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Dave:
One of the problems with these matters is that in many circumstances, there are
no regulations or it isn't clear which agency has jurisdiction. These funds
often don't get attention until they are on fire.
I spent a good deal of time running what was essentially a hedge fund and then
managed an off-shore fund. The reason funds like this are attractive is because
they are basically unregulated. I can't speak about the LT fund that has
basically become illiquid, but I know many of the managers of such funds. I have
watched a few friends that were really savvy traders turn a wonderful fund into
an empty shell that ended in litigation.
Someone posted here that the managers of such funds were indemnified from
prosecution--I would say this is not generally true. There are always ways to
get to the managers, and in the past five years, many managers have found
themselves staring down the uncomfortable hand that held out a subpoena.
I personally have been passing on opportunites to manage off-shore capital,
other than my own, because of the litigious environment.
I hope that answers some questions. If you have some specific questions, I'll
try to answer them if I can.
Best,
Tim Morge
David L. Miller wrote:
>
> Stewart Taylor wrote:
> > <snip>
> > As far as Im concerned, these kinds of behaviors should be considered
> > criminal and the principles prosecuted under RICO. You can't convince me
> > that the vast majority of these guys don't know better. Ive been around to
> > many of them to believe otherwise.
> >
>
> Excellent post, Stewart. But who says these kinds of behaviors
> ["Leverage x 50 - 100 - 200 times"] aren't criminal?
>
> If such behaviors are not criminal, then I would think those in charge
> of regulating such matters are themselves guilty of (at the very least)
> criminal negligence.
>
> My God...it's like the insurance company telling me it's ok to store
> 50-gallon gas cans next to my wood stove. Anything wrong with with that
> picture? I mean, what are we talking here...Sheer Stupidity, Pure
> Ignorance, or Criminal Negligence? It *HAS* to be one of the three.
>
> In either case (Hedge Fund or Hedge Fund Regulators), your idea of
> possibly prosecuting those responsible under the RICO statutes deserves
> serious consideration. Sounds to me like another Savings and Loan
> fiasco in the making...this one carrying the potential of being several
> orders of magnitude worse given a global economy teetering on the brink
> of recession.
>
> If anyone on this List could address some of the questions which Stewart
> has so appropriately raised, I'm sure there would be many of us very
> interested in hearing what you would be willing to offer.
>
> Is this a matter for Congress to look into? If so, I'd much rather see
> them spending time on these types of matters than poking their
> collective noses into The Mis-adventures of Little Willie (which Hillary
> could resolve at anytime..."They Found WHAT on the White House Lawn???"
> :-)
>
> Dave
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