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Posting Hedge Fund Letters? Better Think Twice After Elliott Goes Postal Over Absolute Return+Alpha Letter Leak
One of the most irreverent yet competitive practices in the financial blogosphere has long been the tradition of who can post the most recent hedge fund letters first. Yet that may soon be coming to an end, after Elliott Management sought an emergency court order to uncover who leaked its most recent investor letter to Absolute Return + Alpha. Elliott, which has historically been very skittish about having the public see either its performance (and in this case there is nothing to be ashamed of with a 5.3% YTD return by Elliott, and 0.4% in Q2), or its outlook on the economy and potential investing oportunities (in this case saying that "the current economic situation has not produced
the type of new, complicated, restructuring situations the firm likes to
invest in."). What is surprising is that in its court filings Elliott said that "publication of its results would hurt its competitive edge." This is somewhat disingenuous, as a hedge fund's performance is known within days of publication either via official statistics reports such as the the popular HSBC weekly hedge fund performance tracker, or word of mouth. Additionally, investor letters always make it to open, whether via the blogosphere, or IRC chat rooms (yes, despite the incursion of twitter and various momentum trader spin offs, the real information "exchange" still occurs deep in the bowels of mIRC). Yet should the Supreme Court of the State of New York in Manhattan rule on behalf of Elliott, the precedent would be very troubling, as case law would now exist for the forced disclosure of any such letter leaks, and blogs that traffic in fund letters (and ZH has been known to publish some in the past), may have little legal recourse when a subpoena was served to them (luckily, the ZH legal venue is and will always be of a European nature, as such any decision by the Supreme Court will be non-binding and unenforceable).
More from Reuters:
In court papers, filed in the Supreme Court of the State of New York in Manhattan, Elliott said its June 30 letter to investors had been leaked to the magazine, and that it wanted the court to give it emergency authority to investigate the magazine and find out who had violated Elliott's confidentiality agreement and leaked the letter.
Elliott said it was contacted by the magazine and learned it could publish the full letter as soon as Friday. Michelle Celarier, editor of Absolute Return + Alpha, declined to comment.
Elliott, which is run by Paul Singer and specializes in distressed investing, said its investor letter contains its second-quarter positions, and that its publication would cause "significant harm to Elliott and negatively affect its competitive advantage" in the market.
"If other participants learn the particulars of Elliott's positions and results with respect to those positions, it would impact negotiations Elliott has with those parties ... affecting Elliott's future results," the hedge fund's director of communications, Scott Tagliarino, said in the court papers.
In the court papers, Elliott said each of its letters is watermarked with the identity of the person who is accessing it so the time and date when each person accessed the letter can be tracked.
Elliott may be surprised to find that recent versions of Adobe Professional have a de-watermarking feature which allows the removal of such "protection" features (and the outright editing of any and all pdfs) within a minute.
Elliott said it wanted the information from
Absolute Return + Alpha within two days so that it could pursue damages
and an injunction against the leaker.
One wonders just what damages a fund can and will pursue against one of its own LPs, which ultimately would (or at least should) be the first source
of any hedge fund leak.
Hedge funds typically send letters to their
investors every quarter to update them on their results, and while some
expect them to leak out, others have gone to great lengths to try to
keep them secret. But it is rare for a fund to go to court over the
leaking of an investor letter.
And that is precisely the case, which is odd why Elliott would take this action at this point, and more relevantly, which other funds will be willing to go to war with the media industry, over comparable such "leaks." We are certain this will not be the first and last such escalation by a hedge fund, at a time when many HFs are expected to shutter following in the footsteps of Duquesne Capital, dreaming of a time when the market actually made sense, and "levered beta" wasn't the only practicable strategy.
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completely O/T -
AN INTERESTING FACT ABOUT AUGUST 2010.
THIS AUGUST HAS 5 SUNDAYS, 5 MONDAYS, AND 5 TUESDAYS ALL IN ONE MONTH.
THIS ONLY HAPPENS ONCE EVERY 823 YEARS.
http://www.snopes.com/inboxer/trivia/august.asp
Hey, Junker, "off topic" is a mainstay around here.
But misinformation shouldn't be!
Goddammit! That's what I get for forwarding some BS email that is outside my scope of understanding...which is porn. Sorry!
LMAO!!
