Spitzer finds more bad apples

Wed Oct 1, 2003



The hedge fund industry has led a charmed life. But with Eliot Spitzer on the warpath, the industry might want to reconsider its aversion to regulation of any sort. Before any more 'bad apples' fall from the tree, it's high time for hedge funds to start shaping the debate on regulation, rather than burying their heads in the sand and pretending that everything is fine. It isn't. You need look no further than Canary Capital Partners to see that all is not well.

On September 3, Attorney General Eliot Spitzer announced an investigation of at least four mutual funds that may have sold out their reliable, bread and butter, Main Street customers in favor of a flashy new hedge fund client, Canary Capital Partners. The hedge fund generated many more lucrative fees as an active trading partner than those smalltime Moms and Pops did as boring buy-and-hold investors. With...

ISSN: 2151-1845 / CDC10004H

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