The non-compete from GLG is over. With his personal scandal is more or less behind him and Philippe Jabre is getting back on the horse. Jabre has opened Jabre Financial Services in Switzerland and is building up his initial staff with some notable friends and family, including former GLGers, James Saltissi and Daniel Horsely and former Morgan Stanley head of risk management (as well as brother in law), Philippe Riachi. $2.5 billion is the year one target for assets under management.

Jabre had previously opened a firm called Ballena Captial, which was a vehicle for managing his own substantial wealth. The launch of Jabre Financial Services marks his return to managing other peoples money.

-- MDT

Labels: Ballena Capital, FSA, GLG, hedge fund, Jabre Financial Service, Morgan Stanley, Philippw Jabre

Most recently we saw money manager Philippe Jabre, late of GLG Partners and one of the UK's richest citizens announce the creation of Ballena Partners, a new entity for managing his own substantial personal wealth and that of his similarly wealthy clients. Unfortunately, all is not resolved for the man who, before an investigation and conviction by the UK's Financial Services Administration, Europe's hedge fund star. Jabre has defiantly vowed to fight the FSA fines that resulted from his conviction and it appears now that he may also be forced to defend against a potential lifetime ban.

-- MDT

Labels: Financial Services Authority, Philippw Jabre

Earlier this year Philippe Jabre, former super-star trader for GLG Partners, Europe's third largest hedge fund was facing the results of a two-year investigation into alleged insider trading activities and a potential ban by the FSA. Jabre was ultimately convicted of market abuse by the FSA (and is appealing the decision) but did avoid a variety of more serious charges. Since then Jabre and GLG have officially parted ways, but plans are in the works for Jabre to re-enter the trading world with the launch of Ballena Capital. While the FSA conviction prevents Jabre from managing client money, he can manage his own.

Which is substantial in quantity...

More on Jabre's moves, here.

-- MDT

Labels: Financial Services Authority, insider trading, Philippw Jabre

Philippe Jabre, a star with alternative investment firm, GLG Partners had been awaiting details on the financial penalty associated with the FSA's recent disciplinary action taken against both he and GLG. Surprisingly to some, the FSA's fine against GLG, which was expected to be in the millions, came in at a modest $750,000. The FSA's accusations against Jabre relate to a 2003 bank bond deal. In a February 2006 decision notice the FSA declared that GLG was vicariously liable for not more closely monitoring what Jabre was doing.

Jabre is currently on a leave absence from GLG and recently left his directorship with the firm. While GLG has not expressed an interest in fighting the fine, Jabre has appealed the FSA decision and is keeping mum pending the outcome.

More here.

-- MDT

Labels: Financial Services Authority, Philippw Jabre

Meanwhile investors pledge to stick by the hedge fund while it weathers the scandal (17% returns will do that).

Via Reuters:

Investors to stick with hedge fund GLG

By Pratima Desai
and Alistair MacDonald
Reuters (London)
March 3, 2006

Fines imposed on hedge fund GLG, for charges related to market abuse, will not enhance public opinion of hedge funds but unfazed investors said they would not pull money from the firm.

The hedge fund, which has around $11.5 billion (6.6 billion pounds) under management and is Europe's largest non-listed hedge fund, makes too much money to be cold shouldered by investors, they say.

The Financial Services Authority is set to find GLG senior trader Philippe Jabre guilty of market abuse and violating market conduct, according to a source. GLG is expected to share the blame for not properly monitoring Jabre's activities...

More here.

Curiously, our friend, Mr. Fink from Man Group did not appear to mention the GLG matter in his recent comments about hedge fund fraud being a North American issue.

-- MDT

Labels: Philippw Jabre

So says The Independent:

Trader in insider dealing case not coming back, says GLG

By Gary Parkinson
City Editor
The Independent
February 27, 2006

Philippe Jabre, the GLG Partners star trader under investigation for alleged insider dealing, is unlikely to return to the hedge fund manager whether or not he is cleared of any wrongdoing. The founders of GLG - the Israeli-American Noam Gottesman and the Belgian Pierre Lagrange - are telling investors not to count on Mr Jabre's return no matter what the outcome of the Financial Services Authority inquiry.

The City watchdog is examining whether Mr Jabre traded in the Japanese company Sumitomo on inside information gleaned from the Goldman Sachs banker John Rustum. Separately, French financial regulators are looking into Mr Jabre's trading in the French company Alcatel.

The FSA's decision on Mr Jabre is expected soon, while the French are unlikely to arrive at findings for some time. Theirs is the more complex case. Should the FSA find against him, Mr Jabre faces suspension or even an outright ban from trading....

