Snickers Heard In Supreme Court As Elliott Presses Argentina

Snickers Heard In Supreme Court As Elliott Presses Argentina
By World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

The snickers over Elliott Management’s fight with the government of Argentina just grew from inside the hedge fund community into the hallowed halls of the US Supreme Court, which heard the case today.

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Initial victory in information aspect of case seems likely

On Monday, US Supreme Court justices provided indication that creditors have a right to seek limited information about Argentina’s non-US assets.  The case stems from a 2001 investment Elliott made into Argentine bonds.  After the bonds defaulted, Elliott and a small group of investors refused a payment near $0.30 on the dollar.

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The holdout investors, most notably Elliott, engaged in a humorous game of attempting to repossess assets from Argentina like a reality TV show might dog a convict who escapes their bond obligation. At one point an attempt was made by a separate investor to seize the president of Argentina’s plane as it refueled with the president inside.  Then Elliott unsuccessfully attempted to seize an Argentine naval vessel off the coast of Ghana.  After taking control of the ship, it was eventually released back into the ocean.  Elliott has also attempted to seize assets in a rocket program the Latin American nation was involved in.

The humorous tone to the case surfaced in the Supreme Court hearing, as reported by CNBC’s Kate Kelly.  When musing over why other nations didn’t join Argentina in an Amicus brief supporting the nation’s position, Justice Antonin Scalia quipped that perhaps Argentina owed other nations as well, which was followed by insider laughter from the courtroom.  It is interesting to note that France, which filed an Amicus brief in a lower case, did not file one in this higher profile case.  Elliott currently is involved with the French government in an unusual insider trading case. Mexico and Brazil, which had also showed support for Argentina, stayed on the sidelines as well.

Two issues before Supreme Court

There are two issues involving Elliott and its NML Capital hedge fund subsidiary and Argentina.  Today’s deliberation was about the ability of the hedge fund to subpoena for information about Argentina’s non-US assets.   Elliott has issued subpoenas to Bank of America and Banco de la Nacion Argentina for financial information in the case.

The more contentious issue has yet to be heard, that being Argentina’s appeal of a lower court ruling in favor of Elliott ordering the South American nation to pay up to $1.33 billion.

Chief Justice John Roberts and Justice Anthony Kennedy seemed to seek limits on Elliott’s plan, while Roberts described what Elliott wanted as “pretty extraordinary.”

When asked if Elliott insiders had difficulty holding back a grin during the court hearing today, a source inside the fund did not return comment.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)
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  1. You make these ‘snickering’ hedge funds sound like fat pigs with their snouts in the NML/Elliot trough. All Argentina owes that insider trading scammer is a slap in the face.

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