Raj Rajaratnam, the former hedge- fund manager serving an 11-year prison sentence for insider trading, can have his passport back, along with the title to his $17.5 million Manhattan apartment and $2.5 million in cash. [Bloomberg]
hedge fund managers
Area Hedge Fund Manager Pretty Sure Wall Street Protesters Are Just Looking To Rub Up Against Each Other And Score DopeBy Bess Levin
What do top financial services employees think of the month-long protests headquartered in Zucotti Park, which took over Times Square over the weekend? So far the most vocal people have expressed support for the movement, like Jim Chanos, who said, “New York is so finance-centric that people here underappreciate the reaction of the rest of the country” and that OWS shouldn’t be underestimated; Larry Fink, who told reporters, “I believe we should not turn our backs on these protests…Maybe we will get some balance”; Jamie Dimon, who told those listening to the JPM conference on Thursday, “I do vaguely remember the First Amendment that it is legal to demonstrate and it is completely fine. You should listen and not just have a knee-jerk reaction”; and Vikram Pandit, who in addition to saying that “trust has been broken between financial institutions and the citizens of the US,” told protesters he’d love to chat over the phone. With the exception of John Paulson, however, who last week issued a statement telling protesters to 1) beat it and 2) thank their lucky stars that as the founder of a ‘most successful business‘, he chose to set up shop in New York, most financiers with less then charitable feelings have kept their feelings to themselves, fearing retribution from the anti-Wall Street group. Until now. Read more »
In sentencing Raj Rajaratnam to 11 years in prison for insider-trading charges, U.S. District Judge Richard Holwell said Rajaratnam’s ill health justified some leniency in sentencing…Former BOP official, Phillip Wise, says Rajaratnam in 2007 suffered a “severe cryptogenic stroke,” or a stroke with no obvious cause. According to the document released by the court, Rajaratnam also has been diagnosed with high blood pressure, high cholesterol, “marked obstructive sleep apnea” and Type II diabetes. The doctor said Rajaratnam’s diabetes “remains under poor control,” resulting in damage to his nerves, eyes and kidneys, and chronic anemia. [Deal Journal, earlier]
The defense had asked for 6.5 to 8 years on account of 1) the fact that, they say, Raj only made $7.4 million off his trades and 2) the “unique constellation of ailments ravaging his body” that would result in him dying behind bars if given a sentence “anywhere near” the prosecution’s request for 19.5 to 24 years. Read more »
Mr. Paulson, the money manager who made billions during the financial downturn betting against the subprime mortgage market, admitted in his quarterly conference call that he had made a bad bet on a recovery in the domestic economy, the linchpin of the firm’s investment thesis this year. Now, Mr. Paulson is moving to cut leverage in one troubled portfolio, the Advantage Plus fund, which is down 47 percent this year. He also plans to reduce the firm’s exposure to the stock market more broadly, according to several people who listened to the roughly hourlong call. [Dealbook]
As you may have heard, after occupying downtown Manhattan for the last 25 days, those protesting Wall Street (etc) announced that they’d be making a trip up North, with stops at the Upper East Side homes of, among others, Jamie Dimon and John Paulson. Before they made an appearance at the Paulson and Co founder’s house, JP issued the following statement/suggestion:
“The top 1% of New Yorkers pay over 40% of all income taxes, providing huge benefits to everyone in our city and state. Paulson & Co. and its employees have paid hundreds of millions of dollars in New York City and New York State taxes in recent years and have created over 100 high paying jobs in New York City since its formation. New York currently has the highest income taxes of any state in the country and thousands of businesses have fled New York to states with no income taxes such as Florida, Texas and Nevada, or moved offshore.
Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.”
Apparently organizers of the march were not swayed and after choosing not to take the advice, made their planned stop at Paulson’s townhouse, where they left him a (slightly mixed) message of their own. Read more »
Confidential To Harbinger Capital Investors: Phil Has Been Working His Ass Off To Find People With An Investment Time Horizon Of Infinity. A Little Gratitude Would Be Nice.By Bess Levin
Pop quiz: you’re a hedge fund manager named Phil Falcone. Your relationship with your investors has been on the downhill since you loaned yourself $113 million from a gated fund in order to pay personal taxes you didn’t set aside enough cash to cover. You apologized after the fact but apparently that wasn’t good enough, because they’d already moved on to freaking out over your decision to tie up much of their capital in a side project building walkie-talkies that might not pan out on account of the growing opinion that it might kill a few people. A bunch of them asked for their money back and although you weren’t really in a place to be offering any cash refunds, in July, you came up with what you thought was a pretty genius alternative plan to offer them, in place of actual money, illiquid LightSquared equity. Great idea, right? You thought so, too, but noooooo, they didn’t like that.
At this juncture, most money managers would’ve said, you don’t like that? Well door number two is the option to go fuck yourself. But not you. Even with everything you’ve got going on, from your pissy investors to getting killed on the walkie-talkies, to the boss riding you, to a prima donna named Wilbur who doesn’t let a day go by without not only letting you know he’s got options but flaunting them in your face, you went back to the drawing board. And there, you came up with something even better. Read more »
September was a month we’d like to erase from the whiteboards but as always, we shall overcome. Read more »
Though they’ve got three more months to turn things around, 2011 is on track to be a year most hedge fund managers would like to forget, performance-wise. John Paulson can’t catch a break, Whitney Tilson is having PTSD flashbacks to 2008 and even among those making money, the gains are a measly 3 or 4 percent a month. One investor who stands out from the crowd? Marx NY Capital founder Niki M. Three years ago Niki was a stripper, first at Sapphire New York, then at HQ Gentleman’s Club, using the gig as “a way to advance her financial career,” and now? She’s running her own show and scoring triple digit returns so far this year, according to the latest letter to investors posted on her Facebook page. Read more »