Post by jcline on Mar 27, 2006 23:56:06 GMT -4
What’s all this Fuss over Hedge Funds - March 27, 2006
David Patch
Imagine if those secret and unregulated investment pools for the wealthy continued to operate at will and used every legal and illegal means available to destroy publicly traded companies if that meant a higher profit could be turned.
On CBS’ 60 Minutes Sunday night we heard tale of how one of the largest Hedge Funds in this country, Greenwich Villages own SAC Capital may have actually taken extraordinary steps to garner profit for their wealthy clients and their founder Steven Cohen.
The Hedge Fund is accused in a lawsuit of colluding with an Arizona based analyst research firm Gradient Analytics to publish a “Hatchet Job” report on Canadian based Biovail Corp. (BVR) in order to generate larger and faster profits. SAC has been accused of not only ghost-writing much of the report produced by Gradient but then asked that the report be delayed in its release until a large short position in the stock was created by SAC. SAC expecting that the report would damage the company stock and a significant profit would be made from the short positioned it had taken in the stock.
As part of the 60 Minutes episode, anchor Leslie Stahl had on as quests former Gradient employees who not only described how the “hatchet” reports were written but where the information came from, SAC Capital, and who defined when the reports would be published, SAC Capital.
Gradient has claimed that each former employee present, four in all, were all fired for cause while each told Leslie Stahl tales of being terminated for questioning how these reports were being drafted, edited, and published. According to each employee, when they questioned Gradient management over the legality of actions taken, the company fired them.
If you were to believe the allegations of Biovail Executive Chairman Mr. Eugene N. Melnyk, the company has been lucky to even survive based on the repeated onslaught of negative reporting orchestrated by SAC Capital and published by Gradient Analytics.
Forgotten in the smaller picture of one investor’s profits and another’s losses is the bigger picture this game has on our total economic well being.
Think about it. What if SAC Capital, innocent until proven guilty, had succeeded in their wish to destroy Biovail?
Biovail Corporation engages in the formulation, clinical testing, registration, manufacture, and commercialization of pharmaceutical products utilizing oral drug-delivery technologies primarily in North America. Its primary focus is on various therapeutic areas, including cardiovascular disease, central nervous system disorders, and pain management. Biovail employs over 2,200 people across countries.
Some of the products Biovail has brought to market include Cardizem CD ® for Angina and High Blood Pressure, Vasotec ® for High Blood Pressure and Heart Failure, Vasertic ® for High Blood Pressure, Ativ AN ® for Anxiety disorders, and Isordil ® for Angina. Biovail Corp. is also working to bring to the US Markets Wellbutrin ® for the treatment of depression.
If the allegations of Melnyk and Biovail are true, these products, and the 2,200 employees working for Biovail would have vaporized at the hands of one Hedge Fund looking for higher and faster profits. The local economies that depend on the work Biovail provides, the jobs, the taxes, the re-investment into the community would all have suffered. Imagine if!
But is this really isolated, Hedge Funds taking extraordinary means to insure faster and higher profits at the expense of businesses, jobs, and the products offered to market?
Recently, the SEC brought enforcement actions against Madison Ave. Hedge Fund Manager Jeffery Thorp for illegally shorting ahead of a minimum of 23 separate PIPE deals through a period of several years. Madison Ave. in New York is considered your more upscale operations on Wall Street.
Why would an upscale Hedge Fund engage in such activities? Profits, seven million dollars worth of ill-gotten profits!
Of the 23 companies listed in the SEC complaint in which Thorp engaged in illegal shorting are firms like Generex Biotechnology (GNBT), which engages in the research and development of drug delivery systems and technology. It develops a proprietary platform technology for the delivery of drugs into the human body through the oral cavity. One of the products Generex is bringing to market is Oral-lyn, which is an insulin oral inhaler for Type I and Type II diabetes. The product is in late stage clinical trials.
I guess our world could live without this medical breakthrough as long as Mr. Thorp and his wealthy clients could afford to go out and buy themselves a new luxury toy. It’s not about what the company provides to society it is what service the company can yield to the funds bottom line profits.
Thorp was also involved in illegally shorting New York based SIGA Technologies (SIGA) which engages in the discovery, development, and commercialization of vaccines, antibiotics, and novel anti-infectives for the prevention and treatment of infectious diseases.
Do we need these in our society?
Thorp also victimized Portland based AVI Biopharma (AVII), a biopharmaceutical company that engages in the development of therapeutic products with principal products in development target life-threatening diseases, including cardiovascular disease, infectious disease, and cancer.
Who said we need this medical breakthrough? And jobs? Portland Oregon must be busting out with jobs under our present economy. This community can afford one local company being put out of business to provide personal profits to a select few wealthy people.
And while the SEC has their complete list of 23 companies victimized by Thorp, which also includes MGI Pharma, HealthExtras, and Cell Pathways, there are many more companies that have never seen any regulatory support provided. Under those circumstances the Hedge Fund’s still have the profits and the access to do more damage.
