Morgan Stanley May Not Be Able To Cut FrontPoint Loose Following Redemptions

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FrontPoint Partners, the home of the delightful Steve "I will shut you down" Eisman, is expected to be hit with $500 million in redemption requests, potentially putting Morgan Stanley's plans to spin off the hedge fund on ice.

Given FrontPoint's woes, insiders said, Morgan Stanley may be forced to hold on to its FrontPoint stake and eventually wind the hedge fund down. Morgan Stanley has 10 years to comply with new regulatory rules restricting banks from owning so-called proprietary funds.

Meaning if we want to keep Eisman in our lives we'd better start raising money for his new firm STAT.

FrontPoint In Flux [NYP]

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