The following is a press release being sent around by Hermitage Capital Management with regard to the death last night of Sergei Magnitsky.  The link to the 40-page complaint by Magnitsky to Chief Prosecutor Yuri Chaika detailing the urgent care he required for his medical conditional is very damning.

Death of Hermitage Lawyer in Russian Prison

17 November 2009 - Last night Sergey Magnitskiy, a 37-year old legal adviser and father of two, died in Matrosskaya Tishina pre-trial detention center in Moscow.

Since 2007, Sergey Magnitskiy was defending the Hermitage Fund and HSBC against serious frauds perpetrated with the involvement of Russian officials. Sergey Magnitskiy gave formal testimonies naming officers of the Interior Ministry and their

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This is horrible, horrible news, especially considering the circumstances behind the arrest of Sergei Magnitsky, a lawyer involved in the William Browder and Hermitage Capital affair (this saga of state corruption is best told in a ten minute film released by the defense).  We already knew the lengths to which Russian prosecutors can go in forcing prisoners to manufacture false testimony, but this terrible death is beyond outrageous.  Let's be clear that the circumstances of the death are currently unclear, but for a man who should never have been in prison in the first place, this incident requires a very serious and strong response.Read the Vedomosti coverage here.  This is from Greg White in the Wall ...

In a case brought to light by Hermitage Capital Management's campaign to expose state corruption in Russia, Viktor Markelov has pleaded guilty to 'fraud by prior collusion by a group of persons and in an especially large amount' in a Moscow court.  Hermitage, meanwhile, has sent out a new letter to six government agencies alleging that senior Kremlin officials have 'conspired with a private gang' to steal $230 million from the Russian treasury.  Bloomberg and The Times of London report the figure as $381 million, the Moscow Times as less than a quarter of that sum.  AvtoVAZ workers are rallying for the company's nationalization.  Swiss engineering firm ABB says it is reassessing its business model in Russia, owing to increased operating costs.  Is Russian oligarch Mikhail D. Prokhorov planning to buy a ...

William Browder of Hermitage Capital Management, the victim of a considerable state theft by the Russian government, is upping the ante in his fight to bring attention to the flagrant corruption and abuses of office currently taking place in the Kremlin.  He and his team have released a devastating 10-minute documentary film on YouTube (below) which outlines the risks of investing in Russia, and from what we're hearing, they have been pretty successful in ruffling the feathers all the way up to the top of the government (Putin used to pretend that he had never heard of Browder ... that no longer seems plausible).  Hopefully Browder can find that elusive tipping point for the siloviki and elites which makes injustice more politically onerous than justice.From the Telegraph's write-up of the YouTube campaign:"The Russian ...

VEB, which holds a blocking state in Vimpelcom, will apparently agree to the merger of the mobile operator with Ukrainian company Kyivstar.  Car sales in Russia fell 52% in September year-on-year, a slight improvement on August's drop of 54%.  State-controlled VEB bank has extended loans for six companies, including Gazprom's oil unit Gazpromneft.  Reuters reports that Italian automaker Fiat is interested in launching its SUV in Russia.  Fiat SpA has said that its CNH unit has signed a letter of intent with truck-maker Kamaz for a joint agricultural and construction equipment project.  The government will provide around $170 million in financial assistance to state-controlled defense industry corporation Oboronprom and titanium producer Vsmpo-Avisma.  Russian Railways has reported that 2008 net income dropped 47% from a year earlier to $2.6 billion.  Russia has placed Hermitage Capital Management ...

I have long argued that there exists a component of Russia's failure to reform, deepen democracy, and respect rule of law as a normative member of the international community that is solely the responsibility of Western complicity - our banks, our energy firms, our investors, and our businesses which have been more than willing to prop up authoritarian governments, regardless of their human rights records.  This new lawsuit, launched by William Browder and Hermitage Capital, alleging corruption at the highest levels of the Russian government to defraud the country's biggest investor, may bring some changes to the traditional equation of risk and politics in Russia.From the New York Times:

The filing is a new twist on Mr. Browder's case, which began almost four years ago. His lawyers say the wire transfers will show a fraud larger than previously disclosed --

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A draft 2010 budget has been approved by the government, which sees large cuts in the improvement of transport infrastructure and rural development, but welfare spending prioritized.  The government is reportedly considering borrowing from the World Bank and issuing eurobonds in 2010.  IKEA has concluded talks with the government allowing it to open its mall in the Samara region, after license-related setbacks.  Moscow City Hall has denied reports that a Chinese trade center will be built to replace Cherkizovsky Market, although the Moscow government has decided to offer space to Chinese investors to give out of work traders from Cherkizovsky a new opportunity.   Certain banks are hesitant about the gargantuan restructuring plan for Rusal.  Kamaz will suspend output in part of august.  More on the nature of the Gennady Timchenko/Econmist libel case in the Guardian.  ...

Jason Bush at BusinessWeek has a very interesting piece today: Mysterious lawsuits targeting prominent financial institutions could become the latest worry for foreign investors in Russia. Earlier this year, Hermitage Capital Management, an investment fund managed by British bank HSBC (HBC), claimed that three of its subsidiaries had been besieged by Russian fraud artists. Hermitage alleged in public statements that a series of bogus suits, based on fake contracts to sell shares, had been filed against the units as part of a scheme to seize ownership of the subsidiaries and reclaim $230 million in taxes previously paid by Hermitage to the Russian government. Russian authorities are investigating these allegations.

An initial report from Interfax, erroneously saying that Mikhail Khodorkovsky's parole request had been granted, fueled a 1.6% jump in the Russia market within 10 minutes - a rise of $12 billion in real terms. When Interfax posted a correction, the index surrendered two-thirds of the gain. Other than this brief gain, the markets continue to fall, apparently for some reasons separate to the Georgia conflict. Russia is quickly overtaking European countries to become the biggest car market. A lawyer representing Hermitage Capital Management and Bill Browder says his office was raided in an attempt to link him to tax fraud. "They are trying to tie me, as Browder's lawyer, to the extortion of $232 million from the state budget," he said. Rostekhnologia is blaming the recent crisis at AiRUnion on the management of Russia’s aviation alliance, saying ...

Russia Hedge Fund Guide Guide to Russian Hedge Funds Here is a short guide collection of articles on the hedge fund industry in Russia. I am always looking for more valuable online tools and resources to add to these geographical guides to the hedge fund industry. If you have a white paper or PowerPoint that I can include here please send me an email and I will post it for everyone's benefit. Excellent New York Times article about a Russian multimillionaire, his hedge fund, and America Russia dominates the list of leading hedge funds Good summary from Hermitage Capital Management about hedge funds in Russia Russia Hedge Funds 2008 Event in Switzerland “Russia’s hedge fund managers: The long, the short and the tall” Informative June 2008 Russian Hedge Fund ...