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Last Night, John Kinnucan Sent A Bizarre Email To Hedge Funder Lee Ainslie

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lee ainslie

Yesterday at 11:46 PM, Lee Ainslie of Maverick Capital got an email with the Subject line, "Yo Lee homey, Sorry to break it to you, but looks to me likely that Maverick will soon be charged with insiderr trading. Just thought I'd let you know..."

Sent by John Kinnucan from the expert network Broadband Research, the contents of the email was this link.

The email is below.

What's in the article that suggests Maverick Capital is next?

From what we gather, there are a few pieces of new information in the article that Kinnucan might think will lead to Maverick's getting charged with insider trading. 

  1. "In questioning by Rakoff, Shimoon said he had passed tips about a Flextronics supplier, OmniVision Technologies Inc. (OVTI), to a man named “Nick,” who worked for one of Primary Global’s hedge fund clients. Assistant U.S. Attorney Antonia Apps identified that man as Nicholas Caputo of Kingdom Ridge Capital LLC, an asset management firm in White Plains, New York.
  2. The complaint that was recently released contains details about Walter Shimoon and the insider tips he gave to 3 hedge fund clients, who are identified as CW-2 (someone who has experience evaluating tech companies and who has pled guilty and is cooperating), Hedge Fund Employee-1 (someone who works for a hedge fund with an office in New York City), and Hedge Fund Employee-2 (someone who works for a hedge fund located in New York City). 
  3. "On Nov. 23, 2009, “Shimoon had a 42-minute call with the analyst at Hedge Fund No. 2 during which Shimoon conveyed material nonpublic information” about Apple, according to the complaint."
  4. "In a parallel lawsuit, the U.S. Securities and Exchange Commission alleged Shimoon spoke with people from at least 11 hedge funds over 14 months and leaked stock tips to some of them."
  5. "Fleishman is scheduled to be tried next month on two counts of conspiracy."

Some of the possibilities crossing our mind is that he might think that Maverick got the same tips, or that CW-2, Hedge Fund Employee-1, or Hedge Fund Employee-2 worked for Maverick, or that because Kingdom Ridge was identified, soon Maverick will be.

Or Kinnucan might just be messing with Maverick's Lee Ainslie. The email blast was copied to tons of reporters and people working in hedge funds. That was likely done to embarrass Ainslie or weird him out.

In any case, it's almost a certainty that more hedge funds will be charged with insider trading related to the expert networks that supplied information to them. The big question is who's next. Maverick was already on the suspect list because it got a subpoena last November. UPDATE: Maverick did not get a subpoena, but Charlie Gasparino reported that it had in the fall, so suspicions were piqued. Also, Maverick has had no contact with anyone involved, according to a PR rep for the firm.

Kingdom Ridge is a new possibility, but it's not shocking because it's a SAC spin-off, and a bunch of them have been targets.

Here's the email. And here's more about the recent news about Kingdom Ridge.

kinnucan-email-

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An SAC Tech Portfolio Manager Was Recorded By FBI

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steve cohen exam

It turns out that as part of its insider trading probe, the government intercepted the calls of 97 different money managers as part of its wiretap of two Primary Global Research phone lines.

"The government identified 15 of those as targets of its investigation in 2009,"  the FT reported.

The court filings in which these figures were revealed, "also show that during the government’s investigation of Mr Rajaratnam, it received court approval to record conversations in 2008 and 2009 involving Dipak Patel," a portfolio manager at SAC Capital.

At the beginning of the year we reported that Patel, who lead a team of five that invested in telecom and tech stocks for both SAC and its Sigma subsidiary in New York, had left the firm.

Patel has not been accused of any wrongdoing.

Two other equity investment staffers who worked under Patel in the Sigma fund, left SAC at the same time as him; Max Jellinek and George Minett were analysts on Patel's team.

We were told in January that Patel, who worked at SAC since 2002, was winding down his portfolio and was transitioning out of the firm soon after.

Sigma Capital's tech portfolio, in particular one of the firm's portfolio managers, Michael Steinberg, were under scrutiny because of the insider trading investigation by the government.

Don't miss: The FBI Has A Whopping 97 Fund Managers On Wiretap >

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The Seven Former SAC Employees Who Defied SEC Laws This Year

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david ganek

All things considered, SAC Capital Advisors' Steve Cohen is having a pretty good year so far.

His flagship fund is up about 10 percent, and this is after his 1 percent management fee and astounding 50 percent performance fee.

Assets under management continue to flow into the firm and were at $14 billion at the end of 2010, according to Institutional Investor's Hedge Fund 100 ranking.

This post originally appeared on Instituional Investor

However, 2011 is also proving to be something of a regulatory embarrassment for the multi-billionaire who grew up in Great Neck, New York, one of the most affluent communities on Long Island, the son of a dress manufacturer father and a piano teacher mother.

While neither Cohen, 55, nor his firm have been accused of any wrong-doing, at least seven former employees have fallen foul of federal regulators this year alone. Two of them pled guilty to criminal charges, in part for actions that took place while they worked at SAC, while the others settled civil claims made by the Securities and Exchange Commission.

