Thursday, September 28, 2006

Stormy Times at Pirate Capital

Thursday brought more trouble on the hedge fund front, as CNBC’s David Faber reported that more than half of the investment professionals at Pirate Capital have left the firm. The reasons for the exodus were not clear, but Mr. Faber said at least some of the departures came after a meeting including Pirate’s analysts and the head of the firm, Thomas Hudson, “failed to address concerns [the analysts] had about the fund’s dealings with regulatory issues.” Earlier in the week, The Wall Street Journal reported that the Securities and Exchange Commission was investigating whether Norwalk, Conn.-based Pirate properly disclosed changes in its holdings in some publicly traded companies.

In a letter to investors, cited by Mr. Faber as well as Reuters, Mr. Hudson said the head of the firm’s fixed-income portfolio and two analysts had resigned, and that he had asked for the resignation of two other analysts.

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