My favorite store, im not so sure about that. But it is one of my favorite stories. There is a deal that should keep this company out of bankruptcy. A person familiar with the matter says investor standard general will give American Apparel 25 Million Dollars to pay off the 10 million loan and in exchange get to overhaul the board. Julie hyman has been on the story for weeks now, in part because there is such a captivating figure at the center of the American Apparel story, the ousted ceo. It is fascinating because of him even though he is not involved, especially in this current situation, in the current phase of the news. 25 million is coming from standard general. Standard general is one of the companys the guest investors, recently struck a deal with charney whereas whereby it lent him money to increase the state in American Apparel to 43 , but they would essentially have control of that. He could not vote without the approval of standard general. Are they his ally here . He is their ally because they helped him increase his stake, but they did not full that they did not put full support behind him because it is not clear if he were returned to the company. Standard general has the last laugh. Standard general will be able to appoint three directors to the board. One will be a person from standard general, two others will be outside people, and the other two will be chosen mutually by the existing board and bystander general. There are two directors that will remain on the board. So standard general effectively takes control. Well, 25 Million Dollars and controlling half of the company as well through dov charney. It is a little bit complicated. Have what control does he at this point . It is unclear because he did own 27 of the company beforehand, so it looks like that is still solely his. He increased his stake with the help of standard general. So what is the likelihood he comes back . That is what is very unclear at this point. Could he be a director on the board . Idont know if he would dont know if that would happen. So, what, he is going to sit on the board and poke holes and twist and say we have problems . This is Something Like we talked about yesterday on street smart, the idea that could he be chairman but not ceo. In the cases where you have a controversial founder who has been just the chairman, it has not been a successful situation. The chairman has been active in some folks opinions, interfering with the operations of the company. It is difficult to see any kind of situation where he could be a little bit involved and not entirely involved. This given this guys personality, hes either all in or out. When he is out, hes out there toling the newest competitor American Apparel. I do not see him as a trusted senior advisor. One thing is clear. American apparel lives to see another day here. There is no default on the loan and the company it should be clear that the loan from line capital is not the only loan to the company. It also has other loans outstanding. Line 10 million loan from to give there is a larger loan from capital one as well, now mattting, mostly done by townsend and Susan Burchfield from bloomberg, their reporting shown that Everyone Wants to be repaid, right . We are still talking about a company that has 250 stores around the country, they be selling less stuff but is still selling stuff. Julie hyman with the latest on American Apparel and the unclear future of dov charney. Time to take you to the newsfeeds, the top business stories from around the world. Citigroup is close to selling to settling that investigation. The New York Times says the bank could pay as much as 7 billion. Prosecutors say citigroup misled investors about the quality of bonds backed by mortgages. Forget the fact that those buyers were qualified institutional buyers. They be they should have known what they were getting into. Erik is rolling his eyes. Theers of the jury says aratnam is raj he was found not guilty of conspiracy. It was the prosecutors first loss in april that has led to 85 convictions. Israel may be on the verge of launching a ground offensive into gaza. The government has now called up 40,000 reservists, and Palestinian Militants have launched rockets against israels largest city. The second richest man in the world, carlos slim, it is breaking up his mobile phone and pile, empire, bowing to pressure from the government saying that he controls too much of the Mexican Telecom market. 70 of the wireless market, 80 of the landline market. Those are the numbers. Pretty hard to believe, but they are what else carlos slims fortune. Patricia leah is covering that for us from mexico city. Matthewrgs editor miller. What is happening on the ground in mexico . We know that carlos slim has been under pressure from the Mexican Congress for some time, but what finally drove him to make the decision that American Mobile needs to be broken up . The bill was just approved by the congress this morning, and the board announced last night that it approved the plan to sell mexican assets. American mobile executives have been weighing their options for a while. Yearsuld be to resist for it would pose a threat to their revenue. The second is, what kind of structural options make sense . They decided to break up their assets. Given how much power carlos slim wields by virtue of his wealth and influence in mexico, is it amazing that this actually came to pass . I think so. I was estimating that this would happen, but it is analysts were estimating that this would happen, but it is surprising. In a year when this comes to movil will not have to share its infrastructure. In the end, i think it is a smart move for american movil because the parts may be valuable, more valuable than the whole thing. Its not try for carlos slim, still with a fortune of 71. 