Thu, Aug 21, 2014
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. Institutions – Texas Employees sets 2015 tactical plan for alternatives, CalPERS' real estate consultant cautions the pension fund's investment committee, Why Sunsuper likes hedge funds[more]

    Texas Employees sets 2015 tactical plan for alternatives From PIOnline.com: Texas Employees Retirement System will invest in up to four new hedge funds in the next fiscal year, which begins Sept. 1. Trustees approved 2015 tactical investment plans for the hedge fund, private equity and in

  2. Private equity follows hedge funds into reinsurance for long-term capital[more]

    From Artemis.bm: It’s not just hedge funds that are entering the insurance and reinsurance market in search of so-called long-term capital to put to work in their strategies, private equity firms targeting the space are also seeking opportunities to add assets under management. The entry of large pr

  3. North America – New York City’s next hot neighborhoods targeted with property funds[more]

    From Bloomberg.com: New York’s real estate world is filled with tales of ordinary people who bought property decades ago and saw values skyrocket to the millions. Seth Weissman is seeking investors to get in early on the next hot neighborhoods. The veteran of Goldman Sachs Group Inc. and hedge

  4. Investing – George Soros bets $2bn on stock market collapse, Warren Buffett's Berkshire reveals Charter stake, cuts DirecTV, Hedge funds lusting to cash out of MGM, Top hedge fund managers are buying Ally Financial, Hedge funds dumped 5m Herbalife shares in Q2, Paulson & Co hedge fund ups Puerto Rico real estate bet, Netflix Inc., Citigroup Inc, Google Inc are top new picks in Tiger Management’s 13F[more]

    George Soros bets $2bn on stock market collapse From Newsmax.com: Billionaire investor George Soros has increased his financial bet that U.S. stocks will collapse to more than $2 billion. The legendary hedge fund manager has been raising his negative bet on the Standard & Poor's 500 Inde

  5. Investors now net short S&P500 and increased Russell shorts, technicals suggest further selling[more]

    Komfie Manalo, Opalesque Asia: Market Neutral funds increased their market exposure to -1% net short from -6% net short last week, according to Bank of America Merrill Lynch’s Hedge Fund Monitor. The report also added