Is Hedge Fund Synonymous With Ponzi Scheme?
Another day, another Ponzi scheme. Or so it seems.
This time, the Securities and Exchange Commission moved to shut down a Texas man it says bilked 31 investors, most of them elderly, out of at least $45 million.
His weapon of choice? "Hedge fund," of course.
The SEC contends that Rod Cameron Stringer of Lamesa, Texas, promised annual returns of as much as 61 percent and total returns in excess of 600 percent. In fact, the agency says, he consistently posted losses on what little of his investors' money he actually did put into the markets.
Most of the money -- more than 80 percent of it, regulators say -- was siphoned off to either pay back early investors or to support the fund managers all-too-familiar "extremely lavish lifestyle."
Nothing new here, not even most of the items on Stringer's purported personal shopping list: expensive cars and trucks, luxury boat, several houses, jewelry, and a horse racing partnership.
Still, coming on the heels of Bernard Madoff's meltdown and other recent frauds, one would think the notoriously independent elder statesmen of the hedge-fund industry had better think about banding together to do a little reconstructive public relations.
Or, since it's easier, maybe it's just time to change the industry's name. Remember how "leveraged-buyout artists" became "private equity fund managers," "corporate raiders" became "activist investors" and "junk bonds" became "high-yield securities?"
Nominations, anyone?
by Mark SteinRelated LinksInnocence LostSteve Cohen's Shrink in High DemandCan Hedge Funds Be Fraudulent?
