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Tax day, hedge funds, and tax havens: Murky waters in the Caribbean

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In a follow-up email after being sent the SEC filings, Mr. Power said, “These filings relate not to a securities sale from our portfolio but to us registering with the SEC every time a “sale” in a new state has occurred, or in other words every time we have received an investment from a particular US state for the first time. I think the below filings were us playing catch up and registering all previous sales, as we had not previously been keeping up to date with the filings.”

Power declined to answer questions about potential investments.

If Power’s guess is correct, then perhaps the $10 billion in proceeds registered on March 12 and March 16 was Bush-related firms playing catch up. (And some people say change has not come.)

Spokespersons of other companies contacted have been unavailable or have not returned calls.

Under SEC regulations, the Form D notice must be filed “within 15 days after the first sale of securities in the offering, not counting weekends or holidays. So the proceeds indicated on March 16 and March 12 could have been raised back to February 27 or February 25.

In any case, the network of relationships indicates that either the quiet transactions or the filings were coordinated, or both.

The amounts and transactions mentioned above are only part of the picture.

Bree and Don Seymour are also both listed as directors in Emerging Sovereign Offshore Fund Ltd, which on March 16 sold $358,685,792 in shares to 73 investors required to put up at least $1 million each. Another Cayman hedge fund with Bree and Seymour as directors, WRA Investments Offshore Fund Ltd, sold $138,133,090 the same day to 35 purchasers with the same minimum. A third similar entity named Brightline Capital Offshore Fund Ltd, with Bree and Tammy Seymour as directors, did a mere $5,700,000 in Form D business the same day.

Don Seymour, Bush’s other Winston Global co-director, did 18 Form D sales on March 16, including Rock Creek Potomac Fund Ltd and Rock Creek Georgetown Fund Ltd. One sizeable transaction was that of an entity named Highly Managed Offshore Access Fund Ltd, which sold $393,150,859 on March 16. Another Seymour entity, Highly Managed Offshore Access Fund (ERISA) SPC, sold $10,156,000 that day.

The nature of directorship in companies that exist mostly on paper and/or on a plaque in some beautiful island is open to debate. The director of an offshore investment firm is not exactly a plant manager and sometimes more resembles what would be called a Registered Agent (RA) stateside, so far as daily plant-managing responsibilities are concerned, those being nil. Probably some directors of smaller entities lacking the clout of a former First Brother resemble notaries public as much as they do attorneys or accountants. They have sufficient authority to keep the firm’s paperwork in order with the island government. But they are directors for the purpose of SEC filings.

Nonetheless, these unregulated transactions seem to have a lot of vibrancy offshore. Evidently huge amounts of ‘liquidity’ can be raised in the British Virgin Islands and the Caymans even when we read every day about the skittishness of investors unwilling to wet their toes in American stock markets. That skittishness is used to justify enormous taxpayer bailouts for U.S. banks and other financial entities, to induce them to invest in lending in the U.S. housing, education and transportation sectors—but the brother of an ex-president can still find a remarkable splash of investor energy, even in Tortola.

 

March 12 another big day for Form D registrations

A hedge fund sharing David Bree as director named Telluride Capital Fund Ltd raised $377,128,085, registered on March 12. The same day, Pennant Windward Fund Ltd sold $574,918,743, and Pennant Offshore Partners Ltd registered $274,714,754, both directed by Bree. That’s a total of $5.7 billion on March 12 for the Grand Cayman branches directed by another Winston Global director.

On the same date, the home branches of the same hedge funds—Diamondback and Pennant hedge funds onshore—also registered Form D transactions. Diamondback Partners LP of Stamford CT sold $780,604,770, with a minimum of $5 million required from each purchaser. Also on March 12, four other Pennant funds—of Chatham NJ, director Alan P. Fournier--registered over $916 million in Form D investments.

Again, the hedge fund transactions mentioned share an offshore dimension. Broadly the money trail is always the same--from island base to shared personnel to shared company name back in Dallas or Atlanta or Stamford CT or Chatham NJ.

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Margie Burns Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Freelance journalist in metro DC area.
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