A federal court gave former SAC Capital Advisors fund manager Michael Steinberg the okay to appeal his earlier conviction on insider trading, according to Bloomberg. The go-ahead was made after the appeals court on Friday rejected the government’s appeal of an earlier ruling that threw out the convictions of two other hedge fund managers whose cases were based on similar evidence as that used against Steinberg. According to Bloomberg, the court lifted the hold on the Steinberg case on Monday. In a potentially sweeping decision, an appeals court panel earlier ruled that in order to be guilty of insider trading, not only must an individual know the tip came from a confidential source but that the source also received some sort of benefit from disclosing the information.
Crazy day for Herbalife. The stock opened down as much as 4.3 percent after CNBC reported that several federal law enforcement agencies have sought information from Herbalife members about their business practices. According to the report, the agencies are looking at the activities of 10 or so mostly top Herbalife members. The report does not say exactly what the Feds are interested in or who specifically they contacted. CNBC also said Herbalife has received a number of inquiries related to trading of its stock. Perhaps the lack of detail in these reports explains why the stock then recovered and actually ended the day up about 1 percent. But the intrigue continues as Pershing Square Capital Management’s William Ackman presses hard on his argument that the multi-level marketer of nutrition supplements is a pyramid scheme.
Two special purpose vehicles (SPV) controlled by Nelson Peltz’s Trian Partners sold a combined 628,000 shares of Legg Mason, reducing the total number of shares owned by the New York-based activist hedge fund firm to 10.88 percent of the total shares outstanding.
The MKP Opportunity fund, which deploys a macro strategy, rose 1.4 percent in March, bringing its gain for the first quarter to 6.5 percent. MKP Enhanced Opportunity, which is a higher risk version of the macro strategy, was up 2 percent in March and 10 percent for the quarter. MKP Credit rose 0.5 percent last month and was up 2 percent in the first quarter. Altogether, New York-based MKP Capital Management manages $8.5 billion.