American investor Martin Shkreli is facing a new lawsuit for allegedly retaining and sharing recordings from a one-of-a-kind Wu-Tang Clan album that he was forced to sell following his 2017 conviction on securities fraud charges. The lawsuit was brought by a cryptocurrency collective, PleasrDAO, which purchased the only known copy of the album from Shkreli for $4.75 million. Shkreli is accused of retaining digital copies of the album in violation of their deal and disseminating them widely among his social media followers. The album, titled 'Once Upon a Time is Shaolin,' has not been released to the public and functions as a rare contemporary art piece. PleasrDAO bought the physical copy of the album and its digital rights in 2021 and 2024. Shkreli had previously sold the album, which is packaged in a hand-crafted silver and nickel case and includes a 174-page book wrapped in leather, following his conviction on securities fraud charges. The lawsuit claims that any dissemination of the album's music to the general public greatly diminishes its value and damages PleasrDAO's reputation and ability to commercially exploit the album. The album was recently loaned to the Australia's Museum of Old and New Art for private listening sessions featuring select tracks from the album. [a69409b4]
South Korean investors, including 75-year-old Park Soon Ja, have suffered significant losses in structured products tied to the Hang Seng China Enterprises Index. These investments were sold by prominent lenders and brokerages in South Korea. The complex nature of these products made it challenging for both investors and bankers to understand their workings. The losses are estimated to be close to $4 billion, affecting more than 20% of investors who are 65 years or older [bdbd6e65].
South Korea's Financial Supervisory Service (FSS) has previously announced plans to compensate losses from derivative products tracking Chinese stocks listed on the Hong Kong exchange. The FSS conducted a preliminary inspection and found various cases of incomplete sales involving equity-linked securities (ELS) products tracking Hong Kong's H Index. The outstanding value of these products is 18.8 trillion won ($14.2 billion), with 15.1 trillion won (80.5% of the total) set to be redeemed this year. If redeemed at the end-February value, the products would result in a combined loss of up to 5.8 trillion won. The FSS identified illegal and unfair practices, including incomplete sales, by financial institutions. The proposed compensation package requires sellers of ELS products to pay a minimum of 20% of the consumer's loss when violations are found, with the compensation rate potentially reaching 100% depending on the seriousness and number of violations. The FSS plans to start the dispute mediation process, and financial institutions may voluntarily compensate consumers based on the proposed compensation rate [d6c53d66].
The head of the Financial Supervisory Service (FSS) stated that the compensation draft for Hong Kong Equity Linked Securities (ELS) losses has almost been finalized. The FSS will provide a detailed explanation of the compensation plan in the coming weekend. The issue will be discussed at the Dispute Mediation Committee, and the FSS aims to hold a meeting and have an open discussion or disclosure on the issue within the next week. Financial institutions that take responsibility and provide financial compensation may receive mitigated penalties [3c39458f].
South Korea's financial market watchdog, the Financial Supervisory Service (FSS), has found wrongdoings by financial firms selling derivatives linked to the Hang Seng China Enterprises Index. The FSS stated that there was poor management of sales policy and consumer protection, incomplete sales at the system level, and various kinds of incomplete sales in individual cases. Investors have lost 1.2 trillion won ($911 million) out of 2.2 trillion won that matured in January and February, and an additional loss of 4.6 trillion won is expected this year if the index remains at the current level. The FSS will punish wrongdoings in investment product sales, and financial firms will provide voluntary compensation to investors for their losses [3f0eacd5].
Investor confidence in hedge funds could see a temporary dip in the aftermath of the insider dealing probe into Segantii Capital and its subsequent shutdown. Hong Kongโs financial regulator launched criminal proceedings in an insider dealing case against hedge fund Segantii Capital Management and its founder and director owner Simon Sadler. The charges relate to dealing in shares of an unnamed company listed on the Hong Kong Stock Exchange in June 2017. The incident is expected to have a negative impact on the sentiment towards hedge funds, but experts believe the collective performance of the asset class will be a bigger sentiment driver. Hedge funds globally have a chequered past, but continue to attract wealthy and large institutional investors for their ability to generate absolute returns. About 60% of wealthy investors in Hong Kong are planning to increase allocations to private market strategies and hedge funds. The top concern for investors is the lack of greater diversification in their portfolios. Multi-strategy, multi-manager hedge funds have been delivering higher risk-adjusted returns compared to single manager hedge funds. The Segantii scandal highlights the relationship between banks and hedge funds, and experts believe regulators should clarify rules to avoid market manipulation based on non-public information. Investors are advised to conduct deep due diligence on hedge fund managers and assess their ability to generate idiosyncratic returns. Hedge fund allocation can be complementary to existing public market investments and can lower the volatility and correlation of the overall portfolio. [74dab33d].
Yida Gao, a former MIT graduate and founder of Shima Capital, raised $200 million from investors like Bill Ackman and Galaxy for his crypto fund. However, an investigation revealed that Gao created a secret offshore entity and funneled assets from his venture fund into his own name, violating SEC investor protection rules. Shima Capital has experienced an exodus of top employees and struggles to raise further capital. Gao's firm valued investments based on his own estimations and faced difficulties finding an auditor. The ownership structure of Shima Capital, with an offshore entity owned solely by Gao, raises conflict of interest concerns. Gao's missteps serve as a cautionary tale for investors in the crypto industry [71bebb3d].
American investor Martin Shkreli is facing a new lawsuit for allegedly retaining and sharing recordings from a one-of-a-kind Wu-Tang Clan album that he was forced to sell following his 2017 conviction on securities fraud charges. The lawsuit was brought by a cryptocurrency collective, PleasrDAO, which purchased the only known copy of the album from Shkreli for $4.75 million. Shkreli is accused of retaining digital copies of the album in violation of their deal and disseminating them widely among his social media followers. The album, titled 'Once Upon a Time is Shaolin,' has not been released to the public and functions as a rare contemporary art piece. PleasrDAO bought the physical copy of the album and its digital rights in 2021 and 2024. Shkreli had previously sold the album, which is packaged in a hand-crafted silver and nickel case and includes a 174-page book wrapped in leather, following his conviction on securities fraud charges. The lawsuit claims that any dissemination of the album's music to the general public greatly diminishes its value and damages PleasrDAO's reputation and ability to commercially exploit the album. The album was recently loaned to the Australia's Museum of Old and New Art for private listening sessions featuring select tracks from the album. [a69409b4]