Monday, 30 March 2015
Last updated 2 days ago
Mar 26 2010 | 4:12am ET
Appaloosa Management has denied that it knowingly violated a rule that bars participating in a secondary offering if a firm is selling a stock short.
The Securities and Exchange Commission is investigating the $13 billion Chatham, N.J.-based firm for trades it made in Wells Fargo shares as the bank was acquiring Wachovia Corp. in 2008. In a letter to investors yesterday, Appaloosa said two of its funds shorted more than one million Wells Fargo shares between Oct. 31 and Nov. 5 of that year before buying 125,000 shares in a secondary offering announced on Nov. 5.
The hedge fund said it only learned of the secondary offering after its public announcement—and after it had already shorted the bank’s shares.
“There is no assertion that Appaloosa knowingly acted to manipulate the market for Wells Fargo stock,” it wrote.
The SEC’s Rule 105 bars investors with a short interest in a stock five days before a stock offering from participating in that offering. It is designed to prevent market manipulation.
The firm is cooperating with the probe, Appaloosa lawyer Christopher Clark told Bloomberg News.
“The amount of the stock in question is immaterial on any measure of Appaloosa’s finances, whether it be its balance sheet, income statements or asset under management,” he said.
The SEC is also looking at a series of trades made by Dallas-based Carlson Capital’s Black Diamond hedge funds around four secondary offerings.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…