Meanwhile, Senator Chuck Grassley of Iowa is investigating how the SEC handled referrals from the Financial Industry Regulatory Authority (FINRA) regarding suspicious trades by the Cohen's firm. In a press release, Grassley’s office says it is interested in whether the SEC is properly policing and regulating the financial markets on behalf of pension holders with investments in securities and other investors.

Let’s be clear. No one is accusing SAC founder Steve Cohen of any wrongdoing. And there is no evidence that Cohen was involved in any illegal activity.

Even so, one of the most overriding questions is whether the targeted ex-SAC traders learned to skirt the rules from their experience at SAC, or whether they were generally the rules-breaking types who were kept in line by SAC’s compliance and oversight.

We don’t pretend to know the answer.

More than likely, they were motivated by a higher calling that has so permeated Wall Street that the average and above-average person who works there does not even realize it—greed.

Donald Longueuil and Noah Freeman Guilty Pleas

Earlier this year, former SAC portfolio managers Donald Longueuil and Noah Freeman pled guilty to insider trading charges stemming from their role in a wider government investigation into illegal insider trading among hedge funds and individuals who supplied them tips. The illegal activity took place partly during their tenure at SAC.

At the time, the US Attorney for the Southern District of New York charged Longueuil, who at one time also worked for Westport, Connecticut-based Empire Capital, and Freeman, who worked at Bain Capital until 2008 before moving to SAC, which he left in early 2010, as well as Samir Barai of Barai Capital Management and Barai technology analyst Jason Pflaum.

The government said the four individuals participated in a conspiracy to obtain nonpublic information, including detailed financial earnings, about a number of public companies, including Marvell Technology Group, Nvidia, Fairchild Semiconductor, Advanced Micro Devices, Actel and Cypress Semiconductor.

According to the government, Barai and Longueuil each tried to destroy digital records and documents that would have shown they had received inside information from employees at public companies and that they in turn shared this information with each other and Freeman.

For example, at one time Freeman and Longueuil discussed a USB flash drive that Longueuil maintained and which contained critical incriminating evidence. According to the complaint, Longueuil told Freeman after reading about a newspaper report about the government’s widespread insider trading probe that he “pressed the eject button and everything’s [expletive] gone.”

Longueuil then detailed how he got rid of the USB drive, including how he pulled it apart with two pairs of pliars and put them into four little baggies. Then at 2 a.m. he put it into his North Face jacket, left the apartment, walked about 20 blocks, and threw them into four different random garbage trucks. 

Longueuil pled guilty to one count of securities fraud based on his trading in Marvell, and one count of conspiracy to commit securities fraud and wire fraud. He faces up to 20 years in prison. He also agreed to forfeit more than $1.25 million in proceeds from the securities fraud offenses.

Freeman worked in SAC's Boston office from June 2008 through January 2010. Longueuil worked in SAC’s New York office from July 2008 through June 2010.

In a statement issued when the pair was initially charged earlier this year, SAC said it was “outraged” by the alleged actions, stressing it “required active circumvention of our compliance policies.” It pointed out at the time that the “egregious violations” of its ethical standards began at their prior firms in 2006 and continued after they joined SAC in mid-2008.

SAC also stressed the pair were employed by the firm “for a short time.” It said Freeman was fired in January 2010, and Longueuil in June 2010 due to poor performance.

Freeman pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and to securities fraud.

In court testimony, Freeman said he had run a standalone portfolio at SAC focused on technology stocks, primarily in the United States, although some in Asia as well. He told the court his strategy and trading approach was very company specific, and “ill suited” during the global financial crisis. 

Freeman admitted to the court he circumvented SAC’s compliance policies, although he did say he told one of their portfolio managers about part of his scheme.

Longueuil is a former manager for a division of SAC, CR Instrinsic Investors, who worked from a New York office. He is a former professional speed skater who was best man at Freeman’s wedding.

Jonathan Hollander

On April 28, Jonathan Hollander settled charges with the SEC stemming from insider trading related to the impending acquisition of the supermarket chain Albertson’s (ABS). The complaint alleged that Hollander used material nonpublic information received from a friend who was employed by the financial advisor retained by ABS in connection with the acquisition to trade the stock. Hollander was also accused of tipping a family member and another friend who also traded ABS securities. As a result of their trading, Hollander and those with whom he shared the information generated $95,807 in illegal profits.

Without admitting or denying the SEC’s allegations, Hollander agreed to settle the charges against him and to disgorge $95,807 plus prejudgment interest and to pay a civil penalty of $95,807. Hollander was also barred from associating with a broker, dealer, investment adviser, municipal securities dealer or transfer agent for three years.

Hollander’s employer was not named by the SEC in its complaint. However, Bloomberg identified him as a former SAC analyst.

According to a published report, Hollander conducted his illegal trading in January 2006 at CR Intrinsic Investors, an SAC subsidiary.

Hollander founded Chesapeake Advisory Group after spending nearly four years with CR Intrinsic Investors, where he focused on natural resources, REITs, physical commodity and private equity investments. He also worked with Citicorp Venture Capital (CVC) as a private equity associate where he focused on leveraged buyouts and portfolio management in the technology and industrial sectors. Prior to CVC, Hollander was an analyst in the leveraged finance group at CSFB.

