7 Ways The Hedge Fund Industry Is Built On Fraud, Lying, And Stealing

matthew-tannin-in-handcuffs-accompanied-by-federal-agent-getting-placed-into-black-carCould the entire hedge fund industry rest upon tens of thousands of instances of lying, cheating, and stealing? Well, at least they’re immensely generous (with their political donations). Via Guernica:

1. Insider Trading. If the Feds could tape every hedge fund we’d get an earful of how hedge funds use “expert networks” to transfer bits of illegal information that provide hedge fund managers with knowledge of events that are sure to move markets and make them a bundle.

2. Ponzi Schemes. Madoff isn’t the only one. Hedge funds and Ponzi schemes are made for each other since the funds are designed to evade so many disclosure regulations. It’s virtually a sure thing that every new year will reveal another Ponzi scheme through which a hedge fund steals money from investors and then uses new investor money to pay returns to the old investors.

3. Tax Evasion. No surprise here. Wherever you find billionaire financiers, you’ll find schemes to move money around the globe to dodge taxes. Fortunately, Rudolf M. Elmer, a Swiss banker, has blown the whistle on an international web of rich investors, banks and hedge funds that evade taxes by illegally shifting money to low-tax jurisdictions. There’s something particularly slimy about hedge fund tax dodging, given that they only pay a 15 percent federal tax rate no matter how much they make.

4. Front-running trades. With their high-speed trading systems and algorithms that sense ever so slight market moves, the biggest hedge funds and banks are able to trade just a fraction of a second before the rest of us do. The SEC is also worried that brokers leak information about large trades by institutional investors to hedge funds so that favored hedge funds can pull off the trade just a split second sooner, thereby earning a quick, easy, and illegal profit.

5. Late Trading. When Eliot Spitzer was New York Attorney General (and earned the handle, “Sheriff of Wall Street”), he uncovered hedge funds maneuvering around trading rules like a Ferrari speeding around the hapless shmoes stuck in midtown traffic. In violation of all rules, hedge funds were allowed by mutual fund managers to jump in and out of mutual funds many more times than normal investors, enabling them to score high returns at the expense of regular mutual fund customers. They even got away with booking trades hours after the market closed for the day—a real perk, since market-moving announcements often are made right after closing.

6. Accounting Irregularities. Boring stuff, but the stuff of big money. Hedge funds and banks cook the books to avoid showing losses and to artificially inflate profits. Hedge funds are also deeply involved in helping other companies—like Enron and WorldCom—bend their books. According to a study by Bing Liang at the University of Massachusetts, as of 2004, 35 percent of all hedge funds cited no dates for their last audit. Hmmm.

7. Setting up bets that can’t fail. I just can’t get enough of how banks and hedge funds collude to rig securities so that they are designed to fail. The best part is that in order to win their negative bets, they have to market the securities to chumps as if they were pure gold. This ploy always seems to involve a big investment bank and a hedge fund. You have Goldman Sach’s dancing with Paulson and Company, and then there’s JP Morgan Chase doing a two-step with Megatar.

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  • Anonymous

    That, babycakes, is just the way god made the system.  If you don’t have the gnarlies to hang with the big boys then I suggest you get back into the kitchen.  I’m hungry.

  • Anonymous

    That, babycakes, is just the way god made the system.  If you don’t have the gnarlies to hang with the big boys then I suggest you get back into the kitchen.  I’m hungry.

  • Social_Parasite

    That, babycakes, is just the way god made the system.  If you don’t have the gnarlies to hang with the big boys then I suggest you get back into the kitchen.  I’m hungry.

    • GoodDoktorBad

      Tonight I’m cooking head-cheese. Yours! Served with fava beans and a nice Chianti…

      • http://twitter.com/ArielFornari Ariel Fornari

        Have you ever tried “Manzanilla” wine instead, it’s from the Guadalquivir Basin around the area of ancient Tarshish, where Hercules used to hang out.  :-)

  • Anonymous

    Anymore every one of us is a crook, it is the only way to survive.  What did they expect in this crooked system?

  • Investinourftre

    Anymore every one of us is a crook, it is the only way to survive.  What did they expect in this crooked system?

    • http://hormeticminds.blogspot.com/ Chaorder Gradient

      When everyone accepts that this false system is all there is, the real problems arise.

