As you’re aware, ten more people are expected to be charged with insider trading this week. Some of them may be connected to the Rajaratnam case. Others will be accused of dipping their wick elsewhere. The authorities refuse to give any hints as to who could potentially be perp-walking, forcing us to wildly speculate, since we can’t take the suspense! To that end, we’re just going to throw some stuff out there. Maybe it means something, maybe not! It’s all relative.
One of the cooperating witnesses in the Galleon case is Choo Beng Lee, who started Spherix Capital in March 2008, after working at Stratix Asset Management, a tech fund. Stratix was formed by SAC veterans Ian Goodman and Richard Grodin, and closed in December 2007, supposedly due to personal issues between the founders. Grodin then started Quadrum Capital, another tech-focused fund, around March 2008. We were told yesterday that Quadrum “abruptly” closed at some point last week. And apparently they really don’t want to talk about it, because the firm’s number is now out of service.
Update, 10/24: The WSJ has confirmed all of the above, and notes that Grodin had been subpoenaed for his trading records.
Archive for October 2009
The ECB is worried about going old school on hedge funds. It recognizes there are some significant risks involved in reverting back to an environment overly rich in regulation and has spelled out its concerns.
“The ECB sees a potential risk of regulatory arbitrage between alternative investment fund managers, insurance companies and credit institutions, among which the proposed directive does not create a level playing field,” it said.
In the end, this going to come down to a test of wills to see who joins the EU’s initiative. They are willing to risk putting an end to the party and betting that others will follow in their footsteps. Much like another person familiar with old school ways, Frank the Tank.
No projected numbers yet but John Mack told employees today that re: compensation, “it’s going to be controversial. And it is what it is.” Which should bode well for the Mackettes! If it’s going to piss off the public, that’s gotta mean it’ll be good for you.
Galleon Informant Surfaces (WSJ)
Roomy Khan, who worked for Galleon in the late 90s, is said to be “Tipper A.” In 2005, she asked Rajaratnam for another job. He didn’t give her one, but he did ask if she had any inside information about any companies (turns out the answer was yes). Investigators say the informant and Mr. Rajaratnam both traded shares of Polycom multiple times, as well as shares of two other companies where the informant allegedly got inside information: Hilton Hotels and Google Inc. Also, Kahn and her husband were sued by their housekeeper a few years ago.
Meriwether Setting Up New Hedge Fund (FT)
How much investor money can John Meriwether lose in one lifetime? Step right up and find out. Fresh off the success of JWM Partners and huffing on the fumes of the LTCM days, Meriwether is starting a third hedge fund, JM Advisors Management, to launch next year. It will reportedly use the same strategy as both LTCM and JWM to “make” money. Act now to get in on this can’t-lose opportunity.
TPG Plans To Return $20 Million In Fund Fees (WSJ)
Throwing investors a bone: “The gesture is TPG’s second concession this year, as it tries to shore up its relationships with investors who have committed billions of dollars with the private-equity firm but have seen little in the way of new deals or positive investment returns.”
$$$ The good people of Bloomberg Help Desk [NYM]
$$$ Rebecca Jarvis Leaves CNBC [TVNewser]
$$$ Becky Quick Can Out-Party Carl Quintanilla [BI]
$$$ Extreme Makeover: Wall Street Edition [Cityfile]
As previously mentioned, despite all drugs have done for him, Jimmy Cayne rabidly denies smoking pot or blowing rails during his time running the good ship Bear Stearns. We get why, circa 2007, JC would want to downplay his love of weed, and understand why now he does the same now, as Jimbo attempts to preserve his legacy as the most prudent and lucid-minded CEO on Wall Street, ever. But apparently even back in the day, when for the most part this shit was accepted, Big Daddy CaCayne was going to great lengths to insist he was clean (though obviously not offering to piss in a cup since clean samples were hard to come by). I don’t think I have to tell you this comes from DEA Officer Charlie Gasparino’s new book:
…some stories about Cayne’s partying did make their way back to Greenberg, including one time when a senior executive at the firm, William Montgoris, walked by Cayne’s office, detected the scent of marijuana, and reported the incident. Greenberg asked Cayne if what Montgoris was saying was true, but Cayne attributed the marijuana smell to “a new leather couch in my office,” and later invited Montgoris in for a whiff. “Does the couch smell like pot or not?” he asked Montgoris, who nervously said it did, and the matter was dropped. Montgoris, in an interview, wouldn’t deny the account; Cayne, for his part, maintains the same position he had back then; that he didn’t smoke pot in the office.
Senior ranking member of the Senate Finance Committee Orrin Hatch has seen just about enough of the big, major players always getting their way and shutting out smaller competitors. While he wouldn’t break up the usual suspects, Hatch did call on the White House to help level the playing field. After years of potentially illegal activity, it’s about time to put the debate that always comes to a boil around election time to rest once and for all. Is there a way to get rid of the Bowl Championship Series?
Rookie Traders Trying To Short Galleon Portfolio Might Need Lesson In Professional Trading
By Teri BuhlNot all traders feeding off of Galleon’s wind down are making wise moves. Today squawk-boxes on tech desk were buzzing about the movement of $AERG, Applied Energetics. A penny stock position Galleon held 7.5 million shares in at the end of the second quarter.
“The stock fell on the first news of Galleon troubles and today it was doing its reversal off the news of Galleon’s portfolio liquidation,” says CNBC contributor Paul Kedrosky.
It’s not just the top 25 highest paid executives working at the charter members of the bailout club who are going to be hurting from the pay czar’s decision to slash salaries by 90% and reduce total comp by 50%. There will be some collateral damage and for those at Citi and AIG, all you have to do is look out the window to see it. As it stands now, the State of New York will likely not have enough money to pay its bills come December. With six weeks to go, the state is about $3 billion short of being able to pay for such luxuries as “property tax rebates, aid to school districts, counties and cities.”
Most of the staff at Rajaratnam fun house have been spending the last several days updating their resumes, which makes sense if you’ve been following the news since Friday, and most especially this morning. Except for this li’l fella, who believes Raj when he says the allegations are baseless and knows, in his gut, that Galleon will get through this. He’ll be there Monday, business as usual. Will you?
Buddy of mine works at Galleon. Thinks they’re going to pull through. He has several years in deferred comp. Not sure how to break it to him…
Hopefully Citi is already working on some new ads for its push into the exploding credit card space. If you act right now, you’ll get the chance to participate in the bank’s Mission Impossible inspired oil partner co-branded MasterCard program whereby you can look forward to rewards like 3% cash back on fuel purchases, 1% cash back on other purchases, and the possibility that in spite of paying your bill on-time, the rapidly shrinking bank has decided to turn off your tap without any prior warning. The recent steps taken to cut off even more of its limbs takes the process down to the most granular level. But you’d think the decision by the former banking supermarket, which looks more and more like a banking bodega, to make going to the pump a bit more interesting for Citi customers wouldn’t be simply random. They must have solid credit-based reasons for these incidents.
