman of the Financial Services Authority, said in a statement on Tuesday.

Several European banks, including Barclays and UBS, already have paid multimillion-dollar fines to ! American, British and other international regulators related to the ongoing investigation into Libor manipulation. Other large firms, including Deutsche Bank and Citigroup, remain under investigation.

The Financial Services Authority’s audit was conducted in response to claims made by politicians and the British bank Barclays that regulators had been informed several times about the potential rate-rigging, but had failed to act.

As part of a major overhaul of the Libor rate, the rate-setting process will become regulated by the British authority from the beginning of April, just as the authority is divided into two separate units that forms a major overhaul of the country’s regulator regime.

Royal Bank of Scotland and Northern Rock.

Southeastern Seeks Dell Shareholder List

This Amendment No. 2 amends and supplements the Statement on Schedule 13D filed with the Securities and Exchange Commission on February 8, 2013, as amended by Amendment No. 1 on February 11, 2013 (the “Schedule 13D”), which relates to the common stock, par value $0.001 (the “Securities”) of Dell Inc., a Delaware corporation (the “Issuer”). Capitalized terms used herein and not otherwise defined have the meaning assigned to such terms in the Schedule 13D. All items or responses not described herein remain as previously reported in the Schedule 13D.

                    

Item 3.

Source and Amount of Funds or Other Consideration

Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:

The respective investment advisory clients of Southeastern used approximately $2,268,025,473.00 in the aggregate to purchase the Securities reported in this filing. All assets used to purchase Securities were assets of these respective clients and none were assets of Southeastern. In addition, none of the proceeds used to purchase the Securities were provided through borrowings of any nature.

Item 4.

Purpose of Transaction

Item 4 is hereby amended and supplemented by adding the following immediately after the fifth paragraph thereof:

On March 5, 2013, Southeastern sent a letter to the Board of the Issuer reiterating its opposition to the proposed go-private transaction.  Accompanying this letter to the Board was a demand letter from Longleaf Partners Fund, Southeastern’s largest client and a Dell stockholder, to the Issuer, made pursuant to Section 220 of the Delaware General Corporation Law, requesting the opportunity to inspect and make or receive copies of certain records of the Issuer relating to, among other things, the names and address of the Issuer’s stockholders (the “Demand Letter”). The purpose of the Demand Letter is to enable communications with fellow stockholders on matters relating to the stockholders’ common interests, including the proposed go-private transaction.  A copy of the letter to the Board, including the Demand Letter, is attached hereto as Schedule VI.

Item 5.

Interest In Securities Of The Issuer

                      

Item 5 of the Schedule 13D is hereby amended and restated in its entirety as follows:

  (a) The aggregate number and percentage of Securities to which this Schedule 13D relates is 146,612,358 shares of the common stock of the Issuer, constituting approximately 8.4% of the 1,738,600,597 shares outstanding.  This amount includes 25,000,000 in Securities underlying shares in options, but excludes 6,476,800 European style options that are only exercisable on the expiration date of the options and will not be exercisable within the next 60 days.  The calculation of the foregoing percentage is based on the number of shares disclosed as outstanding as of February 3, 2013 by the Issuer in its current report on Form 8-K, and filed with the Securities and Exchange Commission on February 6, 2013.

      

Â	Â	Common Shares Held		Â	Â	% of outstanding Common Shares		Â
Voting Authority	Â	Â		Â	Â	Â		Â
Â	Â	Â		Â	Â	Â		Â
	Â	Â		Â	Â	Â
	Â	Â			Â	Â
	Â	Â		Â	Â	Â
Â	Â	Â	Â	Â	Â	Â	Â	Â
	Â	Â			Â	Â

*Consists of shares owned by Longleaf Partners Fund.  This amount includes 25,000,000 in Securities underlying shares in options, but excludes 6,476,800 European style options that are only exercisable on the expiration date of the options and will not be exercisable within the next 60 days.

 **Does not include 705,000 shares held by one non-discretionary account over which the filing parties have neither voting nor dispositive authority. Beneficial ownership is expressly disclaimed with respect to these shares.

