Falcone, Harbinger seek dismissal of SEC charges (Reuters)
Hedge fund manager Philip Falcone on Friday asked a federal judge to dismiss U.S. Securities and Exchange Commission charges accusing him of market manipulation, giving preferential treatment to certain investors and borrowing cash from his own fund to pay his personal taxes. The billionaire, who was sued in U.S. District Court in Manhattan in June, said government regulators had no evidence that he had deceived investors or acted outside of the law.
Brazilian Ex-Banker to Pay $5.1 Million for Insider Trading in Burger King Stock (SEC)
The Securities and Exchange Commission today announced insider trading charges against a Brazilian ex-banker for his role in a scheme to illegally trade Burger King securities. The SEC previously charged a Brazilian citizen working in the Miami office of Wells Fargo with tipping him the inside information. The SEC alleges that Igor Cornelsen and his firm through which he made trades – Bainbridge Group – reaped illicit profits of more than $1.68 million by trading Burger King options based on confidential information ahead of the company’s September 2010 announcement that it was being acquired by a New York private equity firm.
Caxton Vet. Launches $240 Million Hedge Fund (Finalternatives)
A former Caxton Associates trader has launched a hedge fund of his own with $240 million in initial capital. Daniel Lascano’s Lomas Capital Management launched its maiden hedge fund last month. The fund is a U.S.-focused long/short equity vehicle.
SEC Charges Connecticut-Based Business Executive with Insider Trading During Bidding Process (SEC)
The Securities and Exchange Commission today charged a Connecticut-based business executive with insider trading ahead of the sale of Patriot Capital Funding Group based on nonpublic information he learned at the helm of a firm involved in the bidding process. The SEC alleges that I. Joseph Massoud, who founded investment advisory firm Compass Group Management, gained access to nonpublic information contained in an online “dataroom” where bidding companies could learn more about Patriot Capital’s financial condition.
What has gone wrong with hedge funds? (CBSNews)
The $2 trillion hedge fund industry has taken quite a battering of late. According to HedgeFundResearch.com, the average hedge fund is up only 4.5 percent year to date through October. This is less than half of the 10 percent return of the balanced traditional 60 percent stock/40 percent bond in low-cost index funds. The funds have shown the same dismal performance over last five years compared with the same indexed portfolio. …Hedge funds come in a variety of flavors, but I explain the concept to my students as follows. I take a student’s book and pretend he is willing to sell it to me for $20 while the student next to him is willing to buy it for $21. As the hedge fund manager, I take advantage of this arbitrage opportunity and pocket the buck without taking any risk.
Einhorn’s Greenlight Cranks Up Market Exposure, Posts 10 Percent Gain YTD (InstitutionalInvestorsAlpha)
Who’s afraid of the stock market? Not David Einhorn, the widely watched and frequently imitated hedge fund manager, who has dialed up his exposure to the equity markets over the past few months. The position hasn’t hurt Einhorn’s flagship long-short equity fund at Greenlight Capital, which was essentially flat in November, losing a mere 0.5 percent for the month; it is still up 10 percent for the year. While many managers have taken down their exposure to the markets, Einhorn is getting more bullish. As of the end of November, Greenlight’s investment portfolio was roughly 118 percent long and 72 percent short, compared with being 100 percent long and 73 percent short at the end of October and 96 percent long and 70 percent short at the end of September…
Advisers Bullish on Energy Sector in 2013 (WSJ)
Breakthrough technologies are making the U.S. dramatically more energy competitive, an advancement expected to bring tremendous investment opportunities in the sector. Betting on expanding U.S. oil and natural-gas industries also can offer a hedge against inflation and substantial tax benefits. Many investors paralyzed by the looming fiscal cliff may now be overlooking opportunities that will potentially drive U.S. growth into 2013, the energy sector among them, said Hank Herrmann, chief executive of Ivy Funds.
