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 City’s regulator has threatened to impose unlimited fines on investors that breach its new rules on betting against UK bank shares amid a flurry of late disclosures by hedge funds.
The warning came yesterday as Gordon Brown promised new permanent rules to curb short-selling once the Financial Services Authority (FSA) ban expires in January. The Prime Minister said: “We’ll be reviewing over the next four months and I think you will find new rules for the future.”
Such a move could further threaten the hedge funds industry, which has grown explosively in London. The FSA last week introduced measures to tackle short selling of UK bank shares, fearing falling prices would undermine the financial system.
It ruled that any short position greater than 0.25 per cent of a market value of any 34 named financial stocks must be disclosed by 3.30pm on Tuesday this week. A number of other companies have since approached the regulator asking to be included on the list.
Reuters – John Paulson, a U.S. hedge fund manager who gained a superstar reputation with a big bet against the U.S. housing market, was shown holding a 1 billion pound ($1.9 billion) bet against UK banks as short sellers were forced to disclose their positions.
Paulson & Co., run by John Paulson and based in New York, said it had a 1.2 percent short position in Barclays, worth over 350 million pounds, a 1.8 percent short position in Lloyds TSB, and short positions of just under 1 percent in Royal Bank of Scotland and HBOS.
The stakes were unveiled on Wednesday after Britain’s regulator imposed a ban on short-selling financial stocks last Friday, which was followed by similar moves in the United States and elsewhere.
New York Times – To the ranks of chief executives who blame those terrible meanies who run hedge funds for their troubles — Jeffrey Skilling at Enron, say, or Jimmy Cayne at Bear Stearns, or Patrick Byrne at Overstock.com — we can now add a new name: the one and only Steve Jobs. According to Jim Goldman, who interviewed Mr. Jobs today on CNBC after his latest razzle-dazzle product announcement, the Apple chief executive said the rumors that he had suffered a recurrence of cancer came from “hedge funds with a big short position in Apple.”
Let’s quickly review the facts: In June, Mr. Jobs, who survived pancreatic cancer four years ago, appeared at an Apple developer’s conference looking gaunt and haggard. Naturally, investors worried that the cancer had returned. At first, Apple’s public relations folks lied — saying he had a common bug. Then, the company refused to say anything at all, even when asked during a conference call by an analyst. “Steve’s health is a private matter,” was the party line.
So today, Mr. Jobs appeared on stage under a sign that read, “The reports of my death are greatly exaggerated” before plugging the latest iteration of iPods. These fairly minor product announcements got enormous attention as a result. So apparently, during marketing events at least, he is willing to put aside his privacy concerns. Interesting.
Business Spectator- Hedge funds sharply increased their bets against UK lender HBOS in the first days after the Financial Services Authority imposed new rules on June 13, targeting abusive short-selling and smooth the process for firms raising cash from rights issues, reports The Financial Times.
HBOS, Britain’s biggest mortgage lender, which earlier issued its prospectus for a £4 billion rights issue has seen its shares drop below the rights issue price, as hedge funds revealed their positions.
US hedge fund Harbinger Capital said it held a 3.3 percent short position, worth about 345 million pounds, in HBOS, under the new disclosure rules for companies during rights issues.