Dispositive Authority	Â	Â		Â	Â	Â		Â
Â	Â	Â		Â	Â	Â		Â
	Â	Â		Â	Â	Â
	Â	Â			Â	Â
	Â	Â		Â	Â	Â
Â	Â	Â	Â	Â	Â	Â	Â	Â
	Â	Â			Â	Â

*Consists of shares owned by Longleaf Partners Fund.  This amount includes 25,000,000 in Securities underlying shares in options, but excludes 6,476,800 European style options that are only exercisable on the expiration date of the options and will not be exercisable within the next 60 days.

**Does not include 705,000 shares held by one non-discretionary account over which the filing parties have neither voting nor dispositive authority. Beneficial ownership is expressly disclaimed with respect to these shares.

            

(b) Southeastern generally has the sole power to dispose of or to direct the disposition of the Securities held for discretionary accounts of its investment clients, and may be granted the sole power to vote or direct the vote of such Securities; such powers may be retained by or shared with the respective clients for shared or non-discretionary accounts.  Shares held by any Series of Longleaf Partners Funds Trust are reported in the “shared” category.

(c) Purchase or sale transactions in the Securities during the past 60 days are disclosed on Schedule II.

(d) The investment advisory clients of Southeastern have the sole right to receive and, subject to notice, to withdraw the proceeds from the sale of the Securities, and the sole power to direct the receipt of dividends from any of the Securities held for their respective accounts.  Such clients may also terminate the investment advisory agreements without penalty upon appropriate notice. Southeastern does not have an economic interest in any of the Securities reported herein.

(e) Not applicable.

Item 7.

Material to be Filed as an Exhibit

Item 7 is hereby amended and supplemented by adding the following immediately after the fifth paragraph thereof:

Schedule VI.  Demand Letter and Letter to the Board of Dell, Inc., dated March 5, 2013.

Signatures

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: March 5, 2013

  

Â	Southeastern Asset Management, Inc.			Â
Â	Â	Â	Â	Â
Â	Â	Â	Â	Â
Â	By:	 /s/ O. Mason Hawkins		Â
Â	Â	Name:  O. Mason Hawkins		Â
Â	Â	Title:  Chairman of the Board and Chief Executive Officer		Â
Â	Â	Â	Â	Â

                   

Â	O. Mason Hawkins, Individually			Â
Â	Â	Â	Â	Â
Â	Â	Â	Â	Â
Â	 /s/ O. Mason Hawkins			Â
Â	Â	Â	Â	Â

 

                                     

Joint Filing Agreement

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, the persons or entities named below agree to the joint filing on behalf of each of them of this Schedule 13D with respect to the Securities of the Issuer and further agree that this joint filing agreement be included as an exhibit to this Schedule 13D. In evidence thereof, the undersigned hereby execute this Agreement as of March 5, 2013.

 

Â	Southeastern Asset Management, Inc.			Â
Â	Â	Â	Â	Â
Â	Â	Â	Â	Â
Â	By:	 /s/ O. Mason Hawkins		Â
Â	Â	Name:  O. Mason Hawkins		Â
Â	Â	Title:  Chairman of the Board and Chief Executive Officer		Â
Â	Â	Â	Â	Â

                                                  

Â	O. Mason Hawkins, Individually			Â
Â	Â	Â	Â	Â
Â	Â	Â	Â	Â
Â	 /s/ O. Mason Hawkins			Â
Â	Â	Â	Â	Â

 

 

 

 

 

 Schedule II of the Schedule 13D is hereby amended and restated in its entirety as follows:

SCHEDULE II

Transactions in the Last Sixty Days

 

