Mon, Aug 21, 2017
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. Opalesque Exclusive: Albright Capital puts a value lens on emerging markets[more]

    Bailey McCann, Opalesque New York: Over the past decade, investors have steadily increased investments in emerging markets private funds. Allocations to the cohort have increased from $93 billion in December 2006 to $564 billion in September 2016, according to data from research firm Preqin. Howe

  2. Comment: "Long-Term Investing": What managing drawdown risk can do to your long-term returns[more]

    Matthias Knab, Opalesque: Real Investment Advice writes on Harvest Exchange: Last week, I was having lunch with a prospective portfolio management client discussing the curre

  3. Jasper Capital International joins Hedge Fund Standards Board[more]

    Komfie Manalo, Opalesque Asia: Diversified and systematic investment firm Jasper Capital International has become the second China-based signatory to the Hedge Fund Standards Board (HFSB), an organization that brings hedge fund managers and investors together to set standards for the hedge fund i

  4. Investing - Hedge-fund honchos including David Tepper are loading up on Alibaba, Billionaire hedge fund manager Stanley Druckenmiller is betting big on the Chinese consumer, Big-name U.S. hedge funds shed healthcare stocks during the rally in second-quarter, U.S. hedge funds bearish on FAANG stocks in second-quarter, Hedge fund titan Viking Global made a $680 million bet on scandal-plagued Wells Fargo[more]

    Hedge-fund honchos including David Tepper are loading up on Alibaba From CNBC.com: David Tepper's Appaloosa Management and three other he ge funds took new stakes in Chinese e-commerce giant Alibaba in the second quarter, according to the latest quarterly filings. Appaloosa disclos

  5. FinTech - Danger: Crowdfunding on the wrong platform could force you to go public[more]

    From LinkedIn.com: Some equity crowdfunding platforms are putting startups at serious risk. Working with a platform that doesn't structure your deal appropriately could jeopardize your ability to raise future capital or worse, force you to become a public reporting company. The emergence of eq