Category Archives: Overhedged

Derivatives Don’t Cause Massive Losses. Only People Cause Massive Losses.

Such was the thrust of testimony before a Senate committee this week by Robert Pickel, head of the International Swaps and Derivatives Association (ISDA), and Richard Lindsey, former president of Bear Stearns’ brokerage unit, regarding the role of credit default … Continue reading

Posted in Finance, Overhedged | Tagged , , | 1 Comment

A Little Noted Case Regarding Credit Default Swaps Could Portend Major Problems for Financial Institutions

In response to my recent postings regarding credit default swaps (CDSs), a professional acquaintance was kind enough to refer me to a relatively recent decision. Aon Financial Products v. Societe Generale, 476 F.3d 90, issued nearly one year ago by … Continue reading

Posted in credit default swaps, Overhedged | 3 Comments

Hedge Fund Founder Gets 51-Month Sentence

James G. Marquez, the founder of several Bayou Management hedge funds, was sentenced yesterday by a federal district judge to 51 months in prison, followed by two years of supervised release. He must also pay close to $6.26 million in … Continue reading

Posted in News, Overhedged | Tagged

Securities Law Getaway Driver

Let’s say you and three friends decide to rob a bank. One of your friends decides he will go into the bank with a gun, your other friend says he will collect the money in a bag from the tellers, … Continue reading

Posted in Commentary, Legal Commentary, Overhedged | Tagged | 4 Comments

Supreme Court Limits Fraud Claims Against 3rd Parties

From the wonderful crew at the SCOTUS Blog: “The Supreme Court, in one of the most important securities law rulings in years, decided Tuesday that fraud claims are not allowed against third parties that did not directly mislead investors but … Continue reading

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Basis Capital seeks Court Assistance for Redemptions

More trouble for Basis Capital. Yield Alpha Fund’s Sister, Basis Aus-Rim Diversified Fund, has also lost about half its value since the credit crunch began. Basis recently announced they will be seeking help from the courts regarding redemptions. In a … Continue reading

Posted in News, Overhedged | Tagged | 2 Comments

Feeding Frenzy

Hedge Funds that invest in distressed debt have been “lying in wait” for the next wave of bankruptcies to emerge. When the tsunami hits, it is likely that these investors will be the dominant players in the market place. With … Continue reading

Posted in Bankruptcy, Commentary, Distressed Debt, Overhedged