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Hedge Fund Explained

Hedge Fund Explained

Hedge fund fraud cases are vital because
they give a base to the investment industry. The securities legislation that
covers fraudulent behavior on behalf of corporations does not clearly define
the punishments regarding hedge fund fraud. Hedge fund fraud is not clear cut,
which makes it difficult to apply securities law to it. However, hedge fund
news has recently connected valuation issues to fraud in an overwhelming
manner. In many ways the value of an investment is difficult to obtain. Hedge
fund fraud has to do with the value of the hedge funds assets, and securities.
The value can easily misrepresented in different ways. The value of a hedge
fund can be exaggerated upwards to hide losses or report a steady performance.
Hedge fund news has reported fraud that is used to cover up larger white collar
schemes within a corporation. Hedge fund news reports that valuation issues
contribute to almost sixty percent of hedge fund fraud cases. 


The United States Securities Exchange Commission has used the increase in hedge
fund fraud to crack down on registration requirements for hedge fund companies.
Hedge fund news helps emphasis the importance of investor due diligence on a
corporation. When conducting this type of background check on a hedge fund, it
is important that the investor be thorough. In the past hedge fund fraud has
been allowed trough insufficient due diligence practices. Investors have lost
large sums of money for not analyzing the answers that corporations give. An
investor can question key individuals before deciding to work with a hedge
fund. The auditor, funds coordinator, and managers are good resources for
information. If these individual hesitate to answer questions that deal with
public information, investigators can use private investigators. These
individuals can insure that the company has nothing to hide. Hedge fund news
has reported on the many ways an investigator can assist investors in following
through on their due diligence. 

Since the year two thousand and two hedge funds
have grown at a rapid rate. In addition, hedge fund news has reported fraud at
a rapid rate. Fraud within hedge funds has increased up to five times the rate
that it existed in the year two thousand and two. Hedge fund fraud news has
shown an increase in losses for the company, investors, and the economy as a
whole. Since hedge funds are increasing so rapidly the SEC regulations become
more important each day. The SEC provides risk evaluations that investors can
conduct on a company. In addition, the SEC requires that all hedge funds
practice transparency to ensure legitimate activity. 

Which Famous Cases on Hedge Fund You Should Know

Which Famous Cases on Hedge Fund You Should Know

Corporate fraud has impacted investors across the world. Some of the most infamous cases of business fraud are popular because they effect the masses. Many of these cases were small, however they involved sophisticated information. That sophisticated information was used to steal millions of dollars up from underneath intelligent investors. Business fraud was committed by the Lipper Company, by Ken Lipper and Edward Strafarci.
 
 
These two individuals committed securities fraud by lying about the worth of their companies equity. Specifically, Ken Lipper stated that his company was worth about five billion dollars, which was later found to be a lie. He admitted to committing corporate fraud by adding forty percent to the actual total worth of his company. He was forced to pay back investors all the money that was acquired fraudulently. 
 
 
Beacon Hill Asset Management company was guilty of corporate fraud in the same way by manipulating the numbers. The leaders in this company increased the actual worth of their company by fifty percent. The investors of the company experienced losses adding up to three hundred million dollars. John Barry, Thomas Daniels, John Irwin, and Mark Miszkiewicz were charged with business fraud, and charged about four and a half million dollars. This money had to be paid back to the investors of the company. In addition to restitution, these individuals were banned from acting in an administrative role within a large corporation. 
 
 
Tradewinds International was a company guilty of corporate fraud, along with administrator Charles Harris. Mr. Harris was accused of lying about how much money his corporation was worth as well. Tradewinds International was worth about one million dollars, he claimed that it was worth twenty times that amount. Aside from business fraud, he was accused of spending the money in his personal life as well. He later recorded a message confessing how he had lied to the investors, and then turned himself into the police.
 
 
Donald O'Neill of Orca Funds committed corporate fraud when he gambled away eight hundred thousand dollars worth of corporate assets. He lied to investors by claiming to invest the money in another country. Donald was later convicted of fraud through mail and wiring, and sentenced to prison time. 
 
 
A popular hedge fund, the Manhattan Investment fund, was home to one of the first massively reported hedge fund scandals. Michael Bergers committed corporate fraud against investors by manipulating investment reports. He did this in an effort to cover up losses within the company. He acquired about six hundred million dollars in assets in the year nineteen ninety nine.
 
 
However, the company began experiencing significant profit losses. The failure of Michael Bergers to report to his investors the losses that have occurred, couple with his fabrications, made him liable for business fraud. He pleaded guilty to the corporate fraud, however is still on the loose. 
 
 
All of these cases of business fraud are infamous for manipulating investment information. The individuals that committed the fraud were found guilty because investors were not allowed to make their own decision based off of public information. The company information was left private, or was publicized in a way that was reflective of a non existent group of assets. Due to these infamous cases, SEC regulations have increased within financial industries, in an effort to combat business fraud. 

Hedge Fund Fraud At A Glance

Hedge Fund Fraud At A Glance

A hedge fund is a form of investing that is private and involves intelligent investors. The backgroundHedge funds can be very profitable when they are running smoothly. When they begin to fail, assets can dwindle at a rapid rate. A hedge fund fails for different reasons including, problems with cash flow, and lack of returns. Hedge funds also experience losses and penalties.

 
 
Hedge funds are also investigated by the Federal Bureau of Investigation, which has tackled many different famous casesMore importantly, it depicts the need for more federal regulation. Hedge funds account for up to fifty percent of daily stock exchanges on the New York Stock Exchange. Hedge funds cover a significant amount of the economy. This makes it very dangerous for the economy to not regulate hedge funds. Automatically, hedge funds are carrying an investment risk of some sort. It is the job of the investor to research the company and weigh the risks against possible profits.Performing a due diligence and filing complaints are also ways to combat fraud. 
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