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Correction on D.E. Shaw and Lehman/SunCal Assets

We received a note correcting the interpretation of the CNN Money article that noted that SunCal financer D.E. Shaw was buying Leman Brother’s assets.

The phrase “Along with other well-known hedge funds such as D.E. Shaw & Co. … GLG is trying to retrieve assets held with Lehman’s prime-brokerage units, which provide trading and lending services…”

Evidently, this is intended to indicate that D.E. Shaw had assets held in escrow by Lehman when they filed for bankruptcy, and the hedge fund is simply trying to get back what is rightfully theirs.

But we note the recent story in the East Bay Express wherein it’s fair to infer that a former Lehman exec is now at D.E. Shaw, heading up a division that will buy distressed real estate assets of the type that Lehman invested in with SunCal.

‘After all, D.E. Shaw announced earlier this month that it was starting a new group devoted to mortgage-backed securities, the very thing that led to the nation’s current economic woes in the first place. Although many investors have been afraid to buy such securities, The New York Times noted that Shaw is undaunted. It sees a “major opportunity in the seized-up market for mortgage-backed securities” and is ready to step up its bidding on these complex securities that have been “punching holes in the balance sheets of many Wall Street firms, including Lehman, that still held these assets on their books.”

And who will be heading this new group? Richard McKinney, fresh off his stint as the head of the securitized products division at Lehman Brothers.” ‘

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