Not only is Europe’s debt problems bludgeoning the U.S. markets today, but the continent is also on the verge of dealing a huge blow to the hedge fund industry and its favorite tax havens.
Lawmakers in the European Union are close to passing legislation that would prevent European investors from putting money into a hedge fund domiciled in certain offshore tax havens. The proposal would create a “black list” of countries that would be off-limits to EU investors and the Caymans appears to be a prime candidate for the list.
As expected the hedge fund industry is outraged. By some estimates, nearly 80 percent of all U.S. funds have a registered entity in the Caymans.
The raw emotion, the cursing, the threats to rip the face off, just a for instance, Dylan Ratigan. None of it’s an act. Ask anyone and they’ll tell you. Ask Jimmy, ask Snakes, ask Greg Valentino. Call up the people he used to work with at the Journal and they’ll confirm they still have nightmares about him coming back to the office after a lunchtime workout, arms hanging out of his Champion sweatshirt with the sleeves cut off like two lethal weapons. They’ll tell you.
Investors in Wynnefield Capital (Oscar Tang, Michael Steinhardt, Chuck Royce, Stephen Schwarzman, Larry Leeds, Michael Kassen, Walter Stern, Edward McAree) are up 17 percent year-to-date. But an insider trading case brought by the SEC nearly four years ago is still hanging over the firm. The small-cap fund filed a motion for summary judgement in the case last November.
Retired NFL player Bryce Fisher is a University of Chicago Booth School of Business student who will graduate next year. This summer he’s interning in Bank of America’s LevFin group. He’s 6’3, 265 pounds and whereas his fellow interns would probably pass out at the sight of a stack of Double Downs, hundreds of oysters or the entire contents of a vending machine, all he sees is a light lunch. Think about it.
Or he might do it after lunch. Maybe tomorrow (probably not though because Cinco de Mayo is taken very seriously at GS). Could be Friday. Possibly the week after next. It would be shocking if it didn’t happen before Memorial Day but stranger things have happened. It’s really hard to say because this is one of those situations that so fluid. Point it, odds are, it’s going to happen sooner or later, most likely. Chaz reports:
People familiar with the matter say attorneys for the embattled Wall Street firm plan to initiate settlement talks soon after the firm releases its response to the SEC’s charges, and FOX Business has learned that Goldman may unveil that response imminently, possibly Tuesday. According to sources, Goldman continues to believe strongly that the SEC’s case is without merit, but the firm also does not want to go to battle with regulators. “We can’t be going to war with the SEC,” said one senior executive at the firm.
Goldman Sachs announced yesterday that it has so far been hit with six shareholder suits (on top of the SEC stuff, and in addition to a little criminal investigation by the Justice Department). And that’s fine, it’s no real sweat of Lloyd’s sack, or the sacks of Gary Cohn, or Lucas van Praag, either. Sure, it threatened to disrupt the trifecta’s viewing of last night’s Real Housewives of New Jersey premiere but that was really it. An annoyance, yes, but one they’ve vowed to get used to, as suing GS is de rigeur among the peasants these days. If you think any of this is actually hurting them, as I’m sure many are hoping, you are sorely mistaken. The only time Lloyd feels pain is during the unfortunate times he runs into Viniar air-drying post soak and the obligatory bimonthly manscaping sessions downtown (you can’t dip them in liquid gold unless they’re completely hair-free). But you know who it is hurting? The children. Continue reading »
UBS returns to profit on fixed-income performance (MarketWatch)
The bank earned 2.2 billion francs ($2.03 billion), beating consensus estimates by around 200 million francs. UBS reported a loss of 1.98 billion francs for the first quarter of 2009 and earned 1.21 billion francs in fourth- quarter 2009.
Goldman Faces Suits Over CDOS (WSJ)
The lawsuits were filed since April 22 in federal and state courts in New York, the company said in a securities filing. Goldman, its board of directors and “certain officers and employees” are accused in the suits of “breach of fiduciary duty, corporate waste, abuse of control, mismanagement and unjust enrichment,” according to the company.
Congress Members Bet On Fall In Stocks (WSJ)
According to The Journal’s analysis of congressional disclosures, investment accounts of 13 members of Congress or their spouses show bearish bets made in 2008 via exchange-traded funds—portfolios that trade like stocks and mirror an index. These funds were leveraged; they used derivatives and other techniques to magnify the daily moves of the index they track.
Citi Proprietary Trader Quits for Nomura as Volcker Rule Looms (Bloomberg)
Citi prop trader Jay Glasser quit to join Nomura Holdings, as U.S. lawmakers pressure domestic banks to stop speculating with their own capital. Glasser told his former bosses at Citigroup, which has lost at least 10 proprietary traders this year, that he quit partly because of concern that President Barack Obama’s proposed Volcker rule may force U.S. banks to divest or close proprietary-trading units, people with knowledge of the matter said. As a Japanese securities firm, Nomura wouldn’t be subject to the rule. Citigroup is the third-biggest U.S. bank by assets.
UBS to Hire `Hundreds’ at Securities Unit as Profit Hits Three-Year High (Bloomberg)
“We still want to increase our sales and distribution force, both in fixed income and to a lesser degree in equities,” Chief Financial Officer John Cryan said in a Bloomberg TV interview today. In corporate finance, the bank plans to “selectively hire into certain key sectors.”
Fortress Eyes Asia Comeback (Reuters)
Fortress recently registered a company in Singapore, a check with the city-state’s Accounting and Corporate Regulatory Authority showed, and lawyers and headhunters said it has sought advice on setting up shop in Singapore and maybe Hong Kong.
Roomy Khan, one of the key cooperating witnesses in the Galleon insider trading case, used her extensive rolodex of insiders to gain access to secret market-moving information. Recently released court documents show that list of contacts could be longer than we thought.
So for we know about several of Khan’s associates connected to the case including Raj Rajaratnam, ex-SAC trader Choo-Beng Lee, Ali Far, Intel executive Rajiv Goel, Anil Kumar and Lenaxa Global Management trader Thomas Hardin (aka Tipper X.)
And last week, we learned that prosecutors are running “covert investigations” that involve two individuals occasionally mentioned in several interviews Khan had with federal agents. That info came to light in a motion by Rajaratnam’s seeking access to unredacted transcripts of the interviews. Judge Richard Holwell quickly denied Raj’s motion because of the ongoing investigation. Continue reading »
[Photo taken by Roy Welland, a former Bear client and "a long-time Cayne nemesis." Welland was the one who called the cops on Cayne for hot-boxing a DoubleTree men's room at a bridge tournament in Memphis.]
Not only is Europe’s debt problems bludgeoning the U.S. markets today, but the continent is also on the verge of dealing a huge blow to the hedge fund industry and its favorite tax havens.
