Corruption at Hedge Funds Even More Rampant Than You Think, Study Shows


Michael Steinberg of hedge fund SAC Capital Advisors, charged with insider trading.

 

Are Hedge funds managers responsible for the current financial woes and should they be punished. Up to to you to make up your own mind 

If a new report about hedge fund corruption is to be believed, the industry is overrun with unethical and illegal activity. Some 46% of people at hedge funds believe their competitors break the law or act unethically and 30% say they’ve seen wrongdoing themselves.  Less than a week after F.B.I. agents handcuffed SAC Capital portfolio manager Michael Steinberg and escorted him from his Park Avenue apartment, the  report, released yesterday, says that more than a third of hedge fund professionals believe they have to break the rules to get ahead.

The report was released by New York law firm Labaton Sucharow, which specializes in representing plaintiffs in securities class action cases and whistleblower actions, together with HedgeWorld, a news and research service, and the Hedge Fund Association, a trade group. They commissioned an anonymous online survey  of 127 hedge fund professionals conducted between Feb. 25 and March 17.

According to Jordan Thomas, chair of the whistleblower practice at Labaton Sucharow, the survey was an attempt to gauge the extent of wrongdoing inside of hedge funds and the likelihood that hedge fund professionals would report illegal activity to the authorities.

A portion of the Dodd-Frank financial reform law, which passed in 2010, was intended to make it easier for people in the securities industry to report wrongdoing. Whistleblowers can remain anonymous, their jobs are protected by law and they are entitled to 10%-30% of the monetary sanctions the SEC gets in such cases.

Despite those protections the survey found that 29% of respondents still think they could experience retaliation if they report wrongdoing at their fund.

In addition, 28% said that if leaders of their firm learned that a top performer had engaged in insider trading, the leaders would be unlikely to report the misconduct. Thirteen percent said they believe firm leaders who find out about wrongdoing  would just ignore the problem. Another 13% said that people who work at hedge funds may need to do unethical or illegal things to be successful and the same number admitted they would commit a crime–insider trading–if they could make a guaranteed $10 million and get away with it.

More than half of the respondents, 54%, said they though the SEC was ineffective in detecting, investigating and prosecuting securities violations.

Thomas, who worked as the assistant chief litigation counsel in the SEC’s enforcement division until July 2011, says there is a silver lining to the new survey. It asked whether respondents would report wrongdoing if they were protected by the provisions of the Dodd-Frank whistleblower law. Eighty-seven percent said they would. Eighty-three percent said they were already aware of the program. But seriously? They say corruption is rampant, and the vast majority would report it—when few actually do.

“The 87% represents hope,” says Thomas. “It is likely that the law will lead to more reporting in the industry.”

Still, there is obviously a disconnect between that hope and the reality that nearly a third of respondents say they believe that they would be retaliated against if they reported wrongdoing at their firm. It also could be that the protections and potential monetary awards just aren’t  enough to motivate people to come forward. Or cheating in the hedge fund industry simply remains, far too much, business as usual.

via Corruption at Hedge Funds Even More Rampant Than You Think, Study Shows – Forbes.

via Corruption at Hedge Funds Even More Rampant Than You Think, Study Shows – Forbes.

About Old Boy

Love the past and the future but live in the present

Posted on April 15, 2013, in buisiness, Crime, Government, IMF/ECB, International affairs, politics, Protest, Wealth and tagged , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

90 +Wines in dublin

With a critical score of 90 points+

MovieBabble

The Casual Way to Discuss Movies

OLD HOLLYWOOD IN COLOR

...because it was never black & white

LEANNE COLE

Trying to live a creative life

CURNBLOG

Movies, thoughts, thoughts about movies.

FilmBunker

Saving you from one cinematic disaster at a time.

From 1 Blogger 2 Another

Sharing Great Blog Posts

Wonders in the Dark

Cinema, music, opera, books, television, theater

Just Reviews

Just another WordPress.com site

Mark David Welsh

Feeding Soda Pop to the Thirsty Pigs since 2013

conradbrunstrom

Things I never thunk before.

News from the San Diego Becks

The life and times of Erik, Veronica and Thomas

The Silent Film Quarterly

The Only Magazine Dedicated To Silent Cinema

Leaden Circles

First a warning, musical; then the hour, irrevocable. The leaden circles dissolved in the air.

My Archives

because the internet is not forever

CineSocialUK

Up to the minute, fair, balanced, informed film reviews.

PUZZLED PAGAN PRESENTS

A Shrine to Pop Culture Obsessiveness. With Lots of Spoilers

Thrilling Days of Yesteryear

“Nostalgia isn’t what it used to be” – Peter DeVries

thedullwoodexperiment

Viewing movies in a different light

Twenty Four Frames

Notes on Film by John Greco

Suzanne's Mom's Blog

Arts, Nature, Good Works, Luna & Stella Lockets & Birthstones

It Doesn't Have To Be Right...

... it just has to sound plausible

Rich Green Photography

The life of a photographer who likes to shoot just about anything.

arwenaragornstar

A French girl's musings...

Jordan and Eddie (The Movie Guys)

Australian movie blog - like Margaret and David, just a little younger

Octopus Films

A place for new perspectives on films, TV, media and entertainment.

scifist 2.0

A sci-fi movie history in reviews

The Reviewer's Corner

The Sometimes Serious Corner of the Internet for Anime, Manga, and Comic related things

First Impressions

Notes on Films and Culture

1,001 Movies Reviewed Before You Die

Where I Review One of the 1,001 Movies You Should Watch Before you Die Every Day

Movies Galore of Milwaukee

Movie Galore takes a look at Silent films on up to current in development projects and gives their own opinion on what really does happen in film!

The Catwing Has Landed

A Writer's Blog About Life and Random Things

Gabriel Diego Valdez

Movies and how they change you.

The Horror Incorporated Project

Lurking among the corpses are the body snatchers....plotting their next venture into the graveyard....the blood in your veins will run cold, your spine tingle, as you look into the terror of death in tonight's feature....come along with me into the chamber of horrors, for an excursion through.... Horror Incorporated!

Relatos desde mi ventana

Sentimientos, emociones y reflexiones

Teri again

Finding Me; A site about my life before and after a divorce

unveiled rhythms

Life In Verses

Gareth Roberts

Unorthodox Marketing & Strategy

leeg schrift

Taalarmen

100 Films in a Year

12 months. 100 films. Hopefully.

%d bloggers like this: