The Securities and Exchange Commission is raising eyebrows on Wall Street with an investigation into a $10 billion hedge fund that tried to dodge the old adage of “no pain, no gain” in a failed drug-industry merger.
At issue are the elaborate financial maneuverings of the Perry Capital hedge fund, as it tried to straddle both sides of a $5.4 billion merger between Mylan Laboratories and King Pharmaceuticals in 2004. Richard Perry, the fund’s namesake manager and an ex-Goldman Sachs arbitrageur, wanted to boost the deal’s odds of success since he was a large King shareholder.
