Articles Posted in Hedge fund whistleblowers

Hedge fund Harbinger Capital Partners Offshore Manager has agreed to pay $30 million to settle a lawsuit filed by the state of New York claiming the hedge fund manager knowingly evaded New York state and city taxes. A statement issued by the New York attorney general’s office claims that Harbinger concealed income it earned while doing business in New York.

“Harbinger Capital Partners Offshore Manager earned hundreds of millions of dollars in New York state and New York City, but deliberately dodged paying its fair share of taxes,” Attorney General Barbara D. Underwood said in the release. “Tax evasion forces ordinary New Yorkers to shoulder the bill. My office will continue to use every tool at our disposal to pursue those who knowingly violate the tax law and hold them accountable.” The suit resulted from an investigation that was launched after a whistleblower lawsuit was filed in March 2015.

The settlement agreement in the case states that the offshore manager for the Fund failed to pay an unincorporated business tax that it had previously agreed to pay in the amount of $4,115,239. In addition, it says that for three years it did not file city UBT returns. “Because it carried on its business in New York, Offshore Manager had an obligation under the New York State Tax Law to apportion and allocate income as taxable in New York State. ”

33-year-old hedge fund whiz kid Mark Malik CEO of Wold Hedge Global Strategy has been charged with securities fraud by the S.E.C. is being held on $1 million bail in the Manhattan detention center. Purportedly, his company was in the process of nailing a $1 billion deal to go public and was hiring dozens of analysts and opening offices in different countries around the world.

His fund had reported assets of $100 million and record returns which raised his profile as a top earner among elite hedge funds. Malik, whose full name is Moazzam Ifzal Malik described himself as “CEO-Global Economist.” Media firm Bloomberg LP called him a “rising fund manager. BarclauHedge Ltd, an Iowa company gave Mr. Malik’s fund a recognition award for excellence #1. A Barclay Hedge report in August 2012 showed the fund achieving returns of 188.06% in 2010 and 189.18% in 2011 according to court filings.

The SEC accuses him of stealing more than $700,000 from investors. He faces trial on 28 criminal counts and up to 20 years in prison if convicted.

Hedge Fund SAC Capital Advisers has agreed to pay a record $1.8 billion to resolve insider trading investigations by the Department of Justice and Founder Cohen Steven A. Cohen will go uncharged uncharged. The U.S. Department of Justice said that payout is the largest insider trading settlement in history.

An indictment in July alleged systemic insider trading took place at SAC Capital involving the stocks of more than 20 publicly-traded companies from 1999 through 2010. Eight employees have pleaded guilty or been convicted at trial. SAC Capital agreed in November to plead guilty to four counts of securities fraud and one count of wire fraud.

The Stamford, Connecticut-based firm renamed itself Point72 Asset Management and is becoming a family office that will primarily manage Cohen’s personal fortune, recently estimated by Forbes magazine at $11.1 billion.

Last week, the Securities and Exchange Commission awarded a confidential whistleblower the highest sum to date for reporting on a fraudulent hedge fund that had bilked moneys from hundreds of investors. The amount received by the whistleblower was $14 million.

While the name of the whistleblower was not revealed and no information about the financial fraud released, it has become known that the whistleblower was reporting on a hedge fund and that the sums of moneys involved were quite  substantial.

The award itself was large but not as large as some of the amounts soon to be awarded, according to sources close to the SEC. This is exactly what the agency is hoping would occur as information on major fraud is hard to come by and usually only revealed by those close to the wrongdoers.