In January 2010, a press report identified Hollander as the unnamed recipient (in an SEC complaint) of an illegal tip regarding the impending takeover of Albertson’s. In response, SAC spokesman Jonathan Gasthalter said that SAC had looked into the allegations involving Hollander and the fund’s trading in Albertson’s stock in January 2009 after the SEC charged Ramesh Chakrapani of Blackstone Advisory Services in the Albertson’s insider trading case. “After reviewing the initial complaint in this matter, SAC thoroughly investigated this former employee’s trading in Albertsons and, on its own initiative, presented the findings to government authorities in February 2009,” said Gasthalter. “We have cooperated fully with the government’s investigation and will continue to do so.”

David Ganek, Anthony Chiasson, Forrest Fontana

In separate cases, Level Global, co-founded by David Ganek and Anthony Chiasson, and Forrest Fontana and Fontana Capital settled civil charges in connection with the breach of a Securities and Exchange Commission rule which prohibits the short selling of stock during a restricted period prior to a public offering and the subsequent repurchasing of the same securities in the offering.

Level Global agreed to pay more than $3.2 million in disgorgement, prejudgment interest and a civil penalty. It also agreed to cease and desist from committing or causing any violations and any future violations.

In February, Level Global announced plans to wind down its operations and fully liquidate its funds’ portfolios. It had been raided by Federal investigators last November as part of a widespread probe into insider trading.

Level Global was co-founded in 2003 by David Ganek and Anthony Chiasson, both of whom had previously worked for SAC. At year-end 2010, Level Global had $3.7 billion of assets under management in its Level Global Overseas Master Fund and Level Radar Master Fund.

The SEC said Level Global violated Rule 105 in April 2009 when it sold short in advance of participating in a public offering by Goldman Sachs, resulting in profits of $298,415. Then in May 2009 it committed a similar infraction when participating in a public offering by Regions Financial, resulting in profits of nearly $2.4 million. Altogether, Level Global made nearly $2.7 million. The firm had about $4 billion when it closed down earlier this year.

The SEC said Level Global did not have policies, procedures or controls in place designed to detect or prevent Rule 105 violations.

Ganek worked at SAC from 1997 through 2003. He is known for his large art collection. His father, Howard Ganek, was a former partner at Neuberger & Berman and was a New York socialite. After graduating from Franklin and Marshall College, David Ganek worked in the risk arbitrage department at Donaldson, Lufkin & Jenrette before joining SAC.

Chiasson, a Babson College graduate, was a tech analyst at SAC, where he worked with Ganek. He served as head of research at Level Global. Before joining SAC, Chiasson was an analyst at Salomon Brothers and Credit Suisse First Boston.

Forrest Fontana and Fontana Capital also agreed to settle charges by the SEC that they violated Rule 105 on three occasions from July 2008 through November 2008. According to the regulator, they participated in public offerings by XL Group PLC, Merrill Lynch and Wells Fargo after having shorted each of these securities during the five business days prior to the pricing of the offerings. Fontana made $816,184 from the offerings.

Fontana created Boston-based Fontana Capital in 2005 with $50 million in seed capital from Cohen. Fontana served as chief investment officer and portfolio manager of the firm, which specialized in financial stocks. The firm eventually managed more than $300 million. However, after Fontana struggled in the early days of the financial crisis, Cohen withdrew his money in 2007. In 2009, Fontana had just $16 million and he shut his firm the following year.

Fontana graduated from Vanderbilt University’s school of engineering in 1987 and received his MBA from Columbia University in New York in 1993. He also previously worked for Fidelity Investments and Putnam Investments.

Under the settlement, Fontana and the firm agreed to pay $985,000 in disgorgement, prejudgment interest and a civil penalty.

Fontana, as it turns out, is no stranger to regulators. A number of years ago he was accused of frequently speaking with a Morgan Keegan analyst who was about to issue a scathing report on Canadian insurer Fairfax Financial Holdings, which resulted in the company’s stock falling sharply. According to published reports, Fairfax accused SAC and a number of high profile hedge funds of conspiring to drive down its stock price.

This case is still pending.

Robert Feinblatt

On January 10, the SEC filed a civil injunctive action against Robert Feinblatt, a co-founder and principal of New York-based hedge fund investment adviser Trivium Capital Management, and Trivium analyst Jeffrey Yokuty, alleging they engaged in insider trading in the securities of Polycom, Hilton, Google and Kronos. Trivium was also charged with insider trading.

The SEC also alleged that Polycom senior executive Sunil Bhalla and Shammara Hussain, an employee at investor relations consulting firm Market Street Partners, which did work for Google, tipped the inside information that enabled Feinblatt and Yokuty to trade on inside information on behalf of Trivium’s hedge funds.

The actions were part of the SEC’s Galleon insider trading case.

Feinblatt spent on year as an analyst at SAC before leaving in 2002 to found Trivium, which at its height had $980 million under management. It closed its doors in December 2008 after suffering large losses that year.

The SEC alleged that Trivium’s hedge funds made more than $15 million from these illegal trades.

In June a judgment was entered against Hussain. The Judge also dismissed the case against Trivium in exchange for its agreement to cooperate and cease doing business.

