Hedge Fund's Mercury Mess

Recent performance figures for Okumus Capital's funds could not be obtained.

At the moment, all Okumus and his hedge complex seem to have is some anecdotal evidence that someone in the market knew a deal was in the works.

In the filing, Okumus notes that the trading activity in shares of Mercury Interactive, one of about 80 companies caught up in the options-backdating scandal, was heavier than normal in the two days leading up to the merger announcement. It points to the spike in trading activity as evidence information about the H-P offer had been leaked to some buyers.

In fact, on July 24, the day Okumus began selling, shares of Mercury Interactive rose 93 cents, or 2.5%, to $38.67. Volume in the stock soared, rising 174% over the prior trading day, with 4.1 million shares changing hands.

The next day the stock rose 33 cents to close at $39. But once again, the frenzied trading was the real story. By the end of July 25, some 8.2 million shares were traded, an increase of 97% over the prior day. After the market closed on July 25, Mercury's deal with H-P was announced.

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