DealBook: Beneath the Calm, SAC Works to Contain Fallout From an Inquiry

At last month’s Hurricane Sandy benefit concert, Steven A. Cohen sat near the Madison Square Garden stage, grooving to performances by Bon Jovi and Billy Joel.

Last week, he flew a private jet to the World Economic Forum in Davos, Switzerland, rubbing shoulders with world leaders and Fortune 500 chieftains. And on Monday, he will show up at the Breakers Resort in Palm Beach, Fla., for one of the year’s biggest hedge fund conferences and, if he can squeeze it in, a round of golf.

For a man who has emerged as the Justice Department’s great white whale in its insider trading investigation — a Wall Street version of Captain Ahab pursuing Moby-Dick — Mr. Cohen, the billionaire owner of the hedge fund SAC Capital Advisors, does not appear concerned.

But inside the offices of SAC’s Stamford, Conn., headquarters, and at Midtown Manhattan law firms, Mr. Cohen’s employees and lawyers are working hard to contain the fallout from the investigation.

His executives have offered financial incentives to Mr. Cohen’s staff members to stay with SAC. Marketing officers are trying to persuade investors to keep their money at the fund. And defense lawyers are working furiously to persuade federal securities regulators not to file a civil fraud lawsuit against the firm.

“This has always been a stressful place to work,” said an SAC employee who requested anonymity because he was unauthorized to speak publicly about the fund. “Now it’s just more stressful.”

Neither SAC nor Mr. Cohen has been accused of any wrongdoing.

The main question now looming over the firm is whether its clients will stand by the fund, or its legal and regulatory problems will cause investors to head for the exits. Under the firm’s rules, SAC clients have until Feb. 15 to ask for their money back, and then cannot make another so-called redemption request for another three months.

Mr. Cohen’s fund was dealt a blow last week when a Citigroup unit that manages money for wealthy families disclosed that it was withdrawing its $187 million investment. The move by the bank was the most prominent client departure since November, when the multiyear investigation into SAC’s trading practices entered a more serious phase.

Citigroup’s withdrawal represents a tiny percentage of SAC’s $14 billion in assets under management. The fund has said it expects total investor redemptions for the first quarter of up to $1 billion, a number that an SAC spokesman has said will not adversely affect its business.

SAC is largely insulated from the potentially devastating effects that client defections can have on a hedge fund in part because of Mr. Cohen’s extraordinary wealth. Unlike other hedge fund managers who rely almost entirely on outside investors, Mr. Cohen has the comfort of knowing that about $8 billion of SAC’s fund belongs to him and his employees.

Still, the Citigroup decision stung, say people close to SAC’s business, because of the longstanding and lucrative relationship between the bank and the fund. Another concern, said these people, is that the move could influence other large SAC investors currently weighing whether to keep their money at the fund.

For Citigroup, its withdrawal of money from SAC carries substantial business risk. The bank has a vast relationship with SAC, earning revenue by providing the fund with financing and trading services.

SAC could exact retribution on Citigroup by terminating, or at least scaling back, its broader relationship with the bank. An SAC spokesman declined to comment.

Citigroup’s move came two months after federal authorities arrested Mathew Martoma, a former SAC portfolio manager, in what they described as the most lucrative insider trading case ever uncovered. The Martoma indictment represented the first time that the government had brought charges stemming from a trade in which Mr. Cohen had been involved. The Securities and Exchange Commission has warned Mr. Cohen that it might file a civil fraud action against SAC related to the case.

In addition to Mr. Martoma, at least seven former SAC employees have been tied to insider trading while at the fund. Three have pleaded guilty to criminal charges.

Citigroup issued a statement that its decision “should not be construed as a statement on the merits of any outstanding legal proceedings or potential regulatory action.” But the bank specifically cited the Martoma case, explaining that “in the event these legal and regulatory matters are resolved favorably for Mr. Martoma and SAC, Citi Private Bank expects to reconsider admission of SAC’s funds to its hedge fund platform.”

Mr. Martoma has pleaded not guilty and rejected requests by federal agents to cooperate against his former boss. Mr. Cohen has told his employees and clients that he is confident that he has acted appropriately at all times.

