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Forbes – British hedge fund manager Man Group on Friday said it had agreed to sell its remaining stake in futures and options broker MF Global to Japanese bank Nomura.
Man, the world’s biggest listed hedge fund manager, said it will get initial proceeds of $112 million from the sale, while its regulatory capital will rise by $90 million.
New York (HedgeCo.Net) – Texas Resident George D. Hudgins must pay $71 million following a federal court order obtained by the CFTC, to pay back victims of his Ponzi scheme and to settle a $15 million penalty.
According to the original complaint, Hudgins swindled about $88 million from June 2001 to May 2008, in a commodity pool operation that was supposed to trade futures and options. Hudgins told investors that his fund was reaping returns of up to 99 percent annually, when in reality, the pool had experienced a net loss since its inception in December 2003, and had lost a total of about $28 million.
In typical Ponzi scheme fashion, Hudgins used about $17 million from the pool to pay “returns” to existing investors and keep up the façade. In addition, he doctored the account statements to reflect a stellar performance. Other funds from the pool were withdrawn by Hudgins to pay for his extravagant lifestyle, which included Tiffany jewelry, antique sports cars, real estate and a plane.
When a judge froze the assets of Hudgins and appointed a receiver to distribute the funds, only $24 million was collected.
Last September, Hudgins pleaded guilty to wire fraud, money laundering and embezzlement. He was sentenced last month to serve 121 months in a federal prison.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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West Palm Beach (HedgeCo.net) – In the last week leading up to today, (Tuesday) hedge funds and other "large speculators" took their largest bullish position (when compared with the number of bearish bets) since early August.
Commercial traders such as refineries, mints, wholesalers and bullion banks, took their smallest bull position in 19 weeks, as they sold the "long" contracts bought by speculative players.
This has returned the balance of bull/bear positions in December to what has been considered the norm for the last four years, with over 85% of speculative position betting on a rise.
Last week also saw the outstanding number of open contracts in Gold Futures and options rise more than 9%, but it remained one-third below the record set in Jan. 2008.
"If gold can close the year above its January 2008 open, it will be one of the few positive asset stories of the year," notes new analysis from Mitsui, the precious metals dealer in London, "from a wealth preservation perspective at least."
"With the Bernanke printing press set to move into overdrive next year," Mitsui said regarding the future of Gold in 2009, "along with the not so pretty reality of negative real interest rates, it is difficult to put together a positive thesis for the US Dollar," Mitsui said, "In such a climate, gold could flourish."
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He’s explaining how hedge fund investors — technically, limited partners — are only allowed to withdraw money on an quarterly or annual basis, which can result, when a fund is performing poorly, in a rush of redemptions that resembles a run on a bank.
To meet those redemption requests, a hedge fund leveraged 5 to 1 will have to sell at least $5 of investments to meet every $1 of redemptions. (And 5 to 1 is conservative; a hedge fund can, in theory, be almost infinitely leveraged.)
Gulf Times- Managers from William Ackman to Jim Rogers made a total of at least $1.4bn in July with wagers against US mortgage financiers Fannie Mae and Freddie Mac, according to data compiled by Bloomberg.
Harbinger Capital Partners staked $665mn that UK mortgage lender HBOS would drop and Sao Paulo-based hedge-fund manager Francisco Meirelles de Andrade’s short selling of Cia. Vale do Rio Doce is also paying off.
More than $1.4tn of equities worldwide are now on loan, about a third higher than at the start of 2007, data compiled by Spitalfields Advisors, the London-based firm specialising in securities lending, show. Almost all of that is being used to speculate that shares will fall, according to James Angel, a finance professor at Georgetown University who studies short selling.
