Hedge Fund Exchange

Appaloosa out of suit

Bloomberg, The New York Post, April 30, 2010

Appaloosa Investment LP, the hedge fund run by David Tepper, lost a legal bid to join in a lawsuit to foreclose on Manhattan's Stuyvesant Town and Peter Cooper Village apartments, New York's largest residential enclave.

US District Judge Alvin Hellerstein in Manhattan said that Appaloosa had no legal right to "intervene" in the suit.

Appaloosa opposes foreclosure because it says it may lose hundreds of millions of dollars if foreclosure proceeds.

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Moore Settles With C.F.T.C. for $25 Million

The New York Times, April 30, 2010

The Commodity Futures Trading Commission’s investigation into Moore Capital’s actions in the platinum and palladium futures market culminated in a settlement Thursday, with the hedge fund ordered to pay $25 million to the regulatory body.

The C.F.T.C. said that for at least eight months after November 2007, a former portfolio manager with Moore Capital tried to manipulate the settlement prices of platinum and palladium futures contracts.

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Bergstein, Tutor return fire with lawsuit

Duo blaming hedge fund Zwirn for film-related financial woes

Alex Ben Block, The Hollywood Reporter, April 29, 2010

David Bergstein and Ronald Tutor have filed a countersuit against D.B. Zwirn, blaming the bankrupt New York hedge fund for most of their financial problems in the movie business. 

They allege that the Zwirn Special Opportunities Fund, its founder Daniel Zwirn and various affiliates promised them $250 million in financing to make and distribute movies but then lied, committed fraud, piled on excessive charges and failed to deliver the money needed to meet obligations to filmmakers, vendors and others.

Zwirn and its affiliates sued Bergstein, Tutor and their companies in November for repayment of more than $120 million.

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High-Frequency Trading Faces EU Market Abuse Probe (Update1)

European Commision Flag (above)

Ben Moshinsky, Bloomberg.com, April 30, 2010

(Bloomberg) -- High-frequency trading faces a European Union clampdown, as regulators investigate whether traders could use the practice to manipulate financial markets.

The European Commission, the EU’s executive arm, said it’s summoning hedge funds and banks “in the coming months” for fact-finding talks on the practice, as it considers stricter rules on market abuse due before the end of the year.

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Denver-Area Man Accused in Ponzi Scheme

The Associated Press, The New York Times, April 28, 2010

DENVER (AP) -- A hedge fund manager who claimed his investments never lost money, even during the economic downturn, faces allegations that he ran a Ponzi scheme and admitted to falsifying documents in an apparent suicide note.

Sean Michael Mueller, 41, who controlled Greenwood Village-based Mueller Capital Management LLC, threatened to jump off a building in Greenwood Village on April 22, Colorado Securities Commissioner Fred Joseph said Wednesday.

Greenwood Village police intervened and took Mueller to a hospital, according to court documents filed in a civil lawsuit seeking to seize the company and its assets. A Denver District Court judge granted Joseph's request late Tuesday to place the company under regulators' control.

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G20 calls for consistent approach to hedge funds oversight

Hedgeweek.com, April 27, 2010

The Alternative Investment Management Association has welcomed the call by G20 finance officials for a consistent and coordinated approach to the oversight of hedge funds.

Todd Groome, chairman of Aima, says this is important for a global industry and is supportive of the goals set by global leaders.

“While hedge funds are not themselves systemically important institutions, they can help to provide systemically relevant data reporting in the interests of financial stability,” he says.

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AIMA backs 'co-ordinated' hedge fund reform

Hedgeweek.com, April 27, 2010

The Alternative Investment Management Association (AIMA) has come out in support of a global approach to regulation of the hedge fund industry.

Leaders from the G20 group of nations have recently been meeting in Washington and changes designed to bring greater transparency to the previously-secretive sector have reportedly been on their agenda.

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European Hedge Funds Plan Singapore, Hong Kong Move (Update1)

(Adds move by BlueCrest in sixth paragraph.)

Netty Ismail, BusinessWeek, April 29, 2010

(Bloomberg) -- Hedge-fund managers in London and other European cities are considering offices in Hong Kong, Singapore or Switzerland as European regulators work on tougher rules, said a member of the industry’s largest trade group.

The managers could base part of their business in another city, without closing their European offices, said Christopher Fawcett, a member of the council of the London-based Alternative Investment Management Association.

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SEC Probes 'Side Pocket' Arrangements

Jenny Strasburg, Wall Street Journal, April 28, 2010

Federal regulators are examining whether hedge-fund managers abused tools known as "side pockets" that helped prevent clients from withdrawing billions of dollars of assets during the financial crisis.

The issue is one of several investigative priorities recently set by a newly organized Securities and Exchange Commission enforcement unit focused on ferreting out misbehavior by private-equity funds, hedge funds and other asset managers.

The group, run by co-chiefs Rob Kaplan and Bruce Karpati, held its first full staff meeting this week. Some 60 attorneys are assigned to the unit across nine offices, said people familiar with the matter. The unit is delving into a number of issues surrounding hedge funds and asset managers, including whether the funds are assigning fair values to assets and accurately disclosing information about investment strategies, assets and performance to investors. 

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Colorado seizes assets of hedge-fund manager accused of Ponzi scheme

Greg Griffin, The Denver Post, April 28, 2010

Colorado authorities Tuesday seized the assets of a south-Denver-area hedge-fund manager accused of running a Ponzi scheme that may have involved as much as $122 million.

The state said that Sean Mueller raised more than $20 million from three investors and that at least 30 more also may have made "substantial investments."

Mueller threatened to kill himself Thursday and was found by Greenwood Village police, who took him to a hospital. He could not be reached Tuesday. Colorado Securities Commissioner Fred Joseph on Friday moved to freeze Mueller's assets and, on Tuesday, obtained a court order to appoint a receiver.

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