Yet the heightened government scrutiny has caused skittishness among SAC’s top ranks, forcing the fund to lavish even richer financial incentives on a group of employees that is already among the most highly compensated in the hedge fund industry.

This month, SAC told its stable of portfolio managers that it would increase year-end bonuses by three percentage points. SAC portfolio managers — the fund’s most senior traders, given the authority to make their own investment decisions and also feed Mr. Cohen their best ideas — are paid, on average, 20 percent of the profits they generate for the fund.

“The program is intended to retain our most valuable resource, our investment professionals,” said Jonathan Gasthalter, the SAC spokesman.

Another valuable resource is SAC’s outside investors, which account for about $6 billion, or 40 percent, of the fund’s assets. That money accounts for hundreds of millions of dollars in fees, which SAC uses to finance one of the world’s largest and most sophisticated hedge fund operations, with more than 1,000 employees and 125 teams of traders and analysts. Its operation is also one of the most successful, posting average annualized returns of about 30 percent since 1992.

Those results have in the past kept SAC’s customers satisfied, but the government scrutiny has made many of them uneasy. The firm’s marketing team has reached out to the fund’s investors to address their concerns and reassure them that the insider trading inquiry will not affect its performance.

Despite those efforts, several investors in addition to Citigroup, including Titan Advisors and a unit of Société Générale, have notified SAC that they are withdrawing money. Other clients, like Chapwood Investments and SkyBridge Capital, have said they will continue to invest with the fund.

SAC executives continued the charm offensive with major clients on Sunday, holding an annual golf outing in Palm Beach on the eve of a hedge fund conference at the Breakers sponsored by Morgan Stanley. The conference — a matchmaking event that connects top managers with the world’s richest investors — is considered an important stop on the hedge fund money-raising circuit.

Since Morgan Stanley does not invite the news media to its conference, there is not expected to be the same paparazzi-like reports on Mr. Cohen that emerged last week from Davos. Bloomberg News filed a dispatch that Mr. Cohen sat in on a panel discussion on data security called “The Digital Infrastructure Context.” And Henry Blodget, the editor of the financial Web site Business Insider, wrote a Twitter post on a sighting of Mr. Cohen.

“Steve Cohen was hanging in Davos lounge yesterday,” he wrote. “Didn’t look worried.”

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L.A. mayoral candidates sound off on pot dispensaries

As Los Angeles voters face the possibility of as many as three medical marijuana initiatives on the May ballot, several mayoral candidates have begun to outline their own plans to deal with the proliferation of pot dispensaries — an issue that has ensnared the City Council in countless legal tangles.

At a mayoral forum sponsored by the League of Women Voters last week, four of the five leading candidates argued for paring back the hundreds of pot dispensaries around the city. But Councilman Eric Garcetti said his first goal would be to persuade the federal government to reclassify marijuana as a medicine: "I will advocate that as mayor," he said.

Garcetti, who presided over many of the battles on the issue as council president from 2006 to 2012, said he would also urge state lawmakers to set regulations governing the distribution of medical marijuana.

"The courts say wildly different things because there has not been clear guidance from the state or federal level," he said. At the city level, Garcetti said, he would try to "keep access" while limiting the number of dispensaries. "You charge a fee so you have an enforcement mechanism, and where possible collect taxes" — steps that, he said, would free up law enforcement officers to focus on more serious crime.

City Controller Wendy Greuel called for "compassion" but said her emphasis would be on tightening regulations on the locations of pot shops in the city.

"I think when people voted in the state of California to allow medical marijuana, they thought they would go to their local CVS pharmacy and get it. They didn't think about the impact it would have on neighborhoods," said Greuel, who is targeting many of the more conservative San Fernando Valley voters. "The bottom line is we have a right to regulate where marijuana clinics are in the city of Los Angeles…. The public is demanding that the government actually do their job."

After the forum, aides to Greuel told The Times she also would support classifying marijuana as a medicine at the federal level.

The city has struggled for years to regulate the placement of pot shops. A loophole in the city's 2007 moratorium allowed hundreds of additional shops to open. The council's efforts to limit the proliferation led to more than 100 lawsuits against the city. In response to complaints from neighborhood activists, the council enacted a ban on storefront marijuana sales last July. But it retreated in October, repealing the ban after a well-organized coalition of marijuana activists mounted an effort to overturn it at the ballot box.

