200 Gather For HedgeCo's Hedge Fund Networking Event

HedgeCo News - Over 200 guests attended the 2011 HedgeCo Spring Networking Event on the evening of the 22nd. Celebrating the end of winter, there was food, drink and networking with other members of the alternative investment community.

"I enjoyed everything about the HedgeCo spring networking event." Craig S. Aronoff, Managing Member at Victor Securities said, "You chose the perfect location, and had a very impressive turn out! The attendee list had a perfect mix of funds, allocators and service providers."

A mix of investors, hedge fund managers, and other industry professionals came together at the Aspen Social Club in New York to enjoy a night of sharing ideas and meeting new contacts.

Recognized as having the largest attendance for any type of event in the hedge fund industry, the HedgeCo Networking Events have quickly become the top destination for generating new business and meeting new industry contacts.

The 2011 HedgeCo Spring Networking Event event was sponsored by American Airlines.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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Roundup: Rajaratnam's Hedge Fund Trial Updates

HedgeCo News - As the Sri Lankan born-American hedge fund manager charged with 14 counts of conspiracy and securities fraud awaits trial, speculation is mounting about who will be testifying against him.

MarketWatch - U.S. federal prosecutors plan to call Lloyd Blankfein, the chief executive of Goldman Sachs Group Inc,, to testify in the insider-trading trial of Galleon Group hedge-fund manager Raj Rajaratnam.

Bloomberg - In calling Blankfein as a witness, prosecutors in the office of U.S. Attorney Preet Bharara in Manhattan said they don’t want Blankfein to be questioned about “whether Goldman Sachs is presently the subject of any pending investigations by either the Department of Justice or the U.S. Securities and Exchange Commission” or whether the bank bears any responsibility for the 2008 financial crisis.

BBC - So far more than two dozen people have been criminally or civilly charged in the case. 19 have pleaded guilty

Hindustani Times - Rajat Gupta, former chief executive of consulting major McKinsey and accused by the US Securities and Exchange Commission of conspiring with Galleon hedge fund executive Raj Rajaratnam in an insider trading scam, has resigned as the chairman of Indian School of Business (ISB), Hyderabad. “Gupta has requested the ISB executive board to relieve him of his board responsibilities till his pending matter with the US SEC is resolved,” an ISB spokesperson said.

Rajat Gupta is also suing the SEC, claiming an administrative action it filed for insider trading bars him from a jury trial.

Editing by Alex Akesson

Cayman Islands Secures Tax Agreement with India

HedgeCo News - The Cayman Islands signed its twenty-second Tax Information Exchange Agreement (TIEA) with India yesterday.

The Cayman Islands is on the Organisation for Economic Cooperation and Development's (OECD) 'white list' of jurisdictions that implement international tax standards for investors such as hedge funds and other alternative investors.

"Our Government has a strong working relationship with our Indian counterparts, and we look forward to implementing the terms of this TIEA", Premier W. McKeeva Bush said.

Signing the agreement on behalf of India was India’s High Commissioner to The Bahamas, the Cayman Islands and Jamaica, Mohinder S. Grover.

"Both countries are members of the OECD Global Forum Global Forum on Transparency and Exchange of Information for Tax Purposes, and are involved in the Peer Review Process; therefore ensuring the effective implementation of the international standards of transparency and exchange of information for tax purposes," the Premier added.

Speaking on behalf of the Cayman Islands International Tax Cooperation Team, George McCarthy commented, "It is further anticipated that this Agreement will continue to pave the way in enhancing the business relationship between our two countries. The TIEA will provide a common ground upon which the Cayman Islands and India can exercise mutual cooperation and focus on increasing investment funds business in the Cayman Islands."

Man Group Donates $1 Million to Japan Relief

HedgeCo News - Hedge fund giant Man Group has made an immediate $1 million commitment via its Charitable Trust to relief efforts in Japan.