Read the full Indy article here. For more background on the Jabre investigation, click here.

-- MDT

Labels: Financial Services Authority, insider trading, Philippw Jabre

The two-year insider trading investigation into the activities of Philippe Jabre of GLG Partners, Europe's third largest hedge fund is about to make it's wasy into open hearings, courtest of the FSA. Wall-Street power-house Goldman Sachs may also get a black-eye for the hearings, as their communications with Jabre are at the heart of the investigation. Via the TimesOnline:

Hedge fund star faces ban

The Sunday Times
February 05, 2006
By Peter Koening
and Louise Armitstead

One of Europe’s largest hedge funds and its star trader face censure by the City regulator as early as this week over an insider-trading scandal that has rocked the financial capital. Sources close to the Financial Services Authority (FSA) say Philippe Jabre, a fund manager at GLG Partners, may be fined and barred from trading after a two-year investigation. GLG, his employer, could be fined.

But people familiar with the investigation say GLG and Jabre are already considering appeals. So far the probe has taken place behind closed doors. An appeal would be held in public before The Financial Services and Markets Tribunal, a body that has been critical of the FSA in the past. An open hearing may prove embarrassing for the FSA as well as for Goldman Sachs, the US investment firm that managed the 2003 stock sale by Japan’s Sumitomo Mitsui bank, which is at the heart of the FSA’s investigation.

GLG and Jabre are expected to argue Goldman supplied privileged information about the stock sale in a way that left Jabre free to deal without breaking insider trading rules. GLG and Jabre are also expected to claim that Goldman and the FSA sat on evidence that supported this defence...

More details on the specific allegations (and the actions that led to them) can be found in the full article.

-- MDT

Labels: Financial Services Authority, insider trading, Philippw Jabre

Yesterday's link to the BusinessWeek story regarding SEC interest in possible insider trading seemed to hit a nerve. To that end, lets take a look at a recent Times Online article concerning Philippe Jabre's GLG Partners, Europes's third largest hedge fund, which has been dogged by allegations of insider for going on two years (as was mentioned briefly at the end of the BW piece).

Conventional wisdom has it that Europe's FSA is more on top of their hedge fund market than the SEC here in the states. Might Federal regulators be examining closely how their colleagues across the pond are handling these matters as a prelude to their own action?

Scandal at the heart of the City

The Sunday Times
January 22, 2006
By Peter Koenig and
Louise Armitstead

GLG Partners, Europe’s third-biggest hedge fund with $11.5bn under management, and its co-owner Philippe Jabre stand accused of insider dealing. Guilty or not, the case has focused attention on the hedge-fund industry and its relationship with investment banks...

...Nearly two years after the City regulator began investigating allegations of insider trading against him and his firm, GLG Partners, a London-based powerhouse, it was now the job of the FSA’s regulatory decisions committee (RDC) to hear the evidence before making a decision.

The case presented by the FSA’s investigators over the next two days centred on Jabre’s trading in the run-up to a $2.9 billion (£1.6 billion) sale of stock by Japan’s Sumitomo Mitsui bank in March 2003. The FSA’s investigators accused Jabre of receiving details of the stock sale from a banker at Goldman Sachs in London in advance of public disclosure. They alleged that Jabre illegally traded on this information to make about $5m for GLG.

City hedge funds and investment bankers are gripped by the drama. Hanging in the balance is the fate of GLG, Europe’s third-largest hedge fund with $11.5 billion under management. More dramatically, Jabre, co-owner and star trader of the fund with a personal fortune estimated at £180m — his assets include a ski chalet in Courchevel, France — could face a lifetime ban from working in the City if found in breach of FSA regulations.

Hedge-fund managers, bankers and regulators further afield are watching, too. The allegations and evidence produced against Jabre and GLG look like part of a general malaise in the City rather than the transgressions of a single fund. If this is the case, the reputation of Britain’s financial capital would suffer.

The sums involved could be huge. Last year’s insider-trading scandal, which led to the conviction of Daily Mirror City Slicker journalist James Hipwell, involved tens of thousands of pounds. If there is a magic circle of City hedge-fund traders and investment bankers operating within the wider investor and investment-banking community, it could involve millions of pounds.

City hedge funds and the investment-bank units serving them generate about £20 billion annually in profits. If 5% comes from trafficking in information unavailable to other investors, the figure might be as high as £1 billion. “The scandal could be the 21st- century London equivalent to what happened on Wall Street in the 1980s, when men like Ivan Boesky and Michael Milken traded tips on pending company mergers and acquisitions,” said one American banker...

London first...New York next?

More here.

-- MDT

Labels: Financial Services Authority, insider trading, Philippw Jabre