Copper River Management, the fund founded by legendary short seller David Rocker and which is currently run by his former Rocker Partners co-manager Marc Cohodes, is liquidating with remaining funds being returned to investors. The fund was said to have been down over 50% In the market turmoil over the past couple of months with results exacerbated by the SEC imposed short selling restrictions as well as its inability to unwind derivatives where Lehman was the counterparty….
Once a $1 billion fund that primarily bet on the declining value of
stocks it deemed overpriced, Copper River held large short positions in
some illiquid stocks when the Securities and Exchange Commission
tightened the rules governing short selling. Short sellers typically
borrow shares to sell them and profit when the price drops.
By
doing away with an exemption that was the backbone of a trading
strategy that allowed funds to short stocks through the options market,
the SEC effectively restricted their ability to maintain these
positions. The SEC later temporarily banned the short selling of
financial institutions whose stocks had been depressed by the credit
crisis.
According to people familiar with the matter, Copper River was unable
to cash out derivative contracts in which Lehman was the counterparty
before the Wall Street company filed for bankruptcy protection.
Hedge Fund Copper River to Liquidate – Wall Street Journal
Tags: Christopher Cox, Credit Crunch, Rocker Partners, Toe Tags
My condolences.
Respectfully and sincerely,
Patrick Byrne