“We have all witnessed through TV coverage the scenes of devastation in Japan after the earthquake and tsunami." Peter Clarke, Chief Executive of Man, said, "It is hard to imagine how this feels to those affected. Our long established and close relationship with Japan means that we are naturally very anxious to play our part in joining with local and international efforts to alleviate the huge suffering that has been caused."

In a response coordinated with its Tokyo office, the hedge fund will focus this charitable donation on children impacted by the crisis and has pledged $900,000 to Save the Children's Japan Emergency Appeal and $100,000 to local children's charities.

“We are extremely fortunate that all of our employees and their families are safe but we are acutely aware that hundreds of thousands of people have been left devastated by last week’s events." Hidehiko Hayashi, Head of Man’s Regional Office in Japan, said, "We will continue to ensure that we are doing all we can to provide support and assistance to Japan as the nation works together to address this massive natural disaster.”

HFA Symposium on Government Impact on the Markets and Hedge Funds

HedgeCo News - The Hedge Fund Association (HFA) has appointed Edward Foreman, a Tax Partner at Price Waterhouse Coopers, as Director of its Midwest Chapter.

“It’s an honor to serve as the Director of HFA’s Midwest Chapter. I have watched the hedge fund industry evolve and become an important participant in the global financial markets. I look forward to advancing the HFA’s many initiatives in Chicago and the greater Midwest area,” Foreman said.

The Midwest Chapter’s new leadership will be introduced on March 22nd at the HFA Symposium on Government Impact on the Markets and Hedge Funds. This event, followed by a cocktail reception, will be held at 4:30pm CST at the Chicago offices of law firm K&L Gates LLP, 70 West Madison Street, Second Floor Conference Room Chicago, IL 60640.

Fresh Air Fund Seeks Hedge Fund Hosts

The Fresh Air Fund is again in need of host families for this summer. If you or someone you know is able to host, please sign up now.

In 2010, The Fresh Air Fund's Volunteer Host Family program, called Friendly Town, gave close to 5,000 New York City boys and girls, ages six to 18, free summer experiences in the country and the suburbs. Volunteer host families shared their friendship and homes up to two weeks or more in 13 Northeastern states from Virginia to Maine and Canada.

Many thanks to previous host families who have opened up their homes for a few weeks each summer, helping children growing up in New York City’s toughest neighborhoods to experience the joys of Fresh Air experiences.

As Hedge Fund Jury Selected, Speculations Of Misplaced Trust Continue

HedgeCo news - As the Sri Lankan born-American hedge fund manager charged with 14 counts of conspiracy and securities fraud awaits trial, speculation is mounting about who will be testifying against him, close friends and colleagues, among others.

A jury of seven women and five men has been chosen for the trial, which is expected to last more than two months. Rajaratnam could face over 100 years in jail if convicted.

Former Goldman Sachs director Rajat Gupta hass already been charged with allegedly tipping Rajaratnam off to a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.

"The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett's investment was disclosed." Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.

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.

Robert Moffat, Jr., in January also pleaded guilty to trading on insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), providing the insider information to to Chiesi, hedge fund founder Raj Rajaratnam’s co-defendant. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.

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.

Alex Akesson
Editor for HedgeCo.net

DeLillo’s “Cosmopolis” To Be Directed By David Cronenberg

HedgeCo News: Horror master David Cronenberg has taken on Don DeLillo’s #1 bestseller “Cosmopolis” and has signed Robert Pattinson to star in the thriller.

Like James Joyce’s Ulysses, “Cosmopolis” covers roughly one day of time and includes highly sexed women and the theme of father-son separation.

The plot involves a young hedge fund billionaire (Pattinson) who hops in his limo to get a haircut but in a course of traveling across Manhattan, loses his fortune, cheats on his wife, and is threatened by two mysterious folks.

The film also stars Juliette Binoche as the the wife, Paul Giamatti as the stalker and Mathieu Amalric’s part is yet unknown. Colin Farrell and Marion Cotillard were originally cast as the lead.

Goldman Director Charged In Galleon Case

HedgeCo News - Former Goldman Sachs director Rajat Gupta has been charged with allegedly tipping Raj Rajaratnam off to insider information in the giant SEC vs. Galleon case.

Gupta is alleged to have told Rajaratnam of a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.

"The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett's investment was disclosed." Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.

The charges are "totally baseless," Gary Naftalis, Gupta's lawyer said, noting that Gupta is not accused of trading in the stocks himself or sharing in any profits. Naftalis said Gupta did nothing wrong and stands by his 40-year record of ethical conduct, integrity and commitment to keeping clients’ confidence.

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.

Alex Akesson

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.”

Hedge Fund Managers Agree To Testify Against Rajaratnam In Exchange For Leniency

HedgeCo News - Two ex-Galleon hedge fund managers pleaded guilty yesterday to insider trading. Adam Smith agreed to testify against Galleon hedge fund founder Raj 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 last week. 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.

Breakout Science Bloggers via Science Weekly

Mind Hacks by Vaughan Bell
Observations of a Nerd by Christie Wilcox
Neurotic Physiology by Scicurious
Science Seeker, an aggregator
Not Exactly Rocket Science by Ed Yong
Bad Astronomy by Phil Plait
The Loom by Carl Zimmer
Laelaps by Brian Switek
Frontal Cortex by Jonah Lehrer
Neuron Culture by David Dobbs
Superbug by Maryn McKenna
NeuroTribes by Steve Silberman
The Gleaming Retort by John Rennie
Science 3.0 by Mark Hahnel
John Hawks' Weblog
Thoughtomics by Lucas Brouwers
Krulwich Wonders by Robert Krulwich
A Blog Around the Clock by Bora Zivkovic
Scientific American blogs
The science comedian by Brian Malow

Chiesi Pleads Guilty Ahead Of Rajaratnam/Galleon Hedge Fund Trial

HedgeCo news - Danielle Chiesi has pleaded guilty at a plea proceeding in U. S. District Court located in New York. She was accused of receiving insider information from Robert Moffat, Jr., who also pleaded guilty in the Galleon hedge fund fraud scheme.

From August to October 2008, Moffat got insider information relating to IBM, Advanced Micro Devices, Inc. (AMD) and Lenovo Group Ltd. (Lenovo), providing the insider information to to Chiesi, hedge fund founder Raj Rajaratnam’s co-defendant. She worked for New Castle Partners, an equity hedge fund group affiliated with JPMorgan Chase & Co.

The court documents reveal that in September 2008, Moffat provided Chiesi with information relating to IBM’s and Lenovo’s performance in the companies’ respective fiscal quarters ending in September 2008.

Chiesi and Rajaratnam were arrested in October 2009. Her guilty plea comes a month before Rajaratnam goes on trial.

Hedge Fund Tax Alert: Reporting of ‘Specified Foreign Financial Assets

New York (HedgeCo.net) – U.S. taxpayers with ownership in foreign hedge funds, investments and assets may be affected by the Foreign Account Tax Compliance Act (“FATCA”), which was included as part of the 2010 Hiring Incentives to Restore Employment (“HIRE”) Act, according to hedge fund adviser Decosimo.

Hedge fund managers may need information on related costs and penalties associated with noncompliance.

A short summary of the key points are:

* WHO is subject: individuals (but may be expanded to entities by regulations).

* WHAT is subject: any “specified foreign financial asset” which includes foreign bank or securities, accounts, any stock or security issued by a non-US person, any financial instrument or contract held for investment where the issuer or counterparty is a non-US person and any interest in a foreign entity with total value of all accounts of $50,000 or more.

* WHEN is effective date: Tax filing year 2011 for most individuals.

* WHERE is this reported: Form 1040 package (specific form not yet drafted).

* WHY should taxpayers comply: potential penalties are substantial and statute of limitations may be involuntarily extended.

Full Alert Here: Reporting of ‘Specified Foreign Financial Assets’ (22KB)