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The Morning Brief: Martoma Trial Scheduled for November; Third Point Gains in May

Mathew Martoma’s trial has been set for November 4. The former portfolio manager at Steven Cohen’s SAC Capital Advisors is accused of helping the embattled hedge fund make $276 million using illegal insider information related to an Alzheimer's drug trial. Martoma’s lawyer, Richard Strassberg, also said at a hearing that prosecutors may file a superseding indictment, which would suggest they may bring additional charges or simply provide additional information. The trial will no doubt attract a wide amount of media attention if Martoma doesn’t settle before then. After all, U.S. District Judge Paul G. Gardephe on Wednesday stated: "It doesn't strike me as a very complicated case."

Daniel Loeb’s New York-based Third Point is running one of the top performing hedge funds. In May the firm’s Third Point Offshore Fund, Ltd. was up 3.6 percent, compared with 2.3 percent for the S&P 500. The fund is up 14.7 percent for the first five months, slightly behind the S&P 500, which is up 15.4 percent. Unlike its previous monthly reports, Third Point’s May report did not provide details such as the top five winners and losers and largest holdings. However, it did note that most of the gains last month came from its long-short equity book. Last year most of Third Point’s funds earned gains of 20 percent to 21 percent, enabling Loeb to earn $380 million, which landed him the number 10 spot on the Institutional Investor’s Alpha Rich List.

Daniel Och’s OZ Master Fund, Ltd. was up 1.09 percent in May, putting it up 7 percent for the year to date. The OZ Europe Master Fund, Ltd. is up 5 percent for the year through the same period, while the OZ Asia Master Fund, Ltd. is up 9.55 percent. Altogether, Och-Ziff Capital Management Group reported that it had $36.3 billion under management as of June 1, up a net $700 million since May 1, 2013.

Good news for Pershing Square’s William Ackman. Herbalife sank 4 percent on Wednesday and is quietly down 15 percent in just the past two weeks, boosting Ackman’s high-profile short position in the multi-level marketing company. Meanwhile, shares of retailer J.C. Penney, one of his biggest long positions, climbed more than 1 percent on Monday amid an otherwise major selloff in stocks. On the other hand, shares of Canadian Pacific fell for the second straight day and are now down more than 7 percent after Ackman said he will unload of big chunk of the stock, which tripled since Ackman initially invested in the stock in 2011.

Michael Hintze’s CQS is planning to launch its first long-short equities fund. The London-based hedge fund firm, best known for its credit funds, does allocate some money to equities in its Directional Opportunities fund.

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