Wednesday, 22 October 2014
Last updated 14 hours ago
Aug 2 2007 | 8:16am ET
Bear Stearns CEO James Cayne, who’s probably not sleeping well to begin with, must dread waking up each morning, as each new day seems to bring more bad news to his embattled firm.
On Monday, the firm halted redemptions in a third hedge fund that had been overwhelmed by investors who wanted out. Late Tuesday, Bear’s bêtes noire, its two collapsed credit hedge funds, struck again, declaring bankruptcy. And yesterday, it was hit by the first of what could be many claims against it.
A 73-year-old retired insurance salesman from Wisconsin filed an arbitration claim with the National Association of Securities Dealers against both Bear and Bear Stearns Asset Management, alleging that Bear misled investors about the High-Grade Structured Credit Strategies Fund’s sub-prime exposure. The investor reportedly lost $500,000.
Lawyer Jacob Zamansky, who along with Ross Intelisano—an attorney who represented a group of Bayou Management investors—filed the claim stating his firm has been contacted by a number of other Bear investors and will almost certainly file further claims.
“We expect to file claims in excess of $100 million in losses,” he told Reuters.
Zamansky explained that his client filed an arbitration claim, rather than suing Bear in court, because it “is quicker and cost efficient.”
Meanwhile, both the High-Grade Structured Credit Strategies Fund and its slightly more disastrous sister fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund, have filed for Chapter 15 bankruptcy, seeking to prevent creditors from further asset seizures. The move was reportedly precipitated by the funds’ inability to meet a margin call.
In addition, the funds’ liquidators, Simon Lovell Clayton Whicker and Kristen Beighton of the Cayman Islands, have secured a restraining order preventing any more asset seizures. There will be a preliminary injunction hearing on Aug. 9 in U.S. Bankruptcy Court in New York.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...