already beginning to see reverberations in Asia due to the
Goldman action brought by the SEC. What are the key
implications for hedge funds?
HP There are a number of potential
implications, in my opinion. First, firms engaged in packaging
synthetic derivatives and similar transactions (including banks
and hedge funds) need to review what they did and how they did
it over the past couple of years, and satisfy themselves that
they don't have a Goldman-like problem on their hands or, if
they do, to find solutions before regulators come knocking.
Second, these types of transactions require firms to have
very effective risk management tools and personnel, and that
will be the name of the game going forward. Firms will have to
make sure they have high quality risk management processes, and
consider all future transactions not just from a legal
perspective, but also from the perspective...