Citadel Followed Paulson, Fairholme in Pre-Rout Wager on Regions Financial (Bloomberg)
Citadel LLC and Lansdowne Partners Ltd. boosted stakes in Regions Financial Corp. (RF) in the second quarter, mimicking earlier bets by hedge fund Paulson & Co., before the bank led this month’s rout in U.S. financial stocks. The three firms, along with Capital Research Global Investors, Fairholme Capital Management LLC and Arrowstreet Capital LP, held a total of $1.21 billion in shares of Birmingham, Alabama-based Regions as of June 30, according to the companies’ regulatory filings this month. Regions has plunged 25 percent this month through yesterday, leading a 16 percent slide in the 24-company KBW Bank Index through yesterday. The firm, whose results improved in the first and fourth quarters, drew investors with a stock “inexpensive versus its normalized earnings power,” said Thomas Brown, chief executive officer of Second Curve Capital LLC and a Bloomberg Television contributing editor. The situation changed this month when U.S. regional banks tumbled on concern they’ll be hardest hit by a slowing economy and extended low interest-rate environment, said Jefferson Harralson, an analyst at KBW Inc.
Hedge fund group spent $1 million lobbying in 2Q (AP)
A trade group representing hedge funds spent more than $1 million in the second quarter lobbying federal officials on new regulations that will expand disclosure requirements for the funds. The $1.03 million that the Managed Funds Association spent was down slightly from the $1.09 million it spent in the same quarter a year ago, but up from the $950,000 spent in this year’s first quarter.
Hedge Fund Leads Suit Against Ex-Baseball Owner (HedgeFund.net)
The Texas Rangers’ bankruptcy administrator has sued its former owner on behalf of creditors, led by New York-based hedge fund Monarch Alternative Capital. The administrator, Alan Jacobs, claimed in legal documents that Hicks ignored team obligations and bought land for parking lots and roads, leaving insufficient money to field a competitive baseball team, FIN Alternatives reported.
Connecticut Physician Pleads Guilty to Hedge Fund Fraud (Becker’s ASC Review)
A physician from Greenwich, Conn., has pled guilty to a conspiracy charge for illegally evading $30 million in losses by obtaining inside tips on drug trials from a French physician, according to a Wall Street Journal report. Joseph “Chip” Skowron III, MD, is a former manager at hedge fund FrontPoint Partners. He oversaw six healthcare-related hedge funds when working there and admitted to directing trades based on inside information he obtained from Yves Benhamou, MD, a French physician. He also admitted to lying to the Securities and Exchange Commission in Aug. 2009 about whether he received the information from Dr. Benhamou.