Sengantii Capital?

Seasider3610

Seasider3610

Well-known member
"Segantii is typically one of the first points of call when bankers are seeking to trade large blocks of shares in Asia, according to several bankers and traders.
The fund has not been accused of any wrongdoing and it is not known whether Segantii has been contacted by US authorities in relation to any of its trades. Media reports earlier this year said US authorities had sought communications between Morgan Stanley, which is at the centre of the block trading probe, and a former employee of Segantii.

From Bank of America article this morning.


🤞
 
Little bit worrying on the face of it, but also reads like a couple of big American banks covering their backs from regulators. Like all these things, we’ll see what happens
 
If you cannot get behind the FT pay wall….

BofA and Citi suspend equity trading with Segantii Capital on block trade concerns Hedge fund run by Blackpool FC owner is a ‘priority customer’ in Asia Hong Kong-based Segantii Capital Management is run by Blackpool Football Club owner Simon Sadler, pic

Bank of America and Citigroup have suspended all equity trading with Segantii Capital Management, due to the banks’ concerns about the hedge fund’s bets on the sale of large blocks of shares, according to several people with knowledge of the matter. The two banks have informed Hong Kong-based Segantii, run by Blackpool Football Club owner Simon Sadler, it had been cut off from trading equities and various other financial instruments, according to the people. BofA has stopped trading with Segantii in all financial instruments, while Citigroup has suspended its equity trading relationship with the fund but has continued to trade with it in other products such as derivatives. The news of the moves by the banks to reduce their exposure to Segantii — one of the most active hedge funds in equity markets in Hong Kong — comes as US authorities have launched an investigation into block trading at several Wall Street financial institutions. Segantii is typically one of the first points of call when bankers are seeking to trade large blocks of shares in Asia, according to several bankers and traders. The fund has not been accused of any wrongdoing and it is not known whether Segantii has been contacted by US authorities in relation to any of its trades. Media reports earlier this year said US authorities had sought communications between Morgan Stanley, which is at the centre of the block trading probe, and a former employee of Segantii. Segantii did not respond to requests for comment. The fund was launched in 2007 by Sadler, who has grown it into a global powerhouse with offices in Hong Kong, New York and London. In 2019, Sadler, who lives in Hong Kong, purchased Blackpool FC, the club of his hometown, after it went into an insolvency process. Recommended Morgan Stanley Goldman Sachs flagged Morgan Stanley block trades to Hong Kong regulator Segantii is “everyone’s first call on pricing risk, they’re a big liquidity provider in Hong Kong, they’re in every deal”, said a portfolio manager at a global asset manager. A prime broker at a European bank in Hong Kong called Segantii a “priority customer for the entire Street” in Asia. One of the people close to the matter said BofA’s market supervision team in the US issued a global directive to “cut off” Segantii in early 2021, in relation to trading by the fund around blocks of shares that had been placed on public markets by other banks. The decision was taken before the scrutiny of Wall Street’s block trading business made headlines earlier this year. Citigroup “stepped away” from Segantii more recently, according to a second person with knowledge of the matter. “When the headlines [concerning the probe into block trading by some Wall Street institutions] started they said ‘risk off’,” the person said, referring to the process by which a bank reduces its exposure to a client. A number of other large banks including Goldman Sachs are still trading with Segantii, according to a person familiar with the matter. Bank of America, Citi and Goldman Sachs all declined to comment. Additional reporting by Ortenca Aliaj
 
seasideone said:
If you cannot get behind the FT pay wall….

