Tag Archives: losses

Israel’s girlfriend sentenced to 3 years probation

Stamford Advocate – Debra Ryan, the girlfriend of Samuel Israel, convicted for his role in a $400 million fraud involving the collapse of Stamford-based hedge-fund firm Bayou Group LLC, was sentenced to three years probation for aiding his escape.

Ryan, a decorator who once rented a house on Highland Avenue in Greenwich, also was ordered to be confined at home for four months and not to have any contact with Israel.

Israel, 49, pleaded guilty in March to faking his suicide by abandoning his car on the Bear Mountain bridge with the words "suicide is painless" written on the windshield and fleeing the day he was to begin a 20-year sentence. He pleaded guilty to fraud in 2005 after admitting he hid $400 million in losses at Bayou.

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Pound extends losses vs dollar after Europe election

guardian.co.uk – Sterling fell against the dollar to near a two-week low on Monday after a collapse of support for the UK’s ruling Labour Party in the European election raised the chances of further challenges to Prime Minister Gordon Brown.

Despite its losses against the dollar, the pound rose against the euro, as the single European currency came under broad selling pressure after Standard & Poor’s cut its sovereign rating on Ireland for the second time in three months.

Analysts said Labour’s drubbing in weekend European elections added to the uncertainty surrounding the political future of Britain’s embattled prime minister, who reshuffled his Cabinet on Friday after six of the party’s ministers quit.

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Bank ‘oligopoly’ slows CDS clearing-BlueMountain

Reuters – Large dealers in the $26 trillion credit default swap market are blocking CME Group’s CME.N efforts to clear trades, in a bid to retain their "oligopoly" over the market, hedge fund BlueMountain Capital Management said on Monday.

Central clearing of CDS trades is viewed as imperative to removing risks associated with the potential failure of a large counterparty. Fears of margin losses helped spur a run on Bear Stearns Cos and Lehman Brothers and sparked government calls for mandatory clearing of standardized CDSs.

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Hedge fund manager Singer wants limits on leverage

Alibaba News Channel – Aggressive government action can hurt the market, but regulators should clamp down on leverage among banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.

Singer said the current "anti-capitalist" fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.

By the same token, he observed that highly regulated banks fueled last year’s market implosion because they ramped up their use of leverage, or borrowed money, for trading and investments. High levels of leverage in a downturn can multiply losses and throw markets into chaos.

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US gloom weighs on London

Times Online – Britain’s leading share index stayed in negative territory in mid-morning trading after failing to shake off concern about rising US debt and growing fears that General Motors will file for bankruptcy protection by Monday.

The FTSE 100 was down 42.78 points at 4,373.45 by mid-morning, although the pound, which yesterday hit a seven-month high of $1.60, made up earlier overnight losses to trade at $1.5935.

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Spanish bank to repay $235M it withdrew from Madoff scheme

USA Today – A Spanish banking giant that channeled $3 billion of its clients’ funds to Bernard Madoff has agreed to repay more than $235 million it withdrew from the confessed Ponzi scheme architect in the months before the scam collapsed in December.

Pending federal bankruptcy court approval, the deal announced Tuesday by a hedge fund investment subsidiary of Banco Santander would boost the amount recovered to help repay Madoff’s victims past the $1.2 billion mark.

The settlement would return 85% of the total sought from Spain’s largest bank by Irving Picard, the court-appointed trustee seeking Madoff’s assets for redistribution to thousands of victimized investors worldwide. Picard has so far issued more than $100 million in repayment commitments, a fraction of the total losses.

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Catastrophe Derivatives Demand Surges as Storm Season Nears

Insurance Journal – Demand for disaster derivatives is surging as insurers seek alternatives to scarce reinsurance and expensive catastrophe bonds, with the forthcoming North Atlantic hurricane season likely to give a further boost.

Prices are at record levels for Industry Loss Warranties (ILWs) and derivatives such as catastrophe futures, used by insurers to cover their potential losses from natural disasters.

"People are trying to purchase as much cover as they can, be they insurance companies in Florida or reinsurers in Bermuda, and obviously pricing has been driven up considerably," said Stephen Breen, Executive Vice President at Tradition Re, which brokers traditional reinsurance and catastrophe derivatives.

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Ospraie’s plans point to hedge fund confidence

NineMSN – Ospraie Management is launching two funds focusing on commodities and other liquid securities just eight months after it was forced to close its flagship fund amid huge losses on commodities trades.

The US hedge fund’s move, announced in a letter to investors, is a sign of growing confidence within the hedge fund industry.

"After much reflection and with a number of lessons learned, we see a set of opportunities today that we believe could create significant value for investors in coming years," Dwight Anderson, Ospraie’s founder, wrote in a letter last week obtained by the Financial Times.

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Why Isn’t There A Hedge Fund Bailout?

Atlantic Online – For all the talk these last few years about the risks to investors of "secretive, unregulated" hedge funds, they certainly haven’t turned out to be the big problem, have they? Thousands of hedge funds lost, in the aggregate, hundreds of billions of dollars last year, and hundreds have shut down. But nobody in government is calling for a hedge fund bailout because hedge funds losses, however painful to investors, don’t create systemic risks to the nation’s financial apparatus. As it turns out, it was the big regulated entities, the banks and investment banks, that were the problem, not the unregulated hedge funds.

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Aozora Posts 242.6 Billion Yen Loss on GMAC, Hedge Fund Losses

Bloomberg – Aozora Bank Ltd., the Japanese lender controlled by Cerberus Capital Management LP, posted its first loss in a decade, after investments in U.S. lender GMAC LLC and Bernard Madoff soured.

The bank booked a 242.6 billion yen ($2.5 billion) deficit in the year ended March 31, compared with a profit of 5.93 billion yen a year earlier, it said in a statement today. It lost 35.8 billion yen on U.S. auto financing company GMAC.

Aozora, rescued by Japan’s government during the 1990s banking crisis, has pledged to focus on domestic lending after racking up losses in the U.S. Chief Executive Officer Brian Prince, who replaced Federico Sacasa on Feb. 10 when the bank forecast a loss, declined to comment on reports he merge the company with Shinsei Bank Ltd.

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Hedge fund managers leery of activist Uncle Sam

Forbes – Following a brutal 2008 of losses, plunging assets and the Madoff scandal, the activities of the Obama administration were a primary worry among the nearly 500 hedge fund managers and other industry executives gathering at a Las Vegas conference this week.

‘When you have government intervention at the scale we have, you do something the markets abhor: you create uncertainty,’ said Sean Mathis founding partner of New Centurion Capital Partners. ‘We have uncertainty where markets are going and what the rules of the road will be.’

The Obama administration, even as it courts private investors to help buy up toxic bank assets, has targeted Wall Street bonuses and called for tougher market regulation.

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David Geffen loses bid for stake in New York Times

PerthNow – Mr Geffen tried to acquire a 19 per cent stake in the New York Times Company that was held by Harbinger Capital Partners, the activist hedge fund, but was rebuffed, it emerged overnight.

Since 1896, the newspaper has been controlled by the Ochs-Sulzberger family, whose members maintain their grip with a separate class of super-voting shares.

However, the dominance of the family, headed by Arthur Sulzberger, has come under pressure as advertising has collapsed and losses have mounted, which have led to speculation that The New York Times may be sold.

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