On January 5, 2000, Phoenix Research and Trading, a Toronto-based hedge fund management group, issued a hastily prepared press release. The firm stated that one of its traders, Stephen Duthie, had lost $7.4 million in unauthorized trading in its publicly traded Phoenix Hedge Fund LP, with the losses originating from a feeder fund called the Phoenix Fixed Income Arbitrage Limited Partnership.
Several days later, the firm clarified its earlier statement: The loss suffered by the fixed-income fund was actually $125 million. The firm's principals, moreover, were proposing the dissolution of the partnership and hiring Ernst & Young to undertake a "forensic investigation.” The firm added that it was hiring a private investigator to locate
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The loss on a pre-established $3 billion note position would have reached approximately $60 million between early December and Christmas.
By December 31, Duthie says, he was no longer willing to nurse his losing position. He claims that after some fractious words with his superiors, he simply did not come in to work after the long holiday weekend. Duthie claims that Phoenix principals Mark Kassirer and Ron Mock then "tried to throw the entire $3 billion position on the market during one day's trading and thereby created added losses.” In a document released March 9, 2000, Phoenix officials confirmed that $3 billion in U.S. Treasury securities were liquidated in early January.
When Phoenix announced the initial losses to the public, Duthie attests he was still in Toronto—aghast at what he was reading in the newspapers, but only willing to communicate with his former employer indirectly via an intermediary. On January 6, he left a somewhat apologetic voice-mail message at the firm, but stopped just short of admitting guilt for having done anything wrong. He then visited the Ontario Securities Commission (OSC), suggesting that it retrieve certain documents from his prior employer to help prove his innocence.
Blame game
The case raises a number of unanswered questions. How much, if anything, did Duthie's superiors know about the fund's trading
“One of the most important lessons learned was never to assume you’ve won before the simulation is over. We possessed the highest shareholder value for all rollovers except the final round. Our placement dropped to fourth in the final round as a result of poor allocation of funds due to the assumption that we couldn’t be beat.”
Analysis: The facts of the case are circumstantial yet lay out a pattern of wrongdoing by the defendant. Specifically that Begelman willfully used non-public information to his financial advantage. The following timeline is indeed suspicious but no “smoking gun” or direct evidence of wrongdoing.
1. According to the case, it shows that management of M determined that a loss would be “probable” and the estimate range would be $15 million to $20 million. However, they determined $17 million would be the “most likely” amount of loss.
10. The current price of silver is $750. Storage costs are $8 per ounce per quarter payable in advance. The interest rate is 12% p.a. with continuous compounding. Calculate the futures price of silver for delivery in six months (to two decimal places).
The defense attorney’s responded to the allegations by stating that Mr. Horvath wanted to take over the company, thus fabricating the incidents of theft and misappropriated funds. The defense also was very quiet in terms of talking to the media, thus not commenting about various aspects of the case. I thought this was a
After talking to Bookwalter, Cuzik executed a sell order on her sizable iTech stock. She then approached Dana DiNofrio (“DiNofrio”), a financial adviser and a friend. R. 4. Cuzik proceeded to tell DiNofrio that she had good information that iTech’s profits were poor. R. 5. While, DiNofrio did not know Abernethy and Bookwalter personally, she did know who they were and knew about their relationship. R. 4–5. The Monday after the party, DiNofrio sold her iTech stock as soon as the markets opened. R. 5. When iTech announced its earnings, its stock value fell by 20% within thirty minutes. R. 5. Cuzik averted a 2.1 million dollar loss for her hedge fund, while DiNofrio averted a loss of 3 million dollars. R.5
Bernie Madoff was one of the most prolific Ponzi-scheme artists in history. Madoff schemes netted him millions of dollars. Mr. Madoff used his BMIS Bernard L. Madoff Investment Securities a New York Limited Liability company, to commit fraud, money laundering, and perjury. This is just a few things that Mr. Bernard Madoff has done to many innocent investors, who believed in Mr. Madoff, and everything he stated. Due to Mr. Madoff’s action he has changed so many people’s lives. Some have lost everything, some committed suicide, and others just humiliated by Mr. Madoff. This paper is to tell you about Mr.
Both parties consulted their attorneys whose guidance instructed them that they did not have to disclose the information. The motivating factor in both decisions was to protect the livelihood of their companies. The facts of the information that had been revealed to each company had not been proven.
The U.S. District Court for the Southern District of Ohio rendered an Order for Final Judgment against John R. Bullar and a Consent Order against his company, Executive Management Advisors L.L.C., requiring that restitution be paid by Bullar and Executive Management Advisors, L.L.C. in excess of $6.2 million. Additionally, Bullar and Executive Management Advisors L.L.C. are required to pay civil monetary penalties in excess of $24.8 million for fraud, misappropriation, embezzlement, and operation of a Ponzi scheme. They were illegally posing as Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs) but had not registered with the CFTC. Permanent trading and registration bans were also imposed prohibiting them from committing
Between August 2013 and May 2014, Lukas Kamay, a former NAB banker and former ABS analyst, Christopher Hill engaged in insider trading (economic offences— white collar crime) and illegally collected and used ‘sensitive information’ to predict the fluctuations in the Australian dollar. This illegal act enabled them to obtain over $7 million.
For this assignment, use the Internet to research high-risk investment brokerage firms that have been indicted or convicted of ethical violations to provide insight and understanding of this market segment.
To combat this assumption it turns out large amounts of money of the value of $300million was invested in Bernard Madoff accounts in the form of pension funds. Some officials knew that the unscathed performance of Madoff securities were too good to be true as their prices consistently climbed up in spite the financial crisis. However, still they pawned its own shareholders’ funds with the hopes of jumping on the same band wagon as Madoff and reaping further profits. Another angle at probing the case was that the CEO, directors as well as executives were only looking out for themselves. Evidently they had direct benefits in the form of handsome compensation packages for retaining high profile clients such as Madoff and Wise which
They faced the potential that by that following April they had losses close to £250 million in two years.
Eventually, his scheme reached a staggering 50 billion dollars under his management. It came to an end after market conditions led to a considerable amount of redemptions when investors started to take their money back.
Astor’s abuse of weaker stakeholders was typical of his era, however if he were to trade today, he would be hit with a hefty fine, thrown in jail and even lose his company and all his earnings.