And all the days end in "Y" freaky
Even more astounding is the so far unobserved (in this thread) that all the days end in "day".
I wonder what all of this means.
That nighttime is just a collective hallucination?
A shared consensus reality chemically manipulated by all those wonderful manufactured meat "stuffs" and genetically altered grains etc. Kind of makes you wonder what "they" are trying to change and what they're trying to prevent.
I knew there had to be something behind my recent my motivation to pray more followed immediately by a hangover (that I notice).
March 2009 had 5 Sun/Mon/Tues.
Every month with 31 days will have 5 of 3 consecutive days.
qualify enough and you'll wind up with a big number like 823. silly.
Does this mean I am vindicated?
They've got to establish the precedent sometime, somewhere.
Besides, there are lots of non-binding, unenforceable precedents just waiting for the opportunity (or crisis, that is) to leap to the forefront of the idea-space of the "but we had to do something!" crowd.
Today is merely the setup for tomorrow's STFU.
The lawyer profession would be too boring and a lot less lucrative without 1,000,000 precedences
+1
All precedent means is, "If the Court committed atrocities and injustices in the past, then it should be able to do so in the present."
Precedent (nor the law) has anything to do with right-and-wrong, and precedent itself has nothing to do with the law. Its sole purpose is to imply "stability" (independent of the actual law).
Thus, precedence is the best mechanism to justify today's injustices. ("Hey, it's not my fault, there was a time in the past the court committed atrocities, so we can rationalize doing that again.")
As I reside in Austria I am happy to post letters of US based hedge funds at my blog.
Maybe not.
I was just reading AR this morning. Fucking site rocks.
http://www.absolutereturn-alpha.com
The AR defense attorney should reference ZH page view stats as prima facie evidence for the general public's overwhelming appetite for truth(or at least semi truth if you filter the penny stock noise).
If a large body of people is seeking the truth on topics long obfuscated by TPTB does this not constitute the will of the people. AMERICAN DEMOCRACY IS FOUNDED on faith and the will of the people. The system has failed us, violated our faith, and we are seeking the truth.
Prosecute AR and you will be hanging from the same lamp posts as your bankster cousins.
Let the information wikileak.
Phew, I was going to copy their strategy!!!
More off topic Gerard Celente videos on Yahoo Tech ticker today
http://www.fundmymutualfund.com/2010/08/video-gerard-celente-anti-kool-a...
opening video: "And now We're headed for the greatest depression"
Gerelde looked snappy in that white suit - ascot, not so much.
Atlantic Ocean, bitches!!!!!!!!!!!
Drown...on your way to justice.
Hey! you managed to find something positive about Europe!! Nice one!! Probably the only thing we got left on this side of the world... And thank god you got your servers standing in a nice "cool" place, literally...
"luckily, the ZH legal venue is and will always be of a European nature"
Elliott are nothing if not litigious. Not to mention 'punchy'. Their 2000 Xmas party remains legendary for the pummelling of a broker foolish enough to complement the MD's wife on her assets.
Do they Caymans have adequate web/net capabilities to support ZH's needs? Redundancy is nice.
"luckily, the ZH legal venue is and will always be of a European nature, as such any decision by the Supreme Court will be non-binding and unenforceable"
That is until new laws are drawn up and this sight is flagged and made inaccessible. Better pick up that latest copy of Newspeak and start toting the line...
I trust the servers aren't in the UK? We would hold the drunken wifflings of junior Senators' aides' tennis partners to be far higher than the laws of our own land.
A simple call to the Zh offices will get members the latest IP address of the ZH servers.
http://188.126.66.66
Nice IP btw. And then there will also be the cell phone app that pulls ZH stories off of popular blogs like CNN.com.
How you ask? Tyler posts stories in the blogs comment section and the cell phone app scrapes stories posted by 'certain' usernames.
-- The Architect
What a lot of people don't realize is that this is then redirected to a small bank of customized Playstation 2 servers sitting under a fight ring in a nasty little gym in the rough part of East Hampton, NY.
Additionally, investor letters always make it to open, whether via the blogosphere, or IRC chat rooms (yes, despite the incursion of twitter and various momentum trader spin offs, the real information "exchange" still occurs deep in the bowels of mIRC).
Do tell. Where are the cool, informative IRC chat rooms?
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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