Sat, Jun 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund Aurelius Capital denies profiting from inside information on WaMu debt

Tuesday, July 19, 2011
Opalesque Industry Update - New York – based Aurelius Capital Management on Monday told the court that it never used confidential information to profit in Washington Mutual's bankruptcy case to trade in its securities.

Aurelius Managing Director Dan Gropper testified before the U.S. Bankruptcy Court in Wilmington, Delaware to deny charges by WaMu’s shareholders accusing the hedge fund of benefitting from inside information about the bankrupt mutual fund. Gropper said the Aurelius has very strict policy against insider trading.

To prove his point, Gropper disclosed that the company spent $150,000 to soundproof his office and that he receives phone calls at least 30 feet away from the trading desk. “We are absolutely compulsive about this compliance,” Gropper testified before the court, referring to restrictions on insider trading in general.

WaMu shareholders are asking U.S. Bankruptcy Judge Mary Walrath not to accept the second reorganization plan of WaMu which Aurelius negotiated with three other hedge funds. Under the plan which will pay creditors more than $7bn, shareholders will receive nothing.

WaMu shareholders now accuse Aurelius and the three other hedge funds of using confidential information they allegedly obtained during the negotiations.

Gropper will resume his testimony today (July 19) as Walrath weighs down the arguments of both parties whether to accept or reject the reorganization plan. The plan is focused on the settlement of lawsuits between Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan Chase against one another after the FDIC seized WaMu's flagship bank in 2008 and sold its assets to JPMorgan.

Last month, Aurelius criticized the on-going investigation into the bankruptcy of WaMu and called it a “shakedown.”
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. Paper: The performance of stocks actively pitched by hedge funds[more]

    Using a novel dataset drawn from investment conferences from 2008 to 2013, I show that hedge funds take advantage of the publicity of these conferences to strategically release their book information to drive market demand. Specifically, hedge funds sell pitched stocks after the conferences to ta

  2. North America - US fundraising for special purpose acquisition vehicles hits record this year[more]

    From AFR.com: Special purpose acquisition vehicles (spacs) are hitting the US market at the fastest rate on record, attracting the likes of Goldman Sachs and hedge fund investor Daniel Loeb for the two largest such deals in 2018. Spacs have raised $US4.5bn so far in 2018, the largest amount fo

  3. Investing - Man Group and AQR try to take aim at private equity industry, Hedge funds poised to be winners in AT&T-Time Warner deal[more]

    Man Group and AQR try to take aim at private equity industry From FT.com: The popularity of private equity investments has prompted asset managers such as Man Group and AQR to devise strategies that aim to replicate PE returns but at a much lower cost to investors. Both companies a

  4. News Briefs: David Stemerman's hedge fund holdings shrank before his run for governor, nvestment manager TSW triggers succession plan, Alan Howard joins Peter Thiel investing in Cologne-based fintech startup[more]

    David Stemerman's hedge fund holdings shrank before his run for governor But the U.S. holdings of Stemerman's Greenwich hedge fund, Conatus Capital, shrank from $2.6 billion at the apex to just over $1 billion before he announced his move into politics. (Hartford Courant) Inv

  5. British Empire: Pershing's 23% discount 'unsustainable'[more]

    From Citywire: The wide discount on Pershing Square Holdings (PSH) is 'unsustainable' and puts star hedge fund manager Bill Ackman under pressure, says British Empire (BTEM). Pershing is the third largest holding in the £850 million British Empire trust, managed by Joe Bauernfreund, which sp