AlterNet /
By Les Leopold7 Ways Hedge Funds Lie, Cheat and Steal
The billionaire head of the Galleon hedge fund was found guilty of 14 counts of securities fraud and conspiracy, but he's not just an isolated "bad apple."May 11, 2011 |
The verdict is in: Raj Rajaratnam, the billionaire head of the Galleon hedge fund, was found guilty of 14 counts of securities fraud and conspiracy on Wednesday: 5 counts of conspiracy, and 9 counts of insider trading – which means he could be joining Bernie Madoff in prison for the rest of his life. The prosecution, which played 43 secretly recorded conversations that revealed how insider information was sought, received and covered-up, provides the clearest view to date of how far billionaires will go to earn their riches.
Which raises an even more perplexing question: Why would a billionaire go out of his way to break the law in order to make “only” a few million more? ($63 million to be exact, which is less than 5 percent of his net worth.)
Greed? Ambition? Status? Sure all of these personal characteristics and more are in play. But maybe there’s a more basic explanation: Perhaps the entire hedge fund industry rests upon tens of thousands of instances of lying, cheating and stealing. The Raj, as he likes to be called, may not be that different from the other 8,000 hedge fund manage who amass riches beyond our imagination.
The reality uncovered by the feds is far different from the usual PR about hedge fund elites -- how they develop the best research, the best trading programs, the best analysis of the economy, and how they translate all their brilliance into hard headed trades that pay off big. If you have the stomach to read the vacuous literature about their daring deeds, you’ll find odes to their courage, their intelligence and their cojones. ...............(more)
The complete piece is at:
http://www.alternet.org/news/150904/7_ways_hedge_funds_lie%2C_cheat_and_steal/