Top of the Morning – Soros Buying Farmland, Brian Coats Pleads Guilty

George Soros is Reportedly Buying Farmland  (MoneyMorning)

Stuart Varney, host of the aptly named and very highly rated “Varney & Co.” program on Fox Business, put the following question to me in his usual direct style: “Will we have an agreement on Wednesday out of Europe and what will that mean for the markets?” Yes, I began, we probably will – but for all the wrong reasons, and it will never last.
J. Ezra Merkin, Madoff Feeder, Ordered to Pay $7M to Ascot Partners Investor (FINAlternatives)
Bernard Madoff feeder fund magnate J. Ezra Merkin has been ordered to pay more than $7 million to an investor in one of his funds. Merkin, who last month one the dismissal of several lawsuit against him and his hedge funds, was hit with a $7.01 million arbitration decision. The winner of that battle, former Odd Jobs Stores CEO Moshael Straus, filed a petition in New York State court last week seeking to have the award confirmed. Straus was an investor in Merkin’s Ascot Partners, putting in more than $5 million.

Eastman Kodak Seeks Rescue Financing from Hedge Funds (WSJ)

Eastman Kodak Co. has held discussions with several hedge funds about providing roughly $900 million in rescue financing that would bolster the imaging company’s finances while it tries to sell a trove of patents, people familiar with the matter said. Since about mid-September, Kodak has held discussions with Cerberus Capital Management LP, Silver Point Capital LP, Centerbridge Partners LP and Highbridge Capital Management LLC, the people said. The discussions are preliminary, and it remained unclear whether they would lead to a deal, the people said. Rochester, N.Y.-based Kodak hasn’t yet negotiated details of the possible financing, one of the people said.

Black Diamond Brian Coats Pleads Guilty to Hedge Fund Fraud (FINAlternatives)

Federal prosecutors won a seventh guilty plea in a $40 million hedge fund fraud case yesterday. Brian Coats pleaded guilty to conspiracy, securities fraud, wire fraud and promotional money-laundering conspiracy. According to prosecutors, Coats and seven others ran a fraudulent hedge fund and Ponzi scheme from 2007 through the end of 2009. Many of the group’s victims were elderly. Coats, his three companies and his co-conspirators told investors they managed a hedge fund called Black Diamond. The eight transformed the scam into a Ponzi scheme when it began to collapse in 2009. Coats faces up to 15 years in prison and a $500,000 fine.

UBS May Ditch Hedge Fund and Private Equity Divisions (FINAlternatives)

UBS could cut two of its largest alternative investment businesses as it seeks to scale back its operations in the wake of a US$2.3 billion rogue trading scandal. The Swiss bank may do away with its private equity placement business and UBS-O’Connor, its asset management business’ hedge fund arm, Reuters reports. The moves come as UBS seeks to cut back on its fixed-income sales and trading. The bank may also reduce its presence outside Europe, including in the United States. The cutbacks could help UBS begin paying a dividend once again, a major goal for the bank, according to Reuters.

Affiliated Managers’ Profit Up 18% (MarketWatch)

Affiliated Managers Group Inc.’s (AMG) third-quarter profit rose 18% as the company generated double-digit revenue across its business segments and again recorded net inflows of new cash. The company, which has stakes in various hedge-fund groups and other asset managers, has reported significantly improved results in past quarters amid rising revenue and an acceleration in net inflows. “We are pleased with the ongoing success of our global distribution strategy, which continues to generate meaningfully positive net client cash flows, including $24 billion of net new client assets in the last twelve months,” Chief Executive Sean M. Healey said.

Nephila Capital Hedge Fund Sees Opportunity in ‘Peak Risks’ (Businessweek)

Hurricane and earthquake “peak risks” avoided by reinsurers offer an opportunity for investors willing to fill the gap, according to Nephila Capital Ltd., a hedge fund specialized on insurance-linked investments.

“Reinsurers are forced to diversify because of rating- agency pressure, resulting in less capacity being allocated to peak-risk coverage and more to diversifying perils than is warranted,” Nephila managing partner Frank Majors said in an interview. “There is a lot of unmet demand for catastrophe cover in peak risk areas such as U.S. hurricanes, U.S. earthquakes, European wind storms and Japanese earthquakes.”