BankNet 360 – Hedge funds are flexing their financial muscles, demanding companies that do not file quarterly reports on time to immediately repay all their debts.
Technically, companies do default on their outstanding bonds when they fail to punctually file quarterly reports with the Securities and Exchange Commission. However, investors have traditionallyturned a blind eye to the missed deadline, allowing the company time to finish its report.
However, hedge funds — hungry for profits — are not being so nice. The widening scandal of companies that have been caught backdating stock option grants to executives is adding tension to the mix,because many firms have had to more closely scrutinize their filings — causing deadlines to be missed, in some cases — to ensure compliance.