5 billion. Should we make friends . More than half of his fortune is american movil. About half of that is based on the american business. If you look about if you look at his fortune, about a quarter of it is based on the stuff that they will spin off. This is what turned him from from alionaire super billionaire into a mere billionaire. Intoom a mere billionaire a super billionaire. I like that, super billionaire. What does it look like he has in cash versus assets . Maybe 5 billion in cash. Doubly a couple of billion dollars in leverage. Most of his fortune is based in public lands security. Would you mind walking us through exactly what carlos slim , american movil is doing . We talk about a breakup. Is he giving assets away to anybody . Does he maintain any kind of arms length control over that part of the business . His goal is to go under 50 of the market. So it is unclear. They have not specified. They say they will sell the telephone towers. But it is unclear what assets they are going to save. All we know is they are going to sell just one operator instead of several. A is an operator that will be new independent operator, so it will not be the operators we have seen in mexico. Is it possible for him to take part in the american movil business and spin it off to American Mobiles public shareholders . It could be. Itd been so vague and there are so few diesels so far. We think there are independent operators that could be a Big InternationalMedications Company like at t. It is unclear. Patricia, thank you very much. Laya covering the story. Matt miller, carlos slim is a creative, crafty, smart man. Does he take the situation and work it to his advantage in a different way . Bet against a guy who became the richest person in the world. Dont to unwind this, but be surprised if he still controls pieces of those businesses. Suddenlynot going to lose the government ties he has. That will not evaporate overnight. No. Matt, thank you very much. Rajoming up, the brother of ranaratnam wont be joining him in prison. Plus, putting limits on the fed. That is what some in Congress Want to do. The potential impact of a new house bill. You are watching Market Makers. I am Erik Schatzker with stephanie ruhle. Attorneys perfect record is no more. After 85 convictions on Insider Trading markets, he is now 851. Juries acquitted Rengan Rajaratnam on conspiracy charges. Hes the kid brother of raj rajaratnam, the most wellknown Hedge Fund Manager jailed in years. The former prosecutor is with us here as is bloomberg businessweeks sheelah kolhatkar. It did not weigh it it did not look like the case was going well into the verdict. Are you surprised that your former boss lost the case . Thank you for inviting me. Every time the federal government brings a case like this, they believe in their case, they put all their resources to find it. All their resources behind it. Here with all the evidence of re raj, theing to government said it was there were difficulties the government had to overcome. Like what . Where was the mistake . Sometimes you do not pick your cases or the facts, but the government did not have a cooperating witness during any particular witness who took the witness stand and said rengan in aatnam was involved conspiracy with us. No witness testified to that. Joe kumars testimony was hurtful to the government, and that was the governments own witness. They had too much heavy reliance on the wire calls. Third, there was a lot of contemporary evidence. What contemporary evidence . Thatmails, phone records, an were completely inconsistent with the government case. You try to draw the sting, you bring that up to the jury and explain why it is still consistent with the governments case. Here there were inconsistencies that the government did not bring them out themselves and the defense was able to say i am bringing it to your attention, showing you why it is inconsistent. The judge did not like the case from the beginning. The case got narrowed from the start. Seven charges down to one. At the very end, the jury feels that and the jury knows that the government opened with three counts, ended up with one. It hurts the government. The judge did not allow specific trades relating to clearwire to be talked about. The case looks to be a route looks to be about raj, not rengan. They did them are margaret will job of they did a remarkable to an he never spoke analyst that he called to testify. Is he getting sloppy here . We have been talking about his record for so long, it makes you wonder. Thana little bit worse 850, or is it law a lot worse than it looks . Right now there is some gloating going on among hedge fund folks. There is some sense of the government has overreached, and perhaps they went too far in pushing these cases. There is another camp that was critical of this perfect record he had, and said that perhaps they are not taking enough risk with the cases they are bringing, and perhaps the jury stackeds unfairly against wall street defendants because it is impossible for the government to lose. Why . 