SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Global trouble

Chase Manhattan Corp. and UBS AG, the bank bigger than Switzerland, must be wondering about the benefits of international trade. They’re being sued by Sumitomo Corp., the Japanese trading company, for a total of $762 million. The case involves loans the banks made to Yasuo Hamanaka, who lost $2.6 billion of Sumitomo’s money in unauthorized copper trading. Sumitomo says Mr. Hamanaka — he’s doing eight years in the Japanese equivalent of the big house — was an unauthorized borrower.

A deal for the birds

Here’s an example of an ostrich investment scam that, like the flightless fowl, never got off the ground. The Securities and Exchange Commission ruled against three principals of a now-defunct company, Ostrich Group Inc., for collecting $800,000 to board ostrich breeder birds that didn’t exist. Another defendant who called himself a consultant to the bird bunch settled with the SEC for $25,439. The three principals, including a mother-and-son-team, agreed to repay the 83 investors, plus interest.

Ostrich Group was charged with selling investment contracts in several states and as acting as an unregistered broker-dealer. Their lawyer said his clients didn’t want to comment.

“This is the only ostrich case I’ve had, knock on wood,” says Joel Kornfeld, the SEC trial attorney who handled the case.

Other odd fraud cases on the lineup? “A plateful,” says Mr. Kornfeld. “I have prime banks that don’t exist, two movie cases where people solicited money to create films, then went out and spent it.”

Adds SEC spokesman John Heine: “We’ve seen everything from ostriches to eels to whiskey barrels. It never ceases to amaze.” In none of these cases is the SEC burying its head in the sand.

If it weren’t for the honor…

It’s usually good to be No. 1, but maybe not this time. The Service Employees International Union has named Citigroup the top Top Trash of 1999 for outsourcing cleaning at 91 bank branches to Golden Mark Maintenance. This happened five years ago when the company was just Citicorp, so you can’t blame Citigroup co-chairman Sanford I. Weill, he of the $200 million-plus pay package.

Anyway, the union says, nearly 100 janitors, some of whom had spent more than 20 years sweeping up crumpled deposit slips and making sure pens were properly chained to desks, found themselves between engagements.

The union says Golden Mark also fired several dozen workers at the Citibank-owned Manhattan Mall, cut janitors’ pay by up to $10 a hour and ended health and pension benefits, which is bad for insurance companies like what was then Mr. Weill’s Travelers Group.

One thing you can bank on, though, is that the union will kick off its Justice for Janitors 2000 campaign tomorrow with rallies in 14 cities.