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.
Chicago Tribune – The judge who is sentencing hedge-fund swindler Samuel Israel III for skipping out on prison may want to make an example of him.
Israel admitted in March that he faked his suicide and jumped bail last year rather than begin a 20-year sentence for bilking investors in his Stamford, Conn.-based Bayou funds.
He finally surrendered to police in Southwick, Mass.
Chicago Tribune – Federal prosecutors have unsealed a wide-ranging indictment against Philip J. Baker, accusing the head of Chicago-based hedge fund Lake Shore Asset Management Ltd. of defrauding hundreds of investors out of roughly $312 million.
U.S. Atty. Patrick Fitzgerald announced the 27-count indictment Tuesday and said it "was unsealed to facilitate international efforts to apprehend Baker."
Baker is a 44-year-old Canadian citizen last spotted living in Hamburg, Germany, whose location is unknown, prosecutors said. The charges include fraud, obstruction of justice and criminal contempt.
Chicago Tribune – The chief executive of Goldman Sachs Group Inc. called for new standards on how Wall Street executives are compensated and new regulation of large hedge funds and private-equity funds.
Lloyd Blankfein said lessons from the financial crisis include the need to "apply basic standards to how we compensate people in our industry."
He suggested a handful of guidelines, including only junior employees being paid mostly in cash and that the percentage of pay awarded as company stock increase significantly along with a worker’s total compensation.
Chicago Tribune – Government attempts to revive the economy could decide what happens to trading volumes at CME Group Inc.
A $1 trillion federal deficit could flood the market with enough government bonds to stabilize volumes, while a Federal Reserve policy to spur borrowing by keeping interest rates near zero could slice further into volumes at the Chicago-based exchange operator.
U.S. Treasury bonds and other interest rate futures represent about 40 percent of the 7.63 million contracts traded daily this month at the CME Group’s Chicago Mercantile Exchange and Chicago Board of Trade.
West Palm Beach (HedgeCo.net) – Some analysts are saying that the mighty New York Times might be headed down the same path as the bankrupt Tribune Company, owner of the Chicago Tribune and Los Angeles Times.
Hedge fund shareholders, Harbinger Capital Partners Funds and Firebrand Partners own 19% of the NYT Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The NYT Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
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Chicago Tribune – Strong returns are a mixed blessing this year for investment funds that specialize in trading futures contracts.
While the stock market plunged about 35 percent, managed futures funds posted annual returns of about 16 percent, according to the Credit Suisse Tremont Hedge Fund Index.
That makes them one of the few havens for investors at a time when pensions, retirement savings and even prominent local hedge funds such as Citadel Investment Group and Magnetar Capital LLC have recorded big losses.
But the success of managed futures has also left them vulnerable to client withdrawals. Because market turmoil froze the assets in many portfolios, some institutional and individual investors are pulling money from managed futures.
