Hedge funds: SEC steps up with hunt on short suspected selling rumor mongerors; Hedge funds forced to change strategies; Moving millions into money into money market funds..
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SEC Presses Hedge Funds - Wall Street Journal
The Securities and Exchange Commission ordered more than two dozen hedge funds to turn over trading information as it ramps up its investigation into whether traders were spreading rumors to manipulate shares, according to people familiar with the matter.
The order, dated Sept. 22, identifies six financial institutions the SEC believes may have been subject to such manipulation. The order is akin to a subpoena and requires information to be handed over with a sworn statement attesting to its accuracy. It seeks a wide range of trading data and email communications over a period of three weeks involving American International Group Inc., Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Morgan Stanley, Washington Mutual Inc. and Merrill Lynch & Co., according to the order, which has been viewed by The Wall Street Journal....
US hedge funds rush to revamp strategies - Financial Times
US hedge funds are scrambling to remodel their trading strategies as they explore ways to regain the potential benefits taken away from them by new rules restricting short selling on financial stocks....
Several traders are concentrating on the over-the-counter derivatives market, which is unaffected by the new rules, as a way of taking implicit bets on the financial sector. The appeal of the sector has grown, in spite of the uncertainty surrounding it, since the government’s sweeping rescue plan was announced......
Hedge funds move $100bn into safe havens - Financial Times
Hedge funds charging hefty fees for sophisticated trading strategies aimed at outperforming the wider market have collectively parked $100bn in simple money market funds typically used by investors seeking safe rather than spectacular returns.
Citigroup estimates that hedge funds have now placed $600bn in cash, and that $100bn of this is held in money market funds, normally seen as some of the safest places to invest cash.....
Hedge fund community defiant despite shorting ban - Reuters
London's hedge fund managers remain in an upbeat and defiant mood, despite widespread vilification and last week's bans on one of their favourite trades -- short-selling financial stocks.
Hedge funds are blamed by regulators, politicians and bankers for accelerating collapses in the share prices of Lehman Brothers and HBOS, but while worrying about the effects of the credit crisis on their portfolios, managers are also busy discussing trading strategies to profit from the chaos....
London Turns Against Hedge Funds in Hunt for Culprit - Bloomberg
London is turning against the $450 billion hedge-fund industry that helped make the city a contender for the title of world financial capital.
As Lehman Brothers Holdings Inc. filed for bankruptcy and HBOS Plc was pushed into a government-brokered takeover, U.K. regulators and lawmakers found a culprit: the estimated 980 hedge funds that reside in Britain, mostly in London. Harbinger Capital Partners Fund chief Philip Falcone was singled out by the Daily Mirror. The tabloid used a front-page story on Sept. 18 to brand him a ``greedy pig'' for short selling, or making bets that Edinburgh-based HBOS would lose market value.....
UK hedge funds shouldn't sue the FSA - International Financial Law Review
Hedge funds that are planning to sue the UK Financial Services Authority (FSA) over last week's short selling rules are wasting their time. They will struggle to show the regulator acted out of its jurisdiction and there is likely to be similar legislation soon.
"I'd be surprised if they could make this fly in a courtroom. It is a real stretch to say that the FSA regulated outside of its remit," said a commercial litigation partner in London....
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