hcttp://www.propublica.org/article/all-the-magnetar-trade-how-one-hedge-fund-helped-keep-the-housing-bubble
http://dealbreaker.com/2010/04/the-secret-story-behind-the-infamous-magnetar-trade/
http://www.google.com/search?sourceid=navclient&aq=0h&oq=Magn&ie=UTF-8&rlz=1T4SNNT_en___US362&q=magnetar#sclient=psy&hl=en&rlz=1T4SNNT_en___US362&tbs=nws:1&q=magnetar%20capital%20%20&aq=&aqi=&aql=&oq=&pbx=1&fp=6d2a44b0a1524abc&pf=p&pdl=1000
http://online.wsj.com/article/SB10001424052748703399204576108461096848824.html?mod=googlenews_wsj
The hedge fund has consistently denied that it selected assets for the CDOs in which it invested and often bet against.
Last April, in response to questions from ProPublica, the hedge fund said that "Magnetar did not choose the assets in any CDO. [6]" ProPublica's story on the Magnetar trade detailed how the fund had an active role in building these CDOs and in choosing assets that were riskier than might have otherwise been chosen.
Magnetar used a CDO called Norma to create a $600 million bet against subprime mortgage securities, according to the document.
The CDO itself took the other side of the bet, and ultimately cost investors in Norma hundreds of millions of dollars. Merrill Lynch underwrote and marketed the $1.5 billion Norma. http://www.magnetar.com/Magnetar%20Mortage%20Recovery%20Backstop%20Whitepaper%20Jun09.pdf
According to the commission report, Magnetar made the selections without the knowledge of the manager legally charged with picking the assets for the CDO or the risk department of the bank that helped create the deal.
The collateral manager, NIR Capital Management, was paid to manage the deal and was supposed to be independent of the investment bank and act in the interests of the CDO as a whole. The Norma offering document says that NIR would select the assets that went into the CDO, and no mention is made of other parties' roles in asset selection.
"King Corey had abdicated its asset selection duties to Magnetar with Merrill's knowledge," the report states.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=59332785
The board was created to discuss the following hypothesis
{C}and any other relevant questions pertaining to NIR:
1. (verified)Attempt to identify stocks that have convertible notes issued to them which are administered or managed by Corey Ribotsky and N.I.R. Group and/or other funds.
2. Attempt to identity fraudulent companies whose stock schemes are/were financed by NIR notes I.E. http://www.youtube.com/watch?v=qD3jpg1TJEw&feature=related
3. Discuss the reasons why (if any) the notes may be unlawful including but not limited to: insider status/information/trading, and....
4. (verified) former NIR employees ever forced current/potential companies financed to enter into consulting agreements.
5. Why Corey Ribotsky may be an "insider" or "control person" of the companies he loaned money to using convertible notes.
6. Attempt to verify whether NIR's offshore funds may have been used for money laundering and/or unlawful tax shelters.
"The company has to know who they're getting into bed with"
"You want someone who's going to be a financial partner as opposed to someone who's just
looking for a trading play."
- Corey Ribotsky
The NIR Group Family of Funds provides investors with multiple alternative investment strategies within separately managed funds.
The NIR Group, LLC is an alternative investment firm focusing on strategies that are structured to mitigate risk and produce returns in all market environments.
The NIR Group, LLC is an alternative investment firm focusing on strategies that are structured to mitigate risk and produce returns in all market environments.
Founded in 1998, NIR initially focused its investment strategy on direct investments in small/micro-cap public companies that have emerging growth, distressed, and developmental stage businesses. NIR has emerged as one of the most active investment fund managers in this financing sector. While utilizing a stringent system of due diligence, NIR allows for a thorough and expeditious funding process that is geared to deliver maximum financial return, while greatly limiting risk to our investors.
NIR has since expanded its investment strategies to include investments in commodities and structured finance instruments. Preservation of capital is of paramount importance and we utilize extensive risk management to achieve our results. Each strategy is separately managed by it's own management team for both high net worth and institutional investors.
