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28 Jan 2010

Hedge Funds & Investors Rate Global Brokers

HedgeCo News - A recent survey of 176 leading investment managers, private banks and hedge funds by McLagan, a compensation consulting, productivity and performance benchmarking firm, showed that broker performance has again risen significantly in many areas this year, particularly in US and Asian markets and for OTC Derivatives.

When asked to rank the leading brokers on their 2009 Operational Performance and Client Service offerings across Equities, Fixed Income and OTC Derivatives, the managers rated as follows:

In the US:
Liquidnet – Best 2009 Broker for Equities Operations
Morgan Stanley - Best 2009 Broker for Fixed Income Operations
Deutsche Bank – Most Improved Broker

In Europe:
UBS - Best 2009 Broker for Equities Operations
UBS - Best 2009 Broker for Fixed Income Operations
Deutsche Bank – Most Improved Broker

In Asia:
UBS - Best 2009 Broker for Equities Operations
UBS - Best 2009 Broker for Fixed Income Operations
Morgan Stanley – Most Improved Broker

For Global OTC Derivatives:
Goldman Sachs - Best 2009 Broker for Core Processing
Deutsche Bank - Best 2009 Broker for Client Management
Morgan Stanley - Most Improved Broker

"The goal of UBS Operations is to be the leading client-focused global service provider." Simon Haggerty, Global Client Service Head at UBS said, "With 176 clients rating 15 brokers across a range of products & measures, the report provides a comprehensive and credible viewpoint on our performance. One of the most accurate and independent methods by which we can measure our progress is for us to sponsor, support and analyse the feedback obtained from this annual survey."

“In particular, UBS has leveraged this feedback to help develop our 2010 client objectives – that of delivering post trade service excellence. The feedback and rankings are taken seriously both within Operations, and also by our trading & sales partners.”

“Providing superior services and support for our Members is why we’ve been voted number one for overall performance in US Equities Operations for the second year in a row, and we very much appreciate this recognition,” said Seth Merrin, Founder and CEO of Liquidnet. “We continuously strive to deliver the best value and experience for our Members throughout the entire trading process.”

A key factor of the survey results this year was the increase in usage of technology by the buy-side, particularly implementation of OMGEO CTM for both Equities and Fixed Income. This has contributed to the rise in Straight Through Processing (STP) particularly in Electronic Trade Matching which in turn has reduced fails and re-work in the back-office.

Carsten Eckhardt, Managing Director, Global Business Services at Deutsche Bank added, "Deutsche Bank has made a commitment to improving its operational processes in order to provide exceptional service to its clients. The McLagan Z/Yen survey is key in enabling us to assess the extent to which we have achieved these goals and in highlighting areas of focus for further improvement."

Galleon Hedge Fund Fraud Case Claims 8th Guilty Plea

HedgeCo News Update - The Galleon hedge fund insider trading case yesterday saw its eighth guilty plea in Mark Kurland, a onetime colleague of Danielle Chiesi at New Castle Funds LLC, Reuters reports.

The SEC alleges that Kurland, Chiesi and a former executive at IBM, Robert Moffat, engaged in overlapping insider trading schemes, according to Reuters. Moffat's case has not been resolved, but his lawyer is talking with prosecutors, the newspaper said.

Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC is seeking it from Rajaratnam and his co-defendant, Chiesi.

Rajaratnam's lawyer attacked the U.S. government's wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid. A hedge fund manager known as "Tipper X", and hedge fund consultant Roomy Khan are cooperating with investigators in providing evidence against Rajaratnam.

Federal prosecutors have doubled the sum of the allegations and former senior partner at McKinsey & Co., Anil Kumar, pleaded guilty to conspiracy, insider trading and securities fraud.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.

The insider trading case involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp, and Chiesi, an executive at New Castle Funds LLC was also indicted on multiple counts of conspiracy and securities fraud.

A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.