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Hedge Fund News: Platinum Partners, Bill Ackman, John Paulson

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Platinum Partners’ Executives Charged With $1 Billion Securities Fraud (The Wall Street Journal)
Top executives of hedge fund Platinum Partners were arrested Monday morning and charged with defrauding investors in one of the biggest such cases since Bernard L. Madoff’s Ponzi scheme. As recently as this fall, Platinum told investors it oversaw more than $1 billion scattered in eclectic investments like loans to bankrupt companies and thinly-traded pharmaceutical stocks. It boasted one of the steadiest performance track records in the hedge-fund industry, with no down years for its funds. The indictment unsealed Monday in federal court in Brooklyn charges Platinum founder and Chief Investment Officer Mark Nordlicht, co-chief investment officer David Levy, and former president Uri Landesman with counts of securities fraud, investment adviser fraud and conspiracy.

Bill Ackman, Pershing Square Capital Management, Herbalife

Pushed By Investor Ackman, Chipotle Adds Four New Directors (Reuters)
Chipotle Mexican Grill Inc (CMG.N), under pressure from activist investor Bill Ackman, named four new board members on Friday, paving the way for a reunion of sorts between its chief executive and a former top executive at McDonald’s, which once owned the burrito chain. Matthew Paull, a former McDonald’s Corp (MCD.N) chief financial officer, will join the Chipotle board. Media executives Paul Cappuccio and Robin Hickenlooper, as well as Ali Namvar, a partner at Ackman’s hedge fund Pershing Square Capital Management, round out the additions. Ackman, Chipotle’s largest single investor with a nearly 10-percent stake, sought to end the company’s co-CEO arrangement and replace some long-serving directors with fresh blood, especially in marketing and food safety, according to people familiar with his thinking.

Paulson Advantage Said Paring Loss With Fannie-Freddie (Bloomberg)
John Paulson trimmed the double-digit losses in one of his main hedge funds last month thanks to a stake in government-sponsored entities Fannie Mae and Freddie Mac that surged on the back of the U.S. presidential election. Paulson & Co.’s Advantage fund, which wagers on companies going through corporate events, climbed 9 percent in November, paring this year’s loss to 16 percent from more than 20 percent as of October, according to a person with knowledge of the matter. Paulson’s Partners merger strategy rose slightly, bringing losses for the year to about 27 percent, said the person, who asked not to be named because results are private.

Greenlight Capital Re CEO Barton Hedges To Leave (The Wall Street Journal)
Greenlight Capital Re Ltd. on Monday said Barton Hedges is stepping down as chief executive and a director of the property-and-casualty reinsurance company, effective March 31. Former chief executive and current board member Leonard Goldberg will serve as interim CEO until a successor is found, the reinsurer said. Greenlight, which is closely associated with its chairman, hedge-fund manager David Einhorn, also said it wasn’t aware “of any circumstance or event that will have a material adverse impact” on its operations or financial positions.

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