sac capital is under fire as you know. charlie gasparino is next as steve cohen's hedge fund braces for these redemptions. melissa: let's get another look at the 10-year treasury as we head out to break. we were looking at 10-year treasury. with all the fed speak going on it is unchanged at 2.13. we'll be right back. everybody ht investment objectives, ideas, goals, appetite for risk. you can't all'. it doesn't. that's crazy. we'rell totally differe. ishares core. etf building blocks for your personalized porolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackck. call 1-800-ishares for a prospectus, which includes investment objectives, risks,harges and expenses. read and consider it carefully before investing. risk includepossible loss of principal. >> i'm jo ling kent with your fox business brief. glencore, strata and blackstone group reportedly potential suitors in rio tint toe's canadian iron ore business in canada. that is valued at $4 billion. >>> pandora's share

wall seet is holding its breath as sac capital braces for maybe billions of redemptions. ng under a cloud of insider trading suspicion courtesy of the fed. there is one catch though. neither sac nor its head, steve cohen have been actually charged with anything criminal. if customers pull their cas, sac could be forced out of business based on suspicion alone. our own charlie gasparino is one of wall street's most knowledgeable oervers. hears been following the sac he has written a new book, circle of friend and about crackdowns and insider trading networks. he we have fox news judge andrew napolitano. senior judicial analyst. i want to start with you. >> how do you like the hairlines? melissa: fantastic. fantastic. you have breaking news on this? what is going on with redemptions. >> as we were talking, over the last couple days on your earlier show that there was a chance of them going to a family office, what they're saying right now, they just give back the customer money, they manage their ownmoney. steve cohen's own fortu. they say that will not happen, no plans to d

we will explain, and a check on how km-- >> this is deadline day for hedge fund firm sac capital. the top managers and owner are under charges of insider trading. >> well, sac capital is not alone in being in the crosshairs of federal investigators the irs in trouble over execucriticisms wasting millions dollars on lavish conferences. we have more. you know, jon, you cannot makeu. how do these new developments and those videos of irs employees doing line dancing change the direction of this investigation? >> doesn't change it in a substantive way, but the fact that you now have pictures that people can associate as goofy for government officials is something that will fuel the critics and have images that they did not have before when we were just talking about a cincinnati office. >> that would be the electric slide right there, i believe, that they are doing and not particularly well. but what happened today at the house hearing on the irs this afternoon, jon? >> this came up, tyler, you had danny werfel who is the interim irs commissioner, once you are beyond shulman and miller

how much is all that driving the latest scandals at places like sac capital? the author gives us the juicy details. >>> plus who made money today? investors gulping down profits from one energy drink company. stay tuned for the afternoon pick me up. even when they say it's not, it is always about money >> agents and agencies of the federal government do not understand that they are servants of the people. they think they are our maers and they are mistaken. i'm not interested in scoring political points. i want to protect and preserve the america that i grew up in. the america that people cross oceans and risk their lives to become a part of. and i'm terrified it is slipping away. melissa: wow! the consvative targets of the irs finally get theiray in front of congress. emotionally-charged testimony. laid out allegation of how the agency obstructed and intimidated organizations that were just seeking tax-exempt status t was legal the stunning details, making the scandal even more chilling. how much worse can this possibly get? joining us now fox business's char

sac capital lost close to $3 billion last broke as part of second quarter redemptions. that figure is in line with expectations but consult a blow for the hedge fund which is fighting to reassure investors that their money is still safe despite an ongoing and intensifying investigation of insider trading by the u.s. justice department. at the start of the year, sac managed about $15 billion in total assets, 6 billion of which came from external investors but amidst new charges against an s.e.c. worker of improper trading, investors asked for $1.7 billion back. now, they pushed that number to more than 5 billion in total in a sign of their waning confidence. sac and cohen have said consistently they have done nothing wrong but the efforts to clear their name has so far fallen short. federal prosecutors have not been persuaded to not pursue the probe. a high-level meeting with justice officials seems to have yielded no agreement to the point, tieier, where sac announce it had was no longer cooperating unconditionally with the government. >> kate, thank you very much. >> s

