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From Kirsten Bischoff, Opalesque New York:
It is every hedge fund manager’s nightmare: uncovering the fact that someone within your firm has intentionally (or even unintentionally) acted in a way that will cause the demise of the business you have put so much work into. While the SEC’s additional scrutiny of the hedge fund industry will hopefully continue to weed out those who break the rules, it is likely that somewhere in the mix of widely distributed Wells Notices, will be hedge funds with management teams that, in the end, are exonerated from any wrongdoing. For those managers, the climb back into the business world will likely be long and slow. Media coverage of breaking investigations is fierce, but exonerations hardly even register on the press’ radar. For those caught up in any taint of scandal, Dan Zwirn’s recent emergence back into the financial world may provide something of a roadmap to recovery.
Zwirn’s firm, the $6bn D.B. Zwirn & Co, came under SEC scrutiny back in late 2006 after Zwirn himself reported accounting irregularities within the firm to his auditors, legal counsel, and to the federal regulatory agency. An investigation that stretched into the financial crisis left the firm a shell of its former asset strength and, in June 2009, Fortress Investment Group folded what was left of D.B. Zwirn & Co ($2bn and approximately 100 employees) into a g...................... To view our full article Click here
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