"If you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality." --Bishop Desmond Tutu

Friday, December 12, 2008

The death of the hedge fund?

Gee, look. Another Wall Street scandal involving fraud and billions of dollars.
Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called "one big lie", prosecutors allege.

Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.
Sounds like a classic Ponzi scheme to me. But typical of the current crop of Wall Street types. Is it the death of the hedge fund? Perhaps...

Many investors have been pulling money out of hedge funds in an effort to reduce their exposure to risk.

"This is a major blow to confidence that is already shattered - anyone on the fence will probably try to take their money out," said Doug Kass, president of Seabreeze Partners Management, a hedge fund.

1 comment:

Hedge Fund Lawyer said...

Unfortunately the Madoff scandal has raised the likelihood that regulators will require hedge fund managers to register in some capacity which may force some legitimate hedge fund managers to delay starting a hedge fund in the new year. How to start a hedge fund.