Hedge fund exec denies inside trades of WaMu notes

AP News
Posted: Jul 18, 2011 6:49 PM
Hedge fund exec denies inside trades of WaMu notes

A hedge fund executive is denying allegations from Washington Mutual shareholders that his firm used confidential information gained in WaMu's bankruptcy case to trade in its securities.

Dan Gropper of Aurelius Capital Management testified Monday that Aurelius made sure its traders did not use nonpublic information he other officials learned of during bankruptcy negotiations. Gropper said Aurelius even spent $150,000 to soundproof his office so others could not hear his conversations.

Gropper will resume testifying Tuesday as a Delaware judge considers whether to approve Washington Mutual's reorganization plan, which is opposed by shareholders. The plan centers on the settlement of lawsuits pitting Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan Chase against one another after the FDIC seized WaMu's flagship bank in 2008 and sold its assets to JPMorgan.