Reuters – Hedge fund Harbinger Capital Partners said it is not pulling out of high-profile investments like The New York Times Co. and Media General Inc., seeking to quell market rumors after their share prices dropped sharply on Monday.

Philip Falcone, who runs the hedge fund, told Reuters that investors would be mistaken if they thought selling by Harbinger was behind the double-digit percentage declines in stocks it holds, including the Times, Media General Inc., Cablevision Systems Corp, Cleveland-Cliffs Inc. and Calpine Corp.

"People are speculating as to what we’re doing and why we’re doing it, but the reality is different from what they think," Falcone, Harbinger’s senior managing director, said in a phone interview.

He said that while their main fund’s composition has changed since its most recent 13 F regulatory filing with the U.S. Securities and Exchange Commission on August 13, Harbinger remained bullish on its investments.

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Bloomberg – The brother of former Bayou Group LLC finance chief Daniel Marino, who is serving 20 years in prison, pleaded guilty to a federal charge that he helped conceal a $400 million fraud at the bankrupt hedge-fund firm.

Matthew Marino entered his guilty plea yesterday in U.S. District Court in White Plains, New York, federal prosecutors said. Marino faces as long as three years in prison when he’s sentenced on Dec. 4, according to prosecutors.

Marino admitted “that he knew a fraud was being perpetrated on Bayou investors,” U.S. Attorney Michael Garcia said yesterday in a statement.

Daniel Marino was sentenced in January to 20 years in prison for defrauding investors. Bayou co-founder Samuel Israel is serving a 20-year prison term.

Bayou, based in Stamford, Connecticut, was among the biggest hedge-fund firms to come under federal scrutiny for missing money. Bayou filed for bankruptcy in May 2006, prompting lawsuits claiming it operated a Ponzi scheme that paid off old investors with money from new ones.

Defense attorney Eugene Riccio said yesterday in a phone interview that Matthew Marino pleaded guilty to misprision of a felony for failing to report the crime. Marino faces as long as 27 months in prison under federal sentencing guidelines, Riccio said. He declined to comment further.

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