EIC/Wall Street investigations
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Nov 24, 2013

Exclusive: Nonprofit that flipped homes to investors faces scrutiny

NEW YORK (Reuters) – A U.S. housing regulator has been investigating the activities of a small California not-for-profit that bought hundreds of foreclosed homes through a federally backed program intended to help local communities hurt by the housing bust, according to government documents reviewed by Reuters.

The U.S. Department of Housing and Urban Development’s Office of the Inspector General late last year began probing San Diego-based Heartland Coalition’s participation in the “First Look” program in Las Vegas and other U.S. cities, according to a redacted investigation report and a letter from the regulator in response to a Freedom of Information Act request.

Nov 24, 2013

Nonprofit that flipped homes to investors faces scrutiny

NEW YORK, Nov 24 (Reuters) – A U.S. housing regulator has
been investigating the activities of a small California
not-for-profit that bought hundreds of foreclosed
homes through a federally backed program intended to help local
communities hurt by the housing bust, according to government
documents reviewed by Reuters.

The U.S. Department of Housing and Urban Development’s
Office of the Inspector General late last year began probing San
Diego-based Heartland Coalition’s participation in the “First
Look” program in Las Vegas and other U.S. cities, according to a
redacted investigation report and a letter from the regulator in
response to a Freedom of Information Act request.

Nov 21, 2013
via Unstructured Finance

The nine lives of the eminent domain for mortgages debate

By Matthew Goldstein and Jennifer Ablan

Law professor Bob Hockett, widely credited with popularizing the idea of using eminent domain to restructure underwater mortgages, says he continues to be approached by yield-hungry angel investors looking for a way to help out struggling homeowners and make money at the same time.

He said an increasing number of wealthy investors on “both coasts” regularly reach out to him to get more information about how eminent domain would work and get a better read on “the prospects of municipalities adopting one or another variance of the plan.”

Oct 31, 2013

Philadelphia trader gets 10 years for investment schemes

NEW YORK (Reuters) – Philadelphia commodities trader and hip-hop promoter Tyrone Gilliams Jr., who portrayed himself as an up-and-coming philanthropist, was sentenced on Thursday to 10 years in a federal prison for swindling investors out of more than $5 million.

The 10-year sentence imposed by U.S. District Judge Deborah Batts was 2.5 years less than the minimum recommended by the U.S. Probation Office under federal sentencing guidelines.

Oct 17, 2013

SAC Capital deal with U.S. prosecutors gets closer -source

NEW YORK, Oct 17 (Reuters) – A deal between SAC Capital and
U.S. prosecutors to resolve a criminal insider trading case
against the firm could come in a few days, a source familiar
with the matter said on Thursday.

Any potential deal between Steven A. Cohen’s SAC Capital and
federal authorities would likely involve some admission of
liability by the firm and a payment of a penalty of more than $1
billion, the source said.

Oct 10, 2013

Top global hedge fund Brevan Howard takes emerging markets hit

NEW YORK (Reuters) – Brevan Howard Asset Management LLP, one of the world’s largest hedge fund firms with $40 billion in assets, is posting lackluster performance in its flagship fund and heavy losses in its emerging market portfolio.

Two people familiar with the numbers said on Thursday that the flagship, the roughly $28 billion Brevan Howard Master Fund, is virtually unchanged for the year as of October 4. The portfolio, the firm’s largest and making macro economic bets, was up about 3.8 percent as of the end of June but has been declining since.

Oct 10, 2013

Brevan Howard posts poor returns in flagship fund, emerging markets

NEW YORK, Oct 10 (Reuters) – Brevan Howard Asset Management
LLP, one of the world’s largest hedge fund firms with $40
billion in assets, is posting lackluster performance in its
flagship fund and heavy losses in its emerging market portfolio.

Two people familiar with the numbers said on Thursday that
the flagship, the roughly $28 billion Brevan Howard Master Fund,
is virtually unchanged for the year as of Oct. 4. The portfolio,
the firm’s largest and making macro economic bets, was up about
3.8 percent as of the end of June but has been declining since.

Oct 4, 2013

Email, undisclosed in SAC trader’s case, could help defense: sources

NEW YORK (Reuters) – In the coming trial of a SAC Capital Advisors hedge fund portfolio manager, Michael Steinberg, prosecutors are likely to present emails purporting to show he was being tipped about inside information on Dell Inc before trading on the stock.

But two people familiar with the matter said there are some emails that prosecutors have not included in court filings that could be helpful to Steinberg’s defense that he did not engage in insider trading in August 2008 at SAC, founded by Steven A. Cohen, one of Wall Street’s most successful hedge fund managers.

Oct 2, 2013
via Unstructured Finance

Breaking bad, the Bitcoin addition

It wasn’t too long ago that Ross William Ulbricht was writing his master’s thesis for a degree in chemical engineering. Now the 29-year-old San Franciscan is looking at spending many years in jail after being arrested by federal authorities on a variety of drug trafficking charges.

The purported founder of Silk Road, the notorious drug trafficking website, was arrested Tuesday by the FBI and appeared in a San Francisco federal court on Wednesday.  A bail hearing was set for Friday. Silk Road, an online marketplace where more than 900,000 registered users bought and sold everything from cocaine to heroin to molly (aka the new ecstasy craze) was shut down after roughly three years in operation.

Oct 1, 2013
via Unstructured Finance

Ackman’s Penney-sized revenge?

It’s hard to say that Bill Ackman came out of the J.C. Penney debacle looking good. But in one regard the hedge fund manager did score a minor victory: he and his Pershing Square Capital Management sold their shares before the bloodbath began in the ailing retailer’s stock.

In hindsight, the $12.90 a share price that Pershing Square sold its 18 percent stake in Penney to Citigroup doesn’t look so bad compared to the $8.73 a share price the stock closed at on Tuesday. There was much made in the press about the $473 million loss Ackman’s fund was saddled with after the hedge fund manager’s push to remake Penney into an upscale retailer failed. The criticism was justified as even Ackman conceded he isn’t great at retail.