I've written previously about how, like the rest of us, the hedge fund gurus are quickly seeing their returns, assets, and now, even freedoms evaporate. Dealbook reports today that the founder of the Bayou family of hedge funds was sentenced to more than four years in prison Tuesday for a scheme to defraud investors.
James G. Marquez was sentenced to 51 months in prison, to be followed by two years of supervised release. He also was ordered to pay nearly $6.26 million in restitution.
Ouch.
His scheme involved inducing "investors to contribute to funds by misrepresenting that the money-losing funds were highly profitable."
Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
Sunk in the Bayou: Another hedge fund blow-up
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Reader Comments (Page 1 of 1)
1-27-2008 @ 1:12PM
Veracity Jones said...
Hedge Fund Members May Now Hedge Their Bets
According to CNN, wealthy hedge fund members no longer trust their own wealth- amassing vehicle. With allegations of hedge fund fraud on the rise, a newly- formed insurance firm, Protean Investment Risks is now offering insurance to wealthy individuals and institutions to protect their portfolios from any misrepresentation of assets, theft or other type of fraud by hedge-fund employees or directors.
This must be very reassuring to these ridiculously wealthy traders. But it does not address the most fundamentally flawed aspects of hedge funds. It is not generally their members they take to the proverbial cleaners with their shadow markets, questionable short sales, their pumping, and their bashing. It is the individual investor, the one who has no insider knowledge, no paid operatives, no way to see the blindside coming, who remains unprotected, while the hedge funds continue unregulated, and free to impose their will upon the market.
www.basherbusters.com
2-04-2008 @ 8:32PM
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2-04-2008 @ 8:32PM
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2-26-2008 @ 10:40PM
Hedger said...
What does it say about an investment vehicle that is so disreputable and open to fraud than investors need to insure themselves (or at least their investments and probably themselves as well without an exclusion for suicide) from losing it all to fraud? And the SEC thinks this is ok? No wonder the financial markets are in such a mess.