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.
Bloomberg – Former Bear Stearns Cos. hedge fund manager Ralph Cioffi, indicted for an alleged fraud that helped bring down the securities firm, attempted to use his $2 million redemption from a fund he supervised as collateral for a condominium, U.S. prosecutors said.
Cioffi, 53, also ”rarely” heeded compliance trading measures, the government said in a court filing in Brooklyn, New York, federal court. Cioffi and another former Bear Stearns hedge fund manager, Matthew Tannin, 47, were indicted last year for misleading investors about the health of two hedge funds that failed in July 2007, costing investors $1.6 billion. The implosion helped trigger the credit crunch and the eventual sale of Bear Stearns to JPMorgan Chase & Co.
Alibaba News Channel – Aggressive government action can hurt the market, but regulators should clamp down on leverage among banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.
Singer said the current "anti-capitalist" fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.
By the same token, he observed that highly regulated banks fueled last year’s market implosion because they ramped up their use of leverage, or borrowed money, for trading and investments. High levels of leverage in a downturn can multiply losses and throw markets into chaos.
Marketwatch – When the $9.2 billion Connecticut hedge fund Amaranth Advisors collapsed in 2006, securities attorneys jumped all over each other to express gleefully how the markets absorbed such a mega-fund failure.
In fact, the markets did soak up the implosion fairly well.
However, two and a half years later, policymakers aren’t so sure the volatile and fragile markets of 2009 could handle another mega-hedge fund collapse.
Herald Tribune – A federal judge extended a freeze on the assets of Sarasota’s Arthur G. Nadel on Tuesday, but failed to include other partners — a measure some investors with the accused hedge fund swindler have been pushing for aggressively because Nadel shared $95.5 million in incentive fees with other Scoop Management Inc. principals.
Nadel did not contest U.S. District Judge Richard A. Lazzara’s order freezing personal and business bank accounts, property and other assets Nadel controls solely or with others, so a hearing scheduled for today was canceled.
Investors like Fort Lauderdale’s Louis Paolino Jr., who is out $5.8 million since the Jan. 14 implosion of the six funds Nadel managed, had hoped the hearing might shed light on why the U.S. Securities and Exchange Commission was not seeking to include Nadel partners Neil or Chris Moody in the freeze.
