Bloomberg – The U.S. Securities and Exchange Commission is seeking information from more than two dozen pension funds, placement agents and other companies as it steps up an investigation into whether money managers made improper payments to win business.

“The SEC is interested in finders’ fees and other payments,” spokesman John Nester said late yesterday. The SEC contacted pension-fund managers, agents that line up business for investment advisers and “other intermediaries,” he said.

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Tags: improper payments, intermediaries, investment advisers, money-managers, nester, pension fund managers, pension-funds, rsquo, securities-and-exchange, securities-and-exchange-commission, spokesman john

Bloomberg – Intercontinental Exchange Inc.’s bid to be the top U.S. guarantor of credit-default swap trades won Federal Reserve approval, leaving the Securities and Exchange Commission as the futures market’s final regulatory hurdle.

Intercontinental and larger rival CME Group Inc. are among four clearinghouse owners vying to back the $27 trillion credit- default swap market, with the winner standing to gain as much as $400 million a year in revenue, according to estimates by Wachovia Capital Markets and Keefe Bruyette & Woods Inc.

“I don’t think the SEC will have any issues” signing off Intercontinental’s clearing plans after the Fed approved them yesterday, said Brian Yelvington, an analyst at CreditSights Inc. in New York. “I hope it’s a rubber stamp, because given the new regulatory regime I would hope this has been a carefully coordinated process.”

Regulators on both sides of the Atlantic are developing separate plans to stabilize the derivatives market after American International Group Inc., once the world’s largest insurer, almost went bankrupt last year from its use of credit- default swaps. The unregulated, privately traded contracts stymied government efforts to assess bank credit risk because the full range of trades between dealers was unknown.

SEC spokesman John Nester said he didn’t know when the agency will make a decision. “The proposal is under active consideration,” he said in an interview yesterday.

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Tags: american international group inc, american-international-group, credit default swaps, credit risk, credit-default-swap, creditsights inc, derivatives market, futures market, government efforts, guarantor, intercontinental exchange inc, international-group-inc, keefe bruyette, regulatory hurdle, regulatory-regime, securities-and-exchange-commission, spokesman john, swap market, yelvington

New York (HedgeCo.Net) – New York University is the latest victim in Bernard Madoff’s web of lies, claiming it lost $24 million in a fund of fund that invested with the infamous Ponzi schemer. 

According to a complaint filed Christmas Eve in a Manhattan court, J. Esra Merkin invested NYU’s money with Madoff through two of his funds, Gabriel Capital LP and Ariel Fund Ltd., without telling investors and without performing proper due diligence.

Gabriel Capital, which manages approximately $1.5 billion, is planning to liquidate in light of the Madoff losses and because the fund posted losses this year of around 39 percent.    A Manhattan judge has barred Merken from liquidated Ariel until a hearing set for January 6^th.  NYU said it had about $94 million invested in the Ariel Fund.

NYU spokesman John Beckham explained that Merkin “was explicitly told this was not a proper investment vehicle,” when he brought up Madoff.  According to NYU however, Merkin had already invested the money with him.

Madoff was arrested on December 11^th after an alleged confession to his sons in which he admitted that his firm was one “giant Ponzi scheme.”  It is estimated that investors will lose a total of $50 billion, making this the largest Wall Street scam in history.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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