Reuters Admits It “Accidentally” Leaked Key Market Data To High Frequency Traders

Sometimes saying you're sorry just isn't enough.  Case in point (from BI): Back on Monday, following the huge miss in the Manufacturing ISM, in collaboration with Nanex, we exposed yet another instance of blatant headline data frontrunning in "15 Milliseconds Of HFT Fame: Watch Today's Early Leak Of The ISM Print" where we showed aggressive trading amounting to tens of millions in notional contracts ahead of the 10am release of the key economic indicator.

We assumed that just like every other lament about a market that is front-run by those "who have the means", manipulated (by the Fed of course - remember when that was just a conspiracy theory: good times) and simply broken, it would disappear in the ether forever. After all: why bring attention to facts when hopium is sufficient for the E-Trade baby to retire rich and famous before it has hit 2.  We were delighted to learn that CNBC's Eamon Javers picked up the torch and actually did some further investigating, which in turn led to an actual admission out of Reuters that it "inadvertently" sent out the data to "a select group of high frequency traders, many of whom immediately traded on the information before it was available to the wider market, CNBC has learned." Inadvertently? The humor just never stops.....

Read more: http://www.zerohedge.com/news/2013-06-05/reuters-admits-inadvertently-leaking-ism-data-15-milliseconds-early-hft-clients#ixzz2W1A013xS

Hennessee Hedge Fund Index up 1.79% in May, Lagging Market Advances

No, you haven't been imagining things.  According to the WSJ hedge funds gained 1.79% in May, again lagging broader market advances, according to a monthly report from industry adviser Hennessee Group LLC.  Outpacing the Hennessee Hedge Fund Index, the Standard & Poor's 500-stock index rose 2.08% in May, the Dow Jones Industrial Average climbed 1.86% and the Nasdaq Composite Index climbed 3.82%.

Bonds fell, as the Barclays Aggregate Bond Index declined -1.78%.

"At month end, managers saw significant increases in volatility, a significant drop in the dollar, especially against the Japanese Yen, the Japanese market experienced a major pullback which were compounded by global GDP, employment, housing, and consumer spending disappointments," said Charles Gradante, co-founder of Hennessee….

http://online.wsj.com/article/BT-CO-20130611-706910.html

Goldman tops prime brokerage ranking

It's good to be the king: Goldman Sachs is again the most popular choice for hedge funds , topping the annual Absolute Return prime brokerage rankings for the second consecutive year.

This is the third year out of the five that that Goldman has ended up on top. J.P. Morgan, the only other prime to taste the glory of first place (in 2010 and 2011), took silver for the second year running, with virtually the same slim distance between it and the top spot as in 2012…..

Read all about it at http://www.hedgefundintelligence.com/Article/3216489/Industry-Analysis/Goldman-Sachs-tops-prime-brokerage-ranking.html?ls=683

Metacapital in Worst Slide as Bloodbath Roils Funds

From Bloomberg: Deepak Narula rose to fame as manager of the best-performing hedge fund last year by navigating the government’s stimulus efforts. He’s having a far harder time as the Federal Reserve  moves closer to an exit.

Metacapital Management LP’s flagship $1.5 billion fund lost an estimated 6.4 percent last month, the worst decline since it started in 2008, according to a letter to investors obtained by Bloomberg News. That followed drops of 0.5 percent in April and 0.1 percent in March, after 17 months of consecutive gains including a 41 percent return last year…

Find out more at http://www.bloomberg.com/news/2013-06-11/metacapital-in-worst-slide-as-bloodbath-roils-funds.html

Banks Get Reprieve on New Swaps Rule

From the WSJ: Some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates.

The Office of the Comptroller of the Currency said it granted extensions to seven banks, giving them until July 2015 to comply with so-called “swaps push-out” rules required by the 2015 Dodd-Frank law….

The OCC notified Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., HSBC Holdings PLC, Morgan Stanley and U.S. Bancorp that they were granted a 24-month extension in response to their requests for a longer transition period…..

Read all about it at http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-252118/

Paulson's Gold Fund Fell 13% in May

Billionaire John Paulson, the hedge-fund manager trying to recover from losses related to bullion this year, posted a 13 percent decline in his Gold Fund last month, according to a letter to investors.

The drop brings losses in the strategy to 54 percent since the start of the year, the firm said in the letter, a copy of which was obtained by Bloomberg News. The Gold Fund is the smallest strategy of the $19 billion money manager, with about $360 million, or 2 percent of assets, most of it Paulson’s own money.

The firm said it has no intention of closing down the Gold Fund and recommended investors stay invested as valuations provide a “significant upside.” Paulson & Co. last week told clients it would start reporting returns for the Gold Fund and the gold share classes of other strategies separately to avoid taking away attention from positive performance in other strategies, according to a person familiar with the matter told Bloomberg.

More?  Check out http://www.bloomberg.com/news/2013-06-11/paulson-gold-fund-fell-13-percent-in-may-to-steepen-loss.html

Active Managers Take a Beating, Thanks to Apple

From CNBC: Active managers in both the mutual and hedge fund industries are badly underperforming their peers, and they have a mutual malady: heavy ownership of flailing tech giant Apple.  The Cupertino, Calif.-based maker of electronic gizmo wizardry is the fourth-most owned company by the top 50 mutual funds and the fifth-most owned by hedge funds.

With Apple shares down 16 percent this year, it's played a heavy role in the inability of active managers to beat the basic Standard & Poor's 500 benchmark.

"The deterioration in performance really commenced after March," Thomas J. Lee, chief market strategist at JPMorgan Chase, said in an analysis. "This is when cyclicals began to meaningfully outperform defensives, and the underperformance has worsened steadily since….”

Find out more at http://www.cnbc.com/id/100803616