Hedge Funds Northern Africa

Hedge Funds Cautious Over Events in Northern Africa

The political events in Northern Africa and the Middle East regions have caught most people off guard including intelligence officials, politicians and other observers. Hedge funds appear to be backing off making investments around the events due to the uncertainty. Only a few hedge funds have made trades on oil and credit protection.

Only a handful are starting to hunt ways to profit with investments, for example, in oil and credit protection.

"It's a little like the financial crisis in 2008. Many managers are saying, 'how am I supposed to figure this one out?,'" said Morten Spenner, who heads hedge fund of fund manager International Asset Management.

"If (Libya's) Gaddafi said tomorrow, 'Look, we've sorted it all out', oil prices could fall as much as 5 or 6 dollars a barrel in a day. And you could be really badly hurt."

A sudden burst of anti-government protest in Tunisia last month has sparked violent uprisings in Egypt and oil-rich Libya, paralyzing economies and threatening asset values across the North African region and beyond.

Macro hedge funds normally like to take bets on which country or company might suffer most or bounce back fastest from a debt crisis or a recession, but are wary of trying to second-guess governments or politically charged situations. Source

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Adam Wyden Hedge Fund

Senator Wyden's Son Launches New Hedge Fund

The son of a sitting United States senator has launched a new hedge fund from the family basement. Adam Wyden, the twenty-six-year-old son of Oregon's Senator Ron Wyden, has launched ADW Capital Partners LP in his mother's house--a decision that will help keep costs down for the young fund. For now, Adam Wyden is running the fund by himself without any employees. Prior to this venture Adam Wyden interned for DE Shaw.

Adam Wyden, 26, started the fund under the name ADW Capital Partners LP and runs it from the Washington house that now belongs to his mother, according to a private placement notice filed last month with the U.S. Securities and Exchange Commission. The fund is modeled after the investment partnership billionaire Warren Buffett ran in the 1950s and 1960s before acquiring Berkshire Hathaway Inc., Adam Wyden said in an interview.

The younger Wyden, whose father hasn’t invested in the fund, is among the first generation of post-crash money managers, many of whom must keep a lid on expenses in the face of a difficult money-raising environment. Before graduating last year from Columbia University’s business school in New York with a master’s degree, Adam Wyden worked as an intern at the $19 billion hedge fund founded by David Shaw, a Democratic fundraiser who backed Ron Wyden’s campaigns in 2004 and 2010.

“Right now it’s just me,” Adam Wyden, 26, said when reached at his home in the Palisades neighborhood of Washington, from where he’s been running his $3 million fund since September. “I am the CEO, I am the secretary, and I am the chief marketing officer.” Source

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Hedge Funds IT Secrets

5 Information Technology Secrets of Successful Hedge Funds

Finalternatives has published an interesting article on information technology providers and hedge funds. The article, the 5 IT Secrets of Successful Hedge Funds, explains how top hedge funds have incorporated technology to complement their hedge fund strategies.

1. They treat their IT provider as a partner. Your IT provider should understand your business so well that he or she can anticipate problems—what the business community likes to call “being pro-active.”

2. They kick their own tires. For years, the big banking institutions have set the technology standard and defined the “institutional class” benchmark against which all other financial services companies are measured.

3. They know IT is the lingua franca of all information divisions. New managers, especially, look at technology from their own perspective, i.e., how can technology make me a better stock, currency, bond or high frequency trader?

4. They realize ignorance is not bliss. The best hedge fund managers have a clear picture of their IT architecture.

5. They insist on documenting the process. Investors (and the SEC in years ahead) want to know the what, why and how of hedge funds’ procedures to reduce operational risks. Source

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Hedge Funds Japan M&A

Hedge Funds Return to Japan in Hopes of More M&A

Hedge fund managers have set their sights on Japan once again as corporate activities are expected to pick up in the country. Mergers and acquisitions and share buy-backs could make strong returns for those hedge funds operating there. Japan has seen an outflow of hedge funds over the last few years so it is a welcome sign of optimism.

