EIC/Wall Street investigations
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Jun 2, 2011
via Unstructured Finance

The ties that bind Dan Loeb and Jim Chanos

By Matthew Goldstein

Dan Loeb and Jim Chanos may not be the best of friends, but a five-year-old stock manipulation lawsuit filed by a Canadian insurer has revealed a one-time alliance of sorts between the hedge fund managers.

It appears Loeb followed Chanos’ lead in shorting–or betting against–shares of Fairfax Financial in 2002 after exchanging a series of emails about the Canadian insurer that summer.

May 31, 2011
via Unstructured Finance

The search for Einhorn’s gold

 

By Matthew Goldstein

These days, all anyone wants to talk about with David Einhorn is his tentative $200 million investment in the New York Mets. But baseball may not be the hedge fund manager’s only interest in Queens–the New York City borough where the Mets play their home games.

A person familiar with the hedge fund industry says a secured facility in Queens is where Einhorn’s Greenlight Capital stores some of the gold bullion it has invested in. An Einhorn spokesman declined to comment on the speculation about the location of the hedge fund’s so-called physical gold.

May 30, 2011

Exclusive: Agents raid life settlement firm, sources say

NEW YORK (Reuters) – Agents with the U.S. Labor Department visited the offices of a Connecticut life settlement investment firm on Friday seeking information as part of an investigation, according to two sources.

A spokesman for Stamford-based Caldwell Life Strategies issued a statement saying the Labor Department officials were “looking for information relating to loans made by” an affiliate of Caldwell “to a third party borrower.”

May 28, 2011
via Unstructured Finance

No comfort for hedgies

By Matthew Goldstein

The news that federal investigators had been gathering evidence of potentially improper trading against one of the founders of Loch Capital Management since early 2009 should make some hedge fund managers nervous–especially ones whose funds were big users of expert network firms like Primary Global Research.

Ever since the FBI raided three hedge funds last November, people in the hedge industry have been grumbling that the high-profile raids–which ultimately forced Loch and Level Global Investors to shut down–may have been an indication that U.S. authorities rushed to judgment. That’s especially since no one at Loch, Level Global or Diamondback Capital has been charged with any improper trading based on stock tips gleaned from a consultant with an expert network firm.

May 27, 2011

FBI has eyed Loch Capital founder since 2009-filing

NEW YORK, May 27 (Reuters) – When federal agents raided the
offices of Boston-based hedge fund Loch Capital Management last
November, they already had evidence that one of the hedge
fund’s founders had obtained “inside information,” according to
a court filing.

Todd McSweeney may have used the information from a
so-called expert network firm to engage in wrongful trading,
according to a wiretap application. The document came to light
when it was attached to a motion filed in a related case.

May 26, 2011
via Unstructured Finance

Einhorn’s Field of Dreams

By Matthew Goldstein

David Einhorn’s decision to plunk $200 million on the cash-strapped NY Mets could be a bullish development for investors holding the bonds to finance the baseball team’s new stadium.

At last look, most of the bonds that were sold in 2006 to finance the construction of Citi Fields were selling for between 79 cents and 85 cents on the dollar. The distressed price for the $547 million bond issuance is a reflection of the dire financial situation the Mets are in and the reason principal owner Fred Wilpon is selling a big minority stake to Einhorn.

May 26, 2011

Hedge fund chiefs: short green tech, store gems

NEW YORK (Reuters) – Bet against solar energy, says famed short seller James Chanos. Squirrel away gems, advises bond guru Jeffrey Gundlach. Go long on discount retailer Family Dollar, counsels activist investor Bill Ackman.

These and other hot — or unusual — ideas emerged on Wednesday from an annual conference where top hedge fund managers pitch their best investment ideas.

May 25, 2011

Chanos recommends shorting Vestas, First Solar

NEW YORK, May 25 (Reuters) – Famed short-seller Jim Chanos
on Wednesday threw cold water on alternative energy companies,
saying that shares in wind turbine maker Vestas (VWS.CO: Quote, Profile, Research) and
solar panel maker First Solar Inc (FSLR.O: Quote, Profile, Research) likely will fall.

Chanos said solar and wind energy are not the panacea that
many predict. He doubts the technologies will be that
successful or create all the jobs that politicians have
predicted.

May 24, 2011
via Unstructured Finance

Grassley the inquisitor

Sen. Chuck Grassley wants to know what the Securities and Exchange Commission did with complaints it received about potential improper trading by Steve Cohen’s SAC Capital.

But Grassley’s request that the SEC provide an official accounting for its actions seems a bit odd, given that securities regulators recently settled an insider trading case with former SAC Capital analyst Jonathan Hollander.

May 23, 2011
via Unstructured Finance

Steve Cohen runs away from his Fairfax co-defendants

Steven Cohen wants a five-year-old stock manipulation lawsuit filed by Canadian insurer Fairfax Financial Holdings to go away.

Earlier this month, lawyers for Cohen’s SAC Capital Advisors filed a motion for summary judgment, claiming Fairfax has failed to produce any evidence his $13 billion hedge fund conspired with other traders to crush the insurers stock. SAC Capital’s lawyers write that even though Fairfax has “received millions of pages of documents from SAC, other defendants, and third parties…not a single scrap of evidence suggests that Mr. Cohen engaged in even one of these alleged acts.”