EIC/Wall Street investigations
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Dec 16, 2011

Corrected:Bill Gross can’t stop bleeding from flagship bond fund

NEW YORK (Reuters) – Bill Gross’s PIMCO Total Return Fund, the world’s largest bond fund, keeps shrinking as investors look to put their money with some of his competitors.

In November, the mutual fund led by Gross saw about $500 million in outflows, bringing its cash outflow over the past 12 months to $10.3 billion, said Morningstar editorial director Kevin McDevitt.

Dec 16, 2011
via Unstructured Finance

Steven Cohen reenactment theater

By Matthew Goldstein and Jennifer Ablan

In the end, one of the more memorable takeaways from the Steve Cohen deposition we unearthed is the feud between the lawyers over what to call the billionaire hedge fund manager: “Stevey” or “Mr. Cohen.”

Bess Levin at Dealbreaker.com used a her unique wit to deconstruct the verbal dispute between Cohen attorney Marty Klotz and Fairfax Financial lawyer Mike Bowe.  And now CNBC’s David Faber weighs in with his own retelling of the verbal jousting. (see video clip here).

Dec 15, 2011

Bill Gross can’t stop the bleeding from flagship bond fund

NEW YORK (Reuters) – Bill Gross’s PIMCO Total Return Fund, the world’s largest bond fund, keeps shrinking as investors look to put their money with some of his competitors.

In November, the mutual fund led by Gross saw about $500 million in outflows, bringing its cash outflow over the past 12 months to $17 billion, said Morningstar editorial director Kevin McDevitt.

Dec 14, 2011
via Unstructured Finance

Steven Cohen in his own words

By Matthew Goldstein and Jennifer Ablan

The thing about deposition excerpts—even lengthy ones—is that some of the tantalizing material gets left on the cutting room floor. And that’s certainly the case with hedge fund billionaire Steve Cohen’s two-days worth of  testimony in the long-running Fairfax Financial litigation.

Now don’t get us wrong—there is plenty of great and illuminating stuff in the 242 pages of deposition testimony Reuters obtained through a court motion to unseal documents in the civil lawsuit. As we noted in our story, Cohen is pressed at great length for his views on insider trading—he thinks the laws are “vague”. And as we highlighted in our blog, there’s even an amusing little feud between the lawyers over how the SAC Capital founder should addressed.

Dec 13, 2011

Steve Cohen says insider trading rules are “vague”

NEW YORK (Reuters) – Hedge fund billionaire Steven A. Cohen in sworn testimony earlier this year called the rules on insider trading “very vague” and said sometimes it’s a “judgment call” as to whether a tidbit about a public company is inside information.

The founder of SAC Capital Advisors LLC, one of the hedge fund industry’s best-known firms, offered up his views on insider trading during two days of deposition testimony in February and April this year as part of a long-running civil lawsuit filed by Canadian insurer Fairfax Financial.

Dec 13, 2011

Exclusive: Steve Cohen calls insider trading rules “vague”

NEW YORK (Reuters) – Hedge fund billionaire Steven A. Cohen in sworn testimony earlier this year called the rules on insider trading “very vague” and said sometimes it’s a “judgment call” as to whether a tidbit about a public company is inside information.

The founder of SAC Capital Advisors LLC, one of the hedge fund industry’s best-known firms, offered up his views on insider trading during two days of deposition testimony in February and April this year as part of a long-running civil lawsuit filed by Canadian insurer Fairfax Financial.

Dec 13, 2011

Exclusive – Steve Cohen says insider trading rules are “vague”

NEW YORK (Reuters) – Hedge fund billionaire Steven A. Cohen in sworn testimony earlier this year called the rules on insider trading “very vague” and said sometimes it’s a “judgment call” as to whether a tidbit about a public company is inside information.

The founder of SAC Capital Advisors LLC, one of the hedge fund industry’s best-known firms, offered up his views on insider trading during two days of deposition testimony in February and April this year as part of a long-running civil lawsuit filed by Canadian insurer Fairfax Financial.

Dec 13, 2011
via Unstructured Finance

Bad data II

By Matthew Goldstein

Bad data continues to confound the U.S. government in its measurement of the economy, with the Federal Reserve Bank of New York noting it too has been a victim.

In the Fed’s most recent report on outstanding consumer debt, the nation’s central bank said it recently discovered it had been underestimating the total dollar amount of student loan debt for a number of years. In the report, the NY Fed said some of the under-counting may have stemmed from the methodology used by one of its vendors.

Dec 12, 2011
via Unstructured Finance

Phil Falcone’s ray of sunshine

By Matthew Goldstein

Leave it to Phil Falcone to find a glimmer of good news to relay to the beleaguered investors in his Harbinger Capital Partners. A day after U.S. securities regulators threatened to sanction the billionaire hedge fund manger for alleged trading irregularities, Falcone told investors in his roughly $4 billion firm that not all is lost.

In a note emailed to investors the day after Falcone officially learned the U.S. Securities and Exchange Commission is considering charging him with a number of securities law violations, the former Harvard hockey star told them that nothing the SEC is looking at involves his beloved LightSquared.

Dec 8, 2011

SEC closes Fairfax investigation on hedge funds: sources

NEW YORK (Reuters) – U.S. securities regulators are closing a long-running investigation into allegations that two well-known hedge funds conspired to spread negative information about Toronto insurer Fairfax Financial, two people familiar with the inquiry said.

The Securities and Exchange Commission recently sent letters to lawyers for hedge fund managers Steven Cohen and James Chanos, advising them that the agency was terminating an investigation that began in fall 2008, two people familiar with the matter said.