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.
HedgeCo.net (West Palm Beach) – ‘Hedge fund operator’ Rod Stringer has pleaded guilty to money laundering in a $14 million Ponzi scheme, federal prosecutors say.
He allegedly took money from 44 victims over 8 years, claiming to be "a day trader and hedge fund operator, although he was not a licensed securities broker," the U.S. Attorney’s Office said.
According to the Securities and Exchange Commission, Stringer doled out about half the money from the phoney Texas hedge fund to some victims, but kept $6.9 million for himself.
"He solicited and enticed individuals to invest money with him by making false representations and promises, such as: the return on investors’ money would be approximately 50% profit; he was a day trader and had a foolproof system; the return on investors’ money would be better than a savings account; the accounts were liquid and investors could withdraw their money anytime; and he had several computers that watched the trend line of stocks automatically and advised him when he should move money in and out of the market," a written statement from prosecutors said.
Stringer faces up to 10 years in prison, a $250,000 fine and restitution. The plea agreement calls for Stringer to forfeit more than $1.5 million, according to Courthouse News Service.
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Siliconindia.com – An Indian-American investment adviser has been sentenced to 10 years in prison following his conviction on 20 counts of fraud with a scheme that bilked 15 investors of $12.5 million.
Amit Mathur, 38, of Shrewsbury, Massachusetts, was also ordered to pay restitution to his victims by the federal District Court in Worcester, the Boston office of Federal Bureau of Investigation (FBI) said in a release.
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.
Bizjournals.com – A Massachusetts federal court has ordered a British man to pay $2.78 million in restitution, interest and penalties for orchestrating a scheme to defraud more than 60 investors who invested in his phony hedge fund operation based in Boston.
TheSecurities and Exchange Commission said Wednesday that Glenn Manterfield, a principal at Lydia Capital LLC, was originally charged in April 2007 for allegedly defrauding clients who had invested $34 million in a Lydia Capital fund — the so-called Lydia Capital Alternative Investment Fund.
Financial Times – The trustee charged with tracking down money for victims of Bernard Madoff’s alleged $50bn Ponzi scheme will target big investors – such as hedge funds – that pulled "substantial amounts" of "false profits" out of the broker’s operation.
Under federal and New York law, investors who withdrew either principal or profits in the 90 days before Mr Madoff’s December 11 arrest are particularly vulnerable to so-called "clawbacks", but the trustee will be able to reach back up to six years in some cases.
With billions in claims and only about $940m in recovered assets, Irving Picard, the trustee, must rely on money from investors who cashed out early as a source of restitution.
He and David Sheehan, a lawyer working with him, told a creditor meeting last week that they intended to focus on large investors, particularly if they had suspicions about Mr Madoff’s operation.
Mr Sheehan cited the example of "someone who may have been well informed and may have had red flags".
Munster Times – Investigators may get a clue Wednesday into how much money might be available for victims in the Bernard Madoff scandal.
The fallen investment guru is scheduled to submit a list of his personal assets to the Securities and Exchange Commission by the end of the year, including property that could be tapped to make restitution to victims of what authorities say was a $50 billion Ponzi scheme.
In a previous court hearing, Madoff also agreed to provide the names and locations of entities, bank accounts, brokerage accounts, investments or assets held by his business, Bernard L. Madoff Investment Securities LLC.
New York Times Blogs – Duff Capital Advisors has recently laid off dozens of its employees and is holding off on its plans to raise as much as $1.5 billion just eight months after the hedge fund firm began business, according to people briefed on the actions.
The Greenwich, Conn.-based firm was started in March by Philip N. Duff, a former chief financial officer of Morgan Stanley, with $500 million of capital from the New York private equity firm Lindsay Goldberg. At the time, Duff Capital said then that it was in discussions with several financial institutions to provide seed money for its investment strategies, beginning in the past spring.
While the firm is still in discussions with clients and some potential investors, it has failed to find any new capital so far.
New York (HedgeCo.Net) – Microsoft CEO Steve Ballmer declared that they are “done” pursuing Yahoo and focused instead on Microsoft’s need to invest in its internet businesses.
However, the past six months of on-again, off-again talks with Yahoo have critics wondering if in fact the door is actually closed on this infamous almost-merger.
"We had a set of principles, we talked about them, it didn’t work out," he said. "Fine, we’re done. We can move on."
Microsoft Chief Financial Officer Chris Liddell added, "The chances of us buying Yahoo on a full acquisition basis are so small that they are essentially negligible."
Instead, Microsoft announced it had expanded its current deal with the internet social networking site, Facebook. In addition to displaying ads on Facebook pages, they will also provide web search and search advertising for its 40 million+ U.S. users.
The rhetoric also focused around the fact that Microsoft’s attempt at an acquisition of Yahoo was mainly to better position themselves to compete against Google. However, with Microsoft’s new strategies in place, their one-time need for Yahoo will become obsolete.
"This is a two-horse race,” exclaimed Ballmer. ”It is about Microsoft and Google."
The backdrop was Microsoft’s annual meeting with Wall Street analysts at its headquarters in Redmond, Washington. Ballmer discussed the potential of its online services division as well as emphasized how important it is to capitalize on future opportunities.
"There is this huge, huge, huge new opportunity around the Internet and online and we have to embrace that opportunity and invest in that opportunity."
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Reuters- South Korean broker Woori Investment & Securities said on Tuesday it will start a $100 million Asia-focused hedge fund in Singapore as part of plans to expand its business in Southeast Asia. Woori plans to boost revenue contribution from its overseas business to 20 percent in three years from five percent now, Joonho Hwang, chief financial officer of the Korean brokerage firm, told a news conference in Singapore.
The long/short hedge fund "Woori Absolute Partners" would likely start operations in July after an injection of $100 million from the parent.
The Columbian- The hope at Lehman Brothers is that a management shakeup Thursday will contain the damage of a stunning quarterly loss – yet some on Wall Street fear this is one more step toward a more dramatic outcome for the embattled investment bank.
The ouster of Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory was an attempt to quell investor anger that Lehman’s leadership has failed them. But, with a four-day stock plunge that wiped $4.5 billion from the investment bank’s market value, it was unclear if the upheaval will be enough to satisfy critics.
"These people deserve to be fired," said Dick Bove, an analyst with Ladenburg, Thalmann & Co. "Their mistakes cost their shareholders billions of dollars in wealth." Lehman shares fell 4.4 percent Thursday to $22.70 and are down 30 percent this week. The decline is a blow to investors who bought into a stock offering at $28 earlier this week – including BlackRock Inc. and former AIG chief Hank Greenberg.