that would be it for sac capital and not a single charge.hing i heard, investigators are unsure if they have a case against cohen. they're unsure if they have enough evidence. so it may come down to the fact that this guy is not even charged. and his fund goes out of business. melissa: yet they still forced him out? >> absolutely. melissa: i mean it's incredible. and we still are no closer to knowing what matthew martoma is going to do? >> i think july and august is the key dates. if they, if that happens, like, for example, the statute of limitations ends in july and august. if he makes it until then, steve cohen is not getting indicted, bottom line. melissa: so if he makes it through a certain period of time and he doesn't get indicted and seeing all the redemptions, is there anything to stop the investors from coming back? >> you know, he would have to reopen the fund. that is one thing he could do. this is it what scares me now that i got my voice back as a civil libertarian. what scares me the notion of a grand jury subpoena, the notion

mathew martoma, a former portfolio manager at sac capital advisors, is accused of generating $276 million in profits while trading shares of drug companies elan and wyeth. it's alleged he obtained inside information on negative trial results of the companies' alzheimer's drug. the firm's founder, billionaire steven cohen, has paid a record $614 million in the scandal, but he has not been charged. sac reportedly remains open to investors. wells fargo is settling a discrimination suit with housing agencies across the nation. the national fair housing alliance and 13 of its members will get $27 million to settle the complaint. it alleges the bank favored white neighborhoods during bank-owned foreclosures. wells fargo will also pay over $11 million to the u.s. department of housing and urban development. it's a tough week for chrysler. the national highway traffic safety administration wants chrysler to recall nearly 3 million older jeep models because of a higher rate of fires in rear-end crashes. chrysler is fighting it, saying the cars meet safety standards. "their concern is that the reca

to join the pr firm defending as they see sac p-uppercase-letterd the appointment is raising eyebrows in law enforcement at the manhattan office weighing capital. the chief executive officer says davis will not be working on issues related to sac. and we told you live nation was halted for news pending while the company just announcing it has indeed won an altercation case against cts. overall off of session lows. that is the latest from the fox business network. tracy: so here is an idea, what if somebody made a new reality tv show but skipped the tv part altogether? dennis kneale has that story today. dennis: they came up the mac two teamed up i knew teenager reality show which will not air on television at all. instead, summer break will play out online spending time on twitter, answe instagram, bind. now, they are real tweets, posts will go out within seconds of creating them. it once a week show will run for maybe three minutes. we should call it short attention span theater. it is designed to be watched on a smart phone because that is where the kids are going. less than $5 million for an eight weeklong show. news corp. four years ago he

investors must decide whether they want to pull capital from the firms. sace expecting to see significant redemptions, perhaps the majority of the $4 billion in external capital, but hasn't been yanked already. if it happens, sac could simply become a de facto family office and that's a fund manager, managing only his own money which in this case is not a small little bit of change. it's closer to about $9 billion. they also have some sticky money that would get them up to -- sticky being outside investors who will stick with them to $10.5 billion which is the size they were a few years ago. so even with potential outflows with significance, they are still going to be a very large hedge fund, assuming, of course, that the government does not finally bring charges. >> a fabulous article by james b. stewart talking about the prisoners' dilemma in theory. >> and it does seem like these are all sideshows to what the u.s. attorney decides to do and what the u.s. attorney can do to break. i think that these stories all lack the single biggest issue that, you know w

more money flowing from steven cohen's sac capital. jim stewart wrote a terrific piece about this. they both join us now, welcome to both of you. >> i'm going start with you. you did pen a terrific piece. tell me how you think it's all going to play out. >> there is no question if you look at this through the lens of gains theory, the rational choice would be to cooperate. unfortunately the real world is not a world of peer gain theory, so there are a lot of other factors and people can change the incentives to cooperate or not. and in theory, the people can't talk to each other and we can assume that through their lawyers are somehow some kind of communication. . there is. prosecutors there is a lot of pressure on these other people to cooperate with the government. >> i am surprised that they haven't caved yet. >> that's true. >> the deeper i got into this research, the more obvious it seemed to me that this guy ought to be cooperated if he can. he faces decades in jail because of the magnitude of the dollar of damages here and he could maybe get something as low as probation if

sac capital detest day as increasing fears of the you liquidity crunch in china rattled investors here states. finishing one headed 39 points lower. being dropped as the spokesperson after college dean contract would not be renewed after she had used racial slurs in the past. olive garden is continuing with the effort to win back customers. the chain except stew different serving options small plates and family size souders. it caters to the dining habits of millennial and $30 meal deal that includes two families style plotters. tripp 13 -- this is the latest from fox business, giving you the power to prosper. liz: if we told you there was the u.s. stock and one of the hardest-hit industries of recession now up 50 percent of the past year would you guess a car company? ford motor company is that stock and no doubt this strategy is part of reason going full speed ahead in the country that causes us problems today, china with new lines of vehicles being released with the "first on fox" business alan mulally joined as last hour and a cast of the bad economic news coming under china and ch