Kevin James, a former federal prosecutor and the sole Republican among the major contenders, said the confusion and legal wrangling illustrated the dysfunction of the council.

"More pot clinics than Starbucks? Unbelievable," James said at Thursday night's forum. "Only this City Council could put a moratorium on 180 or so pot clinics — and it skyrockets to over 1,000."

The five mayoral candidates were pressed to say how many dispensaries should be allowed across the city. James said he favored about 10 in each of the 15 council districts. Garcetti said the original number of dispensaries — approximately 100 — was "about right."

Greuel and Councilwoman Jan Perry said they were hesitant to name an exact number, with Perry adding that she would take her policy cues from the voters in May.

Candidate Emanuel Pleitez, a technology executive who read from notes throughout the forum, argued that "politicians shouldn't be in the business of setting numbers" and should "let the market decide."

Last week the City Council advanced a measure for the May ballot that would permit only the dispensaries that opened before the moratorium to operate; the measure would also raise taxes on marijuana sales. Garcetti backed the request by Councilman Paul Koretz and Council President Herb Wesson asking the city attorney to draw up language for a ballot measure. Perry was absent for the vote.

Two additional — and competing — medical marijuana initiatives have qualified for the May ballot.

One, which is largely backed by dispensaries that opened after the moratorium, would allow many pot shops to remain open, but it would set new requirements for their operations — such as limited hours and maintaining a certain distance from schools. It would raise taxes on medical marijuana by 20% to pay for city enforcement.

The other was created by a coalition of medical marijuana advocates and the United Food and Commercial Workers union, which began organizing dispensary workers last year. Like the City Council-sponsored proposal, it would allow only pot dispensaries that opened before 2007 to operate. Koretz and Wesson have criticized the measure for not mandating that the shops be located farther away from schools, churches and parks.

Some advocates for the union-backed measure now say they probably will support the council's proposal because it too would allow older dispensaries to remain open and has a better chance of passing.

maeve.reston@latimes.com

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‘Fruitvale,’ ‘Blood Brother’ win Sundance Awards

PARK CITY, Utah (AP) — The dramatic film “Fruitvale” and the documentary “Blood Brother” won over audiences and Sundance Film Festival judges.

Both American films won audience awards and grand jury prizes Saturday at the Sundance Awards.

“Fruitvale” tells the true story of Oscar Grant, who was 22 years old when he was shot and killed in a public transit station in Oakland, Calif. Twenty-six-year-old first-time filmmaker Ryan Coogler wrote and directed the dramatic narrative.

“Blood Brother” follows a young American, Rocky, who moved to India to work with orphans infected with HIV.

The Cambodian film “A River Changes Course” won the grand jury prize for international documentary, and a narrative film from South Korea, “Jiseul,” claimed the grand jury prize for dramatic world cinema.

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Well: Ask Well: Squats for Aging Knees

You are already doing many things right, in terms of taking care of your aging knees. In particular, it sounds as if you are keeping your weight under control. Carrying extra pounds undoubtedly strains knees and contributes to pain and eventually arthritis.

You mention weight training, too, which is also valuable. Sturdy leg muscles, particularly those at the front and back of the thighs, stabilize the knee, says Joseph Hart, an assistant professor of kinesiology and certified athletic trainer at the University of Virginia, who often works with patients with knee pain.

An easy exercise to target those muscles is the squat. Although many of us have heard that squats harm knees, the exercise is actually “quite good for the knees, if you do the squats correctly,” Dr. Hart says. Simply stand with your legs shoulder-width apart and bend your legs until your thighs are almost, but not completely, parallel to the ground. Keep your upper body straight. Don’t bend forward, he says, since that movement can strain the knees. Try to complete 20 squats, using no weight at first. When that becomes easy, Dr. Hart suggests, hold a barbell with weights attached. Or simply clutch a full milk carton, which is my cheapskate’s squats routine.

