Bloomberg – Fairfield Greenwich Group, the hedge fund that lost $7 billion invested with Bernard Madoff, accused a Massachusetts regulator of “factual distortions” and told a judge that it closely monitored its investment.

The firm said yesterday it filed court papers challenging an April 1 administrative complaint by Massachusetts Secretary of the Commonwealth William Galvin, who claimed Fairfield Greenwich defrauded investors by misrepresenting what it knew about Madoff’s business. The filing is the firm’s most extensive statement to date about how it monitored its Madoff investment.

Read Complete Article

Tags: administrative complaint, april 1, bernard madoff, bloomberg, distortions, fairfield greenwich group, investors, massachusetts-secretary-of-the-commonwealth, secretary-of-the-commonwealth, william-galvin

CNN Money – Third Point Management, a New York hedge fund run by one of the country’s most outspoken and controversial investors, has come under investigation from the Securities and Exchange Commission.

The $5.6 billion fund, whose founder Daniel Loeb is well known for his pointed regulatory filings targeting chief executives he deems underperforming, informed investors in a letter last month that it has been notified that the SEC has commenced a formal investigation into its communications with other hedge funds.

The SEC’s investigation into Third Point comes at a time when hedge funds are being criticized for playing a key role in the trading of various companies as well as in the continuing financial crisis. The SEC is investigating the actions of up to 50 hedge funds in the collapse of Bear Stearns and in the continuing troubles of Lehman Brothers and mortgage guarantors Fannie Mae and Freddie Mac.

According to reports, the SEC is investigating whether hedge funds knowingly and intentionally spread falsehoods about the financial strength of these – and other – brokers and banks. According to Institutional Investor magazine, which broke the Third Point story Tuesday, Loeb told investors that the communications were uncovered during the course of a routine audit last year after Third Point became a registered investment adviser.

Read Complete Article

Tags: american-international-group, calpine-corp, cliff-asness, deviations, eliot-spitzer, feeder, lehman-brothers-holdings, loan-sales, massachusetts-secretary-of-the-commonwealth, new-marketplace, sphera, stock-fund, traditional-money

West Palm Beach (HedgeCo.Net)- The SEC has clarified its position on the "Cash Solicitation Rule" saying that a registered investment adviser may compensate a person for soliciting investors for, or referring investors to his or her investment fund.

Usually, under the rule, it is illegal for an investment adviser to pay a cash fee, directly or indirectly, as the "Cash Solicitation Rule" only applies to solicitations of “clients.”

But the SEC has taken the position that solicitations of investors for investment funds should not fall ito that category. The determination of whether the cash payment is being made solely to compensate that person for soliciting or referring investors will depend on the facts and circumstances of each particular case.

The SEC also warned that "Despite the additional guidance provided by the interpretative letter, investment advisers will need to continue to be mindful of potential traps for the unwary when entering into solicitation agreements."

Alex Akesson
Editor for HedgeCo.Net
Email: alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: boston, brokerages, definitions, due-diligence-service, istanbul, lipper, massachusetts-secretary-of-the-commonwealth, prison-term, regard, time-difference