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Hedge Fund News: John Arnold’s $10M Donation, Paul Singer & Advertising

Former Centaurus Hedge Fund Founder Donates $10 Million During Government Shutdown (HedgeCo)
Former hedge fund manager John Arnold and his wife have pledged up to $10 million in an effort to fund Head Start programs that could no longer operate due to the government shutdown. “Early childhood programs for low-income families in six states, forced to close because of the government shutdown, will reopen.” CNN reports. “More than 7,000 at-risk children will be able to return to their Head Start classrooms after philanthropists Laura and John Arnold extended up to $10 million in emergency funding support to the National Head Start Association.” The charity said. “The support will provide assistance to Head Start and Early Head Start programs that were forced to close or are facing closure this month as a result of the government shutdown.”

John Arnold

SAC Is Said to Weigh Plea Deal in Insider Trading Case (NYTimes)
After months of fighting the government’s insider trading case tooth and nail, the hedge fund SAC Capital Advisors is leaning toward admitting criminal wrongdoing and agreeing to pay a record financial penalty to resolve the charges, according to two people briefed on the deliberations. …In agreeing to have SAC plead guilty and pay the hefty fine, SAC’s owner, Steven A. Cohen, would be seeking to put his legal woes behind him in the hopes of salvaging his business. Once he resolved the government’s case, Mr. Cohen would look to transform SAC into a “family office” that would manage Mr. Cohen’s own wealth.

Warren Buffett Says No Deal on Debt Ceiling Like a Nuclear Bomb (Forbes)
Another 160 points down on the Dow Industrials and another meaningless press conference from President Obama promising to never pay a “ransom” to the Republican Tea Party. The sense of the brinksmanship suggest to me that we are wandering in a no-man’s land. You don’t hear anyone in Congress or the White House echoing Warren Buffett’s warning of a “nuclear bomb.” I thought the whole showdown was the Republican anathema of the Affordable Care Act, better known as ObamaCare.

Hedge funders reach deep into their pockets to help children (Opalesque)
A lot of charitable acts took place in the hedge fund industry recently. A Leg To Stand On’s (ALTSO’s) second annual Rocktoberfest-Chicago, on October 3rd, raised close to $100,000 with the strong support of major sponsors and attendees from more than 400 Midwestern financial, business and hedge fund communities. “I am incredibly proud to see so many caring individuals from the Chicago financial community come together in support of ALTSO’s vital mission,” said hedge fund manager and ALTSO co-founder/chairman C. Mead Welles…

Why Icahn’s Apple Buyback Is a Dumb Idea (InvestorPlace)
Carl Icahn thinks he knows just what Apple Inc. (NASDAQ:AAPL) stock needs to start moving in the right direction: Fewer shares of Apple stock the market. But Apple investors who think this is a good idea need to take a hard look at other failed stock buybacks before they endorse Icahn’s plan for AAPL. The activist investor has been pushing for an unprecedented AAPL stock buyback tallying $150 billion — more than one-third Apple’s current market cap. For perspective, that alone is more than tech buyback leaders Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NASDAQ:ORCL), Cisco Systems, Inc. (NASDAQ:CSCO), Hewlett-Packard Company (NYSE:HPQ) and Texas Instruments Incorporated (NASDAQ:TXN) have spent in the last five years combined.

Computer-driven hedge fund Density to shut down (Reuters)
Sweden-based hedge fund Density is to close after a poor performance, its manager told Reuters on Tuesday, as computer-driven funds struggle to cope with markets dominated by central bank money-printing. Density’s troubles reflect those of high-profile computer-driven (also known as commodity-trading advisor or CTA) funds such as BlueTrend, Man Group’s (EMG.L) AHL and Cantab Capital’s CCP fund, which have also suffered losses as central bank actions disrupt the long-running market trends they like to follow.

Record hedge fund inflows come at a price (FT)
For hedge funds, with all due deference to Dickens, this is the best of times, and this is the worst of times. Never since the sector began to take on meaningful shape some two decades ago has its performance, in aggregate, been so poor. And yet never has it been so successful in raising assets from the public. Not only that, but surveys suggest that if ever hedge fund managers lie awake worrying at night, it is their attempts to raise funds, rather than to manage money, that worry them.

Tiger’s Robertson: Don’t think the US will default (CNBC)

Hedge Funds Advertising – Larry Zimpleman says hedge fund advertising could open up investment options, Hedge fund advertising, good or bad? (Opalesque)
Is the lifting of the ban on hedge-fund advertising good or bad for investors? Larry Zimpleman: It will be interesting to see how the lifting of the ban on hedge-fund advertising may cause other changes in the traditional hedge-fund industry. Historically, hedge funds have restricted their activity to institutional investors and to individuals who have substantial net worth–thus, not a lot of need for general retail advertising.

SEC’s Case Against Petters Feeder Fund Heads For Jury (Law360)
A Minnesota federal judge on Tuesday declined cross-bids for judgment in the U.S. Securities and Exchange Commission’s action against a hedge fund owner who allegedly funneled hundreds of millions into Thomas Petters’ $3.5 billion Ponzi scheme, saying it’s up to a jury to sort out the facts. U.S. District Judge Ann D. Montgomery refused to back the SEC’s contention that marketing and offering materials given to investors who bought interests in Marlon Quan’s various hedge funds and descriptions of lockbox accounts were fraudulent, finding there were…

Anglo American plc : Hedge fund Elliott blocked in bid for Anglo Irish info (4-Traders)
A tenacious U.S. hedge fund and an Irish property developer were blocked on Tuesday by a U.S. federal judge from digging into the secretive communications that led to Ireland’s decision to liquidate former Anglo Irish Bank. Elliot Management, billionaire Paul Singer’s hedge fund, and John Flynn failed to convince a U.S. Bankruptcy Court judge to allow them to demand a broad range of information that they said could prove the bank was solvent when put into liquidation.

Hey Banksy: Hedge Fund Manager Wants To Collaborate To Help Sandy Victims (HedgeCo)
Former managing Director at Deutsche Bank AG (USA) (NYSE:DB) and CEO of hedge fund Saiers Capital (formerly Alphabet Management), has offered street artist Banksy $100,000 to donate to a charity of his choice. “The rumor is that you are in New York City for the month of October.” Nelson Saiers said in an open letter to the artist, “As we approach the one year anniversary of Hurricane Sandy, there remain a number of victims who are still severely impacted by this disaster.

Should You Sell Disney? Hedge Fund Trading Strategy Profit Behind The Blog (Business2Community)
Today is a special day, we are launching a new product called ‘Profit Behind The Blog’. This is the service where I show you exactly how a Hedge Fund Trader would trade a specific stock. This service combines education with the potential to profit because I will highlight specific trading levels, entries, stops and targets. I will be analyzing The Walt Disney Company (NYSE:DIS) as per our reader’s request (Darius L) for research, available here on

Warren Buffett Now Officially Owns 2.8% of Goldman Sachs (InsiderMonkey)
Warren Buffett, Goldman Sachs: In a 13G filing just reported with the SEC, Warren Buffett and Berkshire Hathaway reported a 2.8% stake in Goldman Sachs Group Inc (NYSE:GS). The total position of 13,062,594 shares represents $1.99 billion worth of Goldman stock, and came via warrants bought in 2008. The relationship between Buffett and Goldman Sachs can be traced back to 2008, when Berkshire Hathaway Inc. (NYSE:BRK.A) played a crucial role in rescuing the bank through the offering of a $5 billion lifeline, which aside from warrants also provided Berkshire with $5 billion worth of preferred stock with $500 million annual dividend.

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