Straight leg lifts are also useful for knee health. Sit on the floor with your back straight and one leg extended and the other bent toward your chest. In this position, lift the straight leg slightly off the ground and hold for 10 seconds. Repeat 10 to 20 times and then switch legs.

You can also find other exercises that target the knees in this video, “Increasing Knee Stability.”

Of course, before starting any exercise program, consult a physician, especially, Dr. Hart says, if your knees often ache, feel stiff or emit a strange, clicking noise, which could be symptoms of arthritis.

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7 Die in Fire at Factory in Bangladesh

A.M. Ahad/Associated Press

Firefighters and volunteers worked to extinguish the fire at a small garment factory in Bangladesh’s capital on Saturday.

DHAKA, Bangladesh — In the latest blow to Bangladesh’s garment industry, seven workers died Saturday after a fire swept through a factory here not long after seamstresses had returned from a lunch break. Workers said supervisors had locked one of the factory exits, forcing some people to jump out of windows to save their lives.

Abir Abdullah/European Pressphoto Agency

Relatives mourned beside the bodies of workers killed in the fire at a hospital in Dhaka.

Reuters

People sifted through the wreckage at the Smart Fashions factory.

The fatal fire comes roughly two months after the blaze at the Tazreen Fashions factory left 112 workers dead and focused global attention on unsafe conditions in Bangladesh’s garment industry. Tazreen Fashions, located just outside Dhaka, the capital, had been making clothing for some of the world’s biggest brands and retailers, including Walmart.

In the aftermath of the Tazreen Fashions fire, political and industrial leaders in Bangladesh pledged to quickly improve fire safety and even conducted high-profile, nationwide inspections of many of the country’s 5,000 clothing factories. And global brands promised they would not buy clothes from unsafe factories.

But Saturday’s fire in a densely populated section of Dhaka is a grim reminder that the problems remain. The blaze erupted about 2 p.m. at Smart Garment Export, a small factory that employed about 300 people, most of them young women who were making sweaters and jackets. All seven of the dead workers were women.

Masudur Rahman Akand, a supervisor in the fire department, said the factory’s workers were returning from lunch when the blaze erupted in a storage area. The factory was located on the second floor of a building, above a bakery, and it lacked proper exits and fire prevention equipment, Mr. Akand said.

“We did not find fire extinguishers,” he said. “We did not find any safety measures.”

With smoke filling the factory floor, workers apparently panicked. Mr. Akand said the seven workers who died either suffocated or were trampled by people trying to escape.

Eight other workers were hospitalized with injuries. Some of them told rescuers that many people could not quickly escape because one of the exits was blocked by a locked steel gate. Witnesses said people began jumping out of windows before the gate was unlocked.

Azizul Hoque, a police supervisor, said the investigation was continuing. “We do not know the reason or the source or the origin of the fire,” he said.

It was unclear whether the Smart Garment factory was making clothing for international brands or retailers. Dhaka’s industrial areas are filled with factories, large and small, that produce clothing for much of the Western world.

Julfikar Ali Manik reported from Dhaka, and Jim Yardley from New Delhi.

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AEG, Koreatown developer help fund L.A. sales tax campaign

The developer of a proposed downtown Los Angeles football stadium and the company behind two planned apartment towers in Koreatown have provided about two-thirds of the funds for the group backing a half-cent sales tax increase in the city, according to the first report released in the campaign.

The committee for Proposition A on the March 5 ballot reported that it had raised $185,000 by Jan. 19, with $100,000 coming from stadium developer Anschutz Entertainment Group. The City Council, which is seeking the tax increase to address a $220-million budget shortfall, approved AEG's proposed stadium last year, which involves the demolition and reconstruction of a section of the city's Convention Center.

An additional $25,000 came from 3150 Wilshire, a company created by real estate developer J.H. Snyder Co., which received $17.5 million in financial assistance to build two residential towers in Council President Herb Wesson's district.

Wesson, who launched the sales tax campaign last fall, has been raising money for the measure. Kacy Keys, senior vice president of J.H. Snyder, said Wesson is "a great leader" who has been pivotal in getting her company's Koreatown project off the ground.

"I know this [ballot measure] is Herb's effort, and we wish Herb well," she said.

