Tag Archives | Hedge Funds

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.

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Hedge Funds Accused of Gambling with Lives of the Poorest as Food Prices Soar

Hunger Casino

Image: World Development Movement (WDM)

Katie Allen writes in the Guardian:

Financial speculators have come under renewed fire from anti-poverty campaigners for their bets on food prices, blamed for raising the costs of goods such as coffee and chocolate and threatening the livelihoods of farmers in developing countries.

The World Development Movement (WDM) will issue a damning report on the growing role of hedge funds and banks in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.

The charity’s demands for the British financial watchdog to follow the US in cracking down on such speculation comes against a backdrop of cocoa prices jumping to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world’s stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa — the biggest from London’s Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times.

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