EIC/Wall Street investigations
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Jan 14, 2013
via Unstructured Finance

Tyrone Gilliams fights the law

By Matthew Goldstein

It’s been a while since we last wrote about the legal struggles of Tyrone Gilliams, the Philadelphia commodities trader/hip-hop promoter/wannabe reality show star/self-styled preacher, whom federal authorities have charged with scamming investors out of $5 million. But the University of Pennslyania graduate is making news again with the scheduled start of his Jan. 22 criminal trial in New York federal court.

Gilliams will be on trial with his former lawyer Everette Scott. Both men are charged with working together to “devise a scheme and artifice to defraud” investors out of their money that was supposed to have been invested in Treasury Strips–a derivative of U.S. Treasury bonds the separates the coupon and principal on the underlying note into different securities.

Jan 11, 2013
via 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.

Jan 10, 2013
via Unstructured Finance

The gold rush in foreclosed homes picks up steam as mad money flows freely

By Matthew Goldstein

Institutional money keeps rushing into the market for foreclosed homes, with some big players snapping up homes at breakneck speed. But the question is whether the big buyers are throwing money around indiscriminately and Wall Street’s big housing long will come up a bit short.

The other day Bloomberg reported that Blackstone Group has already spent $2.5 billion to buy 16,000 homes to manage as rentals and eventually sell them when prices appreciate high enough. Blackstone says it’s finding that the going price for homes sold at foreclosure auctions and out of bank inventories are rising quicker than anticipated.

Jan 4, 2013

Hedge fund chief Einhorn disappoints, Loeb has big 2012

BOSTON/NEW YORK, Jan 4 (Reuters) – Widely followed hedge
fund managers Daniel Loeb and David Einhorn ended the year on
divergent notes with Loeb’s firm handily beating the broader
stock market and Einhorn’s firm posting a modest single-digit
annual gain after performing poorly in December.

For Einhorn, who has moved stock prices by simply opening
his mouth, 2012 ended with lackluster returns when his
Greenlight Capital lost 2.8 percent in December, a person
familiar with the fund’s performance said.

Jan 4, 2013

Hedge fund manager Einhorn disappoints, Loeb wins big in 2012

BOSTON/NEW YORK (Reuters) – Two widely followed hedge fund managers ended the year on divergent notes with Daniel Loeb handily beating the broader stock market with double-digit returns while David Einhorn posted only a modest single-digit annual gain after his flagship fund performed poorly in December.

For Einhorn, who has moved stock prices by simply opening his mouth, 2012 ended with lackluster returns when his Greenlight Capital lost 2.8 percent in December, a person familiar with the fund’s performance said.

Jan 2, 2013
via 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.

Dec 28, 2012

Blackstone seen sticking with SAC despite insider trading probe

NEW YORK, Dec 27 (Reuters) – One of hedge fund billionaire
Steven A. Cohen’s largest outside investors, private equity firm
Blackstone Group LP, appears inclined to keep its money with his
SAC Capital Advisors, even as the U.S. government scrutinizes
the fund in its ongoing insider trading probe.

Three sources said the asset management arm of Blackstone
, which has $550 million invested with SAC Capital, is in
no rush to redeem money from the Stamford, Connecticut-based
hedge fund. Blackstone has had at least three discussions with
the $14 billion hedge fund’s executives about the insider
trading investigation and talked to its own investors, which
include state pension funds, endowments and wealthy individuals.

Dec 26, 2012
via Unstructured Finance

Obama hearts El-Erian

By Sam Forgione and Matthew Goldstein

OK, so it’s not a big gig like being nominated to head the Treasury Dept. But President Obama’s decision to tap PIMCO’s Mohamed El-Erian to head the President’s Global Development Council is no insignificant matter.

As the co-chief investment officer of the giant bond shop founded by Bill Gross, El-Erian is seen as the eventual heir apparent to run the Newport Beach, Calif firm. And El-Erian increasingly has become one of PIMCO’s most visible faces—maybe even more than Gross himself these days–when it comes to talking about what ails the U.S. and global economies.

Dec 19, 2012

SAC Capital’s top consumer trader draws U.S. scrutiny

NEW YORK (Reuters) – U.S. authorities are examining trading by one of SAC Capital Advisors’ most successful portfolio managers, Gabriel Plotkin, as part of a probe into the $14 billion hedge fund firm’s investment in Weight Watchers International Inc last year, according to a person familiar with the investigation.

Plotkin, a specialist in consumer and retail stocks who makes investment decisions for more than $1.2 billion worth of assets, is among several SAC portfolio managers whose trades are being investigated, said the source, who did not want to be identified. The source would not name the other managers.

Dec 19, 2012

SAC’s top consumer trader draws U.S. scrutiny

NEW YORK, Dec 19 (Reuters) – U.S. authorities are examining
trading by one of SAC Capital Advisors’ most successful
portfolio managers, Gabriel Plotkin, as part of a probe into the
$14 billion hedge fund firm’s investment in Weight Watchers
International Inc last year, according to a person
familiar with the investigation.

Plotkin, a specialist in consumer and retail stocks who
makes investment decisions for more than $1.2 billion worth of
assets, is among several SAC portfolio managers whose trades are
being investigated, said the source, who did not want to be
identified. The source would not name the other managers.