The city provided a $12.5-million loan for J.H. Snyder's Koreatown development that can be repaid, in part, from new property taxes generated by the project, Keys said. An additional $5-million redevelopment loan does not need to be repaid until the developer sells or refinances the building, she said.

Wesson said he hopes to raise $2 million for the sales tax campaign and secure endorsements from the Los Angeles County Federation of Labor and others. "I think this is a very good start," he said.

Neighborhood activist Jack Humphreville, who signed the ballot argument opposing the sales tax increase, said Proposition A backers are getting big donations from companies that had received "special treatment" from the City Council.

The campaign contributions are "a cheap price for these special interests to pay."

AEG President and Chief Executive Tim Leiweke said Police Chief Charlie Beck asked him to help with the campaign but did not specify a dollar amount. Leiweke said he contributed out of a fear that the Los Angeles Police Department force would have to be reduced if Proposition A fails.

"I think, quite frankly, that it's difficult to keep on taxing businesses and individuals in the state of California. And if we're not careful, eventually we're going to make it difficult to do business in California and in the city of L.A.," Leiweke said. "That said, I don't see another path."

The Proposition A campaign also received $25,000 from Excel Paving, a company that has received city contracts in recent years, and $25,000 from Crew Knitwear, a Los Angeles-based apparel company.

A $10,000 donation came from a political action committee representing the California Assn. of Realtors. Real estate groups lobbied successfully last fall to stop Wesson and his colleagues from pursuing a ballot measure that would increase the tax on property sales.

Wesson and his colleagues went with the proposed sales tax increase instead.

david.zahniser@latimes.com

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ESPN’s Rachel Nichols jumps to CNN, Turner Sports

LOS ANGELES (TheWrap.com) – ESPN reporter Rachel Nichols has made the leap to CNN.

The former “SportsCenter” correspondent has been hired by CNN, where she will host a new weekend sports program. Nichols will also provide coverage for Turner Sports, and cover all major sporting events, including the Olympics, for CNN and Turner.

Nichols’ first assignment in her new position will be the Super Bowl on February 3.

“We’re just thrilled that a sports journalist of Rachel’s stature and expertise will now be a regular part of the CNN lineup,” newly installed CNN Worldwide president Jeff Zucker said of the hire. “Her arrival, beginning next week, is an important step in expanding the range of programming and storytelling on CNN.”

Nichols added that she “couldn’t be more excited” about moving to CNN and Turner Sports, noting that she believes in the vision that Zucker has for the network.

In the first major hire for CNN since news broke in November that Zucker was taking over, ABC News senior White House correspondent Jake Tapper signed on with the network in December to anchor a new weekday news program.

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40 Years After Roe v. Wade, Thousands March to Oppose Abortion

Drew Angerer/The New York Times

Pro-life activists made their way down Constitution Avenue toward the Supreme Court during the March for Life in Washington on Friday.

WASHINGTON — Three days after the 40th anniversary of the decision in Roe v. Wade, the landmark Supreme Court case that legalized abortion, tens of thousands of abortion opponents from around the country came to the National Mall on Friday for the annual March for Life rally, which culminated in a demonstration in front of the Supreme Court building.

On a gray morning when the temperature was well below freezing, the crowd pressed in close against the stage to hear more than a dozen speakers, who included Tony Perkins, the president of the Family Research Council; Representative Diane Black, Republican of Tennessee, who recently introduced legislation to withhold financing from Planned Parenthood, and Senator Rand Paul, Republican of Kentucky; Cardinal Seán Patrick O’Malley of Boston; and Rick Santorum, the former senator from Pennsylvania and Republican presidential candidate.

Mr. Santorum spoke of his wife’s decision not to have an abortion after they learned that their child — their daughter Bella, now 4 — had a rare genetic disorder called Trisomy 18.

“We all know that death is never better, never better,” Mr. Santorum said. “Bella is better for us, and we are better because of Bella.”

Jeanne Monahan, the president of the March for Life Education and Defense Fund, said that the march was both somber and hopeful.

“We’ve lost 55 million Americans to abortion,” she said. “At the same time, I think we’re starting to win. We’re winning in the court of public opinion, we’re winning in the states with legislation.”

