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.
Washington Post – The government-orchestrated sale of Chrysler to Italian carmaker Fiat is facing a fresh legal challenge from some of the American carmaker’s lenders, which are trying to take the fight to federal district court.
Pension funds representing Indiana teachers and police officers, and a state construction fund, filed Wednesday to have the Chrysler bankruptcy proceedings heard by the district court, which has authority over the bankruptcy court.
The funds contend that the automaker’s sale violates their rights as senior secured lenders to Chrysler, and that under the proposed sale, they would recover less than junior lenders. They also think the government does not have the authority to use federal rescue money designated for banks to bail out Chrysler.
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.
West Palm Beach (HedgeCo.net) – Federal Judge Stanley R. Chesler of the Federal District Court of New Jersey, Friday threw out a Canadian pharmaceutical company shareholder lawsuit against a group of hedge funds including SAC Capital Advisors LP.
The Judge dismissed the lawsuit, saying "The conduct is so egregious, and the futility of imposing alternate sanctions is so clear, that dismissal is the only appropriate sanction."
Apparently the shareholders had violated a New York judge’s order sealing documents in a related Biovail case.
"The record before the court suggests that these proceedings and the RICO action proceedings were all part of a choreographed strategy by Biovail and its attorneys designed to constitute a counterattack against the Biovail securities action," the Judge wrote.
"We are gratified that the court has seen through this charade and has dismissed the case," A spokesman for SAC said.
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New York (HedgeCo.Net) – Hamilton Alan Bird, formerly of XL Capital Partners, who headed the scheme that swindled over $7.5 million of investors’ money, has been sentenced to 24 years in prison. The Colorado Springs resident received his fate on Friday, six months after pleading guilty to one count of securities fraud and another count of theft.
According to the original indictment, Bird, along with partners David Edward Newton and Douglas Alan Scott, took money from about 350 individuals and set up their own “personal piggy bank.” From October 2002 to December 2004, the three men withdrew millions of dollars for personal usages including residences and private jets.
While Bird’s felonies only carried a maximum sentence of 12 years, he was eligible to be charged as a habitual criminal, meaning that his sentence could have been three times his maximum.
Newton, in exchange for testifying against Bird and Scott, was sentenced to 15 years probation and 200 hours of community service. Scott, a former Pastor for the now collapsed River of Life Church, was sentenced to 15 years probation and ordered to pay back $1.4 million in restitution.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – While the aftermath of the collapsed Bayou hedge fund may have left investors with nothing more than shock, the U.S. Marshals are trying to recoup some of the losses that were suffered. By selling Bayou’s failed investments, they are recovering some $115 million from the fund that once squandered over $300 million.
"You can’t believe some of the stupid investments these people made,” said Leonard Briskman, Deputy Chief for Business Management for the U.S. Marshals in an interview with Bloomberg. “The Bayou guys lost money during the late ’90s when almost everybody was making money in the market without even trying.”
Briskman is in charge of heading Bayou’s liquidation sale, in what has become a much more prominent role for the Marshals service with the rise of white collar crimes.
Investments aren’t the only thing being liquidated, however. U.S. District Judge Colleen McMahon ordered Israel to turn over his scooter and RV, the same vehicles that aided in his escape the day he was supposed to report to prison to start serving his 20 year sentence.
Also up for bid is the Tiffany & Co. watch that Israel was wearing. These things will help go towards the $150 million in restitution that he has been ordered to pay.
The U.S. Marshals Service is currently running a portfolio estimated at $1.7 billion that include 30 businesses.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Newsday- A 23-year-old man convicted of running a hedge fund scam in Connecticut has filed a federal lawsuit against New York University, claiming the school owes him a diploma.
Hakan Yalincak, an NYU undergraduate, was sentenced last year to 3 1/2 years in prison for persuading investors to pour millions into a nonexistent Greenwich-based hedge fund.
A $21 million gift that Yalincak had promised to New York University proved to be an a fraud. The $1.25 million first payment turned out to be illegal proceeds from the hedge fund scam.
He was also ordered to pay restitution of $4.18 million.
Reuters – A federal jury in Atlanta on Wednesday convicted former hedge fund manager Kirk Wright on charges of scamming investors, including former professional athletes, out of $150 million, the Justice Department said.
Kirk was found guilty on charges of mail fraud, securities fraud and money laundering relating to the 2006 collapse of his Atlanta-based investment firm, International Management Associates (IMA), the Justice Department said.
IMA also had offices in New York, Los Angeles and Las Vegas and thousands of clients. Evidence presented in his two-week trial showed Wright had been lying to investors since 2001 about investment performance and their account balances, the Justice Department said.
The government presented as evidence fabricated records and material showing he diverted investors’ money for personal use, including cash for himself and family members, luxury cars, jewelry, house renovations and a $500,000 wedding.
IMA collapsed in 2006, after several investors requested distribution, received bad checks and filed lawsuits. The investor group included several former National Football League players who were among victims who testified at the trial.
"A measure of justice was served today for the hundreds of investor-victims in the stunning collapse of International Management Associates," U.S. Attorney David Nahmias said. "Those victims poured more than $150 million into Wright’s hedge funds over the years, only to find in 2006 that the money was gone and that Wright had lied to them for years."
Wright could receive a sentence of up to 710 years in prison, a fine of up to $16 million and restitution for victims’ loses. He remains in custody and is scheduled for sentencing on Aug. 26.