The WSJ claims the following:
Prosecutors Target Hedge-Fund Firm Probe of New York's NIR Group Focuses on Possible Kickbacks in Plot to Inflate Value of Holdings
Federal authorities investigating a Long Island, N.Y., hedge-fund firm are questioning individuals close to the firm about whether it paid kickbacks to outsiders as part of a scheme to inflate the value of its holdings, say people familiar with the matter
![[NIR]](https://si.wsj.net/public/resources/images/MI-BB725_NIR_DV_20100225164734.jpg)
Getty Images Corey Ribotsky, founder of NIR Group.
NIR Group reported eight years of positive returns in its biggest fund with no negative months starting in 2001, according to figures in fund documents. NIR last year reported to investors it managed more than $780 million in hedge-fund assets.
Federal officials have been investigating the firm since at least last year, according to people close to the matter. The criminal investigation centers on whether NIR managers including 39-year-old founder Corey Ribotsky misled clients about investment returns tied to stakes NIR owned in small companies, the people say.
Authorities haven't accused Mr. Ribotsky or anyone else of wrongdoing. A lawyer for NIR and Mr. Ribotsky, Jordan Hershman of Bingham McCutchen LLP, said "The company is cooperating fully with the investigation. It is confident that the facts will show that NIR and Mr. Ribotsky acted properly at all times."
NIR invests its hedge-fund assets primarily in small public companies through privately negotiated deals, making its holdings difficult to value, people familiar with the matter say. In return for money NIR put into small public companies, it often received notes that could be converted into stock at a discounted rate.
Authorities are investigating whether NIR valued certain notes at a higher level than the underlying companies' value justified, people familiar with the matter said.
The investigators now want to know whether people with financial ties to some outside companies received compensation in exchange for helping NIR inflate values of its investments, such as by buying assets at inflated prices in return for some benefit outside the transaction, say people familiar with the matter. Regulators have long been concerned with how hedge funds value investments, particularly hard-to-sell investments like those NIR holds.
Federal prosecutors from the U.S. attorney's office in Brooklyn, Federal Bureau of Investigation agents and U.S. Securities and Exchange Commission lawyers have interviewed what one person familiar with the matter referred to as several "subjects" of the probe. It is unclear which outside individuals are a focus.
Spokesmen for the U.S. attorney's office, FBI and SEC declined to comment.
Federal authorities also are looking into whether NIR failed to properly disclose certain investments, possibly preventing clients from examining where their money was invested, the people said.
NIR commonly has invested through PIPEs, or private investments in public companies, according to regulatory filings and fund documents. PIPEs are most-used by smaller companies that need cash quickly and are willing to sell stock at a discounted price through privately negotiated deals.
A model similar to the firm's could perform strongly in a robust economy when companies benefit from rising stock prices and hedge-fund investors are depositing cash. But falling stock prices during a downturn could sink returns, people close to the matter say.
Authorities are probing whether NIR—which barred investor withdrawals in late 2008—ran into trouble when the credit crisis hit, the people say.
Inside NIR, located in the town of Roslyn on Long Island's North Shore, attempts to assign dollar values to the holdings in its funds hit multiple snags since late 2008, say people familiar with the matter.
Investors haven't received a 2008 audit for NIR's biggest fund, called AJW Offshore II, after being told last summer and fall that the audit would be done soon, according to investors and other people familiar with the matter. A spokesman for NIR declined to comment.
The valuation issues are among those that have piqued the interest of federal investigators, people familiar with the matter say.
Since the financial crisis, some hedge-fund auditors are demanding more documentation justifying how much managers say assets are worth. "We're seeing auditing firms taking very careful looks at valuation procedures," said Richard Buttimer, interim finance chairman at University of North Carolina-Charlotte. He has no affiliation with NIR.
Last year, NIR hired New York advisory firm FTI Consulting Inc. to replace a previously hired firm that NIR no longer was working with, say people close to the matter. But FTI severed its relationship with NIR Group around the start of this year, the people say. FTI declined to comment.
In recent weeks, NIR has talked with other valuations specialists in an attempt to replace FTI, but as of this week hadn't signed an agreement, people close to the matter say.
