FBI Raids Company With Link To Wolf Of Wall Street’s Danny Porush

wolf-wall-streetFBI agents have raided a Florida medical device company run by Daniel M. Porush, who’s character inspired that of  Donnie Azoff, in the movie Wolf Of Wall Street.

An FBI spokesman said the agency is conducting “law enforcement activity in the vicinity.”

Reporters saw dozens of FBI agents, the Florida Division of Insurance Fraud, and local police around the site. Witnesses told Reuters the agents earlier closed entrances to the building that houses Med-Care and removed boxes of files.

Daniel Porush is a New York entrepreneur and former stock broker who is known for his supervision of a “pump and dump” stock fraud scheme in the 1990s. In 1999, as the president of Stratton Oakmont brokerage house, Porush was convicted of securities fraud and money laundering, for which he served 39 months in prison

“The process used today was unexpected, but the company is cooperating, and will continue to cooperate, fully. The company has nothing to hide.” Justin S. Weddle of Brown Rudnick, attorney for Med-Care, said in a statement Wednesday afternoon.  ”Med-Care Diabetic & Medical Supplies, Inc. has always been fully transparent in cooperating with regulatory or governmental inquiries that it receives. This inquiry is no different. In fact, in July of last year, we learned that a federal regulatory agency was inquiring about Med-Care’s business practices, and we contacted them and offered to answer their questions and provide whatever information they needed.”

Jon Porush, the son of the businessman played by Jonah Hill in the Martin Scorsese flick, has said that the movie gives the wrong impression of dad Danny Porush during his Stratton Oakmont days.

Fraud

UCITS Hedge Fund Strategy Index Down -0.10% in December

december 2011 - CopyNew York (HedgeCo.Net) – After having reported gains of 0.81% in November, the UCITS Hedge Fund Strategy (HFS) Index has taken a small loss in December 2014 of -0.10%, the UCITS Index reports.

The broad index started positively into the month with profits of 0.14% in week one. Things changed drastically in the second week with losses of -0.83%. Although the UCITS HFS Index experienced a positive second half of December with gains of 0.33% and 0.23% in the third and forth week respectively, it was not enough to finish the year on an all time high. Of all funds tracked 48.22% reported profits in December 2014.

From a sub-strategy perspective three of the twelve strategies reported positive results in December: CTA (0.86%), Arbitrage (0.17%) and Event Driven (0.14%). Like all other strategies those three had to take losses in the second week of the month, but were able to bounce back: CTA and Arbitrage made up their losses in the week thereafter while Event Driven just turned positive in the last days of trading.

The three worst performing strategies in December were Commodity (-0.76%), Credit (-0.60%) and Global Macro (-0.34%). The latter only took losses in week two while Credit experienced a month of two halves in which the negative first half outweighed the positive second half of the month. Commodity on the other hand was negative throughout the month and only posted a minor weekly return in week three.

Five strategies ended the year in the red, although only Commodity (-3.68%) and Event Driven (-0.74%) had to take more than a marginal loss. The UCITS HFS Index finishes 2014 with a performance of 1.62% for the year.

Hedge Fund Strategy, Hedge Funds

Former Citadel Employee Arrested for Theft of Hedge Fund Trade Secrets

8392684_600x338- A young science engineer whippersnapper, Yihau Pu, also known as “Ben” has been sentenced to three years in federal prison, the Chicago Tribune reports.

The prosecution said he “meticulously planned and brazenly executed” the theft of sensitive trade secrets from two former employers of a trading firm in New Jersey and Citadel, LLC, a Chicago-based hedge fund manager.

Pu bypassed Citadel’s security measures and stole thousands of files that contained Citadels’ alpha outputs. Pu then used those alphas in his own high frequency trading strategy for his own personal investment account in an effort to replicate Citadel’s trading for his own benefit. The Judge found that the crimes caused a total intended loss of approximately $12.2 million.

Pu, 27, currently of Waltham, Mass., and also known as “Ben Pu,” was ordered to begin serving his sentence on May 1, and was placed on three years of court supervision following his release from custody.

An associate of Pu’s, Sahil “Sonny” Uppal , also a former Citadel employee, had pleaded guilty to obstructing the investigation into the theft, and he was was placed on three years’ probation.

