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.
Denver Post – The U.S. filed civil and criminal charges against New York hedge-fund manager Edward T. Stein, accusing him of running a "classic Ponzi scheme" that moved more than $55 million through accounts while preying on acquaintances.
Stein, who controls Gemini Fund I hedge fund, DISP LLC and Prima Capital Management Corp., moved millions from at least 83 investors through accounts he controlled, the Securities and Exchange Commission said.
Bloomberg – Elliott Management Corp., the $12.8 billion hedge-fund firm founded by Paul Singer 32 years ago, told clients that it bought securities from Marc Dreier, the New York lawyer jailed for alleged fraud.
Elliott lost money on promissory notes purchased in October from Dreier, who had previously done work for the company, it said in an undated quarterly letter to clients. The firm’s Elliott Associates LP fund declined 9.2 percent in the fourth quarter, its worst quarterly loss.
“There are many reasons why funds lose money, but being defrauded is among the most embarrassing and annoying,” New York-based Elliott said in the letter, a copy of which was obtained by Bloomberg News. “We continue to adapt our processes to keep several steps ahead of fraudsters, and we maintain an attitude of probing skepticism. But sometimes we get hooked, as in the Dreier case.”
Lower Hudson Journal news – Four hedge funds are at the center of a federal class-action lawsuit accusing them of steering millions of dollars from investors to Bernard Madoff.
The lawsuit, filed in U.S. District Court in Manhattan, charges that Beacon Associates LLC I, Beacon Associates Management Corp., Beacon/Andover Group and Andover Associates LLC I were among a half-dozen companies that lost more than $15 million from investors by funnelling the money into Madoff’s failed brokerage firm.
