The Morning Brief: Tessera Makes Way for New CEO; Rajaratnam's Younger Brother Pleads Not Guilty

Score another one for Starboard Value’s Jeffrey Smith. Tessera Technologies announced Monday that CEO Robert Young is leaving the company and three new independent directors will join the board. The move comes less than a month after the activist hedge fund told the company it planned to launch a proxy fight in an attempt to replace majority of the board. Starboard had also accused the company of not taking “appropriate actions” regarding allegations that Young engaged in “an inappropriate relationship with a female employee of the company.” The company had challenged Starboard to provide further details with proof of the allegations. Tessera’s stock is up about 2.2 percent, closing at $18.58 Monday, an otherwise down day for the stock market.
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Rengan Rajaratnam, the brother of former hedge fund kingpin Raj Rajaratnam, entered a plea of not guilty to charges he illegally traded in several stocks using insider information. He appeared Monday in a Manhattan courtroom after being indicted last week on charges of conspiracy and securities fraud.
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Several hedge fund firms are taking advantage of fledgling European funds and poaching some of their best talent. According to a report, Pine River Capital Management, Millennium Management and SAC Capital Advisors have hired employees from hedge funds started by former European bankers, including Edoma Partners, Occitan Capital Partners and Portman Square Capital. These funds have either failed to raise the kinds of money they had hoped, posted big losses or shut down altogether.
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Christopher Hohn’s Children’s Investment Fund is no longer giving some of its fees to a children’s charity, Children Investment Fund Foundation, run by Hohn’s wife Jamie. The London-based executive launched his hedge fund in part to finance the charity with a portion of its fees. Hohnreportedly stopped making contributions to the charity last year because he said the foundation is now large enough. Last year the hedge fund finally rose above its high-water mark, after losing more than 43 percent in 2008 after rising more than 29 percent in 2012.