Fugitive Moody’s Analyst Ordered to Pay $35 Million to S.E.C. (Dealbook)
Of the 26 defendants criminally charged in the government’s insider trading investigation centered on Raj Rajaratnam, the hedge fund billionaire, only one has not been convicted or pleaded guilty: Deep Shah. Mr. Shah, a former bond analyst at Moody’s Investors Service, has been declared a fugitive and is believed to be in Mumbai. On Tuesday, a federal judge ordered Mr. Shah on Tuesday to pay the government $34.6 million related to the Securities and Exchange Commission’s insider trading lawsuit against him.
Hedge-Fund Bets Against S&P 500 at Highest Since 2008 (WSJ)
Hedge funds have opened the biggest short position on the Standard & Poor’s 500-stock index since December 2008, reflecting the extent of their bearish stance on the U.S. economy. Hedge funds held a net short position of 71,980 short contracts as of Aug. 16, according to a monthly report on global asset allocation from Société Générale SA, which looks at positions reported to the U.S. Commodity Futures Trading Commission. This is the biggest figure seen since three months after the collapse of Lehman Brothers Holdings Inc., when hedge funds held a net short position of 85,984 short positions.
2010′s Top Hedge Fund Manager: Bernanke Should Act On QE3 (Barron’s)
Don Brownstein, who runs 2010′s top performing hedge fund, wrote a letter to investors last week that criticized political leaders for focusing too much on inflation. The head of Stamford, Connecticut-based Structured Portfolio Management LLC also believes that Fed Chairman Ben Bernanke has room to maneuver to help stimulate the U.S. economy. Brownstein’s main SPM Core fund returned 14.7% through June, according to the letter. His firm’s Structured Servicing Holdings LP, which focuses on mortgage debt not tied to government backing, returned 8% in the first half of 2011. The strategy’s gain of 50% in the first 10 months of 2010 put it at the top of Bloomberg Markets’ list of the 100 best-performing funds with $1 billion or more in assets.
Former Lake Shore Group head pleads guilty to $294M hedge fund fraud (Chicago Tribune)
The former manager of a Chicago-based hedge fund that was forced into receivership in 2007 by the U.S. government pleaded guilty Wednesday to defrauding about 900 investors worldwide of $294 million. Philip J. Baker, who controlled Lake Shore Asset Management Ltd. and related companies that purportedly traded clients’ funds in several commodity futures pools, pleaded guilty to wire fraud. He had been scheduled to stand trial next month. He was charged in a 27-count indictment in February 2009.