NIR formally suspended withdrawals from AJW in late 2008, telling investors that market conditions made it difficult to sell holdings. Since then, it has let out a small amount of money, less than 1% per quarter, say people familiar with the matter.
The AJW fund, named for wives of three acquaintances of Mr. Ribotsky, since its early-2001 inception through 2008 reported returns between 10% and 34% per year, according to fund documents and clients. That is a steadily profitable track record that beats that of most hedge funds, including those with similar strategies, according to industry data.
AJW's performance in 2009 was roughly flat, say investors.
Mr. Ribotsky started NIR in 1998, setting out to raise hedge-fund money from wealthy individuals and institutions and invest it in troubled companies, according to marketing materials. His success has helped him develop a profile on Long Island for charitable giving to organizations including Sunrise Day Camp and the Children's Medical Fund of New York, according to information on NIR Group's Web site and press releases about Mr. Ribotsky's philanthropy.
Write to Amir Efrati at amir.efrati@wsj.com and Jenny Strasburg at jenny.strasburg@wsj.com”.
http://online.wsj.com/article/SB10001424052748703795004575087951450071156.html
COREY S. RIBOTSKY is the Managing Member of N.I.R. Group, LLC, a boutique investment management firm. Mr. Ribotsky has been investing in public companies since 1992. Prior to becoming a member of N.I.R., Mr. Ribotsky was a member of the investment management firm, The Rainmaker Group, LLC located in Red Bank, New Jersey. Mr. Ribotsky graduated with a BA from the State University of New York at Stony Brook and attended The New York University, Leonard N. Stern Graduate School of Business for an MBA in Finance and Operations. Mr. Ribotsky also attended Brooklyn Law School.
http://www.tiger21.com/Presenterdtl.aspx?ID=802
Excerpt from the Affidavit of Michael Horsley
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=4NpRAMSzDUAJVZ/UdFPbgg==&from=FiledDocsDetailURL
PIPEwire - Oct 12, 2010 NIR Group, the hedge fund firm led by Corey Ribotsky, said it had no involvement in or knowledge of any alleged kickback scheme involving Ingen Technologies ... |
NIR Denies Involvement, Knowledge of Alleged Ingen Technologies Scheme
Posted October 11, 2010 1:19PM PST
NIR Group, the hedge fund firm led by Corey Ribotsky, said it had no involvement in or knowledge of any alleged kickback scheme involving Ingen Technologies and its chief executive Scott Sand.
Roslyn, N.Y.-based NIR made the statement in an email in response to a request for comment on charges brought by the Securities and Exchange Commission that Ingen and Sand paid illegal kickbacks to a pension fund manager and associate. Ingen was allegedly trying to induce them to make two large purchases of Ingen stock in an effort to generate the appearance of market interest in the company and boost its stock price.
Yucaipa, Calif.-based Ingen is a medical device manufacturer that specializes in respiratory care products, according to the SEC's complaint. The company raised $1.5 million in a 2007 convertible debt offering that made NIR Group Ingen's biggest investor at the time.
James Carlson, the SEC's senior trial counsel, declined to comment on whether the SEC was investigating NIR Group.
NIR also said in its emailed statement that in June 2009, funds it managed filed a complaint against Ingen "due to its failure to honor its obligations to NIR." Details of the complaint weren't immediately disclosed.
What is a hedge fund? and what does it do to make money?
1.0 Useful Terms [derived from Black?s Law Dictionary, 7th ed.]
Arbitrage: the simultaneous buying and selling of securities in different markets with the purpose of profiting from the price difference in the markets.
Derivative: a volatile financial instrument whose value depends on or is derived from the performance of a secondary source such as an underlying bond or currency.