1 , and they uber immediately will say the guy has got to be guilty. There is a Strong Defense theres a strong sense in the wall street world that you cannot win in front of a new york city jury. The sense of resentment for the 1 will in fact any trial that happens, and in fact that did seem to be happening until yesterday. Did that help you as a prosecutor . We have talked about this before. The prosecutor feels they have the wind at the back, postfinancial crisis. He will do not like financial crime. Any evidence of it, they are ready to convict somebody. We talked about this before. Rengan rajaratnam certainly had to be viewed as a wealthy wall street type of person, acquitted. Juries will look at the evidence. The government cannot count on this notion that all wall street ors will be viewed that badly. Every case has to be looked at based on its own facts. In this case the facts when against the government. Why did it take so long to try this case . Raj rajaratnam has been in jail for a couple of years, right . Rengan rajaratnam was not charged with raj rajaratnam. Isnt that weird . Chargegovernment did not gupta at the same time as raj rajaratnam. There are cases in which they continue to investigate, learn new facts, and treat additional charges. What is he going to do now . You double down and say i am not going to let one loss get to me . There are other cases ca . It time to focus on something other than Insider Trading. I dont think this will stop the u. S. Attorneys office or curtail them from investigating Insider Trading, sending out grand jury subpoenas to investigate, work with their counterparts at the sec to investigate. It will not stop the fbi from having a successful and Urgent Program on Insider Trading. What he will do, just like other cases, it will cause prosecutors to take a step back when it ppies. To downstream ti also that this big string of cases is definitely winding down, and this investigation really started in 2006. Someone involved people forget that. It has been going on for a long time. They did not charge Stephen Cohen with anything. A lot of these cases that remain are tying up threads that were never resolved. So we are in a different phase of the novel. I am sure there will be more Insider Trading cases in the future, but this is the winding down of the making of the thriller album. They are going to continue to put resources into it. The fbi will continue to put resources into it. Federal prosecutors will not be deterred from investigating. Maybe they will be deterred a little bit from charging a downstream tippy. We will have to see what is said, writing a lot of guidance to people about whether or not the downstream tippy needs to know the insider or the preacher of the duty that would or the woulder of the duty that reap the benefit. I love the two of them, but gan would have been a good you cannot think of two better people. I am just saying, as much as i may have beenan the good one. Sheelah kolhatkar of bloomberg businessweek. Coming up, shaking up the vatican bank. What francis asks after a dramatic drop in profits. When we come back, happy 100th birthday, Federal Reserve. Some republicans in congress think you need a major renovation process. Blood from wireless pressure monitors to smart watches. What is different about this fitness tracker. Live from bloomberg headquarters in new york, this erikarket makers with schatzker and stephanie ruhle. You are watching Market Makers on bloomberg television. I am Erik Schatzker. Im stephanie ruhle. The Federal Reserve is under fire on the eve of the feds 100th birthday, some House Republicans are pushing a bill to give lawmakers more oversight over the central bank. Tomorrow, economic and policy experts will be on capitol hill to testify at the House Financial Services committee hearing. Good morning to you. Number ofwould do a things including subjecting the fed to greater congressional oversight. It would put some policymaking limits on the fed. You have for several years argued for many things, including more transparency from the fed, and a number of other reforms. Why do you favor this bill . Let me also say that i think the bill is quite modest. The requirement in the bill that the fed published this sort of rule in no way requires that this it doesnt require certain specifications, it just says that the fed needs to be more transparent about what it is doing. We would like to see the fed be around another 100 years, let it be a little more successful than the first hundred years because the first hundred years had its ups and downs. It has some things that nobody would be necessarily proud of its Monetary Policy. I would say for instance, you have doubled the number of times that the fed chair appeared before congress. Instead of two times, it is four. Now there will be more public appearances, more input. Does that. Agency so much of the stuff costbenefit analysis is required and most agencies do that. More transparency. To me, you can certainly argue that maybe the bill tries to nudge the fed in a certain direction or other, but there is nothing requiring the fed to raise Interest Rates. But we know that the republican congressman in this case congressmen in this are smart enough to do that. There are perhaps some that would like to limit the feds ability to raise Interest Rates or force it to raise Interest Rates. But, mark, i read the bill this morning and i am looking at hang on a second . What it talks about is a directed policy rule. I will walk people through this quickly. Theres complicated language. The coefficients of the alice he ruled, i dont want to get into the details, but it requires the fed to report to congress after a policy decision within 48 hours. The gao would then have to approve the reporting on the policy directive rule within another 48 hours, and if the gao were not satisfied, the chairman of the fed would have to explain himself to congress within a period of seven days. That is more than just transparency. Lets parse some of that out. What gao has to approve is that the fed actually reported the rule. It is not that the gao has to say this rule is the right rule, that it is going to work, that it makes sense, it is just that gao has to approve, that this is a policy rule the Federal Reserve is using. They certainly have a model of the economy. What this is requiring is at the Federal Reserve make that model public. That they share it with the rest of us. Which to me, again, allows the rest of us to test it, to look at