Elliott would just like to make one thing clear to any Icelandic bank fakers "We are not involved in Icelandic banks," an Elliott spokesperson said. Yes, that's an on-the-record statement from the notoriously publicity-shy hedge fund. The Icelandic banks part is going to need some explanation. Iceland's government is currently negotiating with offshore creditors of its failed banks (including hedge funds). That much is true. The creditors are being asked to restructure foreign-currency debt owed by the banks before it lifts capital controls. This is complicated. So far the government's not budging. At all: "creditors in Iceland have been kept warm in a cozy situation," according to Prime Minister Sigmundur Gunnlaugsson, leader of a country that knows about cold. So - what to do, if you're among these creditors, lacking clout in the negotiations? Perhaps take the name (in vain) of a fund which is very well-known for acquiring and using its clout in this kind of trade. This is what we've heard has happened. Other funds, not named Elliott, seem to have used a rumour of Elliott buying the debt of Icelandic banks in order to scare the Icelandic government, basically. Not least because we heard the rumour too a few weeks back. It didn't check out at the time. For example, one bank mentioned (Landsbankinn) didn't appear to have the capital structure that would allow distressed trades of the kind Elliott is known for. Because after all, Elliott generally looks at all sorts of opportunities in distressed debt. That is also true. It's what makes this rumour half-plausible. But it's not true, as Elliott has now gone on the record to confirm. So, if you are spreading rumours that Elliott is involved in Icelandic banks... stop it. Everyone else, meanwhile, gets an interesting glimpse of what can go on in the world of distressed debt.