Tue, Sep 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Regulatory cases - Accident analysis of three regulatory complaints

Thursday, February 21, 2013

This analysis was provided by Zurich-based due diligence service provider SwissAnalytics Ltd.

Regulatory Complaints are informative, but often too late

  • Regulatory complaints can usually only serve as an inspection after the "house has already been burnt to the ground" rather than a timely fire detector or an effective firefighter. This caused the SEC to look into its own proceedings, e.g. in the Madoff case as well as in the Westridge case.
  • Regulatory complaints’ inability to timely prevent damage is caused by:

    • Limited resources versus the large universe of managers and strategies
    • Limited specialization and expertise for detailed understanding of the underlying operations
    • Predominantly legal backgrounds of examiners and enforcement staff
    • Lack of verification of information provided by investment managers as well as insufficient follow up on hints and red flags.

    This means that:

    • An investment advisor’s registration with a regulator is no substitute for proper, pro-active due diligence.
    • Regulatory complaints and investigations of failure provide important insights into what structures and circumstances have facilitated fraud and misconduct as well as into typical cover ups employed by the culprits.
    • By carrying out thorough due diligence warning signs can be identified, which should be investigated further while seeking to address areas of......................

      To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius

  5. Big hedge funds tighten grip amid consolidation[more]

    From Asianinvestor.net: The hedge fund industry consolidated last year with the number of funds falling by around a tenth from 2012 but assets under management rising $248.8 billion to $2.6 trillion, finds a new report from research firm eVestment. Firms with more than $1 billion in hedge fund A