A settlement with the SEC and Spitzer cost more than $180
million, but strong returns keep investors in the fold
Imagine this: One of your most profitable traders pleads
guilty to criminal securities fraud charges, and his previously
anonymous face is plastered across the news media. The trader
has now become a witness in the latest crusade of a politically
ambitious state attorney general, and you and your fund have
now become the campaign's poster child.
Then you wait, uncertainty hanging over both
you and your investors. For two years. It's no wonder the media
forecast your hedge fund operation's certain end.
Finally, a settlement is reached, and while you are spared
the kind of criminal charges that the trader faced, and you
neither admit nor deny guilt in the civil securities fraud
allegations made against your firm, you and your investors are
hit with more than $180 million in...