The resurgent interest in Japan could mark a turn in the fortunes of the country's hedge funds industry, which has seen a sharp drop in assets and the number of funds since 2006 as the market peaked.

Hedge funds are betting the current environment is ideal for strategies such as event-driven and long/short, given that many companies are trading at low valuations and funding is cheap -- conditions ideal for M&As.

A stronger yen has prompted domestic firms to buy new production plants abroad and go in for deals. In a symbolic move, Japan's two major steel makers, Nippon Steel Corp (5401.T) and Sumitomo Metal Industries (5405.T) have announced merger plans.

Other factors favoring a relook at Japan are the recent shift in capital flows in favor of developed markets, strong corporate profitability -- which has left companies with about a record $2.5 trillion in cash -- a rebound in exports driven by robust demand in fast-growing Asia and hope that the economy is heading toward a moderate recovery. Source

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SAC Capital Investigation

Steven Cohen's Damage Control Amidst Investigation

Although Steven Cohen has not been directly implicated in the federal investigation into insider trading in the hedge fund industry, he's not taking any chances. Cohen's SAC Capital hedge fund firm has put in place a crisis management strategy to assuage any fears that his investors might have that the investigation is closing in on the firm.

The investors' concerns are not unreasonable considering that two former SAC employees have been charged with insider trading. And there is a feeling in the industry that SAC Capital is being hunted aggressively by American authorities, to the point that the WSJ has likened the pursuit to that of Captain Ahab and the great, white whale Moby Dick. Ultimately, Captain Ahab fails to capture Moby Dick and SAC Capital is surely trying to convince investors it will share Moby Dick's fate.

Three weeks later, Cohen's crisis management strategy appears to be paying off.
Judging by their words and wallets, SAC Capital's clients, including a large Blackstone Group investment fund, are giving the legendary 54-year-old trader the benefit of the doubt. Officials with several investment funds said that while the insider trading charges are unnerving, it's not enough to prompt them to pull money from the 19-year-old fund with a record of generating high double-digit returns.

Indeed, even in the wake of the February 8 charges, some people inside and outside the $1.9 trillion hedge fund industry are whispering that U.S. authorities, who have spent at least four years looking for evidence of wrongful trading at SAC Capital, may come up as empty-handed as Captain Ahab did in his hunt for the great white whale Moby Dick.

In talking with nearly two-dozen former SAC Capital employees, investors, money-managers, defense lawyers and former prosecutors, there is a sense that federal authorities are fighting last year's battle in focusing so much energy and resources on Cohen and his associates. Source

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Hedge Funds Security

Hedge Funds Hire Security Firms to Sweep for Bugs

Hedge funds are hiring security firms to sweep their offices and homes for listening devices. The firms are doing this to avoid the type of insider trading investigation that damaged several hedge funds and financial firms. According to the Securities and Exchange Commission, at least 15 hedge funds received insider information.

“Over the past six months, there has been a really heightened interest in electronic sweeps for hedge funds,” said Christopher Falkenberg, founder of Insite Security, a security and risk management firm in New York. “They’re working harder at clamping down on their information security and making sure the telephones are secured and the offices aren’t being bugged. We’ve also been asked to sweep traders’ homes.”

Federal prosecutors in New York have filed criminal charges against more than 40 individuals, alleging they shared secret information about company earnings and takeovers.

According to court papers filed by the Securities and Exchange Commission, at least 15 hedge funds improperly received inside information.

This month prosecutors filed their first charges against hedge fund employees in connection with a new probe. The investigation is focusing on insider trading allegedly conducted through firms, known as expert networks, that match industry specialists with money managers. Source

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Bill Winters Renshaw Bay Hedge Fund

Bill Winters Hedge Fund

Former JPMorgan Executive Launches Hedge Fund

Bill Winters, a former top executive at JPMorgan, is starting anew with the launch of a hedge fund. Winters formerly served as the deputy to JPMorgan head Jamie Dimon and now he is launching the fund with the help of two prominent investors, Jacob Rothschild and Johann Rupert.