In late June the SEC amended its complaint against Feinblatt. On July 18, the regulator said Feinblatt consented to a final judgment, which, among other things, requires him to pay about $2.7 million, including disgorgement of about $830 million representing profits gained and losses avoided as a result of his conduct, prejudgment interest of $186,023, and a civil penalty of more than $1.6 million.

This post originally appeared at Institutional Investor.

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SAC Capital Is Accumulating A Huge Facebook Stake

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steve-cohenUpdate: The Times confirms the story.

Earlier: We're hearing from market sources that $13 billion hedge fund SAC Capital is accumlating a large stake in Facebook. It's possible that SAC people are investing in Facebook, and not SAC funds.

We've been unable to corroborate some details, so we'll break it down for you…

  • Here's what we've been told by a trusted source: For months now, SAC has been one of the more active buyers of Facebook stock in the secondary markets. SAC has also been buying Facebook stock directly from former employees.
  • Here's what we've been told by a new, untested source: SAC Capital just acquired 8 million Facebook shares at $32.50 per share. That's a $260 million stake at a $76 billion valuation. SAC is looking to buy as much as 50 million shares at $33 per share – a $1.65 billion stake at a $78 billion valuation. Word is that SAC found out about a new 409A revaluation on Facebook employee shares from KPMG at $30+/share, and this caused to "pull their trigger." This source admits he or she is in a position to sell Facebook stock, and that word of SAC's interest will help.
  • An SAC spokesman declined to comment on this story.

Our second source speculates: "It’s obvious SAC doesn’t want this story out, they’re not done accumulating so they don’t want to start a frenzy with the price. They’re smart!!"

For months now, much smaller chunks of Facebook stock have been selling for $35 per share on the secondary markets.

Facebook is expected to float a relatively small amount of stock on the public markets sometime early next year at a valuation above $100 billion. Facebook has about 700 million users. Last we heard it was set generate $2 billion of EBDITA on $6 billion revenues.

Obviously, we'd like to know more details. If you have them, please reach nicholas@businessinsider.com or 646.376.6014.

Related: At Last -- The Full Story Of How Facebook Was Founded

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Steve Cohen Closing Flagship Fund To New Money From Existing Or Outside Investors

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steve-cohen

SAC Capital's flagship fund will no longer be open to outside investors beginning August 1, and existing investors can't put in new money either, Institutional Investor reported.

Steve Cohen's flagship fund is up about 10% year to date.

At least one investor is thrilled about the news.

"I love it," the investor told II  because he "prefers his funds not grow too large, especially from hot money that tends to bail out of funds in general at the first whiff of underperformance."

Don't miss: Pictures Of The Beautiful New Offices That SAC Capital Might Move Into Soon >

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SAC Capital Might Have Just Lost $200 Million In One Day

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steve-cohen

Dendreon is getting destroyed today after withdrawing its 2011 revenue estimate.

And it might be taking a chunk out of SAC Capital.

According to the hedge fund's most recent 13f (which isn't really recent at all, it reports the fund's long holdings as of March 31, 2011), SAC Capital owns 8.2 million shares of Dendreon, making it the company's biggest shareholder. 

If that's still the case today (and he doesn't have a short position), Cohen just lost $196 million, which takes a big chunk out of the $100 million profit he pulled in last year, also in a single day.

According to BusinessWeek:

Dendreon fell 66 percent, or $23.86, to $11.98 at 11:48 a.m. New York time in Nasdaq Stock Market composite trading, the biggest decline since its initial public offering in June 2000.

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Meet Chip Skowron: The Former SAC Man Who Just Pled Guilty To Insider Trading

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chip-skowron

Joseph "Chip" Skowron III, a former FrontPoint portfolio manager, plead guilty today to a single count of conspiracy to commit securities fraud and to obstruct a SEC investigation.

At first he denied the charges against him, but after the Doctor charged with tipping him off about a death in a clinical drug trial plead guilty, he changed heart.

Now he faces 5 years in jail.

Later, he might return to being a doctor, a career her pursued before becoming involved in a huge insider trading scandal.

In fact he might be much more suited for work as a doctor.

Skowron graduated from Yale in 1998 with a medical degree, not an MBA. He earned a doctorate in cellular biology, not in statistics.

He even began a five year orthopedic residency at Harvard in which only ten doctors are selected for surgery training, according to the Wall Street Journal.

He wrote papers like "Cloning and characterization of mouse brush border myosin-I in adult and embryonic intestine."

But three years into the program, he packed up and left. In the same year, Chip Skowron joined SAC Capital, and his Wall Street career began.

He was not at SAC long, the WSJ reports - less than a year. Then it was onto Millenium Partners and then FrontPoint and a $6 million mansion in Greenwich. At all three hedge funds Skowron was appointed to analyze and focus on health-care-related stocks.

From the Wall Street Journal,

Dr. Skowron traveled in elite political and social circles, as a major donor to John McCain's 2008 presidential campaign... and a member of the exclusive Monticello Motor Club, an automotive resort and track outside of New York City. The club's sign-up fees start at $25,000 and among the members are racer Jeff Gordon and comedian Jerry Seinfeld, the president of the club said.

Along the way, the 41-year-old husband and father amassed a collection of luxury cars that has included a blue Ferrari 458 and a black Porsche Cayenne, according to state records.

