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The Morning Brief: SAC Gives Investors a Break; Prosecutors Want to Throw the Book at Diamondback's Newman
Steven Cohen’s SAC Capital Advisors, which landed in the cross-hairs of federal prosecutors and regulators late last year, has told investors they now have until mid-August to decide whether to withdraw their money from the firm’s funds. This gives investors another three months to make up their minds, Bloomberg reports. SAC last month reached a record $602 million settlement with the Securities and Exchange Commission over insider trading charges, but the deal is pending approval from regulators.
Investors will be able to get 50 percent of their money in the third quarter and another 50 percent in the fourth quarter, according to the report. Earlier in the year the firm, which has about $15 billion under management but just $6 billion in outside client money, said it received redemption requests totaling $1.7 billion. The firm had already altered its redemption policy in February, when it said investors could wait until May to take out their money and redeem one third in each of the second, third and fourth quarters.
Prosecutors want to send former Diamondback Capital Management fund manager Todd Newman to the slammer for as long as six and a half years, according to a memorandum filed Friday. Newman, who is awaiting sentencing for his role in a $72 million insider-trading scandal, faces between 63 and 78 months in prison after being convicted in December of one count of conspiracy to commit securities fraud and four counts of securities fraud stemming from trades in Dell and Nvidia. He is scheduled to be sentenced on May 2.
Florida is looking to poach hedge fund managers in high-tax states to move to their operations to the low-tax Sunshine State. According to Miami Today, Miami's Downtown Development Authority plans to send teams to New York City and Connecticut for meetings, which were coordinated by the International Hedge Fund Association. Last year, Eddie Lampert of ESL Partners moved his firm’s headquarters from Greenwich, Connecticut, to Bay Harbour, Fla. Many of his employees, however, chose not to go.
Raj Rajaratnam, who is serving an 11-year sentence for insider trading, has a new high-profile resident in his prison. The Boston Marathon bombing suspect Dzhokhar Tsarnaev was moved to the federal prison at Fort Devens, Massachusetts, where Rajaratnam is serving his term. Tsarnaev was moved to the prison for specialized medical care, according to a report. Rajaratnam is being treated for diabetes and is receiving dialysis at the prison.
More good news for J.C. Penney. One day after George Soros disclosed he had taken a 7.91 percent passive stake in the troubled retailer, Goldman Sachs put together a $1.75 billion financing package backed by the retailer’s real estate and other assets. The stock closed up 11.42 percent, to $16.98,on the news.
Nelson Peltz’s Trian Fund Management, L.P. has cut its stake in Family Dollar Stores to 7.35 percent, or a little more than 8.44 million shares, after selling 524,260 shares at about $63.51 apiece on April 25. The stock closed Friday at $62.93.