U.S. District Judge Charles Norgle, who imposed the sentences, also ordered Pu and Uppal each to pay restitution totaling $759,649 to Citadel to cover the cost of its investigation. Both defendants pleaded guilty last August in Federal Court in Chicago.

Fraud, Hedge Funds

Wealth Manager Rob Konrad Survives 9-mile Atlantic swim after Fishing Accident

rob-conradWest Palm Beach (HedgeCo.Net) — 38-year-old Miami-based Wealth Manager and former NFL fullback, Robert Konrad survived a fishing accident by swimming for 12-hours to safety.

West Palm Beach’s WPTV reports that friends reported Konrad missing on Wednesday after he didn’t return from a fishing trip on his 36-ft boat.

The Coast Guard reported that Konrad fell off the boat while it was on cruise control. The boat drifted away from him forcing him to begin the 9-mile swim to the shore, which took 12 hours.

Konrad came ashore at 1800 South Ocean Boulevard, and alerted local officials. The Palm Beach Sherrif’s Office contacted the Coast Guard who were preparing a second helicopter search, and notified them that Rob Konrad had been found. Robert Konrad was taken to the hospital and treated for hypothermia.

Robert Konrad began his career in the financial services industry while playing for the fullback for the Miami Dolphins between 1999 and 2004, and is currently a Principal of Alterna Capital Management and the President & CEO of Alterna Financial LLC, a financial services company based in Florida.

Robert Konrad served as a gubernatorial appointee to the Florida State Board of Administration – Investment Advisory Council.  The State Board of Administration, a constitutional entity of Florida state government, manages 30 investment funds, comprising over $184 billion in assets under management.  The Florida Retirement System (FRS) Pension Plan is the fourth largest public retirement plan in the U.S. and comprises roughly three-quarters of total assets under SBA management.  The Investment Council (“IAC”) provides independent oversight of SBA’s funds and major investments responsibilities, ranging from the Florida Retirement System programs to the Lawton Chiles Endowment Fund.  Mr. Konrad served as the Chairman of the IAC.

Events, Hedge Funds

Oil & Natural Gas Hedge Fund Ends Year On High Note

OLYMPUS DIGITAL CAMERANew York (HedgeCo.Net) – The Caritas Royalty Fund has successfully navigated the turbulent oil & natural gas markets at the end of the year, generating a +30% net return for investors in 2014, the hedge fund reports today.

“We divested certain assets just prior to the oil price decline, locking in a material gain and maximizing investor returns in a very difficult commodity price environment.” Derren Geiger, Portfolio Manager of the Caritas Royalty Fund, said.

“The recent price slide is beneficial for us moving forward as we have the ability to deploy capital toward attractive oil and natural gas assets at a much lower price threshold, significantly reducing downside risk exposure. It’s definitely a buyer’s market and we will be very active in the acquisition phase of our operations over the next few quarters,” Geiger said.

With a track record spanning over 10 years, the Caritas Royalty Fund has generated a +19% net annualized return since inception. Managed by Cornerstone Acquisition & Management Company LLC, the Caritas Royalty Fund invests in private oil and natural gas assets throughout the Continental U.S.

Hedge Fund Strategy, Hedge Funds, hedge fund technology

Elliott Hedge Fund Demand New Audit Of Kabel Deutschland

Via Reuters Via Reuters

New York (HedgeCo.Net) – One of Paul Singer’s activist hedge funds, Elliott Associates, L.P., has demanded a new audit of Kabel Deutschland Holding AG, Reuters reports.

“The findings of the special auditor’s report contain troubling allegations that pertain to the fair valuation of KDG and to breaches of duty by the company’s management and supervisory boards,” Elliott said today, according to Reuters. A review of management action would “clear up the severe allegations raised in the report.”

Elliott, which has a 13.5% stake in Kabel Deutschland (KDG) via the Elliott Associates LP and Elliott International LP hedge funds, the German cable television operator, has requested a court in Munich give it permission to see a special report prepared by an auditor who probed the actions of Kabel and Vodafone prior to, and during, the British mobile group’s takeover last year.

“First, Vodafone tried to cancel the special audit. Next, the management of KDG criticized the special auditor’s report. Now, the management is refusing to provide shareholders with access to the report.” Elliott made the following statement in conjunction with the filing, regarding KDG’s refusal to provide the report.