Skowron allowed his medical license to expire but the WSJ found that he has applied for a new license. It's probably a good idea.

At first Skowron denied the allegations. His lawyer told the WSJ:

Dr. Skowron is proud of his work as a physician, investor and philanthropist. He denies receiving confidential information about the Achieve trial. It is unfortunate that the government has taken the drastic step of arresting and imprisoning Dr. Benhamou, an eminent physician, on the basis of circumstantial allegations that we believe are untrue.

Skowron was suspended, and later fired from FrontPoint. As soon as he was suspended, Skowron began pouring himself into volunteer work.

He was the national director of AmeriCares, a non-profit that provides disaster relief and care to HIV-positive children in Connecticut, but stepped down indefinitely in the wake of the scandal. Skowron says he carries a photo of himself with a six-year-old boy whose legs he saved in a Kosovo operation room, every day. As soon as Hurrican Katrina hit, he flew to Louisiana to set up a medical clinic in Baton Rouge.

Here's what else we know about him:

For details on Skowron's charity work with AmeriCares, go to AR Alpha >For the full profile go to the WSJ
>

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August Was The Seventh Worst Month Ever For SAC Capital

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Think only you lost money in August? Wrong: even such titans of fair and perfectly legal stock picking as Stevie Cohen lost money. How much? Lots. At -2.96%, this was the first negative month for blue eyes since June 2010, and the single biggest monthly loss since November 2008.

Some other statistics:

  • SAC lost 3% in August which was the second largest monthly decline since 1992 (if you exclude 2008) and was only trumped by Aug 2007's decline of 3.3%
  • So Aug 2011 ranks # 2 out of 217 months (ex 2008) putting it in the bottom 0.9% of all stevie's monthly PnLs
  • If you include 2008, then Aug 2011 ranks # 7 out of 229 total months (bottom 3.1%)
  • In 2008 there were five months with larger drawdowns, Oct 12.1%, Sept 10%, Jan 6.2%, Mar 4.4%, Nov 3.2%
  • Keep in mind these numbers all include a 1.5% FoF fee which is spead evenly over 12 months

Zeohedge

And complete historical performance for SAC by month:

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2011

1.21

1.02

1.81

2.36

1.12

0.03

1.40

-2.96

       

2010

0.72

0.83

2.42

1.80

-2.21

-2.12

1.84

0.64

2.86

1.50

0.34

2.68

2009

2.61

1.19

1.71

-1.32

2.25

1.79

1.67

1.60

2.51

0.14

1.33

2.32

2008

-6.24

4.25

-4.39

3.01

3.11

-2.42

-0.67

-1.20

-9.97

-12.09

-3.20

-2.46

2007

2.10

0.96

2.88

3.47

3.87

0.29

-2.24

-3.31

1.75

2.59

-1.68

0.42

2006

4.19

1.98

3.86

2.02

-1.01

1.62

1.19

2.48

0.49

3.30

3.60

2.40

2005

0.80

2.60

1.32

-0.41

1.97

2.95

1.11

0.68

1.55

-1.31

1.87

1.77

2004

1.69

2.05

1.48

2.36

0.46

1.48

0.06

-0.06

1.68

2.24

3.16

2.43

2003

1.60

0.67

0.31

1.39

1.43

0.02

2.58

1.48

0.64

1.36

1.09

2.40

2002

1.35

0.21

0.92

-0.18

1.43

0.67

2.85

1.03

2.07

0.04

-1.23

-0.02

2001

6.07

2.87

3.90

0.32

2.56

0.86

1.67

2.27

0.78

1.68

1.50

0.96

2000

5.85

5.50

7.10

3.77

5.22

5.41

4.45

2.99

2.97

5.79

2.79

2.80

1999

8.64

1.86

5.42

8.83

5.02

1.75

4.50

2.69

3.17

3.39

4.68

1.64

1998

1.80

3.45

4.32

2.84

2.62

-0.15

3.01

-2.32

8.34

8.28

3.22

3.90

1997

2.34

2.87

2.55

4.04

4.98

2.82

3.52

4.98

3.19

1.49

0.67

1.37

1996

3.84

3.34

4.20

4.89

3.09

-0.47

-0.58

2.71

1.45

3.73

3.35

3.63

1995

4.04

3.11

4.97

0.03

2.71

4.86

2.17

2.77

1.48

3.24

4.60

2.35

1994

4.12

2.72

1.24

0.97

1.02

2.62

-0.08

2.24

2.21

2.78

0.94

-0.18

1993

4.14

1.01

3.58

7.02

5.41

2.16

0.84

1.83

3.42

4.37

3.72

2.62

1992

             

3.26

2.12

6.72

2.62

1.00

This post originally appeared at ZeroHedge.

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The Most Influential Fund Managers In The World

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ray dalio washington

Bloomberg Markets just put together a list of the most influential figures in finance.

It runs the gamut from regulators to bankers to academics, but there are a handful of hedge fund managers on the list, too.

According to Bloomberg Markets Magazine, they are the most influential private equity and hedge fund managers in the world.

(Note: Warren Buffett and David Rubenstein, also money managers, made the list too, but they were recognized as "corporate innovators," not money managers, like these men were.)

