By mid-April, “further price declines had moved some accounts from house calls to NYSE calls” that “have strict deadlines and serious consequences.” Under applicable industry regulations, CLK had no choice but to close out any losses by May 15, 2012.
Its earlier margin calls were too small to impact prices and it went to great lengths to avoid negatively impacting prices when it closed out the positions, attempting to arrange a private sale of the long positions and, when it could not find another buyer, CLK’s current president, Candace Weir, bought them on her own account at a fair price and significant loss to herself.
Respondent’s Story CLK “fully understood that under NSB’s Strategy a substantial increase in the long market value of the stock positions in 2011 …
required a in the strategy’s “coarse hedge,” i.e., additional short index options had to be written” (emphasis in the original), but Nicklin increased the hedge, ordinarily 20% of equity, to 43% of equity by February 2012, during a bull market, greatly increasing the margin debt.
Resembling single-asset private equity funds in structure side pocket accounts are exclusively used in the hedge fund industry by hedge fund managers.As a result, CLK put pressure on NSB’s customers to sell securities, beginning in January 2012 and terminated the Service Agreement on March 14.CLK also tried to find buyers of securities to be sold in forced liquidations from NSB customer accounts. You can change your preferences any time in your Privacy Settings.We do this with social media, marketing, and analytics partners (who may have their own information they’ve collected).