EIC/Wall Street investigations
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Apr 16, 2013

Eminent domain to fix troubled mortgages makes a Calif. comeback

NEW YORK, April 16 (Reuters) – A controversial proposal to
get local government officials to condemn distressed mortgages
– in the same way they might condemn a dangerous property — is
slowly gaining traction in some California communities, several
months after it appeared the idea had been killed.

After months of contentious debate, officials in San
Bernardino County, in January killed the idea of seizing
troubled home loans in a process known as eminent domain. They
rejected the idea after fierce opposition from Wall Street trade
associations and investors in mortgage-backed securities.

Apr 12, 2013

Einhorn’s big bet on gold slammed by sell-off

BOSTON/NEW YORK (Reuters) – This year’s sell-off in gold has been harmful for dedicated gold-bugs like hedge fund manager John Paulson but it has also hit managers like David Einhorn who is better known for his stock picks than his love of the yellow metal.

During the first quarter, however, Einhorn’s Greenlight Capital Management demonstrated just how much he and his investors have riding on gold as he recently listed it as the fund’s third largest position, an investor in the fund said.

Apr 12, 2013
via 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.

Apr 1, 2013
via 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.

Mar 29, 2013

More trouble for Cohen’s SAC Capital as Steinberg indicted in New York

By Nate Raymond and Matthew Goldstein

(Reuters) – U.S. prosecutors on Friday charged Michael Steinberg, a veteran portfolio manager with Steven A. Cohen’s $15 billion hedge fund, with engaging in insider trading in two technology stocks, the most senior SAC Capital Advisors employee to be charged in the government’s long-running probe.

The five-count indictment was announced a few hours after Federal Bureau of Investigation agents arrived at Steinberg’s home in New York City at around 6 a.m. EDT (1000 GMT) and arrested him.

Mar 29, 2013

More trouble for Cohen’s SAC Capital as Steinberg indicted in NY

March 29 (Reuters) – U.S. prosecutors on Friday charged
Michael Steinberg, a veteran portfolio manager with Steven A.
Cohen’s $15 billion hedge fund, with engaging in insider trading
in two technology stocks, the most senior SAC Capital Advisors
employee to be charged in the government’s long-running probe.

The five-count indictment was announced a few hours after
Federal Bureau of Investigation agents arrived at Steinberg’s
home in New York City at around 6 a.m. EDT (1000 GMT) and
arrested him.

Mar 29, 2013

SAC Capital portfolio manager Steinberg arrested in NY: FBI

By Nate Raymond and Matthew Goldstein

(Reuters) – U.S. prosecutors on Friday charged Michael Steinberg, a veteran portfolio manager with Steven A. Cohen’s $15 billion hedge fund, with engaging in insider trading in two technology stocks, the most senior SAC Capital Advisors employee to be charged in the government’s long-running probe.

The five-count indictment was announced a few hours after Federal Bureau of Investigation agents arrived at Steinberg’s home in New York City at around 6 a.m. ET and arrested him.

Mar 28, 2013

Exclusive: Cerberus seeks to bankroll investor landlords

NEW YORK (Reuters) – Private equity firm Cerberus Capital Management wants to provide financing to small investment firms that are buying foreclosed homes as part of a long-term bullish bet on the housing recovery, according to four sources familiar with the situation.

Cerberus is targeting investment firms that are looking to buy a small number of homes in niche housing markets in the U.S. and rent them out, the sources said. These investors cannot tap the much larger financing deals being put together by banks such as Deutsche Bank, Credit Suisse, and Goldman Sachs Group for institutional buyers of foreclosed homes.

Mar 26, 2013
via Unstructured Finance

Cash is king in housing

By Matthew Goldstein

It’s no secret that housing in the U.S. has become an investors market, especially if it’s an investor with cash to burn.

For more than a year now, we and just about everyone else in the financial media have been writing about how Wall Street-backed firms are looking to buy-up the wreckage of the housing bust on the cheap and rent out those homes until the time is right to sell them for a sweet profit. And it should come as no surprise that much of that buying is being done with cash because it’s the easiest way for an investor get a deal done quick.

Mar 21, 2013
via Unstructured Finance

The volubility index

By Matthew Goldstein

With money managers increasingly falling in love with their own voices and so many willing to give them a platform to air their thoughts, I’ve long thought it would be good if someone could come up with a Volubility Index that measured performance against the number of times someone was quoted or made some stock, bond, or market prediction.

It won’t be me because I’m not enough of a math geek or algo genius to even think about how to put something like that together–but it would be interesting to see the results. And given this year’s big surge in money managers spouting off–what with the Ackman-Ichan blood feud over Herbalife and and Einhorn trying to be ever so clever in trying to stop the slide in Apple shares with his iPrefers share class dividend proposal–may be it just will happen.