Hedge Fund Analyst Bail Includes House Arrest with Electronic Monitoring Bracelet

HedgeCo News - Hedge fund consultant Winifred Jiau has pleaded not guilty to conspiracy and securities-fraud charges in the Galleon investigation. Bail was set at more than $500,000.

According to the Seattle Times, the Judge agreed to the bail "Only after she had pledged to turn over the deed to a $25,000 stretch of land and provide $50,000 in cash to go along with $500,000 in cash and property being posted by three friends. She will be required to wear an electronic monitoring bracelet and mostly remain in her Fremont, Calif., home under terms of the bail. She will not be released until all bail conditions are met."

“Company executives and other insiders moonlighting as consultants to hedge funds cannot blatantly peddle their company’s confidential information for personal gain,” Robert Khuzami, director of the SEC’s enforcement division said.

The SEC filed civil charges of insider trading against six people associated with expert network firms after criminal cases brought earlier by the Justice Department against the same group.

The consultants are accused of leaking privileged information to hedge funds about companies like Advanced Micro Devices, Apple and Dell, about $6 million in illicit gains was made through the tips, the SEC complaint said.

Galleon Hedge Fund Trial: Wiretapping Spousal Communications

HedgeCo News - A judge has asked to see a transcript of 18 spousal conversations in the case against Craig Drimal, a trader for the Galleon Group of hedge funds, the Las Vegas Sun reports.

Federal agents were eavesdropping on the couple, it was revealed, intercepting 164 calls between Drimal and his wife during two months in late 2007 and early 2008. The hedge fund trader's defense lawyer complained the calls were of an "intensely personal nature," and is asking the judge to leave the recordings out of the trial.

"In court documents that were recently unsealed with redactions, many of the intercepted spousal calls were of a profoundly personal nature, and yet agents continued to listen to them far in excess of the time necessary to determine that they were spousal calls." The defense said.

The defense has also accused the government of having a "cavalier disregard for marital privacy, (the agents) intercepted 330 calls between Drimal and family members, including his three children, his siblings and his in-laws." The judge said it was unlikely he would exclude the wiretap evidence against Drimal from the trial.

Drimal, who has pleaded not guilty, is scheduled to go on trial in May on suspicion of securities fraud charges.

In order to curtail federal wiretapping, hedge fund managers have begun hiring security firms "to comb their offices and homes for listening devices." Bloomberg reported today.

Galleon/Rajaratnam Hedge Fund Trial Phostponed Till March 2011

HedgeCo News - U.S. District Court Judge Richard Holwell in New York has postponed hedge fund founder Raj Rajaratnam's trial from February 28, to March 8th according to Reuters.

The judge did not provide a reason. Reuters reported that according to court officials, the federal prosecutors requested the postponement.

Two ex-Galleon hedge fund managers also pleaded guilty in January of this year to insider trading. Adam Smith agreed to testify against Rajaratnam in exchange for protection from prosecution for other crimes. Michael Cardillo also pleaded guilty to the same charges. The ex-hedge fund managers agreed to give up any money they made, and Cardillo also agreed to testify against Rajaratnam next month. Smith and Cardillo could face up to 20 years in prison on the securities fraud counts.

Rajaratnam's co defendant Danielle Chiesi also pleaded guilty in court. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

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. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Richard Gere Replaces Al Pacino As Hedge Fund Honcho

Hedge Fund Lounge - Al Pacino is reported to have quit the role as big time hedge fund manager in the new financial thriller “Arbitrage” opposite Susan Sarandon.

However, Pacino is to be replaced by Richard Gere, according to Hollywood sources. Gere is said to be in talks regarding the role.

The movie depicts a hedge fund magnate under investigation, desperate to complete the sale of his trading empire to a major bank before his double-dealings are revealed.

The film is written and directed by Nicholas Jarecki, shooting is set to begin in New York mid-spring. Eva Green, from Casino Royale, will also be starring in the film, according to Hollywood Reporter. The film is to be produced by Infinity Media.

