Hedge Fund News Wrap: Week Ending 10/17/14

Hedge Fund Analyst Gets Five Years in Prison

A former analyst at a San Francisco-based hedge fund, Matthew Teeple, faces five years in prison and close to $600,000 in fines and forfeitures for his role in an insider trading scheme.

Teeple, who was an analyst at Artis Capital Management, allegedly passed a tip about an impending merger to fifteen people. The merger was between Brocade Communication Systems and Foundry Networks in 2008. The hedge fund earned more than $36 million by trading on the confidential tip, which Teeple received from Foundry executive David Riley, according to FINalternatives.

He was a shotgun, firing information out to multiple people,” prosecutor Telemachus Kasulis said.

I’m deeply apologetic to all those impacted by actions,” said Teeple.

 

See detailed coverage from:

Reuters

HedgeCo

FINalternatives

 

 

Hedge Fund Manager Ackman Contends Allergan is Misleading Investors

Hedge fund manager William Ackman continues to wage his battle against Botox-maker Allergan Pharmaceuticals. On Thursday, Ackman accused Allergan of misleading investors in order to fend off a takeover bid from Valeant Pharmaceuticals.

Ackman states that his lawyers have seen documents that show Allergan’s board knowingly released misleading statements about Valeant. However, sources such as ValueWalk state that Ackman hasn’t actually seen the documents himself.

We’ve actually found evidence that will come out in the next few days of attempts at manipulating Valeant’s stock price down,” Ackman said. “I’ve not myself seen the documentary evidence because it was marked highly confidential. My lawyers have seen it and you’re going to see us push forward on that issue.”

Ackman, who has teamed up with Valeant Pharmaceuticals, has been pushing Allergan to agree to a takeover bid. However, Allergan claims that Valeant has had difficulty retaining executives and its takeovers caused sales problems. Valeant has fought back, by filing complaints with the U.S. Securities and Exchange Commission and Quebec’s Authorite de Marches Financiers, alleging a “persistent pattern of misleading statements,” including that sales were “stagnant or declining.”

Another problem for Ackman lies in the legality of his involvement in the acquisition attempt. Allergan filed a lawsuit, alleging that Ackman’s Pershing Square Capital hedge fund and Valeant Pharmacteuticals violated insider trading laws and failed to disclose material information before the takeover bid.

 

 

See detailed coverage from:

Business Insider

Reuters

ValueWalk

 

 

Point72 Still Outperforming Most Funds

Many believed that a guilty plea and a record $1.8 billion fine would be the end for Steven Cohen and his hedge fund, SAC Capital Advisors.

Following the tumultuous insider trading lawsuit that saw a dozen of SAC Capital employees charged with insider trading, Steven Cohen transformed his once successful hedge fund into a family office.

Now, Point72 Asset Management manages Cohen’s estimated $10 billion exclusively, and the fund continues to outperform most hedge funds.

According to The New York Times, Point72 has a year-to-date gross profit of about $1.8 billion. The returns posted by his family office are impressive. The average hedge fund was up 3.07 percent by the end of September, according to the Hedge Fund Research composite index. The broader market was only up 0.8 percent, year-to-date, according the Standard & Poor 500 Index.

It seems that Cohen does not need outside investors to generate impressive trading profits.

Cohen still faces a civil case against the Securities and Exchange Commission, which could bar him from trading.

 

 

See detailed coverage from:

DealBook

FINalternatives