ExodusPoint: Schonfeld Staffers Underpaid (HFAlert.com)
ExodusPoint Capital is firing back at Schonfeld Strategic Advisors. ExodusPoint, which was sued by Schonfeld last year for poaching staff, has filed a counterclaim in which it boldly asserts that it will continue recruiting Schonfeld’s “systematically undercompensated employees.” “There is a great deal of interest and excitement in the industry about the prospect of working at ExodusPoint and apparently widespread unhappiness with Schonfeld, even at the senior level,” ExodusPoint said. The counterclaim, filed April 26, also challenges a provision in some of Schonfeld’s employment contracts that prohibits ex-employees from soliciting former colleagues for a period of five years. That’s an unreasonably long non-solicitation period, ExodusPoint argues.
Sachem Urges Eagle Materials to Spilt Core Businesses, Nominates Board Members (Reuters)
(Reuters) – New York-based hedge fund Sachem Head Capital Management on Wednesday urged Eagle Materials Inc to separate its cement and wallboard businesses and nominated two candidates to the company’s board. Sachem, which disclosed a 9 percent stake in Eagle Materials in March, said the diversion of Eagle’s cash to fund its expansion into oil and gas proppants has resulted in “substantial underperformance” in the company’s stock price.
Citadel Securities Looms Large as a Future Fed Primary Dealer (Bloomberg)
The bond market’s most elite club added a new member this week. Just not the one that’s loomed large over Wall Street for years. Amherst Pierpont Securities became the first firm in more than three years to be added to the list of U.S. primary dealers, a group that transacts directly with the Federal Reserve Bank of New York as it carries out monetary policy. The designation has long been considered a badge of honor, though the benefits have diminished in the post-crisis era as a small pool of banks dominate trading and dealers need not purchase large swaths of Treasury auctions. Primary dealers are required to bid for at least their pro rata share of the total amount of debt the U.S. issues.
Hedge Funds Positive Again in April After Robust First Quarter (HedgeWeek.com)
The Eurekahedge Hedge Fund Index was up 1.13 per cent in April, supported by the global equities which advanced on encouraging economic data and accommodative central bank policies. Positive earnings surprises helped renew investors’ optimism in the global equity market, which rallied 3.38 per cent during the month as represented by the MSCI ACWI (Local). Returns were positive across geographic mandates, with hedge fund managers focusing on North America leading the pack as they gained 1.37 per cent in April. Asian hedge funds trailed behind their peers focusing on other regions, but still managed to generate positive returns. Looking at strategic mandates, equity long-biased hedge fund managers were best positioned to benefit from the equity market performance during the month, and ended the month up 2.78 per cent.
Cannabis Hedge Fund Aims to Go Long U.S. Stocks, Short Canada (Bloomberg)
A pot-focused asset manager run by the chairman of Curaleaf Holdings Inc. is launching a new hedge fund with an eye to going long on U.S. cannabis companies and shorting Canadian producers. Measure 8 Venture Partners LP is aiming to raise $100 million for the hedge fund, which will go live on June 1, and is also in the midst of raising $200 million for a new venture fund. “I have a lot of respect for the Canadian LPs but I don’t want to be long them right now,” Justin Ort, a Measure 8 partner, said in an interview at Bloomberg’s Toronto office. “It’s almost like they have one hand tied behind their back” because of the country’s stringent marketing restrictions.
Will Hedge Funds Ever Truly Embrace ESG Principles? (Preqin.com)
Markets across the alternatives industry are abuzz with talk of ESG, none more so than hedge funds where the topic is far from clear cut. For some, considering ESG within the context of hedge funds may appear contradictory: hedge funds use a variety of instruments to generate an absolute return across a range of markets and asset classes, so why constrain these investments with ESG policies? Will the limitations outweigh the benefits? Preqin surveyed hedge fund managers and investors to gauge their opinion on ESG. We learned which LPs and GPs already have an ESG policy in place, which do not and which are aiming to implement one.