Though the main event officially started at noon, the day began much earlier for the participants, with groups in matching scarves engaged in excited chatter on the subway and gaggles of schoolchildren wearing name tags around their necks. Arriving on the Mall, attendees were greeted with free signs (“Defund Planned Parenthood” and “Personhood for Everyone”) and a man barking into a megaphone, “Ireland is on the brink of legalizing abortion, which is not good.”

The march came two months after the 2012 campaign season, in which social issues like abortion largely took a back seat to the focus on the economy. But the issue did come up in Congressional races in which Republican candidates made controversial statements about rape or abortion. In Indiana, Richard E. Mourdock, a Republican candidate for the Senate, said in a debate that he believed that pregnancies resulting from rape were something that “God intended,” and in Illinois, Representative Joe Walsh said in a debate that abortion was never necessary to save the life of the mother because of “advances in science and technology.” Both men lost, hurt by a backlash from female voters.

Recent polls show that while a majority of Americans do not want Roe v. Wade to be overturned entirely, many favor some restrictions. In a Gallup poll released this week, 52 percent of those surveyed said that abortions should be legal only under certain circumstances, while 28 percent said they should be legal under all circumstances, and 18 percent said they should be illegal under all circumstances. In a Pew poll this month, 63 percent of respondents said they did not want Roe v. Wade to be overturned completely, and 29 percent said they did — views largely consistent with surveys taken over the past two decades.

“Most Americans want some restrictions on abortion,” Ms. Monahan said. “We see abortion as the human rights abuse of today.”

Speaker John A. Boehner of Ohio, who spoke via a recorded video, called on the protest group, particularly the young people, to make abortion “a relic of the past.”

“Human life is not an economic or political commodity, and no government on earth has the right to treat it that way,” he said.

The crowd was dotted with large banners, many bearing the names of the attendees’ home states and churches and colleges. Gary Storey, 36, stood holding a handmade sign that read “I was adopted. Thanks Mom for my life.” Next to him stood his adoptive mother, Ellen Storey, 66, who held her own handmade sign with a picture of her six children and the words “To the mothers of our four adopted children, ‘Thank You’ for their lives.”

Mr. Storey said he was grateful for the decision by his biological mother to carry through with her pregnancy. “Beats the alternative,” he joked.

Last week, the Planned Parenthood Federation of America started a new Web site, and on Tuesday, its president, Cecile Richards, released a statement supporting abortion rights.

“Planned Parenthood understands that abortion is a deeply personal and often complex decision for a woman to consider, if and when she needs it,” she said. “A woman should have accurate information about all of her options around her pregnancy. To protect her health and the health of her family, a woman must have access to safe, legal abortion without interference from politicians, as protected by the Supreme Court for the last 40 years.”

This article has been revised to reflect the following correction:

Correction: January 25, 2013

A summary that appeared on the home page of NYTimes.com with an earlier version of this article misstated the day of the march. It took place on Friday, not Thursday.

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Labor Relations Board Rulings Could Be Undone

By ruling that Mr. Obama’s three recess appointments last January were illegal, the federal appeals court ruling, if upheld, would leave the board with just one member, short of the quorum needed to issue any rulings. The Obama administration could appeal the court ruling, but no announcement was made on Friday.

If the Supreme Court were to uphold Friday’s ruling, issued by the United States Court of Appeals for the District of Columbia Circuit, it would mean that the labor board did not have a quorum since last January and that all its rulings since then should be nullified.

Many Republicans and business groups applauded Friday’s ruling. They often assert that the appointments Mr. Obama made to the board have transformed it into a tool of organized labor. But many Democrats and labor unions say Mr. Obama’s appointments restored ideological balance to the board after it was tipped in favor of business interests under President George W. Bush

Mark G. Pearce, the board’s chairman, issued a statement saying the board disagreed with the ruling and suggested that other appeals courts hearing cases about the constitutionality of Mr. Obama’s appointments could reach a different conclusion.

“In the meantime, the board has important work to do,” said Mr. Pearce, whose agency oversees enforcement of the laws governing strikes and unionization drives. “We will continue to perform our statutory duties and issue decisions.”