Complaints of similar illegal short sales in the US Markets have been circulating over the years by investors in companies like Viragen (VRA) and CEL-Sci (CVM) as these small companies struggle to survive and get their products to market. Both US based companies are focused on products that may help reduce or eliminate the growth of cancer in humans.
Heck we already have a cancer cure don’t we? We don’t need another.
If Hedge Funds had their way each and every one of these companies would be destroyed, vaporized, and the medical products and technology they might bring to our lives would be lost forever.
Is it worth it to protect these secretive investing pools of the rich and famous at the expense of a medical breakthrough?
Together, thousands of companies are impacted by the abuses of Hedge Funds and their trading activities on Wall Street. Not all have the fortune of surviving and when they don’t, Wall Street simply writes them off as yet another unsuccessful business model. A post mortem of how and why they failed is rarely undertaken.
Recently Bear Stearns was fined $250 Million for aiding Hedge Funds in late trading abuses. Bank of America received the largest fine for this type fraud paying over $650 Million for their part in allowing Hedge Funds to defraud the investing public. In total, the fine against Wall Street for aiding Hedge Funds to defraud the investing public has peaked at well over $1 Billion. But that pales in comparison to the losses incurred by the investing public, our local communities, and our overall economy.
How much of our country has been destroyed by the illegal activities of the unregulated Hedge Fund business?
Fortunately for members of Congress who have ignored the signs, we will never really know.
The storyline on CBS last night was not an isolated story. It is more of what anybody who works on Wall Street understands happens when the power of a Hedge Fund wants your services.
Stated in the CBS expose was the report that SAC founder Steven Cohen brought in a personal income of $500 Million last year. That’s right $500 Million. If the allegations against SAC and Steven Cohen are true a man listed in the Forbes 400 richest people on earth, with a net personal value over $2 Billion, will have resorted to robbing the sick to better his own personal financial position.
How sick is that?
One day maybe a loved one for these latest in Wall Street thugs will be stricken with a disease whereby the cure for the disease vaporized with the company they destroyed. Maybe then the value of excessive greed will be put in perspective.
But these Hedge Funds are not selective; they will destroy far more than just medical based companies. Recent attacks have included attempts at destroying the TASER stun gun manufacturer, on-line retailers Overstock.com, and services based Martha Stewart Living. Not immune from the abuse would be most of your major and minor airline companies including US Air, United, Delta, Northwest, Midway, and others. Recent enforcement cases also identified that abuse of a small software manufacturer and a manufacturer of public and federal security systems were also within their crosshairs.
But then again, who needs a public airline when you fly around in a private jet?
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006
David Patch
Imagine if those secret and unregulated investment pools for the wealthy continued to operate at will and used every legal and illegal means available to destroy publicly traded companies if that meant a higher profit could be turned.
On CBS’ 60 Minutes Sunday night we heard tale of how one of the largest Hedge Funds in this country, Greenwich Villages own SAC Capital may have actually taken extraordinary steps to garner profit for their wealthy clients and their founder Steven Cohen.
The Hedge Fund is accused in a lawsuit of colluding with an Arizona based analyst research firm Gradient Analytics to publish a “Hatchet Job” report on Canadian based Biovail Corp. (BVR) in order to generate larger and faster profits. SAC has been accused of not only ghost-writing much of the report produced by Gradient but then asked that the report be delayed in its release until a large short position in the stock was created by SAC. SAC expecting that the report would damage the company stock and a significant profit would be made from the short positioned it had taken in the stock.
As part of the 60 Minutes episode, anchor Leslie Stahl had on as quests former Gradient employees who not only described how the “hatchet” reports were written but where the information came from, SAC Capital, and who defined when the reports would be published, SAC Capital.
Gradient has claimed that each former employee present, four in all, were all fired for cause while each told Leslie Stahl tales of being terminated for questioning how these reports were being drafted, edited, and published. According to each employee, when they questioned Gradient management over the legality of actions taken, the company fired them.
If you were to believe the allegations of Biovail Executive Chairman Mr. Eugene N. Melnyk, the company has been lucky to even survive based on the repeated onslaught of negative reporting orchestrated by SAC Capital and published by Gradient Analytics.
Forgotten in the smaller picture of one investor’s profits and another’s losses is the bigger picture this game has on our total economic well being.
Think about it. What if SAC Capital, innocent until proven guilty, had succeeded in their wish to destroy Biovail?
Biovail Corporation engages in the formulation, clinical testing, registration, manufacture, and commercialization of pharmaceutical products utilizing oral drug-delivery technologies primarily in North America. Its primary focus is on various therapeutic areas, including cardiovascular disease, central nervous system disorders, and pain management. Biovail employs over 2,200 people across countries.
Some of the products Biovail has brought to market include Cardizem CD ® for Angina and High Blood Pressure, Vasotec ® for High Blood Pressure and Heart Failure, Vasertic ® for High Blood Pressure, Ativ AN ® for Anxiety disorders, and Isordil ® for Angina. Biovail Corp. is also working to bring to the US Markets Wellbutrin ® for the treatment of depression.
