Shaw Capital Management Scam Info: HFMWeek Daily Snapshot – 16 February

NEWSPAPERS AND WIRES
Hedge funds posted positive returns for a seventh consecutive month in January, with Japan-focused managers leading gainers, according to Singapore-based fund tracker Eurekahedge, reports Reuters. Hedge funds globally rose 0.06%, while Japan-focussed funds gained 1.26%, making it the best performing hedge fund region in the world, comprehensively outperforming the 0.1% gain of the benchmark Nikkei 225 Index .N225 in January.

Investors in hedge fund Diamondback Capital Management, which is struggling with fallout from an insider-trading investigation, have asked to pull $1bn in capital out of the firm, a person familiar with the situation said Tuesday, reports the Wall Street Journal. The amount isn’t final, and the tally could run higher as investors may put in redemption requests before the deadline later Tuesday. FBI agents raided Diamondback and several other hedge funds in November as part of an insider-trading probe.

DE Shaw & Co, one of the world’s biggest hedge fund firms, has told investors that it plans to charge them less, an investor with the firm said on Tuesday, reports Reuters. The New York-based firm, which oversees roughly $19bn in assets, plans to lower its fees to a 2.5% management fee and a 25% performance fee, said the person, who was not permitted to speak about the matter publicly. Previously, the firm charged a 3% management fee plus a 30% performance fee.

Actelion is preventing some hedge fund shareholders from attending a presentation at the biotechnology company’s headquarters this week, according to two people with knowledge of the situation, Bloomberg reports. Actelion is limiting attendance at the 17 February event in Allschwil, Switzerland, to the company’s largest shareholders and to research analysts from investment banks, according to the people, who declined to be identified because their discussions with the company were confidential.

A two-time CNBC pundit and Manhattan hedge-fund operator is at that heart of a brazen $4m Ponzi scheme, Manhattan DA Cyrus Vance said Tuesday, reports NY Daily News. Brian Kim was indicted on grand larceny and scheme to defraud charges for the scam that began in 2003 and through which he single-handedly bilked at least 45 West Coast investors out of cash from his Manhattan offices, officials said. “The defendant induced his clients to make risky and speculative investments by portraying himself as an accomplished trader and money manager,” Vance said.

Wall Street fraudster Bernard Madoff has said in a prison interview that unidentified banks and hedge funds were somehow “complicit” in his massive Ponzi scheme, AFP reports citing the New York Times. “They had to know,” Madoff said in story posted on the newspaper’s website late Tuesday. “But the attitude was sort of ‘If you’re doing something wrong, we don’t want to know.’”Madoff, who touted himself as one of New York’s most successful money managers, was arrested in late 2008 and sentenced in June 2009 to 150 years in prison.

Gold prices rose to a four-week high on Tuesday as inflation worries sparked a technical breakout, and as Chinese data curbed expectations for further interest rate hikes there, Reuters reports. Bullion investor sentiment improved after US regulatory filings confirmed that top hedge fund managers, such as John Paulson and George Soros, held their big bets on gold in the fourth quarter of last year. “The inflation mentality is beginning to take hold more, and that sparked gold’s rise today,” said Adam Hewison, president ofMarketClub.com.

Galleon Group founder Raj Rajaratnam should be ordered to turn over a list of expert witnesses and secretly recorded conversations he intends to use as part of his defence at trial, prosecutors said late Monday, the Wall Street Journal reports. In a court filing Monday, federal prosecutors in Manhattan said. Rajaratnam’s lawyers have refused to reveal who they may call as expert witnesses and have refused to disclose which secretly recorded wiretaps they plan to introduce at trial.