Pequot Capital Management
Encyclopedia
Pequot Capital Management was a multi-billion dollar hedge fund
sponsor founded in 1998 by Arthur J. Samberg
that was forcibly terminated by order of the Securities and Exchange Commission in 2010. The firm's investment funds invested in a range of markets through a variety of strategies. The firm invested in public equities
as well as private equity
, venture capital
, distressed securities
, and various other fixed income securities.
The firm was founded in 1998 and was based in Westport, Connecticut
with additional offices in San Francisco, California; New York, New York; Los Angeles, California; Greenbrae, California; Menlo Park, California; Wellesley, Massachusetts; and London, United Kingdom.
In 2008, the firm's venture capital business spun off to form FirstMark Capital
, which is based in New York City
.
In May 2009, the firm announced it was closing and in an agreement with the Securities and Exchange Commission on May 27, 2010, the firm was permanently shut, paid a $28 million fine (consisting of $18 million in returned profit and $10 million in penalties), and Samberg was barred from working as an investment adviser for alleged violations of insider trading
involving Microsoft Corporation stock occurring in 2001 and a prospective new hire of the hedgefund from Microsoft. It had been under multiple SEC probes since first being investigated by Gary J. Aguirre
. On May 28, 2009, with an insider trading investigation ongoing, Samberg wrote, "With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business."
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
sponsor founded in 1998 by Arthur J. Samberg
Arthur J. Samberg
Arthur J. Samberg was the chief investment officer, president and chairman of Pequot Capital Management, a $5 billion hedge fund with approximately $510 million dollars of uncalled capital.-Early life:...
that was forcibly terminated by order of the Securities and Exchange Commission in 2010. The firm's investment funds invested in a range of markets through a variety of strategies. The firm invested in public equities
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
as well as private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
, venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
, distressed securities
Distressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
, and various other fixed income securities.
The firm was founded in 1998 and was based in Westport, Connecticut
Westport, Connecticut
-Neighborhoods:* Saugatuck – around the Westport railroad station near the southwestern corner of the town – a built-up area with some restaurants, stores and offices....
with additional offices in San Francisco, California; New York, New York; Los Angeles, California; Greenbrae, California; Menlo Park, California; Wellesley, Massachusetts; and London, United Kingdom.
In 2008, the firm's venture capital business spun off to form FirstMark Capital
Firstmark Capital
FirstMark Capital is a private equity firm focusing on venture capital transactions in the United States. With approximately $2 billion of capital under management, FirstMark invests in technology companies early in a company’s lifecycle, frequently as the first institutional investor.Among the...
, which is based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
In May 2009, the firm announced it was closing and in an agreement with the Securities and Exchange Commission on May 27, 2010, the firm was permanently shut, paid a $28 million fine (consisting of $18 million in returned profit and $10 million in penalties), and Samberg was barred from working as an investment adviser for alleged violations of insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
involving Microsoft Corporation stock occurring in 2001 and a prospective new hire of the hedgefund from Microsoft. It had been under multiple SEC probes since first being investigated by Gary J. Aguirre
Gary J. Aguirre
Gary J. Aguirre is an American lawyer, former investigator with the United States Securities and Exchange Commission and whistleblower. After working in a law firm briefly, he became a public defender, then worked as a trial lawyer in California. Having reached his professional and financial...
. On May 28, 2009, with an insider trading investigation ongoing, Samberg wrote, "With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business."
External links
- Pequot Capital Management (company website)
- FirstMark Capital (company website)