Ray Dalio’s Brutally Honest Tip: Amateur Investing Is Harder Than the Olympics (Observer.com)
Hedge fund billionaire Ray Dalio, one of the most worshiped investors of his time, is not shy when it comes to sharing his secrets of success and observations on the economy and financial markets with the world. As he wrote in his 2017 book, Principles, “I am now at the stage in my life in which I want to help others be successful rather than to be more successful myself.” In the past three months, Dalio has made two bold predictions about how likely the U.S. economy is due for a recession by 2020: He first estimated the chance to be 70 percent, but lowered the bet significantly to 35 percent only a few weeks later.
SEC Charges Nevada Man Who Traded on Confidential Information Taken From Lifelong Friend (HedgeCo.net)
(HedgeCo.Net) The Securities and Exchange Commission today announced settled insider trading charges against a Nevada man who obtained confidential information about a pending corporate merger from a lifelong friend and used it to generate more than $250,000 in illicit trading profits. According to the SEC’s complaint, while Brian Fettner was a guest in the home of a longtime friend who was also the general counsel of Cintas Corporation, Fettner surreptiously viewed documents contemplating an acquisition of G&K Services Inc. by Cintas. Based on that information and without telling his friend, Fettner then purchased G&K Services stock in the brokerage accounts of his ex-wife and a former girlfriend, and persuaded his father and another girlfriend to purchase G&K shares.
SEC, Insider Trader/Tipper Whose Profits Went to Others Settle (JDSupra.com)
Earlier this spring the Commission resolved insider trading cases where one spouse misappropriated inside information from another and an in-house corporate counsel breached an obligation to his firm by using material non-public corporate information to trade. In both cases the person trading secured ill-gotten gains from the wrongful act – at least for a time. In contrast, in the Commission’s most recent insider trading case the person who breached a duty of confidence by using inside information or by passing it along did not directly profit from it – others did. SEC v. Fettner, Civil Action No. 9:19-cv-80613 (S.D. Fla. Filed May 7, 2019).
SEC Chairman Draws Line on Insider Trading `Fairness’ (Bloomberg)
Securities and Exchange Commission Chairman Jay Clayton tells David Rubenstein that trading based on inside information may be legal if it’s been obtained in a “non-nefarious way.” His comments come on the latest episode of “The David Rubenstein Show: Peer-to-Peer Conversations” in an interview recorded April 9 in Washington. (Source: Bloomberg)
Wednesday 5/8 Insider Buying Report: CYH, SSNC (Nasdaq.com)
At Community Health Systems (CYH), a filing with the SEC revealed that on Tuesday, CEO Wayne T. Smith bought 993,449 shares of CYH, at a cost of $3.37 each, for a total investment of $3.35M. Community Health Systems is trading up about 10.8% on the day Wednesday. This buy marks the first one filed by Smith in the past twelve months. And on Friday, Director Michael Jay Zamkow purchased $1.02M worth of SS&C Technologies Holdings (SSNC), purchasing 17,000 shares at a cost of $59.76 each. Before this latest buy, Zamkow made one other purchase in the past year, buying $1.05M shares for a cost of $47.53 each. SS&C Technologies Holdings is trading up about 0.9% on the day Wednesday.
The SVP, CTO of Ebay (NASDAQ: EBAY) is Selling Shares (AnalystRatings)
Today, the SVP, CTO of Ebay (EBAY), Stephen Fisher, sold shares of EBAY for $787K. In addition to Stephen Fisher, 4 other EBAY executives reported Sell trades in the last month. Based on Ebay’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $2.62 billion and quarterly net profit of $518 million. In comparison, last year the company earned revenue of $2.61 billion and had a net profit of $407 million. EBAY’s market cap is $33.18B and the company has a P/E ratio of 13.75. Currently, Ebay has an average volume of 7.81M.
EY Firm Shared Financial Earnings Information, Says Infibeam (Bloomberg)
For most of the last year, Infibeam’s auditors questioned its accounting practices. Now the company is pointing a finger at one of its auditors. Last week, online retailer Infibeam Avenues Ltd.’s board of directors decided to sack their current audit firm SRBC & Co for an information breach. SRBC is an network firm of EY, one of the big four auditors across the world. On May 7, Infibeam’s notice to shareholders revealed the specific breaches the auditor has been accused of. The notices state that as an insider the audit firm breached regulations by sharing the company’s unpublished financial earnings information.