Steven Cohen

Fund: SAC Capital Advisors

Strategy: Equity markets

Why he's on the list: "30 percent annualized returns since 1987 in his main fund" doesn't hurt

Fun fact: Unusually serious art collector (even for a hedge fund manager); collection ranges from Picasso to Damien Hirst


Ray Dalio

Fund: Bridgewater Associates

Strategy: Heavily researched macro

Why he's on the list: Foresaw 2008 crisis; frequently advises central bankers

Fun fact: Big game hunter, meditates frequently


Laurence Fink

Fund: BlackRock

Strategy: Indexing, bonds, equities

Why he's on the list: Performed crucial role in navigating 2008 crash by taking on Bear Sterns and AIG assets; a Home Depot founder said he is “at the hub of the wheel of American capitalism"

Fun fact: Takes the train instead of a private jet; son runs own hedge fund


See the rest of the story at Business Insider

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UPDATE: SAC Capital Says It Is Not Being Investigated By Any Regulatory Authority Over Cougar Trades

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Steve Cohen

The SEC has been probing SAC Capital over trades one of its units made in Cougar ahead of the company's takeover by Johnson & Johnson for over a year, according to a report in the Wall Street Journal.

The WSJ said the SEC is probing whether a unit of SAC Capital Advisors, CR Intrinsic, improperly profited $2.5 million after its 632,291 shares in Cougar soared 16% in value after the $1 billion takeover was announced on May 21 2009, according to the report.

It also said that the SEC probe seeks to determine whether CR Intrinsic learned about the takeover ahead of time from an expert network.

UPDATE: However SAC Capital Advisors LP told Bloomberg that its investment in Cougar Biotechnology was “perfectly reasonable” and based on publicly available information. And the company's spokesman said, “We have not been contacted by any regulatory authority related to this matter, but we would of course cooperate should there be an inquiry."

The WSJ had said SAC is cooperating with the probe.

Earlier: The relevant expert network mentioned by the WSJ is Leerink Swann LLC, a Boston investment bank that also runs an expert-network, MedaCorp. Leerink acted as a financial adviser to Cougar, which suggests that its investment bank unit (presumably kept separate from its expert network unit) would have known about the takeover plans. Meanwhile in Leerink's expert network unit, one of MedaCorp's biggest clients was SAC Capital.

The WSJ made it clear that SAC has not been charged with wrongdoing, which suggests that the SEC has not implicated SAC. However this is the third SEC inquiry into SAC Capital -- and the WSJ says this investigation "raises the stake" for SAC.

The first is detailed here.

The second is detailed here.

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Here's Why We Keep Reading Stories About Suspicious Trading At SAC

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The sheer number of trades that SAC Capital makes every year is one reason that prosecutors and regulators believe that it might be extremely difficult to charge Steve Cohen or SAC Capital with insider trading.

Of course, their innocence might be another reason.

But that won't stop prosecutors and regulators from trying, because they've been alerted to many instances of suspicious trading activity, according to a new article in Reuters.

Reuters says that "regulators have been alerted to "dozens of cases of suspicious trading at SAC Capital Advisors."

Including, "one that centers on trading in Red Robin Gourmet Burgers."

First, just one one trade by a firm like SAC gets brought to regulators' attention. Once a firm has been brought to regulators' attention once, that firm is on their radar and thus, trades of theirs might be brought to regulators' attention more often.

One type of trade in particular attracts regulators' attention, according to Reuters:

  • Trades made shortly before a takeover, critical announcement about a drug or a patent or some other market moving event.

Bottom line: It's hard to tell how many out of the total 903 referrals of possible insider trading that FINRA has sent to the SEC for review in the last three years have been SAC Capital's trades. However they've been on the radar for the past 4 years, and regulators have sent "dozens" of their trades to the SEC.

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Looks Like Hedge Funder Steve Cohen Is Eyeing The LA Dodgers Now

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steve cohen

SAC Capital's Steve Cohen is considering a bid for the bankrupt LA Dodgers, the Wall Street Journal reports.

Of course, there's no comment from anyone from either side (Cohen or the Dodgers) on the matter.

But three people close to the deal said that Cohen has been talking about it with Steve Greenberg, an investment banker who dealt with him earlier this year while Cohen was looking to buy the Mets. Greenberg was handling the sale of a $200 million stake in the New York team.

This time Cohen will have to contend with other bidders like Dallas Mavericks owner Mark CubanRon Burkle, an owner of the National Hockey League's Pittsburgh Penguins, and Tom Golisano, the billionaire former owner of hockey's Buffalo Sabres.

And of course, then there's the bankruptcy court, which could ultimately help Cohen with his bid in two ways. First, there's the fact that 3/4 of MLB owners, who tend to be picky about the people they allow to buy teams in the league, need to approve the sale. The bankruptcy court could advocate for someone the owners don't care for if the bid is attractive enough.

The second way the bankruptcy court could help is with Cohen's legal issues. SAC Capital is under federal investigation, and even though Cohen himself isn't being charged with any wrongdoing that could hurt his chances of winning the team. 

If Cohen makes an awesome offer and it's rejected,  Dodgers owner Frank McCourt can challenge the rejection in bankruptcy court.