how much is all that driving the latest scandals at places like sac capital?gives us the juicy details. >>> plus who made money today? investors gulping down profits from one energy drink company. stay tuned for the afternoon pick me up. even when they say it's not, it is always about money

there's a grand jury empanelled looking at trades at sac capital, but what i know according to sourcesthe investigation, and what they tell us is they are still having a very difficult time making a case against him. there is still a possibility, barring one of these potential witnesses flipping. remember, two guys have been indicted, matthew, michael steenberg, a current portfolio manager, on leave, obviously, from sac. barring them slipping, they parole, well, i say probably. i'm not in the grove. they don't have a case against him meaning that a fund that, you know, was a major business. this outside money is important. it's less than half of all the money in sa chiropractic. it's about 5 billion now. it's going to be probably, you know, closer to zero by the end of the year bus it's a staggered redemption date. that five billion is what they charge all the fees on; right? liz: yeah. >> the fees pay for the firms the compliance, the research. sac will be ceasing to be a business, but a radically downsized entity like george has now, and just think about that. that's where civil libe

how much is all that driving the latest scandals at places like sac capital?etails. >>> plus who made money today? investors gulping down profits from one energy drink company. stay tuned for the afternoon pick me up. even when they say it's not, it is always about money

. >>> today could be a bad day for sac capital and its founder stephen cohen. investors are withdrawing billions of dollars from the fund tcht company expects to lose a billion dollars in outside money, they are fighting insider trader charges. that's the latest. >> ed, i want you to talk to me, are you from the private equity business. here's a case of unsubstantiated government charges are knocking this guy's fund out. what do you make of it? >> i don't like anybody tried in the court of public opinion. i think it's dangerous, there has been a history of overreach f. they are insider trading, i think it's important to the track them down, make an example out of them. i'd like to see it done in private, not in public. the market hack swifter dealing out justice than the justice department could hope to be. >> customer money is moving out. everyone is reporting that. i think that's fair. he will keep something opened like a family office to manage his own money withcy considerable, 8 or $9 million. is that right? >> yes. >> i'm wondering if the sec has made a d

a deadline ticking for prosecutors to file charges on sac capital.ike inside the firm? we'll speak to someone who used to work at s.a.c. that's next. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: scottrade- proud to be ranked "best overall client experience." >>> now to the issues facing s.a.c. capital. ellen davis, the former chief media officer for federal prosecutors in manhattan in an unrelated event, is joining s.a.c.'s public relations firm. that will be in september. now over the government's six-year investigation, nine people from s.a.c. have been charged or implicated in insider trading. will the feds ever have enough evidence to charge steve cohen and traders who have been charged, will they flip and sing on mr. cohen, the own

>>> do you want to know what it's like to work inside of sac capital?>> when it comes to being rich, is it all about being good or being lucky? we'll explore that one top of the hour on "power." back to melissa. >> thank you, tyler. pete, want to get some unusual activity because you have been watching some eem, which tracks emerging markets. >> it's been unfolding for a while. if you go back to may 24th, that's when we started seeing huge volumes coming in. 80 cent level. those have already more than doubled since. then you started to see just last week on june 6th you started to see some rolling in the eem where they were coming out of the june 42 puts and moferg into the july 40.5 puts. going down a strike and getting themselves even a little more room in july and yesterday of the 400 and some odd thousa$400 options it trade, 350,000 were on the put side. buying september 38 puts, september 35 puts. the acceleration to the downside looks like people are getting themselves prepared for more downside. >> coming up next on "half," the telecom empire und

getting our first widance since an important second quarter deadline for investor redentals at sac capitale form of a letter that s.a.c.'s president issued to employees yesterday in the wake of that deadline. according to my sources the letter says that the redemptions were significant, without giving specific numeric guidance, to rumle s.a.c. has roughly $4 billion in outside capital after first quarter redemptions. and people were expecting to see most of that removed. so the notion of the word significant suggests resettles were in line with expectations. we don't know if that was 2 1/2, 3, 3 1/2, what have you. clearly in the billions, a substantial number. the other thing said in the letter, there were no substantial layoffs of any sort planned as well, that the firm did not intend to become a family office. there's been speculation about that given that the majority of this external capital seems to be leaving the firm in the wake of the legal issues that they're having. a reminder again, $9 billion that s.a.c. does manage belongs to steve hill and the founder. reminding people to so

