Dallas's Kyle Bass disastrous Hong Kong short got Bannon-linked cash

A recent U.S. Securities and Exchange Commission case reveals how Kyle Bass’s bet against the Hong Kong dollar has fizzled: He’s lost big, ensnaring some investors who funded his short through what the regulator says was an illicit stock offering. The details were laid out in a September SEC enforcement action that describes illegal financing of an ambitious startup that sought to expose corruption involving Chinese government officials. The startup -- GTV Media Group, with ties to self-professed billionaire Guo Wengui and ex-Donald Trump adviser Steve Bannon -- raised $339 million through an unregistered share sale last year, according to the SEC.

In June 2020, GTV’s parent company -- Saraca Media Group -- transferred $100 million of the proceeds to an unnamed hedge fund that takes positions in the Hong Kong dollar and other Asian currencies, the regulator said. The fund went on to lose more than 95% of the $30 million it invested, according to the SEC. That hedge fund is managed by Bass’s Hayman Capital Management, said two people with direct knowledge of the matter. Bass, 52, had been bearish on Hong Kong’s currency since at least 2019. At the time of the GTV share sale, Hayman was starting a new strategy to make all-or-nothing wagers that the currency’s peg to the U.S. dollar would collapse, Bloomberg has previously reported. The SEC, which said its investigation is continuing, hasn’t accused Bass or Hayman of wrongdoing. Hayman doesn’t comment on its investors or its funds, Jeff Tillotson, a lawyer representing Bass and the company said in a statement. He added that GTV has never invested in Hayman and that neither Hayman nor Bass has ever received compensation from the media firm. Tillotson also said information that Bloomberg planned to report was inaccurate. The SEC declined to comment.