Morning Brief: Ratan’s Nehal Chopra and Husband Dinged by SEC
The once high flyer’s secret sauce was proprietary information from Brahman Capital, where her husband worked, according to the regulator.
The once high-flying Nehal Chopra, whose Tiger Ratan hedge fund was seeded by Julian Robertson, has been accused by the Securities and Exchange Commission of using proprietary information supplied by her husband to make her once-lofty gains.
Both Chopra and her husband, Paritosh Gupta — who worked as a research analyst at Brahman Capital before starting his own firm, Adi Capital — were targeted in an SEC administrative proceeding, which resulted in a settlement that required Gupta to pay a $250,000 fine and Chopra and her hedge fund Ratan to each pay a $200,000 fine.
“Ratan and Chopra failed to disclose to Ratan’s investors and prospective investors the significant role that Gupta played in Ratan’s investment process and operations,” according to the SEC document.
“While employed by Adviser A [Brahman], Gupta shared with Chopra confidential Adviser A information, such as investment theses, models, notes, recommendations, and analyses. This confidential information was developed by Gupta and his Adviser A colleagues for Adviser A fund clients. Gupta at times emailed Chopra Adviser A’s internal trading recommendations, strategies, and analyses developed for Adviser A’s clients,” the SEC explained.
Brahman specifically forbade its employees sharing such information. However, Brahman settled a separate proceeding for failing to “reasonably supervise” Gupta and is required to pay a $250,000 fine.
Chopra’s Tiger Ratan hedge fund had gained 26.3 percent in 2012, 46.8 percent in 2013 and 22.3 percent in 2014, earning Chopra an Institutional Investor “Rising Star” designation. Much of those gains came from high-flying Valeant Pharmaceuticals, a stock also held by Brahman Capital. When Valeant crashed, so did Tiger Ratan, which was down 19 percent in 2015 and has never really recovered.
In 2016, Julian Robertson pulled his $25 million seed investment from Tiger Ratan, and it was renamed Ratan. The firm had $1.5 billion in assets in June of 2015 before the Valeant crash. But it was down to $375 million as of March, according to the SEC proceeding.
Brahman declined to comment. Ratan and Adi could not be reached.
Chris Hohn’s activist hedge fund, TCI, has lost critical support for its shareholder resolution to remove the chairman of the London Stock Exchange as influential advisory group Institutional Shareholder Services recommended that investors vote against the activist’s proposal, Reuters reports.
TCI, which has a 5 percent stake in the LSE, “has not made a sufficiently convincing case for the immediate removal” of LSE Chairman Donald Brydon, proxy adviser ISS said in its report.
Hedge fund legend Paul Tudor Jones, founder of Tudor Investment Corp. and the Robin Hood Foundation, has privately been backing disgraced Hollywood producer Harvey Weinstein.
Jones, a board member of the Weinstein Company until the recent scandals broke, wrote “I love you” to Weinstein in an email, the New York Times reported. The email came a day before Weinstein was ousted from the company and detailed the steps Mr. Weinstein should take to rehabilitate his image, the Times said. Jones told the Times that he “condemned Mr. Weinstein’s alleged misconduct and wanted to encourage him to get help,” the newspaper reported.
Jones faced a less damaging scandal in 2013 when he was caught on tape saying women could not be good traders once they had babies. This year, he’s giving advice to Weinstein. “Focus on the future as America loves a great comeback story,” he wrote to the movie producer. “The good news is, this will go away sooner than you think.”
On Wednesday, Jones wrote a note to Tudor employees in an effort to explain his comments. “I deeply believe in redemption, but what I know now is that Harvey was a friend I believed too long and defended too long,” he wrote. “Perhaps in your own life you have faced a similar dilemma — how to react to a friend who is revealed to be someone other than the person you believed him or her to be.”
Jones’ own fortunes continue to falter. In August, Bloomberg reported that his flagship was half its size from a year earlier, as investors yanked another 15 percent.
Scott Ferguson’s $4 billion Sachem Head Capital Management has disclosed a 3.4 percent stake in British hotelier and coffee chain operator Whitbread.
Shares jumped more than 7 percent on the news, Reuters reported.
Whitbread owns Costa Coffee and Premier Inn.