BofA and Citi suspend equity trading with Segantii Capital on block trade concerns Hedge fund run by Blackpool FC owner is a ‘priority customer’ in Asia Hong Kong-based Segantii Capital Management is run by Blackpool Football Club owner Simon Sadler, pic

Bank of America and Citigroup have suspended all equity trading with Segantii Capital Management, due to the banks’ concerns about the hedge fund’s bets on the sale of large blocks of shares, according to several people with knowledge of the matter. The two banks have informed Hong Kong-based Segantii, run by Blackpool Football Club owner Simon Sadler, it had been cut off from trading equities and various other financial instruments, according to the people. BofA has stopped trading with Segantii in all financial instruments, while Citigroup has suspended its equity trading relationship with the fund but has continued to trade with it in other products such as derivatives. The news of the moves by the banks to reduce their exposure to Segantii — one of the most active hedge funds in equity markets in Hong Kong — comes as US authorities have launched an investigation into block trading at several Wall Street financial institutions. Segantii is typically one of the first points of call when bankers are seeking to trade large blocks of shares in Asia, according to several bankers and traders. The fund has not been accused of any wrongdoing and it is not known whether Segantii has been contacted by US authorities in relation to any of its trades. Media reports earlier this year said US authorities had sought communications between Morgan Stanley, which is at the centre of the block trading probe, and a former employee of Segantii. Segantii did not respond to requests for comment. The fund was launched in 2007 by Sadler, who has grown it into a global powerhouse with offices in Hong Kong, New York and London. In 2019, Sadler, who lives in Hong Kong, purchased Blackpool FC, the club of his hometown, after it went into an insolvency process. Recommended Morgan Stanley Goldman Sachs flagged Morgan Stanley block trades to Hong Kong regulator Segantii is “everyone’s first call on pricing risk, they’re a big liquidity provider in Hong Kong, they’re in every deal”, said a portfolio manager at a global asset manager. A prime broker at a European bank in Hong Kong called Segantii a “priority customer for the entire Street” in Asia. One of the people close to the matter said BofA’s market supervision team in the US issued a global directive to “cut off” Segantii in early 2021, in relation to trading by the fund around blocks of shares that had been placed on public markets by other banks. The decision was taken before the scrutiny of Wall Street’s block trading business made headlines earlier this year. Citigroup “stepped away” from Segantii more recently, according to a second person with knowledge of the matter. “When the headlines [concerning the probe into block trading by some Wall Street institutions] started they said ‘risk off’,” the person said, referring to the process by which a bank reduces its exposure to a client. A number of other large banks including Goldman Sachs are still trading with Segantii, according to a person familiar with the matter. Bank of America, Citi and Goldman Sachs all declined to comment. Additional reporting by Ortenca Aliaj
Click to expand...
Can you break it down for us SO your the one who understands all this stuff.👍
 
I had several attacks of deja-vu when reading that. Or, I might have been stuck in a time loop.

Fortunately, I managed to break out of it with sanity intact, but none the wiser. 😕
 
No expert, but it looks like someone has suspicions about some large trades. Now, it could be dodgy or it could just be good timing , don't forget Hong Kong Hedge funds have better research departments locally than US banks. After all their past misdemeanours, American Banks are very quick to say, it wasn't me it, was that big boy.
 
It doesn't read good when some of the biggest banks in America talk like that

Smacks of insider trading

Fingers crossed there is nothing in it or the financial repercussions could be massive for our club
 
In essence
Scenario A) An ex Segantii is/was a mate of another trader at Morgan Stanley and/or Bank of America. Said person either moved to one of the afore mentioned with knowledge of his old employer. New employer fully aware of the knowledge and did not of course see that as key reason to recruit said individual. MS and/or BofA made a couple of bob due to the brilliance of their recruitment process... ex-Segantii employee stayed mates with old colleagues at Segantii and chatted about work... another couple of bob made. MS and or BofA get damp trousers when the authories look at the size of some trades...
Scenario B) Similar to above, bu the Segantii employee just meets mates from MS and/or BofA and chats about stuff on her/his desk, especially things that might crop up later this week... MS an/or BofA mates make a few bob for employer. All is fine and dandy until the headmaster comes along. MS and/or BofA shout out, "it was all him, not me." Head usually walks off...
 
