Sun, Jun 26, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund Aurelius Capital criticizes WaMu probe as ‘shakedown’

Tuesday, June 21, 2011
Opalesque Industry Update – New York – based Aurelius Capital Management has issued a scathing statement denouncing the on-going investigation into the bankruptcy of Washington Mutual Inc., and calling it a “shakedown.”

The $2.3bn hedge fund, led by former bankruptcy lawyer Mark Brodsky, is one of the hedge funds facing investigation after being accused of benefiting from insider trading that forced the bankruptcy of WaMu. But the firm insists it is a victim, in this case.

Brody said the investigation initiated by WaMu shareholders was a “malicious witch hunt” with the primary objective of forcing a settlement between Aurelius and the shareholders committee.

Brody told the court: "Aurelius prizes its integrity and reputation. It will not allow its reputation to be so sullied, it will never settle to appease such abhorrent tactics, and it has never supported the settlement with the equity committee recently under discussion."

WaMu’s shareholders’ committee are investigating four hedge funds, including Aurelius Capital, Appaloosa Management, Centerbridge Partners and Owl Creek Management, of allegedly engaging in insider trading that led to the collapse and the filing of a $7bnChapter 11 plan without a deal, by WaMu.

The committee has already questions Aurelius Managing Director Dan Groper in May, but is again seeking to depose representatives from the three other hedge funds involved.

Meanwhile, a group of WaMu creditors, like Black Horse Capital, wants to join the investigation to identify if the four hedge funds indeed used confidential information to trade in the debt of the bankrupt company.

WaMu’s trust preferred securities holders, including Lonestar Capital Management LLC, Greywolf Capital Management LP, and other holders, of WaMu’s trust preferred securities have sought a court ruling from the judge overseeing the company’s bankruptcy to order the four hedge funds to provide them trading-related data.

Previously, U.S. Bankruptcy Judge Mary Walrath granted a committee representing common and preferred shareholders’ request to question and depose the hedge funds under oath and provide the necessary documents.
Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Visium hedge fund manager Sanjay Valvani found dead[more]

    Benedicte Gravrand, Opalesque London: A hedge fund manager connected with an insider trading case has apparently committed suicide. Sanjay Valvani, 44, a hedge fund manager at New York-based Visium Asset Management, was found dead in an apparent suicide on 21 June in his Brooklyn residence,