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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow Did Major Hedge Fund Earn 30% Returns for 20 Years Straight? Lots of Cheating.
http://www.alternet.org/corporate-accountability-and-workplace/how-did-major-hedge-fund-earn-30-returns-20-years-straight?akid=10485.277129.Pc4wuw&rd=1&src=newsletter845591&t=3How would you like to invest $10,000 and watch it grow over 20 years into $1,461,920? Well that's what happened at the giant hedge fund, SAC Capital Advisors, which made a 30% return for 20 years in a row.
How is it possible to make such profitable investments again and again and again? The U.S. Attorney for Manhattan, Preet Bharara, believes he has the answer: SAC is cheating ... again and again and again. In fact, Bharara suggests that hedge funds that engage in insider trading may be rotten to the core:
"Given the scope of the allegations to date, we are not talking simply about the occasional corrupt individual; we are talking about something verging on a corrupt business model, for the defendants seem to have taken the concept of social networking and turned it into a criminal enterprise. " [refers to a 2011 hedge fund indictment, not the current case against SAC.]
To date, nine current and former SAC employees face insider trading criminal charges stemming from their work at the firm. Four have pled guilty and two are still fighting their indictments. Now the head of SAC, multi-billionaire Stephen A. Cohen (note the initials), will be subpoenaed to appear before a grand jury. The federal strategy may be to indict the entire hedge fund and shut it down, according to the New York Times.
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How Did Major Hedge Fund Earn 30% Returns for 20 Years Straight? Lots of Cheating. (Original Post)
xchrom
May 2013
OP
DCKit
(18,541 posts)1. Punitive damages? I didn't think so.
Not to mention that they'll probably serve less time (if even sentenced) than Martha Stewart.
NJCher
(35,616 posts)2. so soon?
Sounds just like Bernie Madoff. Never had a bad year.
It just doesn't happen.
Cher
Newest Reality
(12,712 posts)3. Why do they hate
our most primary, ingrained and ensconced American values?
Benton D Struckcheon
(2,347 posts)4. See Vanity Fair article in thread
They're going to take Cohen down. He's already, as this article concludes, "damaged goods".
http://www.democraticunderground.com/10022803303