Bid books should be going out in the next few days, with the first round of bidding set for January. Blackstone Group is handling the sale.

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SAC Capital's Steve Cohen Admitted He's Not Well-Versed In His Own Fund's Compliance Manual

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Steve Cohen

Reuters has obtained hedge fund billionaire Steve Cohen's deposition testimony from a lawsuit filed in 2006 that reveals his thoughts on insider trading.

In the lawsuit filed by Fairfax, the founder of SAC Capital Advisors -- a hedge fund with $14 billion AUM -- was accused of betting against the company's shares and then spreading negative stories to push the stock price down. 

The lawsuit against Cohen's SAC Capital was recently dismissed.

Here are some key takeaways from his deposition: [via Reuters]

  • He relies on SAC's attorney to determine whether something constitutes inside information.  
  • He's also not well-versed in his own fund's internal compliance manual.  
  • Following the downfall of Raj Rajaratnam and Galleon, Cohen's PR firm suggested he reach out to the media to "dispel" rumors of insider trading. 
  • He says the rules of what constitutes insider information are "very vague" and these things are "judgment calls."  

Read the full Reuters exclusive here >>

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Steve Cohen Is So Serious About Buying The Dodgers, He's Already Hired An Architect For Their Stadium

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That's what The New York Times is reporting.

After backing away from buying a minority stake in the Mets earlier this year, the hedge fund manager is now exploring full ownership of another financially troubled Major League Baseball franchise, the Los Angeles Dodgers:

Cohen’s desire to buy the Dodgers appears to be quite strong. The Los Angeles Times said he had hired the investment banker Steve Greenberg, a former deputy commissioner of Major League Baseball who is representing the Mets in selling their minority shares and sold the Houston Astros for Drayton McLane.

Cohen has also hired a architecture firm to explore changes to Dodger Stadium.

If Cohen's bid is successful, it still must be approved by the MLB, which might be tricky given that Cohen's fund, SAC, is at the center of SEC investigations into insider trading, with two former portfolio managers pleading guilty.

However, media mogul David Geffen and billionaire Eli Broad have vouched for Cohen, telling the LA Times he would make a good owner of the team.

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Home Builders And Some Big Hedge Funds Are Winning After Today's Positive Pending Home Sales Data (MAS, PHM, LEN, DHI, XHB)

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After pending home sales for November overshot expectations this morning—with an increase of 7.3% compared to an expected 1.5% uptick—share prices for home builders are surging. 

In fact, they make up the highest gainers today on the S&P 500.

Here's a rundown:

  • Masco Corporation (MAS): +5.5%
  • PulteGroup, Inc (PHM): +4.9%
  • Lennar Corp. (LEN): +4.0%
  • DR Horton, Inc. (DHI): +3.6%
  • S&P Homebuilders ETF (XHB): +2.64%

There's been a flush of bullish reports and outlooks on the housing market as of late. Today's 7.4% jump put pending home sales at its highest level in 19 months, according to the National Association of Realtors.

Last month, pending home sales for October also beat expectations by rising 10.4% compared to an expected 2%. And just two weeks ago, Goldman Sachs put out a report saying the housing price bottom is imminent, meaning a recovery following may also be in sight.

The Wall Street Journal also has a report out today on big hedge funds, such as SAC Capital and Avenue Capital, that are making large investments in housing-related companies because they are convinced of a recovery. The story also mentions Blackstone taking a stake in PulteGroup in November and JHL Capital Group—a $1.5 billion Chicago-based fund—buying shares of Lennar Corp.

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These 10 Hedge Fund Are Probably Really, Really Happy They Invested In Vivus

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Shares of drugmaker Vivus skyrocketed today after an FDA panel gave a favorable review for the company's weight loss pill.

The stock was last up more than 88% in late morning trading.

That's good news for a bunch of hedge fund managers who have a significant stake in Vivus. 

Here are the top ten hedge funds with the biggest positions in the drugmaker, according to data compiled by Bloomberg.

1.  Chilton Investment: ~8.62 million shares (9.7%)

2. QVT Financial LP: ~8.53 million shares (9.59%)

3. OrbiMed Advisors: ~6.16 million shares (6.94%)

4.  Caxton Associates: ~5.25 million shares (5.91%)

5. Suttonbrook Capital: ~5.05 million shares (5.68%)

6.  Passport Capital: ~4.29 million shares (4.83%)

7.  Citadel Advisors: ~1.85 million shares (2.08%)

8.  Severn River Capital: ~ 1.29 million shares (1.45%)

9.  D.E. Shaw & Co.: 645,633 shares (0.73%)

10.  SAC Capital: 538,400 shares (0.61%)

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Steve Cohen Is Officially Seeing Two Baseball Teams At The Same Time, And They Know About Each Other

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steve cohen mets

We're all familiar with hedge fund managers and their affinity for sports teams. Most recently, SAC Capital founder Steve Cohen has been a prime example—last year, he had to watch as fellow hedge funder David Einhorn tried to negotiate a deal with his beloved New York Mets, which he had originally hoped to own a part of.

Then, he set his eyes on the West Coast, and decided to bid on the bankrupt Los Angeles Dodgers.

