Archive
Reuters blog archive
from Unstructured Finance:
Insider trading—it’s not just hedge funds
Sometimes it seems that insider trading cases are all about hedge funds. After all, the overwhelming majority of the federal government's multi-year crackdown on insider trading has netted dozens of traders and analysts working in the $2.25 trillion hedge fund industry.
But this week's escapades involving a former top audit partner at KPMG and his golfing buddy are reminder that the temptation to profit from inside information exists in many industries and professions.
Still, senior hedge fund reporter Svea Herbst-Bayliss reminds us in the following post, a recent survey found a good portion of people who labor for hedge funds harbor private doubts about the integrity of their colleagues. If the numbers expressed in this survey are anything close to accurate, law enforcement should be busy for quite a while longer.
By Svea Herbst-Bayliss
This week's insider trading case involving a former KPMG partner has stolen some of the attention from the hedge fund industry. But a survey released this month suggest the regulatory heat won't be lifting from the industry any time soon.
from Unstructured Finance:
The burden of being SAC Capital’s “Portfolio Manager B”
Michael Steinberg, the SAC Capital Advisers portfolio manager who was arrested at the crack of dawn last Friday morning probably envies former Goldman Sachs trader Matthew Taylor’s rush-hour surrender to the Federal Bureau of Investigation on Wednesday.
While Steinberg was led away in handcuffs as a Wall Street Journal reporter took shaky video footage of the scene outside his door at 6am, Taylor sauntered into FBI headquarters in New York on his own, at 8:30am, having had plenty of time to collect his wits with a cup of hot coffee.
from Unstructured Finance:
Steinberg indictment sheds some light on SAC’s computer program that once annoyed some top traders
By Matthew Goldstein
SAC Select may not have been one of SAC Capital Advisors' best-known portfolios during its brief trading history. But the computer-driven trading program may have been one of the more controversial at Steven A. Cohen's hedge fund.
Setup by a number of SAC Capital's algo- savvy traders, including Neil Chriss, who left SAC in 2007 to found Hutchin Hill Capital, SAC Select was designed to piggyback on the trades on some of the hedge fund's top portfolio managers. SAC Select, which at its peak in 2008 managed about $4.2 billion in hedge fund assets, was discontinued sometime in 2009 or early 2010. The strategy was intended as an added investment benefit for long-time SAC Capital clients.
from Breakingviews:
Maybe SAC should forget about other people’s money
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Maybe SAC Capital should forget about managing other people’s money. Steve Cohen’s $15 billion hedge fund firm is paying a whopping $616 million to settle Securities and Exchange Commission insider trading charges. It would be an ignominious time to follow legends like Stanley Druckenmiller, but Cohen is already losing over a quarter of some $6 billion of outside investor funds this year. It could be time to focus mainly on looking after his own cash.
from Stories I’d like to see:
A working legislature, post informant life and Wal-Mart’s guns
A legislature that works:
Maybe it’s because I live in New York and have to read all the time about what may be the world’s two most dysfunctional legislative bodies – in Albany and Washington. But I wish a reporter for a national news organization would try to find the country’s best state legislature. A place where Democrats and Republicans actually work together. A place where money isn’t everything, and where everything isn’t done at the 11th hour, or later, followed by an orgy of self-congratulation.
We’ve got 50 states. They can’t all be governed by lawmakers who embarrass their constituents. Which ones function well, and why? What conflict-of-interest, campaign-spending or other rules do they have that help keep things in line? What makes them different, and how can we export their success to the rest of our capitals?
from Unstructured Finance:
Stevie, SAC and that ticking redemption clock
By Matthew Goldstein and Svea Herbst-Bayliss
The WSJ is out today with a big story saying Stevie Cohen and SAC Capital are bracing for up to $1 billion in redemptions, or roughly 16 percent of the $6.3 billion it manages for outside investors. That’s a lot of money but sources are telling us redemptions will likely come in lower than that—think more in the $500 million range.
And more important, no matter what the figure is, don’t look for it to put much crimp in Cohen’s operation.
from Unstructured Finance:
Why Steven Cohen won’t turn SAC into a family office
By Matthew Goldstein
Every time the insider trading investigation thrusts Stevie Cohen back into the spotlight, there's always speculation about whether the billionaire trader will simply give back money to his outside investors and convert his $14 billion SAC Capital into a family office in order to avoid the unwanted headlines. But as tempting as that might be to the publicity-averse Cohen, the well-known trader has a big financial incentivel to keep managing money for his outside investors.
SAC Capital's fee structure--one of the highest in the $2 trillion hedge fund industry--probably pays for a good chunk of Cohen's overhead, say people in the hedge fund industry. These sources say that by charging a 3 percent asset management fee and skimming off as much as 50 percent of the firm's trading profits, SAC Capital's outside investors provide Cohen with a rich source of cash to pay his 900 or so employees.
from Breakingviews:
SAC investors set to stew alongside founder Cohen
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
SAC Capital investors are set to stew alongside Steve Cohen. The Securities and Exchange Commission may take civil action against the $14 billion hedge fund firm that bears Cohen’s initials. Those with money at SAC need to weigh the risk. The law moves slowly, but so does the redemption process - it would take investors months to withdraw cash.
from Breakingviews:
One crime in SAC probe is letting snitch go free
By Reynolds Holding
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s almost criminal that the snitch will walk in a probe involving SAC Capital. Mathew Martoma, an ex-trader at Steve Cohen’s $14 billion hedge fund firm, faces possible jail time for alleged insider trading. But the doctor accused of giving him secret data doesn’t - he won’t be charged after agreeing to help prosecutors. Flipping suspects to land bigger game is standard. Going easy on serious wrongdoing shouldn’t be.
from Unstructured Finance:
Talking straight with money managers, policy makers and econ gurus
By Matthew Goldstein and Jennifer Ablan
We may not be TV people but there's something to be said for just sitting down and doing a video interview to discuss the big issues of the day. And that's just what we did as part of this year's Reuters Investment Outlook Summit and it's something we hope to keep doing as a regular feature going forward into the new year.
In advance of this year's summit, we did videos with noted short-seller Carson Block, bond guru Dan Fuss, OWS bank leader Cathy O'Neill, FBI heads April Brooks and David Chaves, Avenue Capital's Marc Lasry, economist Henry Kaufman and Steven Gluckstern of eminent domain fame. The videos were frank discussions and to make them seem more natural we went outside the environs of our Reuters newsroom in NYC and conducted them in places like the middle of Times Square, an ice ream shop and a park.
