Ropes & Gray: In the news again…
Law firm Ropes & Gray has gone from commenting on the Galleon insider trading case to being in the case.
Just last week, Ropes & Gray partner Christopher Conniff talked with the New York Times for an article about the Galleon insider trading case, discussing the statue of limitations for these cases.
Today, nine more people were arrested in the Galleon Group insider-trading scandal, including Arthur Cutillo, a former associate at the tony, Boston-based law firm.
Ropes & Gray said in a statement that it was deeply disappointed to learn of the insider trading allegations, and the firm was moving quickly to protect its clients.
Conniff will not likely be publicly discussing the Galleon case any more.
Allen Stanford: Tales from Mexia
Trying to report the comprehensive story of Allen Stanford, the Texan billionaire that the U.S. Securities and Exchange Commission has accused of perpetrating an $8 billion fraud, is like trying to reassemble 100 documents after they’ve been through the shredder.
Stanford’s business and sports interests and the subsequent investigations into them stretch across the ocean, through numerous government agencies and courts and into the lives of people in places big and small.
As usual, there was too much to fit into any one story.
Last week I flew from New York to Houston and drove about three hours north to Mexia, Texas the small town where Stanford grew up. I wrote about Mexia here, and about Stanford’s complicated personal ties — apparently he charmed women as well as investors and has left an angry trail of both, including an estranged wife, several girlfriends and six children with four women.
Here are some thoughts and notes from Mexia. First tip: if you pronounce the town’s name correctly (Muh-HAY-uh) you win points with the townspeople.
Stanford and Goswick
Stanford’s board included Chairman Emeritus James Stanford, Allen Stanford’s father, who is 81 years old, and gets around with a walker. His office is a little white rancher on the side of the main road heading into town from the interstate. There’s a tiny hole in one of the windows that James’s wife and Allen’s stepmother Billie said came from a BB or pellet gun. No, it’s due to disgruntled investors, she said. It was more likely poor neighborhood kids playing with guns again.
Alan Stanford and Anna Nicole Smith had something else in common…they both had inflated assets.
from Funds Hub:
Staying positive
There seems to be an endless wave of bad news hitting the hedge fund industry at the moment -- gates and suspensions, record poor performance, the Bernard Madoff scandal and so forth -- but there are still one or two reasons to be positive.
According to a survey of institutional investors by alternative assets data group Preqin, conducted in January (and therefore after the alleged Madoff fraud came to light), only 8 percent said they were no longer confident about hedge funds and would reduce investments.
By contrast, 26 percent said they would be increasing their allocations this year.
This appears to be a more positive picture than for high net worth individuals, who, according to some anecdotal evidence, have become more cautious on hedge funds.
Institutions such as pension funds, in contrast, tend to have time horizons running into decades, so a year of bad performance is not necessarily the be all and end all.
They have also seen equities, which constitute a far greater portion of their portfolios, plummet last year, leaving hedge funds, relatively speaking at least, looking quite good.
Having followed wealthy individuals into hedge funds and helped fuel the industry's massive growth of recent years, they could end up supporting it through the difficult times.
Yes, paying more attention to history would probably have helped in this crisis. But it’s a tough one when it comes to hedge funds – the industry has not been going, on this scale at least, for very long so there is not much history to learn from.