William T. Winters, a former senior executive at JPMorgan Chase, has teamed up with the investment firms of Jacob Rothschild and the South African billionaire Johann P. Rupert to set up an asset management and advisory firm in London.

Mr. Winters, who left JPMorgan abruptly in 2009 after falling out with the chief executive, Jamie Dimon, will own half of the new company, called Renshaw Bay, he said in a statement on Thursday. Mr. Rothschild’s RIT Capital Partners and Mr. Rupert’s Reinet Investments will share the other half.

“Our objective is to build a global alternative asset management and advisory business that provides outstanding and differentiated investment opportunities for our founding shareholders as well as other sophisticated investors,” Mr. Winters said in the statement.
Mr. Winters, who was co-chief executive of JPMorgan’s investment banking business, will be chairman and chief executive of Renshaw; Mr. Rothschild and Mr. Rupert will be directors. Source

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Insider Trading Costs

The Cost of Insider Trading Investigations to Hedge Funds

The cost of coming under investigation for insider trading is enormous, even if the fund is not found guilty. The damage to the fund's reputation, the withdrawals and the loss of future commitments are major consequences. Three hedge funds learned this as an insider trading scandal cost them a combined $9 billion.

Level Global Investors has not disclosed the level of the redemption requests it received, but has announced it is closing and returning all of the $4 billion it manages in its funds to investors by the end of the quarter.

Diamondback Capital was hit by $1.3 billion of redemptions for the quarter ended March 31, about 17% of its $5.8 billion of assets under management. Diamondback Capital will remain open.

Executives of both long/short equity hedge fund managers have acknowledged their offices were searched by the FBI and are cooperating with Preet Bharara, the U.S. attorney for southern New York, in connection with an investigation into insider-trading tips that allegedly were passed to hedge fund managers by expert-network consulting firms. Charges have not been leveled against either firm, and executives at both firms said the government has confirmed they are not targets of the probe.
Source

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Hedge Funds Cocoa Price

Hedge Funds Up Bullish Cocoa Bets Amid Ivory Coast Troubles

Hedge funds monitor political situations as a factor in trading decisions and the turmoil in the Ivory Coast was no exception. Hedge funds have increased bullish bets on the price of cocoa to a level not matched in seven months. The disputed election last year is still being resolved and the political instability threatens cocoa supplies from the country.

Hedge funds are the most bullish on cocoa futures in almost seven months as political turmoil threatens supplies from Ivory Coast, the world’s biggest producer, and prices jumped to the highest since 1979.

In the week ended Feb. 15, hedge funds and money managers increased their net-long positions, or bets on rising prices, by 11 percent to 20,936 futures and options contracts, the highest since July, U.S. Commodity Futures Trading Commission data show. The holdings have more than doubled in the past month.

Alassane Ouattara, the internationally recognized winner of Ivory Coast’s Nov. 28 elections, told exporters to halt cocoa shipments until Feb. 23 in a bid to cut off funds to his rival. Prices surged to a 32-year high last week. The political stalemate entered its third month as Laurent Gbagbo, the incumbent president who has ruled for a decade, refused to cede power. Source

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Hedge Funds Systemic Risk

FSOC Report Finds Hedge Funds Pose a Systemic Risk

A report by the Financial Stability Oversight Committee has found that hedge funds and private equity firms pose a systemic risk. This is a troubling finding as financial firms that pose a systemic risk are expected to fall under the Federal Reserve's watch. This would also mean that regulators would require more information from hedge funds than they are currently required to provide.

The 80-page FSOC report, obtained by Bloomberg News, is intended to help regulators decide which non-banking financial institutions need Federal Reserve supervision.

The FSOC counts 10 members, including Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner, and was created as part of the Dodd-Frank financial reform law in 2010.

Significant redemptions by hedge-fund investors could “cause activity in some markets to freeze,” according to the February 3 report.