Transaction Type	Date	# of Shares	 Price Per Share*
Â	Â	Â	Â
Sale	2/6/2013	86,000	$ 13.46
Sale	2/6/2013	112,000	$ 13.46
Sale	2/6/2013	59,000	$ 13.46
Sale	2/6/2013	26,000	$ 13.46
Sale	2/6/2013	43,000	$ 13.46
Sale	2/6/2013	46,667	$ 13.46
Sale	2/6/2013	9,000	$ 13.46
Sale	2/6/2013	5,000	$ 13.46
Sale	2/6/2013	5,000	$ 13.46
Sale	2/6/2013	10,000	$ 13.46
Sale	2/6/2013	28,000	$ 13.46
Sale	2/6/2013	12,000	$ 13.46
Sale	2/6/2013	5,000	$ 13.46
Sale	2/6/2013	15,000	$ 13.46
Sale	2/6/2013	6,000	$ 13.46
Sale	2/6/2013	4,000	$ 13.46
Sale	2/7/2013	74,333	$ 13.46
Sale	2/7/2013	144,000	$ 13.46
Sale	2/7/2013	4,000	$ 13.46
Sale	2/7/2013	19,055	$ 13.46
Sale	2/7/2013	34,445	$ 13.46
Sale	2/7/2013	6,500	$ 13.46
Sale	2/7/2013	20,000	$ 13.46
Sale	2/7/2013	21,000	$ 13.46
Sale	2/7/2013	49,334	$ 13.46
Sale	2/7/2013	7,000	$ 13.46
Sale	2/7/2013	14,000	$ 13.46
Sale	2/7/2013	17,000	$ 13.46
Sale	2/7/2013	28,000	$ 13.46
Sale	2/7/2013	3,000	$ 13.46
Sale	2/7/2013	30,000	$ 13.46
Sale	2/8/2013	54,666	$ 13.49
Sale	2/8/2013	25,000	$ 13.49
Sale	2/8/2013	15,000	$ 13.49
Sale	2/8/2013	6,000	$ 13.49
Sale	2/8/2013	136,000	$ 13.49
Sale	2/8/2013	136,000	$ 13.49
Sale	2/8/2013	9,000	$ 13.49
Sale	2/8/2013	38,000	$ 13.49
Sale	2/8/2013	1,000	$ 13.50
Sale	2/8/2013	1,000	$ 13.50
Sale	2/8/2013	50,000	$ 13.49
SaleÂ	3/4/2013	192,200	$ 13.97

 

 

Sales by Southeastern at the direction of a client in the ordinary course of business on NASDAQ or through Electronic Communication Networks (ECNs).

 

* Net of commissions

 

Schedule VI

March 5, 2013

Board of Directors

Dell Inc.

One Dell Way

Round Rock, TX 78682

Attention:

Lawrence P. Tu

Â	Senior Vice President, General Counsel and Secretary

Â

Re:

Demand for Stockholder List and Other Books and Records

Dear Board of Directors:

As Dell’s largest outside beneficial owner, and one of many long-term shareholders who have entrusted their capital to Dell, we reiterate our opposition to the proposed go-private transaction, as well as our deep disappointment with the Board of Directors’ failure to implement a transaction that would maximize shareholder value and be more beneficial to all shareholders. The Board of Directors has placed the interests of management above those of public shareholders.  Furthermore, it is unfortunate that the members of the Special Committee have such minimal stock ownership, which suggests that their interests may not be fully aligned with those of all shareholders.

First, the Board of Directors has long declined to distribute Dell’s growing excess cash to shareholders, labeling it “trapped” overseas due to the tax Dell would incur for repatriating that cash.  We were surprised to see this long-standing position change after Silver Lake and the management team announced their intention to bring the cash onshore in order to finance the buyout.  A more equitable approach would have returned the cash to all shareholders instead of using it to fund the proposed buyout at the expense of other shareholders. As stated in our February 8 letter, instead of agreeing to a proposed go-private transaction that grossly undervalues the Company, the Board of Directors could have paid all shareholders a special dividend of $12 per share (comprising proceeds from repatriating overseas cash, monetizing Dell Financial Services (DFS) at book value, and raising $9 billion in new debt) with the Company retaining over $1.00 per share of free cash flow.

Second, we strongly disagree with the Company’s refusal to comment on the proposed buyout or provide 2012 product segment results during the recent earnings announcement, which served to deprive shareholders of necessary information about their investment.  Given the significance of the pending, go-private transaction, shareholders should be provided with meaningful, straightforward information.  By changing to product segment reporting going forward, but not providing this information for the period just ended, we believe management is intentionally emphasizing declining PC sales in order to justify its inadequate buyout price.  Had management disclosed segment profitability data, it would show that PCs are of low and shrinking importance to Dell, whereas most of Dell’s value comes from its healthy, growing Enterprise segment.  As a result, the Enterprise segment should command a much higher multiple than implied by the proposed transaction value.

