Cityfile: New York's Most Notable and Influential

The Taint Spreads to SAC | The growing insider trading scandal involving hedge funds has made its way to the offices of SAC Capital, the firm founded by one of the industry's most powerful figures, Zamboni-loving billionaire Steve Cohen. One of the 14 new defendants charged today, Richard Choo Beng Lee, seems to have started his crime spree when he was employed by SAC. [BI, Reuters]

Whether or not hedge fund billionaire Julian Robertson was a resident of New York City way back in 2000 may seem like a trivial question. Unless, that is, you work for the New York State Department of Taxation and Finance and you're arguing he did spend the majority of his time in NYC that year and you'd like to see him cough up the $27 million in city taxes he owes. More

Rajaratnam: 'I'm Innocent' | Billionaire hedge funder Raj Rajaratnam was arrested on Friday morning on charges he participated in one of the biggest insider trading schemes in recent memory, one that netted him at least $25 million (but possibly millions more since the investigation continues.) Fortunately for Rajaratnam, the high-profile bust didn't end up depriving him of a weekend of freedom. By the end of the day, he'd been released on $100 million bail—the highest in history—and had to give up his passport and agree not to travel more than 110 miles from New York City. And today? He was back in the office for what must have been the awkwardest Monday morning meeting ever, telling employees that he's innocent and plans to fight the charges against him.

Another Hedgie Goes Down | Raj Rajaratnam, the founder of the $7 billion hedge fund Galleon Group, the 551st richest man in the world according to Forbes, and America's one and only Sri Lankan billionaire, has been arrested and charged for taking part in a $20 million insider-trading scheme. [NYT, WSJ]

Hedge fund mogul Dan Loeb paid $45 million for one of the city's poshest apartments last year, a 10,000-square-foot penthouse at 15 Central Park West. His move-in, however, didn't go so smoothly, it seems. It's unclear what took place precisely, but the moving company that Loeb and his wife Margaret hired to help them settle in, Auer's Moving & Rigging, filed a lawsuit against the couple in Manhattan Supreme Court earlier this year claiming breach of contract. (Panorama on the Park LLC, which is also listed as a defendant, is the company Loeb set up to acquire the property.) The high-end moving company is demanding that Loeb cough up the $98,689.07 which it says it's owed. Last week, though, an attorney for the Loebs responded to the suit by filing a motion to dismiss. So what went wrong? Was the prickly hedge fund manager's grand piano damaged by a faulty crane? Did a burly mover accidentally step on Biggie, the couple's miniature pinscher? The legal papers don't indicate why Loeb decided to withhold payment—let's hope that Biggie wasn't harmed—but you can review the documents for yourself below. More

It's Good to Be a Hedge Funder (Again) | Don't be shocked if you notice what has been an endangered species until recently—the elusive banquette-dancing, champagne-swilling hedge funder—make a comeback in the coming months. Hedge funds "had nearly $20 billion pour into their coffers last month, as investors flocked back amid revived market optimism." Or take the glass-half-full approach and focus on the positive chalk up the news to more evidence the recession is over. [Dealbook, HedgeFund.net]

Scam of the Day | If you were thinking the recent spate of Ponzi schemes has convinced investors to do a bit more due diligence before handing over their cash, think again: A group of a dozen hedge funds have filed a lawsuit against a California businessman named Todd Ault, who they accuse of taking the $4.2 million they gave him for a stock trading venture and instead investing it in a "swingers ranch" in the Catskills. We're thinking Ault's MySpace page should have been a tip off, but feel free to decide for yourself. [NYDN]

Another Hedge Fund Goes Down | Maybe he should have stuck with hockey. Tim Barakett, the founder of Atticus Capital and possibly the only hedge funder in history to turn down an opportunity to play professional hockey to go Harvard Business School, announced today that he's shutting down his flagship fund and handing $3 billion back to his investors. "After 15 years of being singularly focused on building and managing Atticus, I believe it is time to reassess my future," Barakett said in a letter to investors. On a more positive note, you can rest assured Steve Cohen's hockey rink will see a lot more action over the coming months. [WSJ]