Hedge-fund industry lobbyists say the funds are not systemically important enough to warrant supervision by the Federal Reserve and that the costs involved in complying with additional regulation would put them at a disadvantage to their competitors. Source

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Diamondback Redemptions

Diamondback Capital Redemptions Top $1 Billion

Diamondback Capital Management has continued to lose money after the FBI raided its office as party of the insider trading scandal. Diamondback has reportedly been hit with withdrawal requests totaling $1 billion, 17% of the hedge fund's assets under management.

Diamondback Capital Management received withdrawal requests totaling $1 billion — 17% of the hedge fund manager's $5.8 billion under management — for March 31, the next redemption window, confirmed a source with knowledge of the situation who insisted on anonymity.

Diamondback was among the hedge funds raided in November by the FBI in connection with a widespread Department of Justice insider-trading investigation. Neither Diamondback nor its employees have been charged with wrongdoing.

Monica Everett, a Diamondback Capital spokeswoman, declined to comment.

Several of Diamondback's large investors “have expressed their current intention to remain invested at or close to their current levels,” according to a Feb. 1 client letter from Richard Schimel and Lawrence Sapanski, co-chief investment officers, that was obtained by P&I Daily. Source

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Banks and Hedge Funds Bernie Madoff

Madoff: Banks and Hedge Funds Knew About Scheme

Bernie Madoff has made headlines again by claiming that hedge funds and banks knew of his ponzi scheme. This is a powerful accusation from the convicted fraudster as it implies that banks and hedge funds were complicit in his multi-billion dollar fraud.

For 26 months since Bernard Madoff's multi-billion dollar Ponzi scheme unraveled -- one of history's great financial villains -- has claimed he acted alone, reports CBS News correspondent Jim Axelrod.

Now he's telling the New York Times certain banks and hedge funds were "complicit" in his fraud, calling it "willful blindness" in an interview published Feb. 16. "They had to know. But the attitude was sort of, 'if you're doing something wrong, we don't want to know,'" Madoff said in the interview.

"American law treats willful blindness the same as actual knowledge -- you can't shut your eyes and avoid having knowledge attributed to you that you would have known had you opened your eyes" said Columbia Law School professor John Coffee.
Source

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Japan Hedge Fund Managers

Japan Hedge Funds Lead January Returns

Japan hedge fund managers have led the industry in the first month of 2011. Hedge funds around the globe gained 0.06% while Japan hedge funds returned 1.26%. It was a month of mixed returns for the industry but hedge funds continued a seven-month long streak of positive returns.

Hedge funds globally rose 0.06 percent, while Japan-focussed funds gained 1.26 percent, making it the best performing hedge fund region in the world, comprehensively outperforming the 0.1 percent gain of the benchmark Nikkei 225 Index .N225 in January.

Asset flows into the industry were positive for a seventh consecutive month, with investors allocating a net $3.39 billion, helping the industry grow to $1.68 trillion.

"Although January is usually a slow month for asset flows, the excellent returns posted by hedge funds in the last quarter of 2010 and improving macro-economic fundamentals have led to strong interest among investors to allocate to hedge funds," the firm said in a statement. Source

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David Tepper Banks

David Tepper's Hedge Fund Increases Bets on Big Banks

David Tepper, the manager of Appaloosa Management LP, has increased his holdings of the four largest U.S. banks. Appaloosa Management doubled its stake in Citigroup to a holding of an estimated $576.9 million, according to quarterly filings with the Securities and Exchange Commission.

Appaloosa Management LP, the New Jersey hedge fund run by investor David Tepper, increased its bets on the four biggest U.S. banks during the fourth quarter and now holds more than $1.23 billion combined in the banks, according to a filing with the Securities and Exchange Commission.

Among its moves, the fund more than doubled its stake in Citigroup Inc. to more than 117 million shares, a holding that at Monday's closing price would be valued at $576.9 million.