Third, while the Board of Directors characterizes the proposed transaction as a transfer of “the risk of the business to the buyout group,” we believe it is more appropriately characterized as a transfer of “the opportunity of the business to the buyout group.”  Management knows the Company better than anyone, and clearly sees Dell’s substantial unrealized value. Under the current buyout proposal, management and Silver Lake stand to receive all of the future upside while denying shareholders, who have paid to reposition the Company, the opportunity to reap the rewards of our investment.

The Board of Directors appears to have dismissed better alternatives for public owners and selected a transaction, which has been publicly derided by shareholders as opportunistic and grossly undervalued, that favors management.  We reiterate our demand that the Board of Directors pursue proposals that are more favorable to shareholders.  To enable us to communicate with our fellow shareholders on matters relating to our common interests, including the proposed going-private transaction, please find enclosed a demand submitted by Longleaf Partners Fund, our largest client and a Dell shareholder, for various corporate books and other records.

Â	Very truly yours,	Â
Â	Â	Â
Â	Â	Â
Â	 /s/ O. Mason Hawkins	Â
Â	O. Mason Hawkins, CFA	Â
Â	Chairman & Chief Executive Officer	Â
Â	Â	Â
Â	Â	Â
Â	 /s/ G. Staley Cates	Â
Â	G. Staley Cates, CFA	Â
Â	President & Chief Investment Officer	Â
Â	Â	Â
Â	Â	Â
Â	 /s/ Andrew R. McCarroll	Â
Â	Andrew R. McCarroll	Â
Â	General Counsel	Â

 

                  

SECTION 220 DEMAND NOTICE

Southeastern Asset Management, Inc. (“Southeastern”), as investment advisor to and acting on behalf of its clients is the “beneficial owner” as defined by Securities Exchange Act Rule 13d-3 of 146,612,358 shares (including options) of common stock, par value $0.01 per share (“Shares”), of Dell, Inc., a Delaware corporation (the “Company”).  Longleaf Partners Fund, a series of Longleaf Partners Funds Trust, a registered investment company organized as a Massachusetts business trust (the “Stockholder”), is Southeastern’s largest client, owning 30,878,000 Shares (excluding options). Documentary evidence of the Stockholder’s beneficial ownership of 30,878,000 Shares (excluding options) is submitted herewith, and such documentary evidence is a true and correct copy of what it purports to be. The Stockholder hereby demands, pursuant to Section 220 of the Delaware General Corporation Law (the “DGCL”) and the common law of the State of Delaware, and under oath, the right durin the usual hours for business of the Company, no later than March 12, 2013 and continuing thereafter as we may determine is necessary, to inspect, and to make copies and extracts from, the following books and records:

(a)           A complete record or list of holders of the Shares, certified by the Company or its transfer agent and registrar, showing the name, address and number of shares registered in the name of each such holder, as of the date hereof and/or the most recent available date as of the time of each inspection (each such date, an “Inspection Date”).

(b)           A CD-ROM, diskette or other electronic file of the holders of outstanding Shares as of each Inspection Date, showing the names, addresses and number of Shares held by such holders, together with such computer processing data and instructions as are necessary for the Stockholder to make use of such CD-ROM, diskette or other electronic file, and a printout of such CD-ROM, diskette or other electronic file for verification purposes, if different from the list in (a) above.

(c)           All information in or which comes into the Company’s, its transfer agent’s or its proxy solicitor’s or any of their agents’ possession or control, or which can reasonably be obtained from brokers, dealers, banks, clearing agencies or voting trustees or their nominees concerning the names, addresses and number of Shares held by the participating brokers and banks named in the individual nominee names of Cede & Co. and other similar nominees of any central certificate depository system, including (i) respondent bank listings and omnibus proxies and (ii) Cede & Co. depository listings on a daily basis, including as of each Inspection Date.

