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.
Bloomberg – Highland Capital Management LP, the Dallas-based investment firm that’s liquidating its main hedge fund, was sued by attorneys Schulte Roth and Zabel LLP for allegedly not paying $2.83 million in legal fees.
The New York-based law firm initiated a lawsuit in New York state court yesterday, listing what it said were unpaid invoices from June 2008 to this month.
“We believe Schulte Roth overbilled the firm and its funds for legal services,” Highland said in an e-mailed statement. “Highland has paid Schulte Roth nearly $1 million in good faith, and has made every effort to resolve this issue with them.”
Caribbean Net News – The trustee liquidating Bernard Madoff’s investment-advisory business has asked a judge for a default ruling against Harley International Ltd, arguing that the Cayman Islands hedge fund failed to respond to a lawsuit accusing it of taking $1.07 billion in fake profit from Madoff’s firm.
If trustee Irving Picard’s July 2 request is granted, the hedge fund, run by Cayman Island-based Euro-Dutch Management Ltd, would be ordered to return money it allegedly withdrew during the six-year period before New York-based Bernard L Madoff Investment Securities LLC collapsed in a $65 billion fraud. Harley is being liquidated in a Cayman Islands court.
Lexington Herald-Leader – A bankruptcy judge agreed Tuesday to postpone a hearing on a hedge fund’s request for the appointment of an examiner in horse track owner Magna Entertainment’s Chapter 11 bankruptcy case.
At the request of attorneys, a hearing originally scheduled for Tuesday on the request by Greenlight Capital Offshore Partners was postponed until Aug. 18.
CNBC – Attorneys for a hedge fund are asking for the appointment of an examiner in horse track owner Magna Entertainment’s Chapter 11 bankruptcy case.
A hearing was scheduled Tuesday on the request by Greenlight Capital Offshore Partners, which wants an investigation of ties between Magna and its parent company, known as MID.
MID has played a dual role as both a potential bidder for MEC assets and one of its primary lenders.
Greenlight, an unsecured creditor of Magna as well as a large shareholder in MID, is concerned about the fairness of any asset sale.
Bloomberg – Former Democratic political adviser Hank Morris and New York State Deputy Comptroller David Loglisci may hold the keys as authorities examine whether private equity firms and hedge funds knowingly paid kickbacks to manage state pension money.
The pair, accused of orchestrating the alleged pay-to-play scheme, is in the best position to explain what firms including Carlyle Group and Quadrangle Group LLC were told while allegedly being led to dole out sham finders fees between 2003 and 2007, attorneys who represent investment advisers said. Both men have said they will fight the state and federal claims.
Marketwatch – When the $9.2 billion Connecticut hedge fund Amaranth Advisors collapsed in 2006, securities attorneys jumped all over each other to express gleefully how the markets absorbed such a mega-fund failure.
In fact, the markets did soak up the implosion fairly well.
However, two and a half years later, policymakers aren’t so sure the volatile and fragile markets of 2009 could handle another mega-hedge fund collapse.
West Palm Beach (HedgeCo.net) – President and Chairman of Hedge Funds Care (HFC), John Budzyna, will preside over the Closing Bell to mark the 11th Annual New York Open Your Heart to the Children Benefit to be held at Cipriani 42nd Street on February 11, 2009.
Hedge fund industry professionals established HFC, a charitable organisation focused on assisting young victims of abuse, in 1998. Since that time, chapters have opened in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, Cayman, and most recently in London.
The organisation comprises those companies with interests in hedge funds, including investment managers, investors, prime brokers, attorneys, accountants, administrators and information providers.
USA Today – The great unwind in the secretive hedge fund world caused by steep losses has contributed to the megapain in the stock market.
Wealthy folks and big investors yanked a record $31 billion to $43 billion out of hedge funds in the third quarter, according to estimates from tracking firms Hedge Fund Research (HFR) and TrimTabs. As a result of ongoing redemption requests from worried investors, the so-called smart-money crowd has been forced to sell assets to raise money to pay back investors.
That vicious cycle of forced selling by these private investment funds has exacerbated the heavy pressure that has pushed the U.S. stock market down as much as 43% from its October 2007 high. "It is really like a global margin call. It feeds on itself," says Woody Dorsey, president of Market Semiotics, which specializes in behavioral finance.