The fund also reported a new stake in J.P. Morgan Chase & Co. valued at $25.2 million. Its stake in Bank of America Corp. rose 12% to 25.1 million shares, a value of $373.3 million, while its stake in Wells Fargo & Co. rose to 7.5 million common shares from 6.4 million and 335,482 preferred shares from 292,019. The common stake in Wells Fargo would be valued at $252.7 million at Monday's close. Source

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Hedge Funds Wheat

Hedge Funds Add Bullish Bets on Wheat Amid Shortage

Hedge funds are raising bullish wheat bets to a high not seen since 2007. As global supplies of wheat are dwindling and there are concerns that food inflation will increase in the coming months. Extreme weather is one of the main causes of lower supplies, with floods in Australia and Canada and a drought in Russia.

Hedge funds increased their bullish bets on wheat to the highest in more than three years amid shrinking global supplies and mounting concern that food inflation will accelerate.

In the week ended Feb. 8 on the Chicago Board of Trade, the funds and money managers increased net-long positions, or wagers on rising prices, by 19 percent to 51,787 contracts, the highest since August 2007, government data showed on Feb. 11. On Feb. 9, wheat prices reached a 29-month peak of $8.9325 a bushel.

Last week, the U.S. Department of Agriculture lowered its forecast for global inventories. Futures have jumped 77 percent in the past year after drought slashed crops in Russia and floods in Canada and Australia reduced output. Surging food costs have triggered riots in North Africa and the Middle East. Egypt’s Hosni Mubarak ceded power on Feb. 11.

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John Paulson Banks

John Paulson Cuts Stakes in Citigroup and Bank of America

John Paulson is cutting back stakes in CitiGroup and Bank of America, according to his quarterly release. The hedge fund giant is also purchasing bonds of Alcoa, as well as shares of BlackRock, Seagate and J. Crew.

The $5 Billion Man, hedge fund manager John Paulson, reported buying bonds of Alcoa, and shares of BlackRock, Seagate and J. Crew in his latest quarterly snap shot of his investment holdings.

He pared his stakes in Citigroup and Bank of America, both among Paulson & Co.’s biggest stock holdings by market value, according to his reported investments as of Dec. 31. At the end of the third quarter, Paulson reporting owning 424 million shares of Citi. Today, Paulson disclosed owning nearly 414 million shares.

As of the end of September, Paulson owned 138 million BofA shares, and now he’s reporting about 124 million. (He also holds warrants on Bank of America.) Our Dow Jones Newswires colleagues are reporting Paulson also trimmed back his holdings in Wells Fargo. Source

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Level Global Investors Shut Down

Hedge Fund Closes Amid Insider Trading Investigation

Level Global Investors is one of the four hedge funds currently under federal investigation for possible insider trading. This probe proved too much for management as the hedge fund announced that it is shutting down. One of the founders explained the shut down to investors, "The government has commenced what may be a lengthy inquiry with no set timeline. This process, even when it leads to the positive outcome that counsel expects, nonetheless threatens to undermine our ability to meet our fiduciary responsibility to our investors.” Additionally, Diamondback Capital has been asked by investors to cash out $722 million or 12.3% of AUM (Diamondback has also been investigated by federal regulators).

Level Global Investors, currently under investigation along with three other hedge funds for insider trading by federal authorities, told investors on Friday that it would shut down. It cited the investigation and investor withdrawals as the cause. At the same time, Diamondback Capital, which was also raided by investigators, has been asked by investors to return some $722 million by the end of March. This amounts to 12.3% of the company’s capital.

According to Reuters, David Ganek, one of the founders of Level Global, said in a letter to investors, “The government has commenced what may be a lengthy inquiry with no set timeline. This process, even when it leads to the positive outcome that counsel expects, nonetheless threatens to undermine our ability to meet our fiduciary responsibility to our investors.” The letter went on to say, “With the continuing cloud of uncertainty, we understand why investors might elect to redeem in the current environment.”

