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.
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.
West Central Tribune – A federal magistrate judge ordered the release on bail Wednesday of an Illinois hedge fund manager who allegedly helped Minnesota businessman Tom Petters orchestrate what prosecutors call a $3.5 billion Ponzi scheme.
Prosecutors tried to persuade U.S. Magistrate Judge Jeffrey Keyes that Gregory Bell should be held without bail because he has no significant ties to Minnesota and has millions of dollars in offshore accounts.
They said he also may have or be able to get citizenship in Russia, which has no extradition treaty with the U.S. Bell was born in Moscow in 1965, emigrated to the U.S. in 1981 and is a naturalized U.S. citizen.
Kare11.com – An Illinois hedge fund manager who claimed to be the biggest victim of Minnesota businessman Tom Petters’ alleged Ponzi scheme was actually a participant in it, the Securities and Exchange Commission says.
Greg Bell and his company, Lancelot Investment Management, were charged with fraud Friday. The SEC said it also moved to freeze his assets, which include millions of dollars in Swiss bank accounts.
Ron Peterson, a court-appointed trustee for Lancelot’s investors, told the Star Tribune that Bell was arrested Friday in Highland Park, Ill., and was taken to the Anoka County jail in Minnesota.
American Chronicle – A Los Angeles businessman has pleaded guilty to corruption charges in a pension fund scandal that began in New York and is heading west.
Julio Ramirez Jr.’s guilty plea to securities fraud, revealed Tuesday in New York, tightened the connection between that state’s scandal and the pension fund industry in California. The charges arise from Ramirez’s work as an unlicensed "placement agent" for Wetherly Capital Group of Los Angeles, a politically connected firm that has secured investment business from CalPERS and CalSTRS.
Boston Globe – A Boston law firm has filed a class-action lawsuit against a hedge fund controlled by Massachusetts Mutual Life Insurance Co. for placing all of the fund’s assets with Bernard Madoff, who is facing life in prison for conducting a massive fraud.
The lead plaintiff is Lawrence J. Rothschild, a Needham businessman who invested about $1.1 million with the Rye Select Broad Market XL Fund, according to the lawsuit, filed yesterday in Massachusetts Superior Court.
The suit alleges that Rye did not explicitly say that it placed all of its assets with Madoff, and that the firm’s parent, Tremont Partners Inc. (also part of MassMutual), ignored red flags about Madoff’s activities.
Seattle Times – Just a third of hedge funds with assets of more than $100 million had positive returns in 2008, according to data compiled by Bloomberg. Abraham Trading Diversified Program, a small operation in rural Texas, was up 30 percent in 2008.
It’s late on a Sunday evening in October, and Salem Abraham is the last diner at the Cattle Exchange steakhouse. Abraham is a businessman and lifelong resident of this tiny oasis of a town — population 2,277 — nestled among cattle ranches in the desolate Texas Panhandle, its green hills watered by the Canadian River.
Philadelphia Inquirer – A federal grand jury indicted an Indiana investment adviser Tuesday on charges of deliberately crashing his small airplane in the Florida Panhandle to try to fake his own death as part of a plan to escape financial ruin.
Authorities say Marcus Schrenker, 38, an amateur daredevil pilot and businessman, secretly parachuted to the ground before the crash and sped away on a motorcycle he had stashed away in central Alabama.
A three-day search came to an end on Jan. 13, when authorities finally caught up to Schrenker at a campground near Tallahassee, where they say he tried to take his own life by slashing one of his wrists.
Bloomberg- South Korean life insurers are shunning U.S. and European corporate bonds because of a rising risk of default and plowing money into domestic debt.
Samsung Life Insurance Co., Korea’s biggest insurer, is diverting $500 million into 10-year government bonds, said Koo Sung Hoon, head of investments at the company. Kyobo Life Insurance Co., the third-largest, is reconsidering plans to invest the equivalent of $1 billion overseas and may put the money to work at home instead, said Cho Ok Rae, chief of international investments.
“Risks are increasing so we are now rebalancing our fixed- income portfolios, which means we are selling corporate bonds we hold in the U.S. and Europe,” Koo said this month in an interview in Seoul. “Corporate default risk will rise.”
Reuters- Former Samsung Group chief Lee Kun-hee, one of South Korea‘s most powerful businessmen, was handed a 3-year suspended jail sentence on Wednesday for tax evasion, but was cleared of other charges.
The court also fined Lee 110 billion won ($109 million), more than double the amount of taxes he evaded, but cleared him of charges of breach of trust and illegal issuance of bonds aimed at transferring wealth to his children.
His jail sentence was suspended for five years.
Analysts and experts had expected Lee to escape prolonged jail time because judges have often been lenient to South Korean corporate leaders convicted of white collar crimes on the basis that putting them behind bars could hurt business.