  • Anonymous

    Tonight I’m cooking head-cheese. Yours! Served with fava beans and a nice Chianti…

  • http://hormeticminds.blogspot.com/ Chaorder Gradient

    When everyone accepts that this false system is all there is, the real problems arise.

  • Andrea Heiden

    Yes, and strangely it’s the invisible math that founded it long ago on a formula that could work so long as no one changed the rules, and when they tried, they become another character in a conspiracy theory, eg, Kennedy, Lincoln, etc.

    So here’s 7 reasons why it will be an end all “math formula”, and oddly, that had to be known at it’s inception, it’s what we may call a vicious cycle of self-destruction, but it grinds from the bottom up, the planet first, and the top mathematicians of the game are insulated for almost the whole trip.

    1. It’s built immediately on a money printing myth, and worse, a digital numbers myth running on a market myth, which is embedded into the commerce and production myth, which oddly enough, LOL, at the top of the pyramidic food chain, is based on a weapons reality, the monopoly of “perfectly” applied violence, whether that be physical, economic, or a combination.

    2. This embedded myth though, LOL, is very real! So real that by this third cycle we have the entire weapons, finance, market, and governmental structure consumed by it through debt, and though that layer between the masses, and the predatory international finance and banking organism goes broke and broker, the top NEVER loses as dime, and in the start, middle and end, can leverage the lowered tiers, to serve it…. or die one way or another, a fear mathematic.

    3. To allow it to have gotten this bad, was a systemic media inducement, commercial, institutional, public, and to the point the greed scenario became art, eg, Gordon Gecko, etc.

    4. It’s driven by 3 strong religions, the gentile elite Satanists, the Jewish Elite Occult Supremacists, and the various religions of the masses; and don’t think purely spiritual religion, we are talking evolution to drive the sociopathic development of the blood bath of the planetary species, the temple of materialism to drive the market conveyor belt, the temple of money to spur it further and further, and all the other opiates to blind by justification of global criminal greed, LOL.
    This driving Chamaeleonic hybrid belief system is the driving addiction of the
    majority of all the tiers in service together.

    5. It has a perpetual motion because what took 4000 years to deliver the
    previous 100 years, was then replicated by 1914 (WW1), seven time exponent by
    1942 (WW2), and is now on a global crushing trajectory for the final round, ALL
    in that century which means no human, group, government or united global sovereign
    coalition could even impede 1/10th of 1/10th of 1/10th of a percent of this
    driving self-destructive inertia, every day, are years of velocity and aging in
    this engine. (It must blow the engine, eg, itself and the planetary base system)

    6. It is so “predator” like the movie, that it blends into life
    like a moving mirror alien, and not even politicians, lawyers, mathematicians,
    economists, religious leaders and the like, have kept up with the mighty
    multi-paradigm shifts which just the last 2 decades ushered in, which is a
    natural evolution to globalist architecture on the one hand, and a decentralized
    implosion to nano-architecture at speed of light AI and computing, land birn,
    transparent AND space born, and you would be lucky, if 1 percent of 1 percent of
    ANY nation-state government on earth even sees it. They are totally blind, maybe
    1 in 100 of your friends know what we are talking about, right? LOL…

    7. Every math, science, and religious end “prophecy” and or
    “calculation” already predicted the end game, total world great
    tribulation, leading to the divine kill button, no matter what religion may
    ignore it, it is already even written into man’s DNA (death), this
    “organism” of human design MUST end itself, with a little help from
    above, which will also be a natural “reaction” of the base system
    (earth), to preserve it’s own much older and more powerful “life”, at
    the expense of this giant, mathematical, greed driven “predator” upon
    it, which simply, in this steel cage death match, is way overpowered by earth,
    boom boom out go the lights, LOL.

     

    So, in this formula, T equals the finality, just a matter of a little time.
    Trust in God, man is going down to the remnant once again, eg, Noah’s day.

     

    Right? LOL

  • Andrea Heiden

    Yes, and strangely it’s the invisible math that founded it long ago on a formula that could work so long as no one changed the rules, and when they tried, they become another character in a conspiracy theory, eg, Kennedy, Lincoln, etc.

    So here’s 7 reasons why it will be an end all “math formula”, and oddly, that had to be known at it’s inception, it’s what we may call a vicious cycle of self-destruction, but it grinds from the bottom up, the planet first, and the top mathematicians of the game are insulated for almost the whole trip.