After emphasizing that the firm is “not a target” of the investigation and has retained outside counsel to review its practices, Ganek added in the letter, “I remain highly confident that my conduct in leading the firm and its investment process was lawful and ethical at all times.” Source

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Hedge Funds January 2011

Hedge Funds Lagged Behind Stock Indexes in January

Eurekahedge has found that hedge funds stumbled in the first month of the new year. The Eurekahedge Hedge Fund Index, which follows 2,600+ hedge funds, showed that hedge funds returned just 0.01 in January 2011. The index shows the industry got off to a rough start while the major stock indexes provided better returns to investors last month.

Hedge funds worldwide were little changed in January, returning 0.01 percent and underperforming global equities as losses in some emerging markets limited gains, according to Eurekahedge Pte.

Last month’s return follows a 10.9 percent gain in the Eurekahedge Hedge Fund Index, which tracks more than 2,600 funds worldwide, in 2010, the Singapore-based data provider said in an e-mailed report. The index rose 2.9 percent in December. More than 30 hedge funds started in January, the firm said, without elaborating.

Hedge funds had a seventh consecutive month of positive returns, helped by better-than-expected earnings, a stronger outlook for the U.S. economy and easing concerns over the European sovereign crisis, Eurekahedge said. Last month’s gain compares with a 2.2 percent advance by the MSCI World Index.

Source

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Hedge Funds Euro Trading

Hedge Funds Hit By Losses Trading the Euro

The fluctuations of the euro have caught many hedge funds off guard. Several large hedge funds have been hit by losses from the European Union currency. Hedge funds including FX Concepts, Moore Capital Management and Bridgewater Associates are among the funds said to have lost money trading the euro.

FX Concepts, an $8 billion currency-focused hedge fund in New York, struggled with losses as Europe's shared currency unexpectedly surged last month. Other hedge funds in the U.S. and Europe, including Bridgewater Associates Inc. and Moore Capital Management, have also stumbled recently, several investors and bankers say.

For months, Wall Street banks have recommended that investors sell the euro while buying higher-yielding currencies, such as those of emerging-market economies. So far, these bets haven't panned out.

Sentiment on the euro changed suddenly and sharply in the middle of January as European leaders moved closer to working out details of a beefed-up fund to help finance struggling nations, and the European Central Bank even indicated it may raise interest rates sooner than expected, a move that would attract investors to euro-denominated assets. Source

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Citigroup Hedge Fund

CitiGroup Hedge Fund

CitiGroup Hedge Fund Makes Gains from Inside Info

A Citigroup hedge fund has reaped almost half a million dollars from insider information, according to American prosecutors. The fund made more than $450,000 during 2006 and 2007 from trading involving Fairchild Semiconductor International Inc. The hedge fund has been identified as Citigroup’s Tribeca Global Management LLC.

The fund, described as “Hedge Fund A,” in a criminal complaint filed in federal court in Manhattan, was identified in a parallel lawsuit by the U.S. Securities and Exchange Commission as Citigroup’s Tribeca Global Management LLC. This fund managed about $2 billion before the bank began to close it in September 2007.

The court filings, stemming from a nationwide federal probe of hedge funds, technology companies and so-called expert networking firms, accuse onetime Tribeca portfolio manager Samir Barai along with a former manager at SAC Capital Advisors LP of illegal insider trading. Barai, 38, surrendered to authorities yesterday. Neither Citigroup nor Tribeca, which the bank began shutting down in 2007, were accused of wrongdoing.

“Barai obtained material, nonpublic information provided to him in breach of fiduciary and other duties or trust and confidence,” according to the criminal complaint. Manhattan U.S. Attorney Preet Bharara announced the charges against Barai, who worked at Tribeca in 2006 and 2007 before starting his own hedge fund. Source

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Hedge Funds Municipal Bonds

Hedge Funds Looking to Short Municipal Bonds

Hedge funds are looking for a way to short municipal bonds. The financial instability of states in America that are bogged down by debt and in danger of defaulting has drawn the attention of hedge funds. Hedge funds would like to bet on the bonds' creditworthiness.

How do you “short” an indebted US state? As fears grow over the scale of a crisis some believe could rival the debt problems of the eurozone, hedge funds and other investors are looking at how to trade the market in America’s municipal debt.