“This pattern of obstructing shareholder attempts to gain transparency into the Vodafone transaction is unacceptable and lacking any legal basis. Furthermore, it is absurd that the company has criticized the special auditor’s report but won’t make that report accessible to shareholders. What is in the report that the company doesn’t want shareholders to see? Shareholders have the right by law to access the report – in full and unredacted – and evaluate its conclusions for themselves.”

Elliott says that according to the Stock Corporation Act, and German law, shareholders have the right to access the report.

Hedge Fund Strategy, Hedge Funds

Biotech Hedge Fund Founder Shot In New York

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New York (HedgeCo.Net) – The founder and managing member of Wainscott Capital Partners was discovered shot to death in his New York apartment over the weekend, police said.

The NYPD said that the victim, Thomas Gilbert Sr, was allegedly shot in the head by his son during an argument. Gilbert’s son, Tommy Gilbert,  has been taken into custody by the police for questioning.

“Reportedly, Gilbert and his son had an argument regarding Thomas Gilbert Jr.’s monthly allowance.” West Side Story reports. “The incident was told by Gilbert’s wife, Boyce to the police. She told the police that after she returned home from a dinner with his son on a Sunday afternoon, she found her husband’s dead body in the house. It was shot in the head with a gun, covered by the left hand, resting on his chest. But she claimed that it was a staged suicide and convicted her son of the act. Upon investigation, Thomas was also found to be in possession of a weapon that was linked to the death of his father.”

Headquartered in New York City, New York, Wainscott Capital Partners is an opportunistic, actively-managed global long/short equity hedge fund that focuses primarily on biotech/healthcare investing, the company’s website says. The fund employs a fundamentally driven, value-oriented approach to identify investment opportunities with the ability to offer annualized returns in the 20% – 30% range with a low correlation to the broader market.

Hedge Funds

Five Hedge Fund Trends Predicted For 2015

Cat_post2015Global independent hedge fund administration service company Centaur Fund Services has outlined five trends that they believe will shape the Fund Administration industry in 2015. They revolve around major market changes, regulation, innovation and due diligence.

“This is a trend we have been observing over the last year or so and the rate of change has accelerated markedly in the last few months. As a result of large banks cutting off smaller hedge fund clients, managers (and investors and board directors) must deal with the short term disruption of changing administrators,” says Karen Malone, Founding Partner of Centaur Fund Services. “In the longer term, however, funds are benefitting from this trend, as they are ultimately partnering with more appropriate service providers.”

It doesn’t stop there: There is a trend of some of the larger bank backed administrators to offer incredibly cheap short-term deals for new and smaller managers. She continues, “Whilst initially this may appear tempting to some funds, the managers quickly realise that client service is often weak and in some cases funds are terminated if they don’t reach certain thresholds. Also, the cut price deals typically only last 12 months at the most and we are seeing lots of funds and managers being presented with huge fee increases after a relatively short period of service.”

As a result, managers are seeking out more suitable service providers who are focused on boutique hedge fund business and are offering a more collaborative approach between the administrator and client, backed with superior service compared with the large banks.

“The increase in due diligence is mainly driven by investor groups demanding proof that Administrators are credible, well run and deliver a robust client service. As Investors continue to sit in the driver’s seat in the decision making process around Administrator choice, there remains a strong and clear desire for evidence of independent and accountable third party Administrators.”

“Centaur assists and advises clients on every aspect of regulation, including AIFMD. We are constantly adapting to support clients as they race to keep up with regulatory requirements. For example, we have recently seen a surge in demand from managers to supply data required for Annex IV reporting,” says Karen. She continues “In 2015 we expect to see growth in this area of our business as we continue to help managers shoulder their increased reporting burden.”

Karen says, “Centaur has developed a suite of tools to enable managers to achieve higher levels of operational and cost efficiencies. We pride ourselves on delivering accurate, timely and transparent reporting to all stakeholders while continuously focusing on how fund managers can run their business more cost-effectively.”

“It seems that yet more compliance changes are coming down the line in 2015 and beyond. This has been driven primarily by the need to standardise global practices of Administrators. As a result, we will see Fund Administrators undergoing External Control Audits on every aspect of their business.” says Karen.

Karen concludes, “2015 is set to be an exciting year for Fund Administrators as we see significant developments within our industry. The opportunities ahead for Administrators are many and Centaur is positioned to provide Managers with a solution that evolves with the market. We have experienced substantial growth year on year, and we envisage this trend to continue for 2015 and beyond.”

