Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Reuters UK – Amaranth Advisors, the largest collapsed hedge fund in history, has been ordered to pay $15 million in civil fines for attempting to manipulate natural gas markets, federal agencies said on Wednesday.
The Commodity Futures Trading Commission said it settled charges against Amaranth and the fund has been ordered to pay a $7.5 million civil fine.
Pittsburgh Post-Gazette – In a conference call with analysts yesterday, Joseph A. Ferrara, president, chief executive officer and board chairman of Tollgrade Communications, highlighted the company’s ”transformational activities” during the past quarter, including selling off its cable product line for $3.1 million and closing a deal on a managed services contract expected to bring in $20 million over a four-year period.
But the manufacturer of communications network testing equipment did not experience enough transformation during the past quarter to move into the black. Rather, it reported a second-quarter loss of $1.5 million, or 12 cents per share, on revenues of $10.6 million, compared with a loss of $255,000, or 1 cent per share on revenues of $12.1 million in the same quarter a year ago. The $10.6 million figure does not include $1.4 million from discontinued operations.
Chicago Tribune – Illinois hedge-fund manager Gregory Bell, who was charged with wire fraud for his role in an alleged Ponzi scheme, was granted $1.5 million bail and required to wear an electronic monitor, a federal judge in Minnesota ruled Wednesday.
Bell, founder of Lancelot Investment Management LLC, was accused Friday by U.S. prosecutors and regulators of feeding client assets to the alleged scheme run by businessman Thomas Petters. Magistrate Judge Jeffrey Keyes, citing Bell’s cooperation with authorities, ordered Bell to put up interest in his home in Highland Park to satisfy the bail.
Herald Tribune – At a bail hearing in which Arthur G. Nadel was sent back to his cell to come up with better co-signers, a federal judge heard from the receiver in the case about a previously unknown multimillion-dollar hedge fund account controlled by Nadel in the Cayman Islands.
Receiver Burton Wiand, a Tampa lawyer, testified that he had discovered a hedge fund in the Caymans that at one point contained $15 million. He was able to follow $5 million back to one of the six funds at Nadel’s Scoop Management in Sarasota. The whereabouts of the remaining $10 million is unclear.
VC Circle – Flower exporter Karuturi Global is raising Rs 290 crore from its promoter Ramakrishna Karuturi and a consortium of foreign institutional investors (FIIs). Both promoter and FIIs are together subscribing 241.5 million warrants of Rs 12 each, which would converted into one equity share. A group of four FIIs, which include hedge fund Monsoon Capital, are pumping in Rs 248.64 crore in the firm. The rest is being invested by the promoter, Ramakrishna Karuturi. The company is now seeking shareholders approval through a postal ballot.
The four FIIs investing in Karuturi will together hold a 29.82% stake in the post-issued capital. They include Emerging India Focus Fund (8.64%), India Focus Cardinal Fund (14.4%), Elara India Opportunities (3.91%) and Monsoon Capital (2.87%). The warrants can be converted within 18 months, and an amount Rs 3 per warrant would have to paid at the time of warrant allotment. The rest of the amount of Rs 9 would be paid when subscribing each equity share, which would have a lock-in of one year.
Forbes – A Silicon Valley hedge fund manager accused of bilking investors out of at least $5 million has agreed to be extradited from Hong Kong to the United States, a government lawyer said Friday.
Fund manager Albert Hu, an American citizen, gave his consent to surrender to the U.S. in a Hong Kong court proceeding, said local government counsel Yasmin Mahomed, who represented U.S. authorities.
Bloomberg – Flowering Tree Investment Management Pte, set up by the co-founder of New York-based Sansar Capital Management LLC, plans to grow its Asian equities hedge fund by about 20 times its starting capital within the next two years.
The Singapore-based fund made its first bets on rising and falling stocks in Asia outside Japan last month, starting with $12.5 million sourced from founding members, family and friends, founder Rajesh Sachdeva, 40, said in an interview yesterday. It will grow to $15 million to $16 million by July, and plans to reach $200 million to $300 million in two years.
Courthouse News Service – Hedge fund operates took more than $2.5 million in kickbacks while putting clients into grossly overstated Wealth Management LLC accounts, the SEC claims in Federal Court. It sued the hedge fund, its managers James Putman and Simone Fevola, and several relief defendants.
Wealth Management claims to have 447 clients for whom it manages $131 million, $102 million of it in Wealth Management funds, the SEC says.
Bloomberg – The cost of insuring hedge funds against negligence has risen as much as 20 percent in the past six months after Lehman Brothers Holdings Inc.’s bankruptcy and Bernard Madoff’s Ponzi scheme increased the threat of lawsuits.
A fund manager with $200 million of assets running a “straightforward” strategy is typically paying as much as $60,000 a year for $5 million of coverage, up from $50,000 at the end 2008, said Brian Horwell, director of professional risks at London-based Miller Insurance Services Ltd.
“We’ve had Lehman Brothers, Madoff and the financial downturn, all of which are hitting claims,” said Paul Towler, head of financial and professional insurance at Jardine Lloyd Thompson Group Plc in London. “There’s a lot of worry and concern about what other claims are still to come out.”
Siliconindia.com – An Indian-American investment adviser has been sentenced to 10 years in prison following his conviction on 20 counts of fraud with a scheme that bilked 15 investors of $12.5 million.
Amit Mathur, 38, of Shrewsbury, Massachusetts, was also ordered to pay restitution to his victims by the federal District Court in Worcester, the Boston office of Federal Bureau of Investigation (FBI) said in a release.
Globe and Mail – An Indian mining giant has quietly amassed a near 10-per-cent stake in HudBay Minerals Inc., HBM securing a major advantage over potential rival suitors for the Canadian zinc and copper producer that has hired advisers to explore the company’s strategic options.
Documents filed in Ontario Superior Court show Lakomasko BV, a privately held company based in Amsterdam, owns 14.5 million HudBay shares – about 9.5 per cent of the Toronto mining firm.
Globe and Mail – An Indian mining giant has quietly amassed a near 10-per-cent stake in HudBay Minerals Inc., securing a major advantage over potential rival suitors for the Canadian zinc and copper producer that has hired advisers to explore the company’s strategic options.
Documents filed in Ontario Superior Court show Lakomasko BV, a privately held company based in Amsterdam, owns 14.5 million HudBay shares – about 9.5 per cent of the Toronto mining firm.