If the allegations of Melnyk and Biovail are true, these products, and the 2,200 employees working for Biovail would have vaporized at the hands of one Hedge Fund looking for higher and faster profits. The local economies that depend on the work Biovail provides, the jobs, the taxes, the re-investment into the community would all have suffered. Imagine if!
But is this really isolated, Hedge Funds taking extraordinary means to insure faster and higher profits at the expense of businesses, jobs, and the products offered to market?
Recently, the SEC brought enforcement actions against Madison Ave. Hedge Fund Manager Jeffery Thorp for illegally shorting ahead of a minimum of 23 separate PIPE deals through a period of several years. Madison Ave. in New York is considered your more upscale operations on Wall Street.
Why would an upscale Hedge Fund engage in such activities? Profits, seven million dollars worth of ill-gotten profits!
Of the 23 companies listed in the SEC complaint in which Thorp engaged in illegal shorting are firms like Generex Biotechnology (GNBT), which engages in the research and development of drug delivery systems and technology. It develops a proprietary platform technology for the delivery of drugs into the human body through the oral cavity. One of the products Generex is bringing to market is Oral-lyn, which is an insulin oral inhaler for Type I and Type II diabetes. The product is in late stage clinical trials.
I guess our world could live without this medical breakthrough as long as Mr. Thorp and his wealthy clients could afford to go out and buy themselves a new luxury toy. It’s not about what the company provides to society it is what service the company can yield to the funds bottom line profits.
Thorp was also involved in illegally shorting New York based SIGA Technologies (SIGA) which engages in the discovery, development, and commercialization of vaccines, antibiotics, and novel anti-infectives for the prevention and treatment of infectious diseases.
Do we need these in our society?
Thorp also victimized Portland based AVI Biopharma (AVII), a biopharmaceutical company that engages in the development of therapeutic products with principal products in development target life-threatening diseases, including cardiovascular disease, infectious disease, and cancer.
Who said we need this medical breakthrough? And jobs? Portland Oregon must be busting out with jobs under our present economy. This community can afford one local company being put out of business to provide personal profits to a select few wealthy people.
And while the SEC has their complete list of 23 companies victimized by Thorp, which also includes MGI Pharma, HealthExtras, and Cell Pathways, there are many more companies that have never seen any regulatory support provided. Under those circumstances the Hedge Fund’s still have the profits and the access to do more damage.
Complaints of similar illegal short sales in the US Markets have been circulating over the years by investors in companies like Viragen (VRA) and CEL-Sci (CVM) as these small companies struggle to survive and get their products to market. Both US based companies are focused on products that may help reduce or eliminate the growth of cancer in humans.
Heck we already have a cancer cure don’t we? We don’t need another.
If Hedge Funds had their way each and every one of these companies would be destroyed, vaporized, and the medical products and technology they might bring to our lives would be lost forever.
Is it worth it to protect these secretive investing pools of the rich and famous at the expense of a medical breakthrough?
Together, thousands of companies are impacted by the abuses of Hedge Funds and their trading activities on Wall Street. Not all have the fortune of surviving and when they don’t, Wall Street simply writes them off as yet another unsuccessful business model. A post mortem of how and why they failed is rarely undertaken.
Recently Bear Stearns was fined $250 Million for aiding Hedge Funds in late trading abuses. Bank of America received the largest fine for this type fraud paying over $650 Million for their part in allowing Hedge Funds to defraud the investing public. In total, the fine against Wall Street for aiding Hedge Funds to defraud the investing public has peaked at well over $1 Billion. But that pales in comparison to the losses incurred by the investing public, our local communities, and our overall economy.
How much of our country has been destroyed by the illegal activities of the unregulated Hedge Fund business?
Fortunately for members of Congress who have ignored the signs, we will never really know.
The storyline on CBS last night was not an isolated story. It is more of what anybody who works on Wall Street understands happens when the power of a Hedge Fund wants your services.
Stated in the CBS expose was the report that SAC founder Steven Cohen brought in a personal income of $500 Million last year. That’s right $500 Million. If the allegations against SAC and Steven Cohen are true a man listed in the Forbes 400 richest people on earth, with a net personal value over $2 Billion, will have resorted to robbing the sick to better his own personal financial position.
How sick is that?
One day maybe a loved one for these latest in Wall Street thugs will be stricken with a disease whereby the cure for the disease vaporized with the company they destroyed. Maybe then the value of excessive greed will be put in perspective.
But these Hedge Funds are not selective; they will destroy far more than just medical based companies. Recent attacks have included attempts at destroying the TASER stun gun manufacturer, on-line retailers Overstock.com, and services based Martha Stewart Living. Not immune from the abuse would be most of your major and minor airline companies including US Air, United, Delta, Northwest, Midway, and others. Recent enforcement cases also identified that abuse of a small software manufacturer and a manufacturer of public and federal security systems were also within their crosshairs.
But then again, who needs a public airline when you fly around in a private jet?
For more on this issue please visit the Host site at www.investigatethesec.com .
Copyright 2006