Just a few years ago, Laurence Curtis Ward spent his days trading millions of shares of stock for a well-known desk in midtown Manhattan. He made six figures and lived in a luxury apartment overlooking Central Park. But that trading desk was part of Bernard Madoff Investment Securities. And when Madoff went down in 2008, so did Ward’s career. “I realized that there was a good chance that professionally I was in a really deep hole,” Ward said.
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The Bernard Madoff trustee, who is fighting to stop a $410 million settlement reached by New York Attorney General Eric Schneiderman with a Ponzi scheme investor, is “extremely unlikely” to win his own lawsuit against former Madoff investor J. Ezra Merkin, Schneiderman said. The judge shouldn’t allow trustee Irving Picard to block the deal because “in the unlikely event” that Picard can win part of his suit, Merkin’s funds would be able to pay him, Schneiderman said in a filing with U.S. District Judge Jed Rakoff yesterday. The attorney general made his filing saying Picard’s “unusual” request for an injunction — to give him time to proof his own $500 million case — required an additional response. Schneiderman said that two Merkin funds, “Gabriel and Ariel, whose assets are approximately $500 million each, have more than sufficient assets to satisfy any potential judgment the trustee could obtain on his claims against them of $17.4 million and $16.2 million, respectively.” A third fund, Ascot, is owed money by the trustee or at worst would be short by only $8 million to pay him, he said. More on Bloomberg [...]

NEW YORK–The Securities and Exchange Commission knew the financial advisory industry would be looking for clues to its intentions when it sought input on creating a single ethical standard for brokers and registered investment advisers. And the agency does, in fact, provide some hints in the formal request for information it issued Friday: For instance it suggests, for the sake of discussion, that respondents assume that brokers are allowed to continue collecting sales commissions. But it’s careful to stress, both explicitly and by the wide range of issues and possible approaches laid out in its 72-page document, that what a new set of rules would look like hasn’t been decided yet. “With its basic assumptions, the commission may have given us an indication of the direction it’s going, but it bent over backward to say its assumptions shouldn’t be considered as policy positions,” notes Marilyn Mohrman-Gillis, managing director of public policy and communications for the Certified Financial Planner Board of Standards Inc. More in the Wall Street Journal [...]

Liongate Capital, the London-based fund of hedge funds, has sold a majority stake of its business to US pension plan specialist the Principal Financial Group. Liongate’s sale is the latest in a series of moves towards consolidation in the funds of hedge funds industry, where many businesses have found themselves squeezed by pressure from investors on fees and low returns from the hedge funds they invest in. Funds of funds were once the single biggest source of money for hedge funds and the route through which most investors accessed the industry. However, since 2008 many have struggled to carve a niche for themselves amid the disappearance of their main high net worth client base. More in the Financial Times [...]