Hedge funds

Hedge Fund Managers, Professional Traders and Senior Corporate Executive Among Newly Charged in $33 Million Scheme

Washington, D.C., Nov. 5, 2009 — The Securities and Exchange Commission today announced additional charges in its insider trading enforcement action against billionaire Raj Rajaratnam and Galleon Management LP by charging 13 additional individuals and entities, including three hedge fund managers, three professional traders at New York-based Schottenfeld Group, and a senior executive at Atheros Communications, a California-based developer of networking technologies.    » read more »

High-Ranking Corporate Executives Also Charged in Scheme That Generated More Than $25 Million in Illicit Gains

Washington, D.C., Oct. 16, 2009 — The Securities and Exchange Commission today charged billionaire Raj Rajaratnam and his New York-based hedge fund advisory firm Galleon Management LP with engaging in a massive insider trading scheme that generated more than $25 million in illicit gains. The SEC also charged six others involved in the scheme, including senior executives at major companies IBM, Intel and McKinsey & Company.    » read more »

Manhattan U.S. Attorney Charges Hedge Fund Managers, Fortune 500 Executives, and Management Consulting Director in $20 Million Insider Trading Case

October 16, 2009 -- PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH DEMAREST, JR., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), today announced charges against six individuals arising out of their alleged involvement in the largest hedge fund insider trading case in history.    » read more »

June 17, 2009 -- THE PRESIDENT: Thank you very much.

Since taking office, my administration has mounted what I think has to be acknowledged as an extraordinary response to a historic economic crisis. But even as we take decisive action to repair the damage to our economy, we're working hard to build a new foundation for sustained economic growth. This will not be easy. We know that this recession is not the result of one failure, but of many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over the course of decades.    » read more »

June 17, 2009 -- WASHINGTON – President Obama will lay out a comprehensive regulatory reform plan this afternoon to modernize and protect the integrity of our financial system. While this crisis has had many causes, it is clear now that the government could have done more to prevent these problems from growing out of control and threatening our overall economy.

The President will be joined by Treasury Secretary Tim Geithner, representatives from the regulatory community, consumer groups, the financial industry and members of Congress for an event in the East Room later this afternoon.

The President’s plan will:

* Require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation    » read more »

June 16, 2009 -- WASHINGTON, DC -- In an effort to strengthen financial oversight of hedge funds and other private investment funds, U.S. Senator Jack Reed (D-RI), today introduced the Private Fund Transparency Act of 2009, which will help protect investors, identify and mitigate systemic risk, and prevent fraud. This legislation amends the Investment Advisers Act of 1940 to require advisers to hedge funds, private equity funds, venture capital funds, and other private investment pools to register with the Securities and Exchange Commission (SEC).    » read more »

NEW YORK, June 2, 2009 - J.P. Morgan was recently named "Best Overall Hedge Fund Administrator" by HFMWeek magazine in its 2009 Service Provider Awards. The awards recognize hedge fund service providers that outperformed their peer group in 2008/2009, and that demonstrated financial progress, growth and genuine innovation.

According to the Awards judges' statement: "A truly global administrator; J.P. Morgan was one of the few top credit-rated banks to take advantage of the flight to quality last year, offering the industry peace of mind at a time it needed it most."    » read more »

Washington, D.C., May 8, 2009 — The Securities and Exchange Commission announced today that Michael Lauer, the head of two Connecticut-based hedge fund advisors, has been ordered to pay more than $62 million within 15 days as a result of being found liable on SEC fraud charges last fall.

U.S. District Judge Kenneth Marra for the Southern District of Florida found that Lauer, head of Lancer Management Group and Lancer Management Group II, must pay more than $43.6 million to deprive him of his ill-gotten gains, and more than $18.9 million in prejudgment interest.    » read more »

Washington, D.C., April 27, 2009 — The Securities and Exchange Commission today obtained an emergency court order to freeze the assets of a Connecticut-based money manager and the hedge funds that he controls, alleging that he forged documents, promised false returns, and misrepresented assets managed by the funds to illicitly raise more than $30 million from investors.    » read more »

Implores companies to think of thousands of families that will be affected

April 22, 2009 --
LANSING - Michigan Governor Jennifer M. Granholm today called on banks and hedge funds that are secured lenders of Chrysler to return to the bargaining table with a new counter-offer that can help the company avoid bankruptcy. Granholm said for the lenders, who received billions of dollars in taxpayer funds to secure their own viability, to do otherwise is unacceptable.

"Who knew when we were bailing out the banks we were setting them up to kill the auto industry," Granholm said. "They need to think about the tens of thousands of workers whose lives hang in the balance because the banks want to get a better deal than what even the market will bear. It's totally unacceptable."    » read more »

Washington, D.C., Feb. 25, 2009 — The Securities and Exchange Commission today charged a Pearl River, N.Y., investment management firm and its principal for operating a large-scale scheme that defrauded hundreds of investors of millions of dollars by providing them with misleading marketing materials that significantly overstated investment returns and by misrepresenting the value of the assets under management.    » read more »

Washington, D.C., Feb. 5, 2009 — The Securities and Exchange Commission today charged seven individuals involved in an insider trading ring that generated more than $11.6 million in illegal profits and avoided losses.

The SEC alleges that two mergers and acquisitions professionals, Nicos Achilleas Stephanou at UBS Investment Bank and Ramesh Chakrapani at Blackstone Advisory Services, L.P., tipped five individuals including Joseph Contorinis, a portfolio manager for a Jefferies Group, Inc. hedge fund, with material nonpublic information about three impending corporate acquisitions.    » read more »

Washington, D.C., Jan. 21, 2009 — The Securities and Exchange Commission today charged Arthur Nadel of Sarasota, Fla., with fraud in connection with six hedge funds for which he acted as the principal investment advisor. According to the SEC’s complaint, Nadel provided false and misleading information for dissemination to investors about the funds’ historical returns and falsely overstated the value of investments in the funds by approximately $300 million.    » read more »

05/21/2008 -- WASHINGTON, D.C. – Today, Senator John Kerry and Congressman Rahm Emanuel (D – Ill.) criticized the White House for opposing reform that would close a tax loophole that allows hedge fund managers and CEOs to defer compensation offshore. In a released statement on H.R. 6049, the Energy and Job Creation Act of 2008, the Administration says it “strongly opposes” the deferred compensation provision.

This provision is based on the Offshore Deferred Compensation Reform Act of 2007 introduced by Kerry and Emanuel on October 18, 2007. The legislation was introduced in response to news accounts of U.S. hedge fund managers being able to defer billions of dollars of compensation offshore. The closing of this loophole would raise $24 billion over 10 years.    » read more »

Calls For Mandatory Rules

April 15, 2008 -- "These measures leave hedge funds in a regulatory black hole.

"This plan is one small step when giant strides are needed. The Treasury Department's proposals for greater transparency and risk disclosure must be mandatory or they are meaningless.

Skyscrapers: Photo by Michael Aston (CC)

"Non-binding best practices or voluntary guidelines are an imaginary fence -- and virtual farce: They stop nothing.    » read more »