Philbfctrois said:
Of course its relevant

No surprise to see one of my stalkers jump on my post but not any others
Click to expand...
It's a messageboard Phillip. If you don't want people to reply to you don't post anything.
To be fair you are not adverse to a bit of stalking. Ask The Robster. 😉
 
Philbfctrois said:
I'm glad you think its important

Now what is the problem with what i posted?
Click to expand...
There's nothing wrong with what you posted and I'm pleased you are seeking my approval. 👍
With a bit of work you could become a good poster.
So your next assignment is to post something that really makes you happy about BFC.
 
Insider said:
There's nothing wrong with what you posted and I'm pleased you are seeking my approval. 👍
With a bit of work you could become a good poster.
So your next assignment is to post something that really makes you happy about BFC.
Click to expand...
I think you need to pay more attention and try not to just focus on what you perceive negative
 
SeasideTerrier said:
In essence
Scenario A) An ex Segantii is/was a mate of another trader at Morgan Stanley and/or Bank of America. Said person either moved to one of the afore mentioned with knowledge of his old employer. New employer fully aware of the knowledge and did not of course see that as key reason to recruit said individual. MS and/or BofA made a couple of bob due to the brilliance of their recruitment process... ex-Segantii employee stayed mates with old colleagues at Segantii and chatted about work... another couple of bob made. MS and or BofA get damp trousers when the authories look at the size of some trades...
Scenario B) Similar to above, bu the Segantii employee just meets mates from MS and/or BofA and chats about stuff on her/his desk, especially things that might crop up later this week... MS an/or BofA mates make a few bob for employer. All is fine and dandy until the headmaster comes along. MS and/or BofA shout out, "it was all him, not me." Head usually walks off...
Click to expand...
This is the kind of quality theory that could cheerfully have been cooked up in the White Swan down in dat der. Sadly, not any more Terrier, sources tell me it's only gone and been demolished 😬
 
No one does nothing for nothing. Risks are taken in the world of high finance and to the winner goes the spoils. We wait for the final result. Could go to extra time and penalties. It's in the lap of the Gods as usual with BFC.
 
Old_Laytonian said:
Is it not the banks Goldman Sachs and Morgan Stanley who are under investigation for having tipped off Hedge Funds?
Click to expand...
Nothing to worry about. Block trading isn’t illegal, although tipping off your clients and selling a chunk of shares to them cheaply so they can then shift them on quickly at a profit is frowned upon, again the rules are very unclear in this area but it’s not illegal.

It might end up with the rules being clearly defined but that’ll be all that comes of this.
 
poolseasider said:
Can you break it down for us SO your the one who understands all this stuff.👍
Click to expand...

First of all I am not going to mention the current report or comment directly on the current situation, just the general situation and an explanation in general of how it works and what the US authorities suspect in general might go on sometimes (and have found previously) around Block Trading.

Block Trading

A block trade is a large, privately negotiated securities (ie Shares) transaction, Block trades are generally broken up into smaller orders and executed through different brokers / hedge funds to mask the true size.

Block trades can be made outside the open market through a private purchase agreement as well as on the exchanges.

Why do they exist?

Let’s say Warren Buffett or any person or bank owns a multi billion dollar position of shares of a company and wants to exit the position.

If they went straight to the market and sold them all it would probably cause the price to crash and they would receive much less money than the current market value.

Block trading is designed to hide this from the general market, so they can do a few things including….

1. Sell a big chunk to a mate away from the market usually at a slightly discounted price.

2. Go to several other hedge funds / brokers who agree to buy a block of shares at a discounted price and they then sell them pocketing any extra they can get for them or indeed lose if the price drops.

So where is the issue?

Obviously before anything like this can take place, people need to contact hedge funds / brokers etc and get their price opinion of the share, how many would they buy and what would they would pay.

The hedge funds are probably bound by an NDA, but the US authorities suspect that this information is being used in advance of deals happening to make money for the said funds or may be more likely - for their other hedge fund mates.

If their mates make the money it is harder to prove any wrong doing.

