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.
New York Times Blogs – Sure, it’s tough being a journalist these days. But if you think the news business is in trouble, try being a journalist turned financier. Some of the reporters who have left their ink-stained professions for the high-paying world of finance haven’t had it easy either.
The latest is Rob Speyer, scion of the Tishman Speyer real-estate empire. As the WSJ reported on Wednesday, a former reporter at The New York Observer and New York Daily News, Speyer is being groomed to take over the New York real estate firm, which recently defaulted on debt tied to a big portfolio of office buildings it bought in Washington, D.C. The firm also is under stress from its top-of-the-market purchase of Archstone Smith, a high-end-apartment landlord, and the Manhattan apartment complexes of Peter Cooper Village and Stuyvesant Town. Speyer tells the WSJ that despite some problems, Tishman Speyer has a “good track record” and $2 billion in liquidity.
CBS News – Here’s a switch: a dozen hedge funds are accusing a California businessman of "playing dirty" with their money and even the name Sarah Palin is a "player" in the defendant’s prior ventures, according to the New York Daily News.
The suit alleges Milton Ault the 3rd stiffed the hedge funds out of their $4.2 million investment in Ault’s firm, Zealous Inc., by shoveling the money into porn, including a publicly traded gentleman’s club and a planned swingers ranch in New York’s Catskill Mountains, according to the paper.
New York Daily News – Park Avenue lawyer Marc Dreier was sentenced to 20 years in prison Monday by a judge who scolded prosecutors for wanting to jail him for as long as Ponzi swindler Bernard Madoff.
"Is the government serious about asking for 145 years?" Manhattan Federal Judge Jed Rakoff asked.
"To me, for the government to ask for 145 years is to demean the sentence Judge [Denny] Chin imposed on Mr. Madoff.
New York Daily News – An enthusiastic math whiz plus hands-on exhibits multiplied by deep-pocketed investors equals a math museum.
This formula may one day lead to every school kid’s nightmare – a museum dedicated to nothing but mathematics – thanks to a Long Island man who quit his hedge fund job to dedicate himself to the project.
"Math is an ongoing, living and developing thing that is beautiful and can be a lot of fun," said Glen Whitney, 40, of Stony Brook.
New York Daily News – State Controller Thomas DiNapoli is booting 10 hedge fund managers from doing business with New York’s scandal-scarred $122 billion pension fund, the Daily News has learned.
Four of the 10 firms were listed, but not charged, in an indictment the state attorney general’s office brought against two top associates to former Controller Alan Hevesi.
The four are Consulting Services Group, HFV Management, Olympia Capital Management and Pequot Capital Management.
New York Daily News – Ezra Merkin should have known better, a lawsuit claims.
The Park Avenue hedge fund king funneled investments to Bernie Madoff and received millions in fees Merkin knew were the spoils of a massive Ponzi scheme, a lawsuit filed Thursday claims.
U.S. Bankruptcy Court trustee Irving Picard sued Merkin to recover the $557.8 million Merkin and his Gabriel Capital Corp. have withdrawn from Madoff’s firm since 1995.
New York Daily News – Marc Dreier will plead guilty to all charges stemming from the $700 million investment fraud he is accused of carrying out, his lawyer said Monday.
Defense lawyer Gerald Shargel said Dreier will enter the plea May 11 to securities fraud, wire fraud and money laundering charges. He wants to accept responsibility and show his remorse, Shargel said.
Until December, Dreier had led a law firm with 250 lawyers and celebrity clients, including Jay Leno and ex-New York Giants star Michael Strahan. He was arrested after hedge funds complained he was stealing from them.
New York (HedgeCo.Net) – J. Ezra Merkin, head of Gabriel Capital Corp., has been sued by New York Attorney General Andrew Cuomo, after it was discovered he had placed investor’s money into funds managed by Bernard Madoff without their knowledge or consent.
Cuomo alleges that the former GMAC Financing Chairman allocated about $2.4 billion worth of client capital to the man who bilked $50 billion out of investors through an elaborate Ponzi scheme.
Cuomo claims Merkin invested the money of many prominent individuals and charities through his hedge funds Ariel, Gabriel Capital LP and Ascot Fund Limited. In exchange, Merkin received about $470 million in management and performance fees.
One investor, New York Daily News publisher Mort Zuckerman, suffered $40 million in losses after placing his funds with Merkin.
“There is no way Merkin could make such a representation without learning basic facts about Madoff’s operation, including the fact that Madoff had not made any stock purchases for at least 13 years,” said Zuckerman in his statement, referring to Merkin’s claim that he exercised “periodic reviews” on his investments.
The Merkin case is the latest in a string of suits brought on by the Attorney General. Last month, Cuomo blew the lid off two high-ranking officials who worked in the New York State’s Comptroller Office after discovering they took millions of dollars in kickbacks from private equity firms and hedge funds.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York Daily News – The hedge fund industry has a public relations problem these days and you have to be a millionaire to invest in one anyway, but there’s a new fund for more modest investors that can offer similar benefits.
The IQ Hedge Multi-Strategy Tracker Exchange-Traded Fund doesn’t actually invest in hedge funds, but attempts to replicate their performance.
The fund does this by holding other ETFs that own various asset classes, including stocks, bonds, currencies and commodities.
Adam Patti, CEO of IndexIQ, the company behind the new fund, said it even enjoys some advantages over hedge funds, including the ability to sell on a moment’s notice. Hedge funds typically offer limited times to sell.
New York Daily News – A federal judge charged with slapping his wife hired a big shot defense attorney as he faces a misdemeanor charge that could land him in the clink.
James Peck, 63, the bankruptcy judge overseeing the breakup of Lehman Brothers, hired Barry Bohrer, a prominent criminal defense lawyer whose clients have included Sam Israel, the hedge fund swindler who went on the lam last summer after faking his own suicide to avoid a 20-year jail term.
Peck, who was briefly assigned to handle the Bernard Madoff bankruptcy until he recused himself in December, told cops when they came to his Park Ave. apartment Saturday afternoon that "I was defending myself."
New York Daily News - Jacob Ezra Merkin was once revered as a wizard of Wall Street, an angel of charity and a lion of Judaic studies.
Now he has earned infamy as a destroyer of wealth, a menace to philanthropy, a pariah in some synagogues and a target of a probe by the state attorney general’s office.
A single unforgivable deed capsized his fortune, reputation and social standing overnight: He embraced a false prophet of profit named Bernard Madoff.
New York Daily News – Disgraced Park Ave. lawyer Marc Dreier gave fellow scamsters $100,000 to impersonate others in calls to victims, Manhattan federal prosecutors said Tuesday.
The new details emerged at a bail hearing for former broker Kosta Kovachev, 57, arrested yesterday for allegedly helping Dreier try to steal some $100 million from hedge fund managers.
Prosecutors say Kovachev pretended to be a real estate developer’s controller in an October sitdown with hesitant hedge fund managers. Kovachev also impersonated the developer’s CEO in a conference call, prosecutors say.
