Investigative financial reporter Teri Buhl is reporting that
hedge funds are scrambling to put as much distance as possible
between themselves and the increasingly radioactive SAC Capital,
which is rumored to be the next target of the FBI’s crackdown
on insider trading. According to Buhl, this
includes purging email exchanges with SAC.
Funds like Blue Ridge, Greenlight, Third Point, Glenview, and
Maverick are cutting back on any contact with [SAC Capital's
Steve
Cohen]. When we asked major players such as [President of hedge
fund Kynikos Associates] Jim Chanos and others if they’ve
been pinging Stevie about a trade lately, you’ll get a very
defensive ‘no.’
…Extra measures are being taken to hire data-miners to
comb through any and all emails firms and their trading consultants
ever sent to anyone at SAC in an attempt to erase them from
internet memory.
If true, hedge funds Third Point and Kynikos will find it quite
impossible to delete all their correspondence with SAC, given
DeepCapture.com possesses several emails which, it just so happens,
implicate all three funds in insider trading of a different sort;
specifically, influencing and trading ahead of an analyst’s
report.
DeepCapture.com first reported on this situation nearly one year
ago, but I feel it’s worth revisiting and updating this
topic, given recent developments.
Here’s the short version: in late 2002, a group of
short-selling hedge funds, led by Kynikos Associates, learned from
a Morgan Keegan analyst that he was preparing to initiate very
pessimistic coverage of Canadian insurance company Fairfax
Financial (FFH) Holdings
(NYSE:FFH). Kynikos promptly alerted SAC Capital and Third Point
Partners about this prime shorting opportunity. In the days that
followed, traders at…