This gives them unfair advantage over other investors and that is not allowed.

Is this classed as insider trading?

Probably!

The Most Famous Previous Case

https://www.thestreet.com/.amp/markets/guilty-plea-in-squawk-trading-case-10246295

What Sentences did the ‘SquakBox” defendants get?

www.reuters.com

U.S. judge sentences traders for "squawk box" misuse

Five former brokers and day traders convicted of misusing "squawk boxes" for insider trading received sentences ranging from four years imprisonment to probation on Thursday.
www.reuters.com www.reuters.com


Why do banks choose specific funds / brokers to dispose of shares?

Usually they will pick a fund / broker who has a speciality in what they are trying to achieve, and like most businesses they will have preferred partners….and they can change these usually whenever they want.

I hope that helps - Any questions just ask!
 
Last edited:
A piece by Bloomberg which further explains the point above

“Block trading is one of a few Wall Street businesses where relationships still drive the flow of deals. Banks acquire a slug of stock from an investor -- such as hedge funds, private equity firms or venture capital firms -- at a discount, before parceling the shares out discreetly to buyers. The aim is to price the blocks at a slim premium, and to avoid sending a stock’s price into a dive before the transaction is completed, which can inflict losses.”

www.bloomberg.com

BofA Halts Equity Trading With Segantii on Block Trade Concerns

Bank of America Corp. has suspended equity trading with hedge fund Segantii Capital Management over concerns related to its wagers on large stock sales, according to people familiar with the matter.
www.bloomberg.com www.bloomberg.com

Incidentally (and quite coincidental to this) I was talking to a couple of friends with backgrounds in financial communications/journalism in Hong Kong last night. The name of the FT journalist happened to come up. Apparently the view among comms people is that she’s rather ‘tabloid’ or sensationalist although, as they noted ‘that might just mean she’s good at her job’.
 
So if block trading is fundamentally about rigging the price (stopping it from collapsing) then it's no wonder there is never ending suspicion around it all.
 
BigHandsOliverKahn said:
So if block trading is fundamentally about rigging the price (stopping it from collapsing) then it's no wonder there is never ending suspicion around it all.
Click to expand...
It’s not rigging the market as that’s fraud!

Controlling how you sell something that could have a massive impact is common sense.

Think of it this way…..

The Hedge Fund buys a big chunk of shares off an institution at wholesale prices and then sells drip feed to retail with a margin.

That’s just supply and demand!
 
seasideone said:
It’s not rigging the market as that’s fraud!

Controlling how you sell something that could have a massive impact is common sense.

Think of it this way…..

The Hedge Fund buys a big chunk off shares of an institution at wholesale prices and then sells drip feed to retail with a margin.

That’s just supply and demand!
Click to expand...
The original act of secrecy is skewing how the open market would have reacted so its concept is fundamentally based on altering the true market behaviour.

I can see why that would create attractive conditions for some lesser honest traders and why the authorities are keeping a close eye on things.
 
BigHandsOliverKahn said:
The original act of secrecy is skewing how the open market would have reacted so its concept is fundamentally based on altering the true market behaviour.

I can see why that would create attractive conditions for some lesser honest traders and why the authorities are keeping a close eye on things.
Click to expand...

It’s just wholesale buying and selling at retail.

If I knew all the wholesale prices in shops I would be trying for a discount harder than I already do.

Anyway you are not skewing the market as the HF is entitled to hold the shares as long as they want - if they dump them the price would probably drop as well.

If you had a 1000 TVs you wouldn’t generally sell to retail would you, you go via a wholesaler normally or someone who can buy the lot??

It’s just the same!!
 
It's a story of interest, but until I read differently, that's all it is and I'll not lose any sleep.
If we sign a player soon, then I'll know all is rosey doen at Bloomfield Road.
In stealing a phrase that is usually tagged to Critch ..... in SS I trust 👍
 
You must log in or register to reply here.
Back
Top