James Dondero Can Manage The Hell Out Of A Hedge Fund AND Own His Turncoat Former Partner/Soon-To-Be-Ex-Wife’s Star Witness Without Breaking A Sweat: Press ReleaseBy Bess Levin
James Dondero is the founder and CEO of Highland Capital Management, a Dallas-based hedge fund. In addition to his duties at the firm, a portion of Dondero’s time is currently being spent on two legal matters. One is his divorce from Becky Dondero, who he’s been battling in court for over two years. The second is his lawsuit against former Highland PM Patrick Daugherty, who the firm described as a “megalomaniacal” manager known for engaging in “abusive tirades” that “dehumanized employees.” Perhaps coincidentally, the suit against Daugherty was filed two weeks after he testified on behalf of Becky Dondero, claiming that over drinks, James told him of a plan to “get his net worth down and pay [Becky] as little as possible.” Daughtery also alleged that Dondero asked him to lie on the stand, and to try remember a time when Daughtery regarded Becky as “a whore.”
Anyway, it wouldn’t be too crazy to think that all of this might be slightly distracting to Dondero and occupy at least a small portion of the attention he might otherwise devote to his day job at Highland. Even Jimmy recognizes that it’s a reasonable assumption to make. But, he assures you, it is an incorrect one. Rather, Dondero can expend unlimited energy on both making investors top dollar AND making sure his estranged spouse gets nada while at the same time making his sworn enemy look ridiculous. The reason we know this is that Highland has released a nearly 1,000-word press release saying as much. Read more »
Deutsche Bank Warning To Employees Re: Not Joking About Market Manipulation Would’ve Been More Useful To Robert Wallden Yesterday!By Bess Levin
At the end of October, Deutsche Bank held a town hall on the topic of electronic communication, specifically the perils of making statements re: engaging in fraud, even in jest. To be safe, one should reserve such riffing for face-to-face conversations, or, to avoid headaches in the form of house calls from the FBI, insert some sort of disclaimer in the chat making clear that any talk of breaking the law is not to be taken seriously. Clearly, these are good tips that Deutsche employees will presumably employ moving forward. Unfortunately, they came a bit too late for trader Richard Whalen, who in retrospect would’ve appreciated hearing them before taking part in the “ill-advised” banter that led to this: Read more »
Goldman Sachs burned by bad currency bets in third quarter (Reuters)
Goldman Sachs Group Inc lost more than $1 billion on currency trades during the third quarter, recent regulatory filings show, offering some insight into why the firm, considered one of Wall Street’s most savvy traders, reported its worst quarter in a key trading unit since the financial crisis. Foreign exchange was the only trading area that was a money loser, according to regulatory data. In the third quarter, Goldman reported its weakest revenue – $1.3 billion – in fixed-income, currency and commodities trading since the height of the financial crisis.
Inside-Trading Probe of Height Securities Over Decision on Medicare Payments Hits Wall in Capital (WSJ)
Investigators are hitting a wall in an insider-trading probe of how a government funding decision made its way to investors before it was officially released, according to people familiar with the probe. The Securities and Exchange Commission and Federal Bureau of Investigation have been examining whether anyone in government illegally passed along information April 1 about a pending decision on Medicare payments, according to officials involved in the probe. A report from a Washington policy-research firm, Height Securities, correctly called the decision just before it was announced, which sent health-care stocks soaring. The incident has put the spotlight on the burgeoning business known as political intelligence, where lobbyists, policy experts and former government officials gather insights on policy changes that they then sell to investors. But investigators are struggling over how to distinguish between illegal insider tips and accurate predictions based on research and analysis, the people familiar with the probe say.
Fed Casts About for Endgame on Easy-Money Policy (WSJ)
Central-bank officials have been debating for months when to start paring the $85 billion-a-month bond-purchase program. They were surprised during the summer when their discussions and public pronouncements on the potential timing rocked markets, pushing interest rates higher and stock prices down. Minutes of the Oct. 29-30 policy meeting, released Wednesday, showed officials continued to look toward ending the bond-buying program “in coming months.” But they spent hours game-planning how to handle unexpected developments and tailoring a message to the public to soften the impact of the program’s end.
SAC exec used stolen info to make ‘lots of money,’ jury told (NYP)
SAC Capital Advisors ex-money manager Michael Steinberg used stolen business information to make money — “lots of money” — for himself and his company, a Manhattan federal court jury was told Wednesday. When Steinberg “traded on that illegal information, he broke the law,” prosecutor Antonia Apps said in her opening statement. The 41-year-old Steinberg, charged with conspiracy and securities fraud, is the seventh SAC executive to face charges in US Attorney Preet Bharara’s massive multiyear crackdown on insider trading. The high-stakes criminal case, which finished jury selection Wednesday morning, opened in the afternoon before a packed courtroom…The government’s key witness will be Jon Horvath, an SAC tech research analyst who reported to Steinberg. Horvath pleaded guilty last year to similar charges regarding trading in tech stocks Dell and Nvdia. Horvath was pressured into the criminal activity after some of his recommendations failed in 2007 and he was at risk of losing his job, according to the government. “Steinberg told him he needed to get edgy proprietary information,” Apps told the jury. Horvath will testify that he called Steinberg, who was vacationing in Mexico, with an illegal stock tip about Dell, and “one minute later” the accused started to sell Dell shares, making $1 million on the trade, Apps said. But Steinberg’s lawyer, Barry Berke, said Horvath made up the story because “he was facing a very long jail sentence” and “chose self-interest over the truth.”
Mexico’s president denies meeting Bieber after pop star’s tweet (AP)
Mexico’s president has denied a tweet by Justin Bieber saying the singer met with the president and his family prior to a show. It was the latest sour note in Bieber’s controversy-filled Latin American tour. President Enrique Pena Nieto’s office put out a tweet late Monday that read “@Presidenciamx denies meeting between President @EPN with the singer @justinbieber.” That was a response to a tweet from Bieber’s official account saying “just met some amazing mexican beliebers and the presidente of mexico and his familia.” Apparently, Bieber was confused about whether the president was there or not. Early Tuesday, Bieber wrote in a tweet, “correction. I met the presidente’s family and all their friends in the private meet and greet with all their security. They were very nice.” Read more »
$$$ Billionaire Mark Cuban takes on the SEC [WaPo]
$$$ How to Pick a Securities Fraud Jury When Everyone Hates Everybody [BusinessWeek / Sheelah Kolhatkar]
$$$ Man Group employees are feeling the squeeze at the struggling hedge fund, with staff at its London headquarters being shunted into just one-and-a-half floors of the nine-storey building it opened to great fanfare in 2011.
One senior executive based at the HQ on the banks of the Thames said: “We are being shoved into a much smaller area, which people aren’t really happy about it. Our fund assets are shrinking and so it seems is our floor space.” [FT]
$$$ George W. Bush appeared on The Tonight Show on Tuesday, ostensibly to promote his new library but also to show off one of his new paintings, which he gave to host Jay Leno. The painting, a portrait of Leno, marks something of an artistic shift for Bush, who has spent the past several months seemingly painting only animals—specifically, cats and dogs. When Leno showed a painting of the former president’s recently-deceased dog, Barney, Bush segued into an anecdote about Vladimir Putin’s pet snobbery. In short, Putin was not impressed with Barney, a fact he demonstrated during their one meeting with his “body language,” according to Bush; when Bush met Putin’s dog—a large hound—a year later, the Russian president boasted that his dog was “bigger, faster, and stronger” than Barney. [Gawker] Read more »