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Reuters - U.S. federal prosecutors asked securities regulators to delay a civil case against two former Bear Stearns hedge fund managers while they hold grand jury hearings in building a criminal case against the pair.
Fund managers Ralph Cioffi and Matthew Tannin were arrested and indicted in June, the first executives to face federal criminal charges in fallout from the subprime mortgage crisis. Both pleaded not guilty. A trial date has not yet been set.
The Securities and Exchange Commission had also begun civil securities fraud charges against Cioffi and Tannin, accusing them of misrepresenting the investments of two funds they oversaw.
A memorandum filed on Wednesday by U.S. Attorney Benton Campbell in the U.S. District Court in Brooklyn asked for a stay in the civil case until the conclusion of the criminal case.
"A stay is necessary in the civil case to preserve the secrecy of the ongoing grand jury proceedings," the memorandum said.
The document said the SEC was consulted and took no position on the stay, and that the defendants had declined to comment on the request.
A posh part of London or New York can be suitable, as in Pershing Square Capital, Cheyne Capital and Thames River Capital.
Or you could choose something slightly aggressive such as Tiger Capital, Citadel Capital or Centaurus. Among the big financial firms, it is voguish to squeeze as many meaningless words as possible into the title of a hedge fund. Length is not a sign of quality, however; a Bear Stearns hedge fund which went from $642m to zero was called the "high-grade structured credit strategies enhanced leverage fund".
2 Get a brass plaque in the Cayman Islands
Nearly all hedge funds are legally registered in tax havens to avoid both the taxman and to skirt regulatory hurdles - the sunny climes of the Caymans and Bermuda are particularly popular. Theoretically, a fund registered in London would have to register with the Financial Services Authority, but this has never actually happened. An FSA spokeswoman says: "Nobody ever registers hedge funds in the UK. If somebody did, we’d be scratching our heads over how to deal with it. We’d have to devise something."
3 Set your fees
The real fun starts here. Hedge funds are enormously lucrative - their standard fee arrangement is "two and 20". This means that as a fund manager, you can take 2% of clients’ money up front before you do anything, then keep 20% of any appreciation on the value of your fund. For successful hedgies, that means a phenomenal payday. For example, if a fund raises $1bn from investors and achieves a 30% rise in value over a year, the fund’s management earns $78.8m. Crispin Odey - one of London’s leading hedge fund managers - has just paid himself £28m after his firm successfully negotiated the credit crunch to make more than £55m profit in the past financial year. Most of the remaining £27m will be shared among Odey Asset Management’s 11 other partners. The fund manages around £2.7bn of assets.
Reuters- Veteran U.S. lawyer Brendan Sullivan is joining the defense team of indicted former Bear Stearns hedge fund manager Ralph Cioffi, a person close to the matter said on Tuesday.
Sullivan, a trial attorney who has represented high-profile clients including Iran-Contra figure Oliver North, will be an addition to Cioffi’s existing defense team, said the person, who spoke on condition of anonymity.
Cioffi and another former Bear Stearns portfolio manager, Matthew Tannin, were charged in June with conspiracy and securities fraud related to last year’s collapse of two hedge funds linked to risky mortgage investments.
FOXBusiness- With record losses from the subprime and credit crisis veering towards the $400 bn mark, here come the market police.
In the crosshairs: Hedge funds, including the indictments of the two Bear Stearns hedge fund managers.
A senior law enforcement official said in an interview that hedge funds now sit at the top of the hit list of federal investigations into the subprime crisis, including at the Department of Justice and the Federal Bureau of Investigation. Expect more announcements of hedge fund indictments in coming days, sources say.