Soros bets against Euro

[Magda Hassan]

Probe will be all they do of course. If there is any punishment involved it will be a quick flick of the feather duster across the hand.

U.S. Probes Bearish Euro Bets

SAC, Greenlight, Soros, Paulson Told to Retain Records; a Collusion Question


BY SUSAN PULLIAM AND KATE KELLY

The Justice Department has launched an investigation into whether hedge funds might have banded together to drive down the value of the euro, people familiar with the matter say.
In a letter last week, the department has asked hedge funds including SAC Capital Advisors LP, Greenlight Capital Inc., Soros Fund Management LLC and Paulson & Co. to retain trading records and emails relating to the euro, say people who have seen the letter.
The letter was dated Feb. 26, the same day a page-one article in The Wall Street Journal outlined a large bet being made in recent weeks by heavyweight hedge funds against the euro, in moves that are reminiscent of the trading action at the height of the financial crisis like bets against Lehman Brothers and other troubled firms.
The Journal article disclosed that the big euro bets were emerging amid gatherings including an "idea dinner" involving a number of hedge funds including SAC, Greenlight and Soros, where a trader argued that the euro is likely to fall to "parity," or equal to, against the dollar on an exchange basis. The euro currently trades at $1.3609.
One of the questions investigators are likely to examine is whether such information-sharing constitutes collusion, the people say. Charges relating to collusion on Wall Street have been a rarity because of the difficulty of proving that firms intentionally sought to act together and acted nefariously.
The move by the Justice Department highlights the scrutiny the financial world faces amid recent trading in securities related to the Greek financial crisis. Some critics say hedge funds, banks and others in the U.S. and Europe have exacerbated the financial difficulties in southern Europe by helping nations there mask their debts through swaps and other derivatives—and now are benefiting by [shorting] securities related to them.

(Excerpt) Read more at online.wsj.com ...