Hedge Fund News Wrap: Week Ending 1/17/14

Doctor Testifies to Giving Drug Data in SAC Trial

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As the insider-trading case against Mathew Martoma continues, a New Jersey doctor, Joel Ross, has testified that he gave Martoma information regarding the results of an experimental Alzheimer’s drug trial.  In exchange for the confidential information, the doctor received tens of thousands of dollars in consultation fees.

In exchange for his testimony, Ross will not have charges brought against him.

Ross is one of two government witnesses expected to testify against Martoma, who is accused of using confidential information to earn SAC Capital Advisors $276 million in profits and avoid losses. The second doctor, Sid Gilman, is said to have given Martoma the results of the drug trial before he met with Ross.

If convicted, Martoma could face as long as twenty years in jail for each count of the two counts of securities fraud, and five additional years for a conspiracy charge.

 

See detailed coverage from:

Bloomberg News

DealBook

The Wall Street Journal

 

 

SAC Portfolio Manager Quits to Start Own Fund

Vishal Ghiya, a top SAC Capital Advisors portfolio manager, has resigned from his position to start his own hedge fund.

According to a source for Bloomberg News, Ghiya worked at SAC’s Sigma unit and managed $500 million, which included borrowed money.

Ghiya is one of many SAC employees who have fled the embattled hedge fund, as it seeks to convert itself into a family office.  As a family office, SAC will manage founder Steven Cohen’s money exclusively.

In the face of insider trading charges, Cohen raised bonuses to stem “defections,” as the U.S. intensified its case against the hedge fund.

In November, SAC pled guilty to insider trading charges, and agreed to pay $1.8 billion in fines.

 

See detailed coverage from:

Bloomberg News

FINalternatives

 

  

QFS Shuts Down Currency Hedge Fund

QFS Asset Management, based in Greenwich, Conn., is shutting down its last remaining hedge fund and returning nearly $1 billion to clients.

QFS Asset Management used a quantitative approach to global macro investing during its twenty-six years in business, according to a report by Reuters.

In 2012, the firm’s currency program lost 8.6 percent. Last year, the firm lost 8.7 percent, making it the first time in twenty years that it has lost money consecutively.

“The current market environment does not offer adequate risk adjusted opportunities for fundamentally-driven quant macro strategies, and that is unlikely to change for the foreseeable future,” said CEO Karlheinz Muhr in a statement.

The news comes three months after FX Concepts, a currency-focused hedge fund, announced it would close its doors, citing interference by central banks as a reason for poor returns.

 

See detailed coverage from:

The Wall Street Journal

ValueWalk

Reuters

 

 

 

Hedge Fund Founder, Robert Wilson, Leaves Art Collection to Whitney

Robert Wilson, who founded the hedge fund Wilson & Associates in 1969, died on December 23rd at the age of 87 after leaping from his New York City apartment.

Wilson’s hedge fund firm specialized in short selling before he retired in 1986.  A report by the New York Times mentions that Wilson started giving away most of his wealth soon after retiring. In 2000, it is reported that his wealth was at $800 million.

In his will, the philanthropist gave his art collection to the Whitney Museum of Art in Manhattan. However, a painting by James Rosenquist, “The Meteor Hits the Swimmers Pillow,” was the only piece that was not to be donated to the Whitney Museum.

The will, which was filled this week in New York State’s Surrogate Court, also leaves $2 million to his former assistant, Angela Riccardi. In addition, his apartment is to be sold by his estate.

According to the Daily News, he was well known for “maintaining frugal habits, and preferred taking the subway to a cab.”

 

See detailed coverage from:

Bloomberg News

New York Daily News