Hennessee Hedge Fund Index advanced +0.80% in January

HedgeCo News - The Hennessee Hedge Fund Index advanced +0.80% in January (+0.80% YTD), while the S&P 500 advanced +2.26% (+2.26% YTD), the Dow Jones Industrial Average increased +2.72% (+2.72% YTD), and the NASDAQ Composite Index climbed +1.78% (+1.78% YTD). Bonds advanced, as the Barclays Aggregate Bond Index increased +0.12% (+0.12% YTD) and the Barclays High Yield Credit Bond Index advanced +2.21% (+2.21% YTD).

“Hedge funds had a decent start to the year as the environment for stock picking improved. Some managers struggled to produce profits as short portfolios detracted from performance,” Charles Gradante , co-founder of Hennessee Group, said. “The general consensus among hedge fund managers is that the economy is improving and markets should continue to advance in the short term. That said, managers are aware of several key macro risks, such as the European Sovereign debt crisis, emerging market inflation, and fiscal imbalances in the U.S. , that have the potential to cause volatility throughout the year.”

Six Analysts Charged In Hedge Fund Insider Trading Case

Winifred Jiau

James Fleishman with attorney Ethan Balogh

New York (HedgeCo.net) – The SEC yesterday charged Mark Anthony Longoria, a manager at A.M.D.; Daniel L. DeVore, a manager at Dell; Winifred Jiau, a consultant with insider information about Marvell Technologies, and Walter Shimoon, an executive at Flextronics International.

Bob Nguyen and James Fleishman, both employees of Primary Global, were also charged by the S.E.C, according to a report by the New York Times.

Walter Shimoon

Mark Anthony Longoria

The SEC filed civil charges of insider trading against six people associated with expert network firms after criminal cases brought earlier by the Justice Department against the same group.

The consultants are accused of leaking privileged information to hedge funds about companies like Advanced Micro Devices, Apple and Dell, about $6 million in illicit gains was made through the tips, the SEC complaint said.

“Company executives and other insiders moonlighting as consultants to hedge funds cannot blatantly peddle their company’s confidential information for personal gain,” Robert Khuzami, director of the SEC’s enforcement division said. “The Primary Global consultants and employees schemed to facilitate widespread and repeated insider trading by several hedge funds and other investment professionals.”

Ramius Challenges Immersion Choice of Directors

HedgeCo News - Alternative investment and hedge fund advisor Ramius Value and Opportunity Advisors LLC, a subsidiary of Ramius LLC., (Ramius) has challenged the board of top touch technology company Immersion to elect a new Director. Ramius also nominated a list of directors for presentation at Immersion’s 2011 annual meeting of shareholders.

“As Immersion’s largest shareholder, we have continually tried to work cooperatively to enhance the composition of the Board for the benefit of all shareholders. “Ramius Managing Director Peter Feld said in a letter to the members of the Board of Directors of Immersion Corporation, “Unfortunately, our efforts have been rebuffed at every turn. Meanwhile, the current Board has overseen extremely poor long-term operating and stock price performance.”

Ramius owns approximately 8.8% of the shares outstanding. In the letter, the hedge fund advisor outlined its views regarding the weak long-term operating and stock price performance and the need for change on the Board of Directors.

Ramius claims the current Director has no experience in technology and was placed in the position due to direct ties to the Chairman of Immersion, Jack Salticha. Only 27% of Immersion’s shareholders voted to support his election to the Board at the 2010 annual meeting.

“Since the end of 2007, Immersion has burned through approximately $78 million of cash, equivalent to $2.77 per share or 46% of the Company’s current stock price. For this substantial investment, which included over $30 million in research and development expenses, revenues have increased by a dismal $1.5 million or 5%,” the letter said.

Dialectic Capital, the second largest shareholder of Immersion, publicly disclosed that they too had nominated a slate of directors for election at the 2011 annual meeting.

“This should be a wake up call to the Board.” Ramius said, “Your shareholders are not happy.”