Tiger Asia Hedge Fund Ordered to Repay $5.8 Million Over Illegal Trading (NYTimes)
A court on Friday ordered Tiger Asia Management, the regional arm of the New York-based hedge fund Tiger Management, to repay nearly $6 million to more than 1,800 investors after the fund admitted to insider trading and share price manipulation. Responding to charges brought by Hong Kong’s Securities and Futures Commission in 2009, Justice Jonathan Russell Harris ordered Tiger Asia and two of its senior officers, Bill Hwang and Raymond Park, to pay 45.3 million Hong Kong dollars, or $5.8 million, as restitution to the investors who were on the other side of its illegal trades in the shares of Bank of China and China Construction Bank.
The hard-landing hedge fund: A new way to bet against housing (TheGlobeAndMail)
A Toronto financial firm is creating a hedge fund that will allow Canadian investors to bet on a housing slump, a move that underscores the skepticism that exists about policy makers’ ability to engineer a soft landing for the real estate market. The proposed fund by Spartan Fund Management Inc. is catering to investors with an outlook that is at odds with the Bank of Canada, which has said it is growing more comfortable with the state of the property market. Governor Stephen Poloz said in a speech last week that “the Bank expects a soft landing in housing,” though he acknowledged the risk that household borrowing will continue to climb, setting the stage for a correction.
Former MBTA pension fund chief recommended $25 million hedge fund investment that went bust (Boston)
Nine months after Karl E. White left his job as chief of the MBTA pension fund to join a New York hedge fund, he visited his former colleagues in Boston to pitch them on a new investment idea. White, in his new job as chief investment officer of Fletcher Asset Management, told the authority’s pension board members in 2007 that he had devised an investment fund just for them, and that it was relatively low risk. They gave their prominent former leader $25 million to invest.
Honey Badger Hedge Fund: Hackers Predict Stock Market With Open Source Mojo (Wired)
Somewhere, out on the web, there’s a secret Twitter Inc (NYSE:TWTR) account that’s one hell of a stock picker. So far, the thing has recommended seven stock trades — all to a private group of traders — and each one of them has turned a profit. The account isn’t run by a bunch of Ivy League MBAs scheming their way up the Wall Street ladder in lower Manhattan. It’s driven by a computer algorithm cooked up by three guys at a hacker school in San Francisco. They call it the Honey Badger algorithm, after that ongoing internet meme that espouses going your own way. And it shows that, thanks to the rise of open source software and cloud computing, anyone can compete on Wall Street. At least for a time.
Microsoft Portfolio Manager, Seeking To Set Up His Own Hedge Fund, Charged With Insider Trading (Forbes)
The U.S. Securities and Exchange Commission just released a statement that it’s charged a senior portfolio manager at Microsoft Corporation (NASDAQ:MSFT) -0.88% and one of his friends with insider trading and said the duo made nearly $400,000 on a scheme that kicked off in April 2012. Microsoft employee Brian D. Jorgenson obtained confidential information about upcoming company news through his work in Microsoft’s corporate finance and investments division, the SEC said. Jorgenson then passed on tips to a friend named Sean T. Stokke, “in advance of the Microsoft announcements, the most recent occurring in October. After Stokke traded on the inside information that Jorgenson provided, the two equally split the illicit profits in their shared brokerage accounts. They made joint trading decisions with the goal of generating enough profits to create their own hedge fund.”
Hedge funds eye Citi (CNBC)
Hedge Fund Secrets Lie in Short Term Over Luck: Cutting Research (SFGate)
The best hedge fund managers tend to find profits in short-term, contrarian bets. That’s the finding of a study published this year by Russell Jame of the University of Kentucky and set to be presented next month at the American Economic Association’s annual meeting in Philadelphia. Investigating an industry that has grown to over $2 trillion from $38 billion in 1990, Jame found the top 30 percent of hedge funds outperform rivals by a statistically significant 0.25 percent per month over the subsequent year, indicating their superior performance persists.
Congers hedge fund manager pleads guilty in $2.7M investor swindle (Lohud)
A Congers hedge fund manager who was accused of defrauding investors out of more than $2.7 million pleaded guilty to four criminal counts Thursday. Stephen Colangelo Jr., who prosecutors said ran a scam that involved misleading investors by issuing fraudulent performance statements and other business documents, was arrested at his home last year. On Thursday, in U.S. District Court in Manhattan, Colangelo, 46, pleaded guilty to two counts each of securities fraud and wire fraud; he faces up to 80 years in federal prison at sentencing. A lawyer for Colangelo could not be reached for comment.
Michael Steinberg Wasn’t The Only Hedge Fund Manager Having A Bad Day Yesterday (DealBreaker)
Maybe the heat or the air-conditioning made the first jury lethargic. Or maybe the second wasn’t interested in debating the finer points of the various fraud statutes both before and after Christmas. Either way, it took the latter less than four hours to do what the former couldn’t accomplish in four days: find hedge-fund manager Michael Balboa guilty on all counts. A U.S. jury on Wednesday found former London-based portfolio manager Michael Balboa guilty of fraud over a scheme to inflate his hedge fund’s assets and management fees by manipulating the value of Nigerian debt.
Phillip Goldstein files for JOBS Act exemption to allow his Hedge Fund to “Publicly Solicit” (Hedgeco)
Phillip Goldstein, activist hedge fund manager and long time vocal champion for hedge fund’s right to advertise, has just filed with the SEC to allow his fund “Opportunity Income Plus LP” to make public solicitations in compliance with the JOBS Act. Phillip Goldstein stepped into the hedge fund spotlight in 2006 when he sued the SEC for their implementation of the “The Hedge Fund Rule” which if fully implemented would have required all hedge fund managers to register as Registered Investment Advisors. In Goldstein v. SEC the court sided with Goldstein and found that the SEC had overstepped its authority, and that hedge funds are not subject to SEC regulation under the Investment Company Act of 1940.
BlackRock Said to Seek $3 Billion for New Credit Hedge Fund (Bloomberg)
BlackRock, Inc. (NYSE:BLK), the world’s biggest money manager, is raising as much as $3 billion for a hedge fund to invest in credit globally, according to two people with knowledge of the pool. The firm began marketing BlackRock Credit Alpha Fund in October, with an initial target of $500 million and the potential to increase it, said one of the people, who asked not to be identified because the process isn’t completed. The long-short fund seeks to capture valuation anomalies and mispricings, the person said. Tara McDonnell, a spokeswoman for BlackRock, declined to comment on the new fund.
Neuberger Berman Introduces Long Short Multi-Manager Hedge Fund (HedgeCo)
One of the world’s leading employee-owned money managers, announced today the launch of Neuberger Berman Long Short Multi-Manager Fund “Unlike traditional hedge funds, the Fund provides daily liquidity, lower investment minimums ($1,000 for Class A and C shares), and 1099s for shareholders, while offering full transparency of portfolio holdings without a performance-based management fee.” Neuberger Berman said. “It employs the risk management and monitoring, mix of managers and long short strategies, and operational due diligence traditionally available only to institutional and high-net-worth investors through traditional hedge funds.”
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