Posted on 11/23/2008 2:58:10 AM PST by TigerLikesRooster
Volatile markets may tempt hedge-fund fraud
* Reuters, Thursday November 20 2008
By Svea Herbst-Bayliss
BOSTON, Nov 20 (Reuters) - While fraud can happen any time, the loosely regulated $1.7 trillion hedge-fund industry looks especially vulnerable following record losses. Losses of roughly 15 percent this year and a growing sense of panic as hedge-fund clients exit worldwide are creating ripe conditions for a small number of the estimated 9,000 hedge-fund managers to break the law, according to forensic accountants, private investigators and former prosecutors.
"In volatile markets there is a greater likelihood that a manager might want to try and cover up his tracks by issuing bogus reports or making false valuations of securities if the market has turned against him," said Walter Pagano, a former Internal Revenue Service agent who now heads the Litigation Consulting & Forensic Accounting Services Group at Eisner LLP.
Whether managers fabricate returns to salvage ailing funds or spend clients' cash on fast cars or famous paintings for themselves, industry experts said fraud is often accompanied by warning signs.
(Excerpt) Read more at guardian.co.uk ...
Ping!
A fool and their money are soon parted - What amazes me is, there are no limits to the corruption these people are capable of.
“issuing bogus reports or making false valuations of securities”
Jail? Im not a white collar criminal type, seems illegal to me. and if not strictly illegal, why it aught to be. (I know it’s illegal, I just want to torture, with bamboo shoots in the fingernails the white collar guys)
I can’t never have no fun. I want Bernackie, (for starters) the suffering his idiocy has put us through? There is no torture to harsh.
Many people here think a hedge fund is a composite pile from your front yard clippings and has nothing to do with mortgages.
The politicians are looting our reitirement funds and wallstreet is looting our investment funds, and here we sit quietly.
The greatest robbery in history.
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