, morgan stanley's wealth management arm which is leaving the capital with sac and other institutions capital are staying on board. it's still unclear what ultimately black stone group which was expected to redeem at least hundreds of millions and other big players decided to do. but the morgan stanley decision is likely to receive a little scrutiny because morgan stanley is one of the top prime brokers, which is one indication of the chris crossing relationships between a major hedge funds and the brokerages on wall street. sac is one of the biggest clients and rapid trading style relies on borrowed capital which is key to goldman sachs and others. morgan stanley investors understand their risks, which is why they are comfortable staying on board. whether other clients decide to stay on remains to be seen and i'm tracking that closely. >> we knew about the sky bridges of the world standing by their man and morgan stanley thing is new and significant. >> it is new and one of the two or three players we were watching most closely. black stone of course is the third. morgan stanley has

meanwhile, some of the others stories we're following today, sac capital is reportedly bracing for aroundder trading over the hedge fund intensifies. the deadline to submit requests is today. "the wall street journal" says if that number holds, it would represent more than half of sa a c's outside capital. the house oversight committee says a government watchdog report finds the irs spends around $50 million on at least 220 employee conferences between 2010 and last year. that includes a $4 million for an august 2010 gathering in southern california. for which the agency didn't negotiate lower hotel room rates, even though that's a standard government practice. employees received several perks including stays in presidential suites and tickets to sporting events. >>> a prominent chinese developer and banking mogul are teaming up to buy a new york landmark. janjing and a company called mata are reporting a stake nearly $700 million. it is one of the largest u.s. real estate transactions by an individual chinese investor. the 50 story gm building is a prize property located just off central

. >> sac capital or something like that. >> i can't talk about any specific cases. >> you knew i wouldng that up. >> no comment. >> you got it. i think it's a good case to be made that markets are somewhat screwed up right now. we have outages at euronext exchange. we have all the dark pools where you can trade stocks off the exchange. one thing i worry about, is the sec paying enough attention to this? we see a lot of other stuff, money market rules, because basics of stock trading are markets. a lot of people like dick grasso on our air friday saying he doesn't think the price of apple is actually the price of apple because there are some of these other markets out there. >> that's right. that is huge concern for us things like what mr. grasso are talking about go to investor confidence. if investors are not confident they're getting right price we have a problem at our hands at the sec to answer your specific question i think a lot of attention has been paid may six since the flash crash. >> right. >> it has been in slices and not comprehensive review of the market structure whether

and that's not a good thing at sac capital.ot redemption, not the company redeeming itself, but the company paying out lots of money to people that are out of there after the toughest quarter in the hedge fund's history, investorses must decide today whether to pull capital from steven cohen's firm. sac insiders are expecting significant redemptions, perhaps the majority of the $4 billion in external capital that hasn't been taken out already. if that happens, sac could become a de facto, a family office, a fund managing only. it's all money been insider money. >> i think they were talking about that, anyway. at least that's been the reports, that there's speculation they would want to do that because then the government gets off their back. this is not that people are saying, well, i'm uncomfortable being at a firm that might have questionable perhapses, it's the performance. i mean, if the performance was still great, they would be looking -- >> there's probably a point when you wonder. the government has been so aggressive,

now to the latest on sac capital this morning. kate kelly is reporting the steve cohen firm has told employees it will survive what it characterizes as significant redempti redemptions. in a letter to employees date odd tuesday, sac says it has no plans to become a family office. a lot of people have been talking about that possibility. it added no significant layoff res in the works. sac has roughly $4 billion in outside capital after first quarter redemptions and, you know, despite all the money that investors are taking out, he still has i think it's about $8 billion or $9 billion of its own money. you can stay open for a very long time. and employ about 1 is,000 people to do it. >> the high on the day that the "usa today" cover came out was 1661. so basically, we can -- the s&p was as high as that. so we can equate the closing high on the s&p with the "usa today." any numbers that we can do. and i'm sure they're happy that we're doing this. they need to serve some purpose. >> it's good for business. >> remember that little -- y

