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 – Five months after Bernard Madoff’s massive fraud was revealed, little of his victims’ money has been found and it appears increasingly likely that the worldwide hunt for their missing billions will drag on for years.
So far, the court-appointed trustee sorting through Wall Street’s biggest investment fraud has located only about $1 billion (656 million pounds) to be distributed to defrauded customers — a fraction of the $65 billion the confessed con man’s records purported to have in nearly 7,000 client accounts when the FBI arrested him in December.
Trustee Irving Picard has signalled, however, that he is ramping up efforts to find more money, a ray of hope for victims if these funds can ever be tracked down and shared among them.
At this relatively early stage of Picard’s investigation, though, it is unclear if that is possible.
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.
The Business Insider – Barack Obama’s decision to paint the hedge funds in the Chrysler case as anti-American obstructionists is prompting death threats against them.
That’s at least what their lead laywer Thomas Lauria is saying, reports The Detroit News. He said in court that the threats have been turned over to the FBI.
We assume Lauria is being honest — you don’t say this stuff in court and turn it over to the FBI if it’s rubbish — though we’ll note that Lauria is being pretty provocative in his attempt to win the war of public opinion in the Chrysler case. He’s of course been airing the complain that one redoubt, Parella Weinberg, only decided to go along with the Rattner plan upon receiving thuggish threats of intimidation.
HeraldTribune.com – So much for Art Nadel’s high-profile legal team.
Nadel, the Sarasota money manager charged with running a $400 million investment scam, is now represented by a federal public defender after his private attorneys dropped him on Wednesday.
Prominent Tampa attorneys Barry Cohen and Todd Foster had defended Nadel against criminal charges since he turned himself in to the FBI on Jan. 27, two weeks after he left Sarasota as his hedge funds imploded.
HedgeFund.Net – Samuel Israel III, the Bayou Group founder who led the FBI on a merry chase after failing to show up to serve his prison term, has recovered sufficiently to plead guilty to escape, a federal judge said last week.
But Israel still hasn’t pleaded guilty as the proceeding was delayed until March 16, to give the convicted ex-hedge fund manager more time to talk to his lawyers, according to news reports.
Forbes – In December, Forbes was a media partner to Markets Media, host of the Global Markets Summit inNew York City. Forbes Intelligent Investing Editor Michael Maiello moderated a hedge fund industry panel that included activist investors Clay Lifflander of Millcap Advisors and Stephen Roseman of Thesis Capital, along with Samuel Hocking, global head of sales for the prime brokerage at BNP Paribas and Kenneth Springer of Corporate Resolutions.
During the discussion, Hocking predicted a 30% failure rate for hedge funds in 2009, rising operating costs and higher margin requirements. Lifflander and Roseman discussed strategies for low-margin investing and the implication of hedge fund failures on shareholder activist strategies. Springer, a former FBI investigator and due diligence expert, revealed the increased scrutiny that hedge fund managers will have to bear.
Reuters – A hedge fund manager, a brokerage trader and a financial adviser were charged on Thursday with insider trading in the stock of supermarket chain Albertsons Inc, reaping total profits of about $7.5 million, according to court documents.
The criminal complaints were filed in U.S. District Court in Manhattan against Joseph Contorinis, a former employee at Jefferies Asset Management LLC, as well as trader Michael Koulouroudis and financial adviser Nicos Achillea Stephanou, whose employers were not immediately known.
Jefferies was not mentioned in the complaint against Contorinis. Firm spokesman Tom Tarrant said Contorinis left a year ago. He declined to comment on the charge or arrest of Contorinis by the FBI on Thursday.
New York (HedgeCo.Net) – Missing hedge fund manager Arthur Nadel, who disappeared last week along with an estimated $350 million of investor’s money, turned himself in to the FBI yesterday.
The Sarasota resident, 76, turned himself in at a Tampa office, accompanied by his legal team and his partner, Todd Foster. In the courtroom later that day, his lawyer Barry Cohen told the judge that Nadel has been “visiting with the psychiatrist the past week” after “suffering some emotional problems.” The judge postponed the bail hearing for three days.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
Nadel reportedly wrote a letter to his wife before he missing. According to reports, he allegedly told her to withdraw as much cash as she could before their accounts were frozen.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Newsday – Maybe you heard the one about the phony multibillion-dollar Long Island hedge fund that was actually performing a public service.
No? Well, apparently neither did four confidence men, according to federal prosecutors.
The four were convicted yesterday in federal court in Central Islip after walking into a federal sting operation in which they thought they were about to collect $3 billion from a hedge fund. The money was to be used to build what they said was a pipeline through the Russian Republic of Buryatia, prosecutors said.
The unnamed fund was a creation of FBI agents and the Postal Inspection Service, Assistant U.S. Attorney James Miskiewicz said during the seven-day trial.