Unless the Senate confirms future nominees to the board — Senate Republicans have blocked several of Mr. Obama’s board nominees — Mr. Pearce will be the only member left if Friday’s ruling is upheld. The board has five seats.

Representative Darrell Issa, a California Republican who is the chairman of the Oversight and Government Reform Committee, issued a statement that urged the recess appointees to “do the right thing and step down.” He added, “To avoid further damage to the economy, the N.L.R.B. must take the responsible course and cease issuing any further opinions until a constitutionally sound quorum can be established.”

The three disputed recess appointees included two Democrats, Sharon Block, deputy labor secretary, and Richard Griffin, general counsel to the operating engineers’ union; and one Republican, Terence Flynn, a counsel to a board member. Mr. Flynn resigned last May after being accused of leaking materials about the group’s deliberations. Another Republican member, Brian Hayes, stepped down when his term expired last month.

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Security boosted for Orange County gun show

As the nation debates the idea of new gun laws, the decades-old Crossroads of the West Gun Show at the Orange County Fairgrounds this weekend will be business as usual, organizers said — with the exception of increased security.

The fairgrounds, whose relationship with the Utah-based Crossroads company spans nearly 25 years, receives about $600,000 from parking, rent, food and beverages from the shows, which are held several times a year, said Jerome Hoban, chief executive of the O.C. Fair & Event Center.

"We're increasing the security because these gun shows are wildly popular, and we want to make sure it's a secure and safe event," he said. "With more people, it's more security, and that's with any event."

Gun shows are under scrutiny from local governments nationwide following the Newtown, Conn., elementary school shooting last month and after accidents at three recent gun shows left five people injured. The Glendale City Council this week took the first step toward banning gun shows and banning all firearm sales on city-owned land.

Also motivated are gun enthusiasts who fear new regulations; they are stocking up on ammunition and guns. The recent Ontario gun show, also sponsored by Crossroads, was packed.

The state-run fairgrounds has its own on-site security and contracts with the Orange County Sheriff's Department for supplemental help.

Four deputies are scheduled to patrol the show, in addition to the two at the fairgrounds' weekly Orange County Market Place, said sheriff's Sgt. Scott Baker.

"We're not foreseeing any problems," he said. "I know there is a heightened sense with all the stuff going on, but we haven't addressed it any further than that."

Having four deputies on patrol is more than have been on hand for past shows, Baker said.

"It's about as safe as you're going to be," he said. "We're not projecting any problems.... We're not going to a higher level because of the situation, or anything of that nature."

Hoban expressed confidence in security at the fairgrounds. "We don't take any event lightly," he said. "If we have the public on our facility, it's our responsibility to keep everything safe."

Sales of handguns and rifles at the show are subject to state and federal mandates, organizers said. "The rules aren't changing because it's a gun show, or you get an exemption. … The rules still apply there," Baker said.

State laws include a 10-day waiting period, valid identification and a registration fee.

"It's not the kind of event where everybody's walking out the door with firearms," Hoban said.

Bob Templeton, owner of Crossroads, said the Costa Mesa show typically draws 10,000 to 14,000 but that number could swell to 20,000 this weekend. "People are concerned about all the discussions at the national level about gun control and so forth," he said.

He said he expected 8,000 people at the recent Ontario gun show but 16,000 showed up — as did some protesters. The Costa Mesa show will have a "free-speech area" for people to voice their opinions, Baker said.

Templeton called the fairgrounds "a very local event." He said about 80% of those who attend the five shows a year live in Orange County.

Despite increased security, some have reservations.

Kevin Wilkes, a Costa Mesa resident and father of a 7-year-old girl, said the event is too close for his liking to Costa Mesa High School, Orange Coast College and parks. He alluded to the recent gun show shootings and the Sandy Hook Elementary School mass shooting.

"You have kids and sports fields and TeWinkle Park," he said. "It makes you stop and think … we're literally playing with a loaded gun here."

He said he supports the 2nd Amendment but would like to see an assault weapon ban, among other restrictions on gun ownership. He wants a safer environment for his family.

"I don't want to take anything away from people who collect.... I'm gathering most people are good, law-abiding citizens," Wilkes said. "It's just a few who mess it up for everybody else."

bradley.zint@latimes.com

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