The Perry Pop Art Palace | Last week, we pointed your attention to a story in the Post about the very unusual Jeff Koons sculpture that hedge fund mogul Richard Perry and his wife Lisa put out on their penthouse terrace. We mentioned that Vogue had published a set of photos inside the Perry pad a few years ago. Now the magazine tells us they've posted the entire shoot from back in 2002 on the web. Do enjoy. [Vogue]

Hedge fund manager Richard Perry and his fashion-designer wife, Lisa Perry, live in a 17-room penthouse on Sutton Place. They're also big-time modern art collectors and home design obsessives. (Their Manhattan apartment earned a 10-page spread in Vogue a few years ago; in the Hamptons, they may own the only house that has a pool installed in its dining room.) But their art collection has landed the couple in a bit of trouble. The Perrys installed a green stainless-steel "diamond" sculpture by Jeff Koons, which they purchased for $2.3 million in 2005, on the terrace of their Manhattan pad. (A crane was required to put it there.) Not only do the couple's neighbors totally despise the piece ("I think it's as ugly as it comes," says one), some are now complaining that it's blinding them: More

Goldman Isn't the Only Firm Thriving | As the public focuses on the lucky bankers at Goldman Sachs who are on track to make more money than ever this year, let's not forget about hedge fund managers. They're doing pretty well, too, you know! According to a new report by Hedge Fund Research, the average fund was up more than nine percent during the quarter, the best quarterly return since the fourth quarter of 1999. So if you see a cocky finance type out and about and he's buying bottles of champagne like the last year never happened—or waving a wad of cash—he could work at Goldman. But he could just as well be employed by a hedge fund. It still remains highly unlikely, however, that he works at Citigroup. [Dealbook]

You may still be dealing with the nasty effects of the economic downturn, but the pain and misery appears to be over for the hedge funders who were forced to momentarily put off plans to buy a new jet or private Caribbean island earlier this year. The Post reports the first six months of 2009 were very good for the likes of Steve Cohen, Paul Tudor Jones, Phil Falcone, and John Paulson as "hedge funds overall turned in their best performance in a decade, with funds up 12 percent through the end of June." Before you immediately brush this off as just another example of the rich getting richer while the less fortunate continue to struggle, consider four reasons why it's actually great news that Phil Falcone may end the year with a net worth north of $3 billion:More

It hasn't been a fun ride for hedge fund manager Phil Falcone since he picked up 20 percent of the New York Times Co. a couple of years ago. He had to face off against the ruling Sulzberger clan for representation on the board of directors and the company's plunging stock price means his investment in the paper is now worth a few hundred million less than it once was. Today, however, he gets his money worth with a Times profile of his beloved bride, Lisa Maria Falcone, who, as the title of the piece informs us, is a "philanthropist with a sense of timing." Indeed!More

Back before Bernie Madoff came along and hogged the spotlight, there was Samuel Israel, the hedge fund founder who ripped off investors to the tune of $450 million, got caught, tried to fake his own death, failed, turned himself in, and was ultimately sentenced to 20 years in prison for his crimes. His legal ordeal isn't over yet. Last Friday, the Second Circuit Court of Appeals ruled against him after he asked the court to reduce his sentence. Next month, additional time will be added to his sentence for that bail-jumping stunt that had him on the lam for three weeks last year. But Israel's tendency to vanish into thin air may be alive and well. More

Cantillon Closes | William von Mueffling, the hedge funder who left Lazard in 2003 to found Cantillon Capital Management—and who had quite the run during the boom days, taking home $250-300 million in 2007—is shutting down his funds due to "ongoing turmoil in the markets," according to the Journal. Expect slightly uncomfortable conversation with Pete Peterson and Felix Rohatyn in the elevator of 810 Fifth later this evening. [WSJ, Dealbreaker]