Hedge Fund News Wrap: Week Ending 10/10/14

Herbalife Hires Former U.S. Regulator in Wake of FTC Investigation

Nutritional supplement company, Herbalife Ltd., has hired former FTC commissioner Pamela Jones Harbour as Head of Compliance amid a current probe

I know first-hand how great the products are because I’ve been a customer for 10 years,” said Harbour in an official statement. “My understanding of the industry and familiarity with the products have given me great insight into what a beneficial company Herbalife is.”

Herbalife has been the target of attacks from prominent hedge fund figures, notably hedge fund manager Bill Ackman, who contend that the company is running a pyramid scheme and misleading distributors and investors. Ackman announced a $1 billion short bet against Herbalife in December 2012.

Herbalife has continued to deny Ackman’s allegations, claiming they are “completely false and fabricated.”

Most recently, Pamela Jones Harbor was a prosecutor in the New York State attorney general’s office for 12 years, and was also a partner helping head the privacy and data protection team at law firm, BakerHostetler. Harbor served as FTC commissioner from 2003 to 2010.

Herbalife shares are down 43 percent this year through last Friday’s close, according to The Wall Street Journal.

 

See detailed coverage from:

Bloomberg News

The Wall Street Journal

Business Insider

 

 

Hedge Fund Elliott Management Urges EMC to Break Up

In the wake of recent spin-offs by tech giants such as Hewlett-Packard Co. and eBay Inc., EMC Corp. has also received a call from activist investors to consider splitting from its software company, VMWare Inc.

Activist shareholder Elliott Management Corp. urged EMC to consider a spin-off in a letter addresses to EMC’s chief executive, Joe Tucci, and the company’s board. In the letter, Elliott criticized the company for being complex, which has allegedly caused the company to fall behind its peers.

Though EMC is a leader in numerous markets with great products, EMC’s stock price has deeply underperformed its proxy peers and the market over all relevant time periods,” said Elliot in the letter. “Both EMC and VMware have grown and are now competing against one another, confusing customers, employees, Street analysts and shareholders.”

EMC is best known as an enterprise hardware company that sells products and services to big businesses. VMWare is a separately traded cloud computing firm valued at nearly $40 billion.

Currently, Elliott has a 2.2 percent stake in EMC.

 

 

See detailed coverage from:

The Wall Street Journal

DealBook

Bloomberg News

 

 

John Paulson’s Hedge Fund Slumps 10.6 Percent

Even John Paulson is not immune to volatile financial markets.

The billionaire hedge fund manager, John Paulson, who is known for famously betting against subprime mortgage securities leading up to the the financial crisis, has had a rough September.

His flagship Advantage Plus fund fell 10.6 percent in September, bringing its year-to-date decline to 14 percent.

While September was not a good month for hedge funds overall, the average hedge fund fell only 0.74 percent in September, according to research group Preqin. The Standard & Poor 500 Index fell 1.40 percent in September.

See detailed coverage from:

Forbes

Business Insider

ValueWalk