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Equity funds: Cerberus gets out of guns

Cerberus Capital Management is seeking to sell Freedom Group, maker of the Bushmaster semiautomatic rifle used in the Newtown, Conn., school massacre, said Peter Lattman in The New York Times. The $20 billion private equity firm announced its intention after one of its largest investors, the California State Teachers’ Retirement System, expressed concern about Cerberus’s control of Freedom, which also owns Remington Arms and Marlin Firearms. Cerberus has shown that it’s eager “to remove itself from the uproar over the nation’s gun laws.” The planned sale won praise from public officials, including New York State Comptroller Thomas P. DiNapoli, who ordered a review of the state pension fund’s investments in firearms manufacturers.

Despite the pension fund pressure, Cerberus is not acting purely out of a sense of moral obligation, said Paul Barrett in Businessweek.com. The firm previously tried to sell Freedom in an IPO that stalled “for reasons that have nothing to do with Newtown.” It can now use the cover of that tragedy “to dump a guns-and-ammo play that wasn’t working out.” Personal issues may also be at work. Martin Feinberg, father of Cerberus founder Stephen Feinberg, lives in Newtown and called the shooting “devastating.

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Banks: UBS settles rate-rigging charge

UBS agreed to pay roughly $1.5 billion to settle accusations in multiple countries that it tried to rig interest rates, said David Enrich in The Wall Street Journal. The Swiss bank acknowledged that dozens of its employees took part in “widespread efforts to manipulate” the London Interbank Offered Rate and other benchmark rates used to price financial contracts worldwide. British, Swiss, and U.S. authorities said UBS “engaged in collusive efforts” with other banks to rig rates, and made “corrupt brokerage payments” for that purpose. Barclays paid $450 million to settle similar charges in June. More settlements are expected.

Bailouts: U.S. to pull out of GM

The government said this week that it would unload 40 percent of its GM stock by the end of the year and sell the rest over the next 12 to 15 months, said Nathan Bomey in the Detroit Free Press. The U.S. Treasury pumped $49.5 billion into GM in 2009, acquiring 500 million shares. GM agreed to buy back 200 million of them for $27.50 apiece. The government will need to fetch nearly $70 a share for its remaining 300 million shares to break even. That “virtually guarantees a substantial taxpayer loss,” since GM is currently trading at under $30 a share.

IPOs: Morgan Stanley fined for Facebook

Morgan Stanley agreed to pay Massachusetts $5 million for violating securities laws when it acted as lead underwriter for Facebook’s $16 billion IPO, said Svea Herbst-Bayliss in Reuters.com. The state’s securities regulator charged that a Morgan Stanley banker “improperly coached Facebook” on how to selectively disclose key information to analysts and institutional investors, giving them an edge over retail investors. The state fined Citigroup $2 million over similar charges in October, but said Morgan Stanley’s conduct was “more egregious.”

Telecoms: Sprint’s comeback deal for Clearwire

Sprint will pay $2.2 billion for the 49 percent of wireless carrier Clearwire that it doesn’t already own, bulking up “just one year after analysts had all but written it off,” said Cecilia Kang in The Washington Post. The deal would equip the telecom company to build a high-speed 4G network like those offered by its much larger rivals, Verizon Wireless and AT&T. “We are in a stronger position than ever-—finally,” said CEO Dan Hesse. But analyst Jeffrey Silva said that in a saturated market, Sprint still had “a tough row to hoe.”