Judge Donald S. Goldman of the Superior Court of New Jersey dismissed Biovail's (NYSE: BVF) lawsuit against SAC Capital Advisors last week, saying that he lacked jurisdiction.

The lawsuit, originally filed in 2006, accuses SAC of colluding with analysts and other firms to produce misleading research designed to drive down the company's share price -- allowing the firm to profit from its large short position in the company's stock

Goldman wrote that he had not evaluated the merit of Biovail's claims, but did say that the company had failed to show that it was entitled to damages, even if its allegations were true. Another judge who had dismissed another Biovail-related lawsuit said that the company's history of securities fraud and run-ins with regulators gave the case a "tainted origin".

On Tuesday, the Securities and Exchange Commission threw a brushback pitch at those who are betting on the further collapse of our big financial institutions. Instead of suggesting better oversight of the companies, the SEC is going after short sellers.

For 30 days starting Monday, short-selling will be restricted on 19 financial companies. Financial regulators are also cracking down on "sensational rumors." To put the short-selling rule in perspective, consider that even when the market re-opened after the September 11th attacks, the SEC considered, but didn't implement, short sale restrictions.

Since Bear Steans collapsed and Vanity Fair bought the company's story that short-sellers did them in, everyone is worried that short sellers are bringing the market down. And I'm sure they are, but short-selling, after all, is legal. The SEC just loosened rules on it last year.

Yesterday, SEC chair Steven Cox testified that he's worried about short-selling in connection with spreading false rumors to manipulate the market. OK, that's not legal, but as Cox pointed out, the SEC brought its first case -- EVER -- for this sort of deception this year. And it still hasn't gone after anyone for spreading false positive rumors about a company.

Let me see if I've got this straight: former trader Andrew Tong is suing hedge fund giant SAC Capital Advisors LLC because his supervisor Ping Jiang ordered him to swallow estrogen pills and wear women's clothing in order to make him more feminine in order to become a more successful trader, according to The New York Post.

SAC vehemently denies Tong's allegations, which the Post says are being investigated by the Equal Employment Opportunity Commission. Tong also now claims he was sexually assaulted at work, a claim an S.A.C. flack told the newspaper was "scurrilous."

A couple of questions come to mind. First, why wouldn't Jiang just hire more women instead of making a man take female hormones? And could estrogen makes someone a savvier trader of stocks? None of it makes a lick of sense to me.

Wall Street's culture clearly isn't for the faint of heart. Sure, you can make tons of money, but the pressure to perform is enormous. People get chewed up and spit out at firms like S.A.C. fairly regularly. I have no idea whether the allegations against Tong are true, but I can tell you this isn't the first report of weird behavior among Wall Street's elite, and it won't be the last.

Hedge fund managers, most notably Steven Cohen (SAC Capital) and Ken Griffin (Citadel Investment Group), have become notorious buyers of expensive and trendy contemporary art. It would make sense, then, that the recent poor performance from many mighty hedge funds would have an effect on art prices because hedge fund managers stand to make less money (or perhaps even, gasp, lose money).

According to a recent Bloomberg article, "the art market will soften...but it may not happen for six months to a year." However, the article also quotes a Moody's analyst who testified that "we've seen record levels of consigning,..and lots of deals are being done." But I tend to agree with the first source -- the art market will inevitably soften as hedge fund managers have less disposable income to invest in their art collections.

This piece, like many others pieces of news, proves the 'domino effect' is unbelievably at-present in the world. News of poor earnings from an American company can effect foreign markets, credit issues in America have created a worldwide sell-off during the last month, increased volatility has hurt many large hedge funds, etc. As I've said before, "gone are the days when simple cause-and-effect can be used to analyze a news event."

MAJOR PAPERS:

• The Wall Street Journal reported that Dade Behring Holdings Inc. (NASDAQ: DADE), a medical diagnostics provider, may soon be sold, with Siemens (NYSE: SI) being a possible buyer.
• General Electric Company (NYSE: GE) is expected to announce $1.8B in new energy orders in the Mideast, reported the Wall Street Journal.
• According to Barron's Online's "Weekday Trader," Home Depot Inc. (NYSE: HD) may now be a bargain at its current valuation.
• The Financial Times reported that Steven Cohen's hedge fund, SAC Capital, may sell up to 20% of itself to private minority investors.

OTHER PAPERS:

• According to the New York Post, Saks Inc. (NYSE: SKS) is once again speculated to be in talks of a buyout.

A month ago, Freeport-McMoRan (NYSE:FCX) agreed to buyout Phelps Dodge (NYSE:PD) for $25.9 billion. The deal would result in the world's largest publicly trader copper producer.

However, a mega hedge fund, SAC Capital, is not happy with the deal and is doing something about it. Today we learn that the fund has bought about 5.1% of Phelps Dodge.

Because of this large purchase, SAC had to file a disclosure document with the SEC (known as a 13D). In it, the fund gives reasons for the purchase:

The Reporting Persons believe that the terms of the proposed FCX transaction would not provide full and fair value to the Issuer's shareholders and would deprive them of their ability to maximize the return on their investment. The Reporting Persons believe that the proposed FCX transaction offers few, if any, synergies to the combined operation, and would use the Issuer's balance sheet to fund the purchase in what is essentially a public recapitalization that would create disproportionate value for FCX shareholders at the expense of the Issuer's shareholders. In addition, the Reporting Persons believe there is unrecognized long term value that the Issuer's shareholders would forego if they sold their shares at FCX's proposed terms. Accordingly, the Reporting Persons currently intend to vote against the proposed FCX transaction.

SAC has a great track record, and no doubt sees Phelps Dodge as undervalued. With some pressure, Freeport-McMoRan may boost the price tag. Or another bidder may come to the table.

This perhaps points to a new trend: hedge funds may start using more activist approaches with their investments. With the surge in M&A activity, there is a lot of opportunity for this.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.