19/01/2012 Author: Will Wainewright

HFMWeek Daily Snapshot - 19 January

NEWSPAPERS AND WIRES
Seven people were charged in Manhattan federal court with counts including securities fraud and conspiracy as part of a five-year probe of insider trading at hedge funds by the FBI and the Justice Department, writes Bloomberg. Prosecutors say the alleged scheme, which involved trades in Dell, netted $61.8m in illegal profits. Among those charged are Level Global Investors co-founder Anthony Chiasson, who along with three other suspects was taken into custody yesterday, according to two people familiar with the matter.

Hedge funds investing based on big-picture, "macro" themes like Europe's debt crisis suffered one of their most gut-wrenching years in recent memory in 2011, reports the Wall Street Journal. The "Global Macro" trading strategy, one of seven tracked by the Dow Jones Credit Suisse "Core Hedge Fund Index," finished last year down over 10%, worse than the entire index, which fell 7.4%. By contrast, the Standard & Poor's 500-stock index ended 2011 virtually flat. That suggests investors wanting to hedge their bets with alternative investments like hedge funds would have been better off keeping their cash in stocks.

Hedge fund advisers are scrambling to meet an unofficial registration deadline that has, until recently, been widely ignored by many mid-size firms, according to Reuters. Mandatory registration with the US Securities and Exchange Commission is looming. Hedge fund and private equity fund advisers who manage at least $150m must register with the agency, for the first time, by 30 March, according to new rules required by the Dodd-Frank financial reform law.

Goldman Sachs asked a New York state court judge to order arbitration in a lawsuit against the investment bank by Basis Yield Alpha Fund or dismiss the complaint, reports Bloomberg. Basis Yield Alpha Fund, a unit of Australian hedge fund Basis Capital Funds Management, sued Goldman Sachs in New York State Supreme Court in October, accusing the bank of making false and misleading statements and omissions in connection with the sale of securities known as Timberwolf and Point Pleasant.

Hedge fund titan Steven Cohen is once again in the spotlight over allegations of improper trading at his $14bn SAC Capital Advisors, writes Reuters. The arrest on Wednesday of technology analyst Jon Horvath marks the fourth time in two years that US authorities have implicated or charged a person with engaging in insider trading while working at SAC Capital. It is the latest to come from an investigation FBI agents have coined Operation Perfect Hedge.

LAUNCHES AND CLOSURES
Hedge fund Tell Investments is pulling down the shutters on 15 years of trading, after deciding the market is too tough, reports Reuters. Its decision follows three years of disappointing performance. The fund, which has offices in Switzerland, London and Malta, is closing its two principal funds -- the William and the Tell -- and has started returning some €600m ($773m) to investors, a spokesman told Reuters.