U.S.-based Wynn Resorts Ltd and chairman Steve Wynn cannot sue hedge fund short-seller Jim Chanos for slander, according to a ruling on Tuesday.
The lawsuit accusing Mr Chanos of defamation was thrown out in San Francisco by a federal judge who said the remarks were protected speech and not slanderous, Bloomberg News reports.
The company and Mr Wynn in September claimed Mr Chanos had falsely alleged they had violated the U.S. Foreign Corrupt Practices Act (FCPA).
Mr Chanos, who heads New York-based Kynikos Associates LP, in April reportedly discussed his investment strategy and concerns about how casino operators might run afoul of the U.S. anti-bribery laws. He was speaking at an invitation-only symposium at the University of California at Berkeley.
“It takes a significant inferential leap to conclude that Chanos’s general uncertainty about the questionable business methods in Macau equates to an assertion that Wynn violated the FCPA,” U.S. District Judge William Orrick said, according to Bloomberg.
Mr Chanos’s statement, that he “began to really get concerned about the risk I was taking with clients’ money under Foreign Corrupt Practices Act and a variety of other, you know, aspects of exactly how business is done there,” is not rendered false by any definitive proof Wynn didn’t violate the FCPA, according to the judge’s ruling, cited by the media outlet.
Mr Wynn and the casino operator have until January 13 to revise and file again the lawsuit. “We intend to take advantage of that opportunity,” Michael Weaver, a spokesman for Wynn Resorts, told Bloomberg.
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Non-executive chairman of Donaco International