Millennium investors: Scandal? What scandal?

Wed Feb 1, 2006

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...

ISSN: 2151-1845 / CDC10004H

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