Looking back at Congress’ $10bn tax and Soros’ French fight

June 22, 2011   Suzy Kenly Waite


In this week’s look back at the archives, AR also revisits a former Banc One PM whose proposed launch is still seeking liftoff.

One year ago

»» The nation's largest hedge funds faced enormous taxes (of up to hundreds of millions of dollars) to pay for financial reform. The proposal, which stated that the Federal Deposit Insurance Corporation would raise $19 billion over five years from hedge funds managing $10 billion or more and financial institutions with more than $50 billion, was added into the financial reform bill at 3 a.m. on June 25, 2010. At that time, there were 34 funds in the U.S. managing $10 billion or more, including Bridgewater Associates, Paulson & Co., and Soros Fund Management.

Hedge funds fought back and within a few days Senator Chris Dodd (D-CT) announced an alternative proposal to come up with the $19 billion.

»» Ona Lewis, a former long-only equity portfolio manager at Banc One Investment Management, formed Evermore Towb Global Investment Management in Columbus, Ohio and aimed to launch the emerging markets/U.S. equity strategy with $150 million in September 2010.

Lewis never raised enough capital to launch the fund, but her game plan hasn't changed. She is still having discussions with wealthy investors. At Banc One, Lewis ran $6 billion in long-only managed accounts invested in U.S. equity and fixed income securities and gained 17% from 1999 through 2000. Before that, at Integrity Investment & Service Corp., an asset management company, she oversaw $100 million in U.S. equity managed accounts, producing an average return of more than 30% over five years.

Five years ago

»» The Cour de Cassation, France's highest court, rejected an appeal by George Soros to overturn his conviction on insider trading charges related to his 1988 purchase of shares of Société Générale. It was alleged that Soros had prior knowledge that the firm was a takeover target.

Despite Soros' lawyers arguing in 2002 that a 14-year delay between the alleged wrongdoing and the trial made the case too old to properly defend, he was convicted of insider trading and ordered to repay €2.2 million he'd made from the 1988 purchase.

After he lost the appeal, Soros turned to the European Court of Human Rights in September 2006 and in September 2010 he won a bid to have that court review his conviction. The human rights assembly said it would not hold a hearing, and will rule on the complaint based on submissions by the parties. As of mid-June, the court was still evaluating the case, according to a Soros spokesman. If he wins, Soros could ask for a new trial.



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