Hot Hedge Fund Highlights March 2nd
Insider Trading Case Against Former Goldman (NYSE:GS) Director (Dealbook)
The former McKinsey executive, Rajat Gupta, passed along information he gleaned while serving on the boards of Goldman Sachs (NYSE:GS) and Procter & Gamble (NYSE:PG). Among the tips that the S.E.C. says Mr. Gupta provided was word that Warren E. Buffett would invest $5 billion in Goldman Sachs (NYSE:GS) in September 2008 as the financial crisis raged. That information, the S.E.C. says, generated “illicit profits and loss avoidance of more than $17 million” for various Galleon funds. Mr. Gupta is also accused of disclosing to Mr. Rajaratnam information about Procter & Gamble’s (NYSE:PG) 2008 fourth-quarter results on the eve of their release. The trial of Mr. Rajaratnam is scheduled to start in federal district court in Manhattan on March 8. Gary Naftalis, a lawyer for Mr. Gupta, said that the S.E.C. allegations were “totally baseless.”
Highbridge Asia Chief Out, To Launch Own Hedge Fund (FinAlternatives)
Highbridge Capital Management has pulled the plug on its $1.4 billion Asia Opportunities Fund as manager Carl Huttenlocher prepares to leave the firm. Huttenlocher plans to launch his own hedge fund after his exit from Highbridge.
Plainfield Dumps Illiquid Assets On Paul Capital (FinAlternatives)
Embattled hedge fund Plainfield Asset Management has sold a chunk of its illiquid investments to private equity firm Paul Capital. New York-based Paul paid about $150 million for the portfolio, which includes 14 names and is primarily composed of illiquid debt positions, Dow Jones (NYSE:DIA) Private Equity Analyst reports. Technology, media and telecommunications companies make up a big chunk of the portfolio.
Baystar Hedge Fund Manager Goldfarb to Pay $14 Million to Setle SEC Suit (Bloomberg)
A California hedge fund manager agreed to pay $14 million to settle claims by the U.S. Securities and Exchange Commission that he secretly diverted cash from investors to entities he owned and controlled. Lawrence R. Goldfarb, of Larkspur, California, and his company, Baystar Capital Management LLC, diverted more than $12 million to fund a real estate venture and a San Francisco record company, the SEC said today in an e-mailed statement. The complaint was filed in federal court in San Francisco, the SEC said.
Goldman (NYSE:GS) Puts Figure on Possible Litigation Losses (WSJ)
Goldman Sachs Group Inc. (NYSE:GS) could lose as much as $3.4 billion in damages and other litigation-related matters involving securities it underwrote in the last few years for which the purchasers are now suing to recover losses or to force the firm to buy them back. In a securities filing Tuesday, Goldman (NYSE:GS) estimated that the figure, in the upper range of estimates, was “reasonably possible.”