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.
The London Free Press – A hedge-fund swindler who faked his own death in an effort to skip out on a 20-year prison term was sentenced yesterday to two extra years.
Federal Judge Kenneth Karas said Samuel Israel III was "thumbing his nose at the system" when he staged a suicide and jumped bail last year rather than do time for taking hundreds of millions from investors in his Stamford, Conn.-based Bayou hedge funds.
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.
Stamford Advocate – Debra Ryan, the girlfriend of Samuel Israel, convicted for his role in a $400 million fraud involving the collapse of Stamford-based hedge-fund firm Bayou Group LLC, was sentenced to three years probation for aiding his escape.
Ryan, a decorator who once rented a house on Highland Avenue in Greenwich, also was ordered to be confined at home for four months and not to have any contact with Israel.
Israel, 49, pleaded guilty in March to faking his suicide by abandoning his car on the Bear Mountain bridge with the words "suicide is painless" written on the windshield and fleeing the day he was to begin a 20-year sentence. He pleaded guilty to fraud in 2005 after admitting he hid $400 million in losses at Bayou.
Wealth Bulletin – Regulators will this week agree broad principles for clamping down further on hedge fund managers, after the European Commission proposed more draconian constraints on their activities.
At the 34th annual meeting of the International Organisation of Securities Commissions, starting today and hosted by the Israel Securities Authority and the Tel Aviv Stock Exchange, the hedge fund industry will come under the regulatory scanner. Greg Tanzer, secretary-general of Iosco, said: “Rules on hedge funds and short-selling will be finalised in Tel Aviv.
North Country Gazette – The brother of the former chief financial officer of the bankrupt hedge fund firm Bayou Group LLC has been sentenced to 21 months in federal prison of his role in concealing a $400 million fraud.
Matthew Marino, brother of Daniel Marino, was also ordered to pay $60 million in restitution.
Prosecutors say that Marino knew about the fraud on the investors in the now-collapsed Bayou Hedge Funds and took steps to conceal it. His brother is serving 20 years for the scheme as is Bayou co-founder Samuel Israel.
Jerusalem Post – While the recent G-20 summit in London provided world financial leaders with the opportunity to begin charting a path of recovery for the ailing global economy, the work to build the markets up and to ensure that a crisis like this never happens again will be left to the world’s securities regulators. Regulators around the world, due to their supposed lapse of supervision on the international securities industry, have come under fire for their role in allowing the crisis to occur.
Here in Israel, the country’s chief securities watchdog, Prof. Zohar Goshen, chairman of the Israel Securities Authority, has also been a center of attention with the publication of his "Goshen Plan," an ambitious agenda that seeks to restructure the local corporate bonds market by giving institutions a government guarantee covering 75-80 percent of new corporate bonds issued. This means the institutions will bear 20% of any loss, with the government bearing the rest.
Reuters – Jailed Bayou hedge fund swindler Samuel Israel pleaded guilty on Monday to jumping bail in an episode in which he faked his own suicide last year in an attempt to avoid going to prison.
Israel’s plea had been delayed several times since August while he underwent medical care. He faces up to 10 years in prison on the bail jumping charge, said Judge Kenneth Karas in U.S. District Court in White Plains, New York.
Israel, 49, was sentenced last April to 20 years for engineering a scam that cheated investors out of about $450 million. The two sentences will run consecutively. Karas scheduled June 24 for the sentencing.
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.
CNN.com – The girlfriend of a convicted hedge fund manager who disappeared last year, leading to speculation that he had committed suicide rather than report to prison, pleaded guilty on Tuesday to helping him, according to federal prosecutors.
Debra Ryan pleaded guilty to "aiding and abetting Samuel Israel III’s failure to surrender to serve his sentence on June 8, 2008," according to the U.S. Attorney’s Office for the Southern District of New York.
With the guilty plea, she avoids a trial but still faces up to 10 years in prison. But the judge indicated Tuesday that she will most likely face about four to 10 months in prison, federal prosecutors said.
New York Daily News – A federal judge charged with slapping his wife hired a big shot defense attorney as he faces a misdemeanor charge that could land him in the clink.
James Peck, 63, the bankruptcy judge overseeing the breakup of Lehman Brothers, hired Barry Bohrer, a prominent criminal defense lawyer whose clients have included Sam Israel, the hedge fund swindler who went on the lam last summer after faking his own suicide to avoid a 20-year jail term.
Peck, who was briefly assigned to handle the Bernard Madoff bankruptcy until he recused himself in December, told cops when they came to his Park Ave. apartment Saturday afternoon that "I was defending myself."
Union-News & Sunday Republican – The girlfriend of hedge fund swindler Samuel Israel III, already accused of helping him skip out on a prison sentence, tried to send him $300 in jail, officials said Wednesday.
The cash was "secreted in the pages of a magazine" mailed to Israel last month at the Westchester County jail, county police spokesman Kieran O’Leary said. He did not know the name of the magazine.
The money was discovered during routine screening and did not reach Israel, O’Leary added. Prisoners are not permitted to receive cash.
The magazine was traced to the girlfriend, 45-year-old Debra Ryan of Armonk, and she was arrested on Friday, O’Leary said. She is due in local court later this month.
Bloomberg - Debra Ryan, the girlfriend of Samuel Israel, the convicted founder of hedge-fund firm Bayou Group LLC charged with bail jumping, pleaded not guilty to helping him escape.
Israel, 49, is accused of faking his suicide and fleeing the day he was to begin a 20-year sentence for his federal conviction in a $400 million fraud. Ryan, 45, entered her plea today before U.S. Magistrate Judge Lisa Margaret Smith at federal court in White Plains, New York, according to Herb Hadad, a spokesman for interim U.S. Attorney Lev Dassin in New York.