Hedge: making arrangements to safeguard against loss on an investment (can involve various techniques)
Leverage: the use of credit (such as margin) to improve one?s speculative ability and to increase the rate of return on an investment
Short Sale: a sale of a security that the seller doesn?t own (if the seller does own the security she is said to be in a ?long position?), and that the seller must borrow. Usually, the technique is employed when prices drop. If the price of the security does drop, the seller can make a profit on the price of the shares sold versus the price of the shares bought to pay back the borrowed shares.
nI a truly surreal and bizarre turn of events, NIR took a stab at the real derivative/mortgage game as follows in this long saga:
A CDO CALLED NORMA: 
http://www.youtube.com/watch?v=XjoJ9UF2hqg ...." you can actually do the trade from any collateralized obligation backed by assets....."
Sections:
Current cases involving NIR or its' employees
Subsection for former employees?
Court docs links (Zoho or Scribed etc...) grouped by the underlying entity involved.
National Information Resources Inc (Nir)
1044 Nthrn Blvd Ste 302, Roslyn, NY 11576, United States
Phone: (516) 739-7110
Also Does Business As:Nir
SIC:Management Consulting Services
Line of Business:Management Consulting Services
Detailed National Information Resources Inc Company Profile
This company profile is for the private company National Information Resources Inc, located in Roslyn, NY. Nir's line of business is management consulting services.
Company Profile: National Information Resources Inc
Year Started:1992
State of Incorporation:NY
URL:N/A
Location Type:Single Location
Stock Symbol:N/A
Stock Exchange:N/A
Also Does Business As:Nir
NAICS:N/A
SIC #Code: View Details
Est. Annual Sales: View Details
Est. Employees:14
Est. Employees at Location:14
Contact Name:Corey Ribotsky
Contact Title:President
http://www.manta.com/comsite5/bin/pddnb_company.pl?pdlanding=1&referid=3550&id=90mbnv
http://www.secinfo.com/$/SEC/Name.asp?M=corey+s.+ribotsky
The board was created to discuss the following and any other relevant issues pertaining to the business of NIR:
1. Identify stocks that have convertible notes issued to them which are administered by Corey Ribotsky and his N.I.R. Group and other funds.
2. Identity any alleged/possible fraudulent companies whose stock schemes are/were financed by Corey Ribotsky's convertible notes.
3. The reasons why (if any) the notes may be unlawful including but not limited to: insider status/information/trading, and....
4. Allegations that any current or former NIR employees ever forced current/potential companies financed to enter into consulting agreements.
5. Why Corey Ribotsky may be an "insider" or "control person" of the companies he loaned money to using convertible notes.
6. Whether Corey Ribotsky's offshore funds may be used for money laundering and unlawful tax shelters.
7. The litigations involving Corey Ribotsky's N.I.R. Group, results and how they are achieved.
8. Media accounts of Corey Ribotsky's notes and praise/criticism/comments in the financial community.
9. Any allegatioins of wrongdoing involing any current or former NIR employees.
USERS: Please provide the names of stocks that have confirmed convertible notes issued by NIR Group, Ribotsky, AJW, or New Millenium. Also feel free to provide any information about them including the result of the underlying stock
NEWS ARTICLES ABOUT COREY RIBOTSKY AND HIS FUNDS:
2007-09-28 Investor blamed for stock's losses by Chris Coletta of Triangle Business Journal
http://washington.bizjournals.com/triangle/stories/2007/10/01/story3.html?b=1191211200%5E1527696&page=2
2007-09-10 Debt strain unclogs pips by Marine Cole/Financial Week (comments by Ribotsky)
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20070910/REG/70907014/1036
2007-05-29 NIR Group closes third collateralized debt obligation (Businesswire PR by NIR Group)
http://www.allbusiness.com/services/business-services/4352609-1.html
2007-03-08 Hedgefund NIR Group scores highest percent increases by Alex Akesson of hedgeco.net
http://www.hedgeco.net/news/03/2007/hedge-fund-nir-group-scores-highest-increase.html
2007-01-27 Sewer PIPEs: Hedge funds are posting nice returns from deals that may involve ex-cons, stock scammers--even the Mob by Nathan Vardi of Forbes.com
http://www.rgm.com/articles/forbes6.html
Med Gen Attracts Investment from NIR Group
Business Wire, April 19, 2005
http://findarticles.com/p/articles/mi_m0EIN/is_2005_April_19/ai_n13631338
Investor blamed for stock's losses
http://www.bizjournals.com/triangle/stories/2007/10/01/story3.html
New Millennium Partners
http://www.nmpartners.com/index.html
New Millennium Capital and A-Z Rolling Stocks
http://www.greatlynx.com/a-z/
FUNDS AND COMPANIES MANAGED BY OR AFFILIATED WITH COREY RIBOTSKY:
SMS Group LLC Corey Ribotsky, Fund Manager
AJW Partners LLC
AJW Offshore Ltd. formerely AJW/New Millenium Offshore Ltd.
