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The Hedge Fund Public Relations Game Plan?

| | Posted in: Animal Spirits, Mutual/Hedge Funds

Is this how a savvy hedge fund manager plays the game? First, get cozy with other fund managers, financial market research firms and the financial media. Then “orchestrate” the attention paid to a company in which the manager’s fund has taken a position? Here’s a picture, with some links to relevant allegations and news/commentary…

The figure derives from court filings and related news/commentary, such as:

Overstock, Inc.’s complaint against Gradient Analytics, Inc., Rocker Partners, LP et al. for unfair competition and negligence. The complaint charges that the defendants “have conspired to denigrate the business of online retailer Overstock.com so as to reap personal profits for themselves.”

Biovail Corporation’s lawsuit alleging that S.A.C. Capital Management, LLC, Gradient Analytics, Inc., et al. made the company a “target of a ‘massive and fraudulent disinformation campaign’ that involved biased analyst reports from purportedly independent sources hired to do ‘hatchet jobs’ to drive down Biovail’s stock.”

As part of an investigation into allegations of stock manipulation, the SEC issued subpoenas to columnists for two Dow Jones & Co. publications, Herb Greenberg of MarketWatch and Carol Remond of Dow Jones Newswires.

The SEC has issued subpoenas to “TheStreet.com and its co-founder and major shareholder, James J. Cramer.” These “subpoenas are related to a Securities and Exchange Commission investigation into allegations that Gradient Analytics, an Arizona stock-research firm, published bearish research reports at the behest of a group of short-sellers, including Rocker Partners, a minority owner of TheStreet.com.”

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