But Cohen was unable to leave his beloved hometown team alone—in fact, he may never have stopped talking to the Mets, and it's now been confirmed that the hedge funder has spent $20 million for a 4% stake in the team. That doesn't mean he's dropping his Dodgers bid though. As Dealbreaker has cleverly pointed out, the guy is essentially hedging his bet on the Dodgers with the Mets buy-in.

From Reuters:

He is said to be on the short list of bidders for the bankrupt Dodgers and last year he flirted with taking a $200 million stake in the Mets before the team settled on another hedge fund manager, David Einhorn. That deal fell apart. If Cohen were to win the bid for the Dodgers he would have to liquidate the stake in the Mets.

Whatever happens, the guy's coming away with a baseball team.

SEE ALSO: Meet The Powerful Bankers Who Control America's Top Professional Sports Teams

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Here Are The Bets That Gave Ten Hedge Fund Titans Monster Returns In 2011

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The average hedge fund fell by 5% in 2011 according to Forbes

But the managers we're about to list do not run your average hedge fund. They were the ones who conquered 2011 dismal financial markets.

The median return for 2011's top 10 managers was $500 million — Forbes did the rankings, now we'll explain how they got there.

Bruce Kovner (retired Sept. 2011)

Firm: Caxton Associates

Good picks: United Rentals Inc., Sotheby's, S&P Put.

Why: Kovner's firm bought approximately 3 million shares in United Rentals in Q4, netting $91 million, according to Whale Wisdom. Another $31 million came from a fresh Q3 position in Sotheby's. A Q4 S&P put worth $125 million, according to Whale Wisdom, rocketed them into Forbes' top 10.

Returns: $210 million

Source: Forbes, Whale Wisdom



John Arnold

Firm: Centaurus Advisors

Good picks: Pharmasset Inc,, Shanda Interactive Entertainment, Cephalon Inc.

Why: $161 million came from a call on Cephalon, according to Whale Wisdom, which Teva Pharmaceutical ended up purchasing in May. Gained $77 million in a call on Pharmasset Inc., Whale Wisdom notes, which was bought out by Gilead in November. The Q4 surge in Shanda Interactive Entertainment shares leading up to that firm's purchase in February yielded Arnold $31 million.

Returns: $360 million

Sources: Forbes, Insider Monkey



Nagi Kawkabani

Firm: Brevan Howard

Good picks: PowerShares QQQ ETF

Why: A mix of quarterly puts and calls on Nasdaq's main ETF, according to Whale Wisdom, yielded more than half a billion dollars for the British firm.

Returns: $400 million

Sources: Forbes, Whale Wisdom



See the rest of the story at Business Insider

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SAC Capital Likes These 12 Stocks (DDS, ARIA, SQNM, Z, WNR, YELP, MOV, AH, WLT, SNTS, CLW, SCSS)

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SAC Capital, named after the hedge fund's manager Steven A. Cohen, has been purchasing a number of stocks as of late, according to SEC filings.

Here are updates on 12 positions.

1. Dillard's (DDS) - 2,134,273 shares, 4.7%

2. Ariad Pharmeceuticals (ARIA) - 8,303,403 shares, 5%

3. Sequenom (SQNM) - 6,128,919 shares, 5.4%

4. Zillow (Z) - 1,011,501 shares, 5%

5. Western Refining (WNR) - 4,860,883 shares, 5.4%

6. Yelp (YELP) - 415,847 shares, 5.1%

7. Movado Group (MOV) - 943,890 shares, 5.1%

8. Accretive Health (AH) - 5,005,600 shares, 5%

9. Walter Energy (WLT) - 3,143,160 shares, 5%

10. Santarus (SNTS) - 3,231,392 shares, 5.2%

11. Clearwater Paper (CLW) - 1,640,000 shares, 7.2%

12. Select Comfort (SCSS) - 2,848,966 shares, 5%

Tip of the hat to Market Folly, who originally noticed Cohen's new investments.

One Of The Best Predictors Of The Stock Market Is In Free Fall >

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The SEC Hauls SAC's Steve Cohen In For Testimony In Insider Trading Case!

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Steve Cohen

Steve Cohen of SAC Capital  was recently deposed by the SEC, Bloomberg Businessweek reports citing sources familiar with the matter.

Cohen is one of the most successful traders in history, and the SEC has been looking into the conduct of him and his firm for years.

A couple of SAC Capital employees were busted for insider trading a couple of years ago in the "expert networks" scandal, but Cohen remained unscathed.

Now, it appears the SEC has found something to talk to him about.

Importantly, the fact that Cohen decided to testify suggests that the SEC probably does not have persuasive evidence against him. Cohen certainly would not go in and admit that he had traded with inside information, and he probably would also not testify if he thought he might have to lie under oath.

And it's possible (though unlikely) that Cohen is merely being deposed as a witness to an investigation rather than a target. 

But there was presumably much excitement in the SEC's offices when Cohen showed up.

From Bloomberg Businessweek:

Cohen, 56, was recently deposed by Securities and Exchange Commission investigators in New York about trades made close to news such as mergers and earnings that generated profits at his hedge fund, said one of the people, who asked not to be identified because the investigation isn’t public.

Neither Cohen nor SAC has not been charged with any wrongdoing.

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