Clay Capital’s Turner Pleads Guilty In $2.5 Million Insider-Trading Case (Bloomberg)
James F. Turner II, 44, the chief investment officer of hedge fund Clay Capital Management LLC, pleaded guilty to his role in an insider-trading scheme that prosecutors said made more than $2.5 million in illicit profit. Turner illegally traded in shares of Autodesk Inc. (ADSK), Moldflow Corp. and Salesforce.com Inc. (CRM), he admitted in federal court in Newark, New Jersey. Clay Capital operated the Clay Fund from January 2007 to December 2010, according to a U.S. Securities and Exchange Commission complaint filed Aug. 31.
Falcone’s Wireless Company Running Out Of Cash (Reuters)
The upstart wireless company that is being bankrolled by Philip Falcone‘s $5 billion Harbinger Capital Partners hedge fund could run out of money during the second quarter of 2012, according to the company’s financial statement. LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital and financing, the statement reviewed by Reuters said. ”There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity,” the company’s statement said.
Oil Advances In New York On Speculation Geopolitical Tension Will Escalate (Bloomberg)
Oil rose on concern that geopolitical tension will increase as a son of Kim Jong Il took power in North Korea and the U.S. and its allies prepared to discuss stronger measures against Iran. Hedge funds and other large speculators cut their net-long positions, or bets that oil prices will rise, by 0.9 percent in the week ended Dec. 13 to 200,986 in futures and options combined, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Dec. 16.
Lone Star $3 Billion Costs For Korea Bank Shows Foreigner Perils: Real M&A (Bloomberg)
Lone Star, which won control of Korea Exchange Bank in 2003 when no local lenders were interested, spent more than five years entangled by courts, regulators and lawmakers as the fund incited public backlash over the profits on its investment. After it was convicted of stock manipulation and two attempts to cash out were undone by legal disputes, Lone Star agreed this month to sell its majority stake. One reason that Lone Star became a target of public ire is because as a buyout fund, it purchased Korea Exchange Bank to make money and had little interest in building up a bank franchise, said Hank Morris, Seoul-based North Asia adviser at Triple A Partners Ltd., which helps hedge funds raise capital.
Speculators Upped Bets Brent Crude Would Fall (Market Watch)
Oil market speculators were bearish on Brent crude prices in the week ended Dec. 6, as measures decided by European Union leaders at a summit meeting in Brussels did little to convince investors that leaders could tackle the region’s debt crisis. According to the Intercontinental Exchange Inc.’s weekly Commitment of Traders report published Monday, money managers, including hedge funds, cut their net long positions, or bets that prices would rise, in Brent crude futures and options by 6.6% compared with the week before, to 79,933 contracts.
Fund Managers Compare U.S. And Japanese Economies (HFN)
Veteran hedge fund managers Sheldon Kasowitz and Ethan Devine think the U.S. economy could have suffered the same fate as Japan’s economy if not for some significant factors. The two also pointed out that the U.S. government’s “policy response dwarfed Japan’s” when the respective countries tackled their particular economic crises. “The Japanese did not recapitalize their banks for eight years after their bubble burst; the U.S. did it in less than a year,” Kasowitz and Devine stated in their op-ed. However, the pair did not shy away from saying that some of the doom-and-gloom that Japanese consumers have had to contend with for a prolonged period is evident in the U.S. based on recent polls and data about stagnation of real wages.
Cliff Asness: A Hedge Fund Genius Goes Retail (CNNMoney)
AQR Capital Management founder Cliff Asness is a high-flyer. Even within the hedge fund industry, which is notoriously tough, the 45-year-old Asness has managed to grow his AQR Capital to $42 billion in assets under management, which makes his fund one of the top players in hedge funds. But, why stop there? Asness has begun to move into largely uncharted area for a hedge fund manager – mutual funds. “Asness is now offering sophisticated strategies to the broad public that for years have been available only to institutional clients,” writes Fortune.
Paulson Victimized By New York Fraud Ring (FINalternatives)
The New York-based hedge fund giant is among the victims of an alleged fraud scheme that used stolen financial information to steal more than $2 million, New York City prosecutors said Friday. Among those to have their information, and money, stolen is John Paulson. The huge alleged fraud ring encompassed some 55 people. One of its alleged leaders, Tracey Nelson, was arraigned Friday. According to prosecutors, the former UJA-Federation check processor had copies of contributor checks in a safe at her home. The stolen money and bogus credit cards were then used to buy expensive items, some of which were resold, prosecutors say.
First South Korean Hedge Funds Expected This Week (FINalternatives)
South Korea will join the global hedge fund industry this week with the launch of the country’s first dozen or so local vehicles. The country’s Financial Services Commission has reviewed the applications of 13 assets managers in recent weeks. Most of them are expected to launch their first hedge funds this month or early next month, with the first expected on Friday.