. >>> breaking news on sac capital.s about redemptions -- in other words, investors pulling money out because of an ongoing legal investigation, s.e.c. performance has continued to be somewhat lackluster through the end of may. numbers just out this week show the fund was up 70 basis points for the month of may, that leaves it up 6% year to date. of course they're comfortably in the black with 6% but they're way behind the s&p to far this year which is probably something of a fair comp for a fund that primarily deals in stocks on both the long and short side. you can see compared to their peers, they're closer to the average mix than they normally are. historical historically sac has been right there in the market. they also sustained losses in 2008 alongside the market. but it is an interesting issue because either they're not having the trading luck that they normally have or you can maybe guess that there are some distractions or some concerns going on internally as these legal situations continue to deepen in terms

. >> kelly, during the second quarter resumption period of deadline was last monday sac capital loster to 3 what i am told by multiple sources. it comes amid government investigation into allegations of insider trading and growing concerns the founder of the firm may himself be indicted although he steadfastly maintained he did nothing wrong. during the first quarter sac lost 1$1.7 billion in resumptios on paper. in the second quarter it appears they got not double that but certainly a number closer to 3 billion. this is more or less in line with expectations, and still a big flow for a firm that only started with $6 billion in external capital and the vast majority of that unless it is replenished may be departing by the end of the year. >> thanks, kate. >> if you're just joining us this morning, here is what you missed earlier on. >> welcome to "squawk on the street." here is what's happened so far. >> we have no single loss in the quarter. we estimate 2 to 5% growth in u.s. for the new year. >> i don't see it ending the bull market now but i do think the market will digest a numbe

the sac hedge fund capital, one of the biggest players on wall street. thousands of jobs are connected to it, is also under now increasing investigation. kate, you've been reporting on this all week. >> what's the value at this stage? >> what's interesting in the past week is that investors pulled between $2 billion and $3 billion out of this hedge fund which manages a total of 15 and that tells you if you add up the math, the vast majority of external capital is now gone. a vote on the wallet of what's likely to occur and an indictment of its founder on insider trading charges. they have cohen in their crosshairs and it's going to be an interesting summer. >> they have boards, these investors have boards that say, look, if there's any chance of problems we have to get out, just from the government's point of view. not like investors really know something that the rest of us don't, and so it's 9 billion that's inside capital, and what, 3 billion outside. >> 9 billion, 6 billion outside at the beginning of the year and back of the envelope it's between 1

capital will stay put. the issue is the legal hot seat. that's after several former employees have pled guilty and others are yet to be tried. sac thought it had alreadily settled the matter with a commission settlement but federal prosecutors who may press forward with criminal charges obviously think differently. >> if they have to sell to meet these redemptions, that could put some pressure. >> the months are particularly out of date for them. they are known for rapid trading both short and long positions. they have been a little bit more liquid. ever since then i am told they kept a little more cash. >> the restaurant chain reporting better than expected third quarter profits in revenue. it raise its yearly forecast and increased the quarterly dividend by 50%. stock is up 47 cents since the beginning of the year. and the battle for clear wire are heating up. sprint nextel attacking saying it violates agreements and contains illegal provisions. dish network is traded off 1% on the session. >> thank you very much. >> long time senator, a new jersey democrat and a very successful businessman, by the way, died at the age of 89.

capital has been going on. >> kate kelly joins us. >> sac officials work withed last night tallying the second-quarter redemptionsvestors were pulling out of the hedge fund this garter and the amount that turned into something of a referendum in the public perception of the firm which was fighting battles on multiple fronts and last quarter, and steve cohen had been implicated and a criminal insider trading case. outside investors who started the year with $6 billion in sac pulled 1.6 million. this quarter with fears rising about a potential cohen indictment amid the arrest of another sac trader and a rash of grand jury subpoenas. outside investors were expected to pull a substantial amount and outside assets that remained. of course, that still leaves cohen's 9 billion or so in internal money which still could provide the basis of a balanced hedge fund or sac office and that possibility can certainly exist. key sac clients whose moves we are watching today include morgan stanley, hsbc and blackstone group and all of whom stayed after the tumultuous first quarter. those companies were widely expected to pull some

kate kelly is reporting that sak capital told employees it will survive what it calls significant redemptions in the quarter. in an memo dated money, management says sacme a family offer. reports are that sac hat signaled at least they would pull some of them money. >>> procter & gamble is reallien its brands. starting in july, the company will split its house old care and bloom efforts into four sectors. global baby care, global fabric and home care lights it's to replace the ceo when he steps down in a few years. p&g stock up 0.25% in frankfurt. >>> still to come, the gort. >> what dethey're wait to the up skooid. a lot bit more vapser outpatient decliners. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ some brokerage firms are. but way too many aren't. why? because selling their funds makes them more money. which makes you wonder -- isn't that a conflict?