Tue, May 23, 2017
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 Exclusive: Time to invest in robotics? (part 1)[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The London-based, Swiss-born manager of the RoboCap UCITS Fund, talks to Opalesque about investing

  2. Investing - Hedge funds have been selling big winners this year, Hedge funds are betting $1 billion that Snapchat shares are going to drop, Here are the biggest bets made by top hedge funds in the first quarter[more]

    Hedge funds have been selling big winners this year From CNBC.com: Hedge fund managers' most popular stock to start the year has been a familiar name that is falling short in terms of performance, while the least popular companies all have been crushing the market. Procter & Gamble

  3. Investing - Third Point's Loeb surfs on as hedge fund washout continues, George Soros has added to his losing bets against the stock market, Hedge funds, VCs and the CIA are throwing money at ex-Bridgewater data scientists' startup, Hedge funds shed retail amid fears of "apocalypse"[more]

    Third Point's Loeb surfs on as hedge fund washout continues From Reuters/Nasdaq.com: Billionaire investor Daniel Loeb said on Thursday that he is still making money even as the hedge fund industry struggles. Loeb, who oversees the $16 billion hedge fund firm Third Point LLC, sa

  4. Investing - Tudor Jones backs AI hedge funds, Massive hedge fund trades highlight insider buying: GE, Pentair, Tempur Sealy, Apollo Global and more, Hedge funds big wigs are buying consumer and selling tech, here's the stocks[more]

    Tudor Jones backs AI hedge funds From FT.com: Hedge fund magnate Paul Tudor Jones has invested in a brace of artificial-intelligence powered "quantitative" hedge funds, underscoring the increasing acceptance that the industry will need to turn more to technology and away from traditional

  5. Opalesque Roundtable: Rise of high-frequency trading in Europe a challenge for traditional asset managers[more]

    Komfie Manalo, Opalesque Asia: The rise of high-frequency trading in Europe, dominating over 80% of the market, has become a challenge for traditional asset managers especially when it comes to risk management, said Philippe Malaise, chairman of advisory firm