For decades, this $3,000bn bond market was safe, predictable and dull. The traditional buyers of the bonds issued by states, cities and other local bodies were wealthy local residents lured to them by the tax breaks on offer for individual investors. They bought the bonds, held them until they matured and then bought more.

Not now. State deficits have ballooned, local authorities are grappling with huge public sector pension liabilities and triple A bond insurance that used to prop up even the riskier municipal bonds is harder to find. Source

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D.E. Shaw and Paulson & Co.

D.E. Shaw and Paulson & Co. "Confused" About Fed Rules

Two very large hedge funds have voiced concerns to the Federal Reserve that they are "confused" about the new rules process. Last month, the managing directors for Paulson & Co. and D.E. Shaw told "expressed concerns that confusing information was circulating about both the process and likely analytical approach" to deciding which firms are systemically important and therefore subject to federal oversight.

Michael Waldorf, managing director at Paulson & Co., and Darcy Bradbury, managing director with D.E. Shaw, “expressed concerns that confusing information was circulating about both the process and likely analytical approach” to designating firms, “contributing to market uncertainty,” according to a notice on the Fed website.

The Financial Stability Oversight Council, a group of regulators that includes Treasury Secretary Timothy F. Geithner and Fed Chairman Ben S. Bernanke, is developing criteria for determining which non-bank financial firms are systemically important and therefore warrant Fed oversight. The council may begin naming companies in the middle of this year.

John Paulson, who runs the New York-based hedge fund named after him, earned about $5 billion last year, a person with knowledge of the firm said last month. New York-based hedge fund D.E. Shaw & Co. was founded by David Shaw and, according to its website, had $19 billion of investment capital as of Jan. 1. Source

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Hedge Fund Managers Insider Trading

Three Managers & Analyst Charged with Insider Trading

The insider trading roundup by federal regulators and enforcers continues with the rumored charges against three hedge fund managers and an analyst. The insider trading probe is part of the larger investigation of the hedge fund industry and so-called expert networks passing along information to fund managers and employees. The investigation is a black mark on the industry just as fund managers were regaining the confidence of investors after the ponzi scheme run by money manager Bernard Madoff and other recent scandals in the financial world.

Law enforcement has been scrutinizing the relationship between hedge funds and so-called expert networks—companies that pair investment firms with public company employees, who offer insight into their companies and industries. The problem, according to prosecutors, is that these conversations sometimes include material nonpublic information.

One of the three hedge fund managers due to be charged, WSJ reports, is Samir Barai, who founded New York-based Barai Capital Management in 2008 after leaving Citigroup’s hedge-fund unit. He has evidently been charged with obstruction of justice.

Charges are also expected against Jason Pflaum, 38, a technology analyst; Donald Longueuil, 35, formerly of CR Intrinsic Investors LLC, a division of hedge fund SAC Capital Advisors; and Noah Freeman, who worked at SAC Capital’s Boston office from 2008 until January 2010. Source

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Richard Gere Arbitrage Hedge Fund

Richard Gere Replaces Pacino in Arbitrage Hedge Fund Film

For those of you who were looking forward to seeing Al Pacino in a movie about hedge funds, here's some potentially bad news. Al Pacino (of Scar Face, and the Godfather) is being replaced by Richard Gere (Pretty Woman, Runaway Bride and Shall We Dance). Gere will star in the film about a hedge fund executive and the movie will start production in a couple of months.

The film tells the tale of a hedge fund magnate who is desperate to finish the sale of his business and winds up making an error forcing him to search for assistance from an unlikely source.

Shooting is expected to start in New York in mid-April, with Laura Bickford, Kevin Turen, Bob Salerno and Justin Nappi producing.

Mohammed al Turki and Brian Young will be executive producers on the project.

Richard has been taken a short break from movies since 2009, where he was last seen in 'Hachi: A Dog's Tale'.

He has a number of films coming up soon, including comedy project 'Movie 43' and he recently finished work on crime drama 'The Double' with Martin Sheen and Topher Grace.

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