Hedge Fund Strategy, Hedge Funds

2014 Global Hedge Fund Technology Benchmark Study

Hedge-Fund-TechNew York (HedgeCo.Net) – For the fourth consecutive year, Eze Castle Integration has surveyed a section of the investment management community to understand the systems and service providers funds are working with to achieve these best practices and attract investors.

Eze Castle Integration surveyed 279 firms worldwide – across the United States, United Kingdom and Asia. The majority of respondents classified themselves as hedge funds (58%). Other firm types surveyed included investment/asset manager (13%), private equity firm (3%), fund of fund (3%), and family office (3%). Additionally, 13 percent fell into an “Other” category which included financial firm types such as venture capital, advisory, fund management, quant and wealth management.

Market Data & Analytics: Bloomberg continues to lead the pack (96%) as far as market data services and analytics in the financial industry.

Front Office: The majority of firms rely on Eze Software Group’s Eze OMS, followed by Bloomberg’s Asset and Investment Manager (AIM), RediPlus EMS and Advent’s Moxy.

Research & Document Management: The majority of respondents reported that they outsource the responsibility of managing research materials and documentation. Forty-three percent (43%) of firms are using in-house or proprietary solutions. For those firms using a specific tool, Microsoft’s SharePoint, Advent’s Tamale, or Code Red RMS are the most common.

Portfolio Accounting: Advent Software continues to be the primary leader in regards to portfolio accounting with its Geneva and APX solutions remaining the top two choices among investment firms surveyed.

Risk Management: Adoption of risk management solutions is still slow as a reported fifty-six percent (56%) are not using solutions to mitigate portfolio risk. For those firms that do have a formal solution in place, popular vendors utilized include Advent, Bloomberg, FT Options, Indus Valley, iVolitility, Orchestrade and The Insight.

Outsourced Administration: While not all firms choose to utilize an outsourced fund administrator for more comprehensive services, those that do tend to work with a variety of different vendors. Citco is the top administrator choice among our survey respondents, followed by SS&C GlobeOp, Northern Trust, State Street and JP Morgan.

Customer Relationship Management: In regards to CRM tools, our survey results found that Backstop is the most popular solution, followed by Salesforce.com and Petrac.

Message Archiving: A large majority of survey respondents (57%) are relying on Global Relay for their email and IM message archiving services, followed by Eze Castle’s Eze Archive service, which is powered by Global Relay. Smarsh and Frontbrige round out the top four services.

Mobile Technology: Firms are using BlackBerry (83%) as their primary mobile solution. However, iPhone use has made great leaps and increased from forty-three percent (43%) in 2013 to sixty-four percent (64%) in 2014.

Firms surveyed fell into three asset groups: thirty-three percent (33%) reported their assets under management (AUM) as less than $100 million; twenty-eight percent (28%) fell between $101 and $500 million; and the majority (39%) reported over $500 million AUM.

Hedge Fund Strategy, Hedge Funds, hedge fund technology

Blackstone And Colombia Management Team Up To Improve Hedge Fund Base

Columbia Management and Blackstone’s Alternative Asset Management sector are teaming up to research and develop investment solutions that leverage Columbia’s asset management capabilities and Blackstone’s hedge fund solutions business, Bloomberg reports.

“Collaboration with Blackstone will enhance Columbia’s already deep product line-up and should allow us to reach even more investors and distribution partners, both domestically and internationally, with a broad set of alternative investment capabilities,” Columbia said in a press release. “This is an important opportunity to further enhance our offering of alternative investments and solutions-based strategies.”

Columbia Management is a long-term mutual fund with assets of $358 billion under management. Blackstone Alternative Asset Management, Blackstone’s Hedge Fund Solutions platform, is the world’s largest discretionary investor in hedge funds, with $64 billion in assets under management.

Hedge funds are up 3.45% year-to-date with roughly 18% of funds boasting double digit returns for the year, half the number for the same period last year, according to a new Eurekahedge report.

Total net asset flows for 2014 were trimmed to $55 billion for the year as hedge funds saw their fourth consecutive month of net outflows in October, with investors redeeming $20.3 billion over the last four months.

Hedge Fund Strategy, Hedge Funds