    1. It’s built immediately on a money printing myth, and worse, a digital numbers myth running on a market myth, which is embedded into the commerce and production myth, which oddly enough, LOL, at the top of the pyramidic food chain, is based on a weapons reality, the monopoly of “perfectly” applied violence, whether that be physical, economic, or a combination.

    2. This embedded myth though, LOL, is very real! So real that by this third cycle we have the entire weapons, finance, market, and governmental structure consumed by it through debt, and though that layer between the masses, and the predatory international finance and banking organism goes broke and broker, the top NEVER loses as dime, and in the start, middle and end, can leverage the lowered tiers, to serve it…. or die one way or another, a fear mathematic.

    3. To allow it to have gotten this bad, was a systemic media inducement, commercial, institutional, public, and to the point the greed scenario became art, eg, Gordon Gecko, etc.

    4. It’s driven by 3 strong religions, the gentile elite Satanists, the Jewish Elite Occult Supremacists, and the various religions of the masses; and don’t think purely spiritual religion, we are talking evolution to drive the sociopathic development of the blood bath of the planetary species, the temple of materialism to drive the market conveyor belt, the temple of money to spur it further and further, and all the other opiates to blind by justification of global criminal greed, LOL.
    This driving Chamaeleonic hybrid belief system is the driving addiction of the
    majority of all the tiers in service together.

    5. It has a perpetual motion because what took 4000 years to deliver the
    previous 100 years, was then replicated by 1914 (WW1), seven time exponent by
    1942 (WW2), and is now on a global crushing trajectory for the final round, ALL
    in that century which means no human, group, government or united global sovereign
    coalition could even impede 1/10th of 1/10th of 1/10th of a percent of this
    driving self-destructive inertia, every day, are years of velocity and aging in
    this engine. (It must blow the engine, eg, itself and the planetary base system)

    6. It is so “predator” like the movie, that it blends into life
    like a moving mirror alien, and not even politicians, lawyers, mathematicians,
    economists, religious leaders and the like, have kept up with the mighty
    multi-paradigm shifts which just the last 2 decades ushered in, which is a
    natural evolution to globalist architecture on the one hand, and a decentralized
    implosion to nano-architecture at speed of light AI and computing, land birn,
    transparent AND space born, and you would be lucky, if 1 percent of 1 percent of
    ANY nation-state government on earth even sees it. They are totally blind, maybe
    1 in 100 of your friends know what we are talking about, right? LOL…

    7. Every math, science, and religious end “prophecy” and or
    “calculation” already predicted the end game, total world great
    tribulation, leading to the divine kill button, no matter what religion may
    ignore it, it is already even written into man’s DNA (death), this
    “organism” of human design MUST end itself, with a little help from
    above, which will also be a natural “reaction” of the base system
    (earth), to preserve it’s own much older and more powerful “life”, at
    the expense of this giant, mathematical, greed driven “predator” upon
    it, which simply, in this steel cage death match, is way overpowered by earth,
    boom boom out go the lights, LOL.

     

    So, in this formula, T equals the finality, just a matter of a little time.
    Trust in God, man is going down to the remnant once again, eg, Noah’s day.

     

    Right? LOL

  • http://twitter.com/ArielFornari Ariel Fornari

    Have you ever tried “Manzanilla” wine instead, it’s from the Guadalquivir Basin around the area of ancient Tarshish, where Hercules used to hang out.  :-)

  • http://www.facebook.com/bill.matsoukas Bill Matsoukas

    Hmmm…Doesn’t Chelsea Clinton work for one of the largest hedge fund firms on Wall Street? Can you say “hypocrite”?

  • http://www.facebook.com/bill.matsoukas Bill Matsoukas

    Hmmm…Doesn’t Chelsea Clinton work for one of the largest hedge fund firms on Wall Street? Can you say “hypocrite”?

  • Mr. Coffee

    Capitalism, and trade itself is based on lying and stealing. It’s simply a matter of convincing both parties that they are stealing from the other that makes trade possible.

  • Mr. Coffee

    Capitalism, and trade itself is based on lying and stealing. It’s simply a matter of convincing both parties that they are stealing from the other that makes trade possible.

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