First Street Manager II LLC Corey Ribotsky, Fund Manager
AJW Qualified Partnews LLC formerly Pegasus Capital Partners LLC
AJW Manager LLC LLoyd A. Groveman and Corey S. Ribotsky Fund Managers
New Millenium Capital Partners II LLC
Legal Cases involving Corey Ribotsky and his "Funds" filed in New York
How to view the docket yourself
- visit this link NY Court System
Select Party Name then for entity type "AJW"
IMPORTANT LINKS:
Hedge fund intelligence: Billion Dollar Club funds report (notes Ribotsky's obtaining funds of over $3 billion)
http://www.kellogg.northwestern.edu/student/club/imc/Downloads/ResearchAndData/Hedge%20Fund%20Billion%20Dollar%20Club%20(2006.pdf
NOTE: For those interested in convertible notes and hedge funds, there is the Cornell Yorkville Clients board (Cornell Capital now Yorkville). They discuss notes from various companies:
http://investorshub.advfn.com/boards/board.asp?board_id=9964
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Dec. 20th 2008
MUST SEE!!!..... http://coreyribotsky.wordpress.com/
***February 6, 2009 10:06AM
Inside Wall Street’s Subprime Bond Factory
By Elizabeth MacDonald
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35418459&txt2find=norma
Published: May 7, 2009
By FLOYD NORRIS
HERE’S an investment opportunity you might be able to pass up.http://investorshub.advfn.com/boards/read_msg.aspx?message_id=37875460
There are tons of documents go to this site
https://iapps.courts.state.ny.us/fbem/mainframe.html
NYtimes
http://www.nytimes.com/2009/05/08/business/08place.html?_r=2&dlbk
Contribution
http://www.newsmeat.com/fec/bystate_detail.php?st=&zip=11568&last=RIBOTSKY&first=COREY
NIR Hedge Fund Touted Itself Before Freeze (WSJ)
http://www.google.com/#hl=en&q=hedge+fund+touted+itself&aq=f&oq=&aqi=&fp=VEE02fthf5k
NIR Group Subpoenaed By SEC Nathan Vardi, 07.24.09, 05:40 PM EDT
http://www.forbes.com/2009/07/24/nir-group-corey-ribotsky-business-wall-street-hedge-fund.html?feed=rss_business
Under Fire, NIR Group Switches Valuation FirmsNathan Vardi, 07.24.09, 04:10 PM EDT
http://www.forbes.com/2009/07/24/nir-group-corey-ribotsky-business-wall-street-nir-group.html
Hedge-Fund Manager Investigated for Fraud (WALL STREET JOURNAL)
http://online.wsj.com/article/SB124840478374278275.html?mod=googlenews_wsj
Investors Accuse NIR Group Of Providing ‘Fanciful’ Returns
http://www.finalternatives.com/node/8594
Federal authorities investigating a Long Island, N.Y., hedge-fund firm are questioning individuals close to the firm about whether it paid kickbacks to outsiders as part of a scheme to inflate the value of its holdings.
http://blogs.wsj.com/law/2010/02/26/on-snowy-long-island-feds-probing-alleged-kickbacks-at-hedge-fund/
Prosecutors Target Hedge-Fund Firm
http://online.wsj.com/article/SB10001424052748703795004575087951450071156.html?mod=WSJ_hpp_sections_business
FINalternatives - Oct 13, 2010 Neither NIR nor founder Corey Ribotsky has been charged with any wrongdoing, but a former NIR analyst in July pleaded guilty to taking kickbacks and fraud. ... |