(d)           A list or lists containing the name, address and number of Shares attributable to any participant in any Company employee stock ownership, stock ownership dividend reinvestment, stock purchase, stock option, retirement, restricted stock, incentive, profit sharing or comparable plan of the Company in which voting decisions with respect to the Shares held by such plan are made, directly or indirectly, individually or collectively, by the participants in the plan, and a CD-ROM, diskette or other electronic file for such list or lists together with such computer processing data and instructions as are necessary for the Stockholder to make use of such CD-ROM, diskette or other electronic file, and a printout of such CD-ROM or diskette or other electronic file for verification purposes.  

         

              

In addition, with respect to each such plan, a description of the method by which the Stockholder or its agents may communicate with each such participant, as well as the name, firm and phone number of the trustee or administrator of such plan, and a detailed explanation of how Shares are voted, including the treatment not only of Shares for which the trustee or administrator receives instructions from participants, but also Shares for which either the trustee or administrator does not receive instructions or Shares which are outstanding in the plan but are unallocated to any participant.

(e)           All information in or which comes into the Company’s or its agents’ possession, or which can reasonably be obtained from nominees of any central certificate depository system, concerning the number and identity of the actual beneficial owners of Shares, including an alphabetical breakdown of any holdings in the respective names of Cede & Co., and other similar nominees for the accounts of customers or otherwise.

(f)           All information in or which comes into the Company’s possession or control, or which can reasonably be obtained from brokers, dealers, banks, clearing agencies or voting trustees or their nominees relating to the names and addresses of and shares held by the non-objecting beneficial owners of Shares pursuant to Rule 14(b)-1(b) or Rule 14b-2(b) under the Securities Exchange Act of 1934 (“NOBOs”) and a NOBO list and CD-ROM, diskette or other electronic file in descending order balance or such other format as may be currently in the possession of or reasonably obtained by the Company or its agents (together with such computer processing data as is necessary for the Stockholder to make use of such CD-ROM or diskette or other electronic file).

(g)           All daily transfer sheets showing changes in the names, addresses and number of Shares of the holders of the Company’s outstanding Shares which are in or come into the possession or control of the Company or its transfer agent, proxy solicitor or registrar, or which can reasonably be obtained from brokers, dealers, banks, clearing agencies or voting trustees or their nominees, from and after the date hereof until such time as the Stockholder notifies the Company that it no longer requires such transfer sheets.

(h)           Any stop transfer lists or stop lists relating to any Shares and any additions, deletions, changes or corrections made thereto from and after the date hereof until such time as the Stockholder notifies the Company that it no longer requires such lists.

(i)           To the extent not already referred to above, any CD-ROM, diskette or other electronic medium suitable for use by computer or word processor which contains any or all of the information requested in this letter, together with any program, software, manual or other instructions necessary for the practical use of such information.

The Stockholder further demands that modifications, additions or deletions to any and all information referred to in paragraphs (a) through (i) above be furnished to the Stockholder on a weekly basis until the termination or consummation of the merger as contemplated by the Agreement and Plan of Merger by and among Denali Holding Inc., Denali Intermediate Inc., Denali Acquiror Inc. and Dell Inc., dated as of February 5, 2013, pursuant to which Denali Holding Inc., seeks to acquire all of the outstanding Shares of the Company, as such agreement may be amended from time to time, as such modifications, additions or deletions become available to the Company or its agents or representatives.

The Stockholder will bear the reasonable costs incurred by the Company in connection with the Company’s obtaining and furnishing the above information.

The purpose of this demand is to enable the Stockholder to communicate with its fellow Company stockholders on matters reasonably relating to the Stockholder’s interests as a stockholder of the Company, including matters in relation to the proposed acquisition of the Company by Denali Holding Inc.

The Stockholder hereby designates and authorizes D.F. King & Co., Inc. (“D.F. King”), its partners, officers and employees, and any other persons to be designated by the Stockholder, to conduct, as their agents, the inspection and copying herein requested.

Please advise Jordan Kovler by telephone at (212) 493-6990 or by email at jkovler@dfking.com or Mary Ellen Goodall by telephone at (212) 493-6957 or by email at mgoodall@dfking.com, each of D.F. King, not later than March 12, 2013 when and where the items demanded above will be made available to the Stockholder and its designated agents.

