Saturday, 22 November 2014
Last updated 22 hours ago
Aug 9 2012 | 1:41pm ET
Aladdin Capital Management will have to defend its handling of a collapsed collateralized debt obligation, after all.
A federal appeals court in New York overturned a lower-court judge’s ruling throwing out the case against the hedge fund. The decision is a victory for Germany’s Bayerische Landesbank, which last year sued Aladdin, accusing it of misleading the bank about the mortgage-backed CDO and of recklessness in its management.
Bayerische Landesbank alleged that Aladdin had sold the CDO as investment-grade. But at least 11 underlying entities—among them Lehman Brothers, Washington Mutual and two Icelandic events—suffered credit events, and the bank’s entire US$60 million investment was lost.
But a lower court judge dismissed the case a year ago. Bayerische Landesbank appealed, and the Second Circuit Court of Appeals found that it had “plausibly alleged that Aladdin’s gross negligence exposed Bayerische to greater risk that it would lose its entire investment than would have otherwise been the case.”
Nov 4 2014 | 9:45am ET
Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…
Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...