Hedge Funds Gain from trading loss
When you hear the word “lunch” don’t assume you’re doing all the eating. Wall Street Journal reported Friday that $7 billion BlueMountain Capital Management and $35 billion BlueCrest Capital Management were among the firms that profited from J.P Morgan’s disastrous situation.
It has been widely reported that the firm admitted Thursday to the substantial loss, which was the product of massive trades done out of J.P. Morgan’s London office.
The Journal article went on to say that BlueMountain and BlueCrest each gained $30 million from making trades counter to the ones carried out by J.P. Morgan.
The fallout from the financial fiasco has resulted in J.P. Morgan’s CEO Jamie Dimon having to explain what went wrong in a conference call with analysts; critics questioning the firm undertaking such risky financial moves during a time of extensive regulation of the financial industry, and the Securities and Exchange Commission opening an investigation into the trades.