This demand is made under oath pursuant to Section 220 of the General Corporation Law of the State of Delaware, and is accompanied by affidavits submitted on behalf of the Stockholder.

Pursuant to the DGCL, the Corporation is required to respond to this demand within five (5) business days of the date hereof.  Accordingly, please advise the Stockholder’s counsel, Dennis J. Block of Greenberg Traurig, LLP, as promptly as practicable within the requisite timeframe, when and where the Stockholder List will be made available to the Stockholder.  If the Company contends that this request is incomplete or is otherwise deficient in any respect, please notify the Stockholder immediately in writing, with a copy to Dennis J. Block of Greenberg Traurig, LLP, 200 Park Avenue, New York, NY  10166, direct dial: (212) 801-2222, direct FAX: (212) 805-5555, email: blockd@gtlaw.com, setting forth the facts that the Company contends support its position and specifying any additional information believed to be required.  In the absence of such prompt notice, the Stockholder will assume that the Company agrees that this request complies in all respects with the requirements of the DGCL.  Te Stockholder reserves the right to withdraw or modify this request at any time.

Â	Â	Â
Â	Â	Â
Â	 /s/ O. Mason Hawkins	Â
Â	O. Mason Hawkins, CFA	Â
Â	Trustee & Co-Portfolio Manager	Â
Â	Longleaf Partners Fund	Â

 

Glencore Extends Deadline for Xstrata Takeover

The commodities giant Glencore International said on Tuesday that it had extended the completion deadline for its $33 billion takeover of the mining company Xstrata from March 15 to April 16. The companies are still awaiting approval from Chinese authorities after European and South African antitrust regulators agreed to the takeover. Read more »

Standard Chartered’s Profit Rises After U.S. Fine

LONDON - Standard Chartered posted a slight increase in annual net profit on Tuesday, as the British bank’s fast-growing businesses in emerging economies offset a $667 million fine in the United States connected to illegal money transfers.

The London-based bank said its net income was $4.8 billion last year, less than a 1 percent rise compared to 2011. Revenue rose 8 percent, to $19.1 billion, over the same period. The earnings are the tenth consecutive year that Standard Chartered has reported a yearly increase in its profit.

The British bank’s vast operations across Asia, Africa and the Middle East helped protect it from many of the problems affecting developed economies, such as the United States and Europe.

Yet the bank’s chief executive, Peter Sands, acknowledged on Tuesday that the large financial penalties agreed with American authorities last year related to illegal money transfers for Iranian and Sudanese banks and corporations had hurt the bank.

The bank said it hadtaken steps, including the appointment of several new non-executive board members, to improve how it dealt with these issues in the future.

“The $667 million settlements dented our profit growth and damaged our reputation,” Mr. Sands said in a statement on Tuesday. “There is no single tool to reinforce culture, no magic recipe, and no organization of nearly 90,000 people can ensure that everyone does everything perfectly all the time.”

The bank’s share price rose 2.7 percent in early morning trading in London on Tuesday.

Despite the cloud created by the U.S. fines, Standard Chartered has continued to expand across emerging markets by taking advantage of a growing demand for financial services from both local companies and international entities looking to invest.

The British bank said its operating income in China, for example, grew 21 percent, to $1 billion, last year as it benefited from expanding its local branch network six-fold since 2003. Standard Charted said ! it was now active in 25 emerging economies where the bank’s annual growth was in double digits.

Mr. Sands cautioned, though, that the financial problems of developed economies were having an effect on emerging markets, as Western companies cut back on buying goods from countries like China and Indonesia.

“The underlying problems of the weaker euro zone countries have not gone away,” he added. “Our markets in Asia, Africa and the Middle East are not immune.”

The bank said it remained well capitalized, with a core Tier 1 equity ratio, a measure of a bank’s ability to weather financial shocks, of 11.7 percent last year, a slight decline from 2011.

Standard Chartered added that it was increasing its shareholder dividend by 11 percent, to 84 cents, and that its return on equity rose 5 percent, to 12.8 percent, last year.