More Madoffs?
My colleague Eamon Javers emails over an addendum to his January 11th story warning to expect more Bernard Madoff-type financial scandals, and presenting some of his own research to show some of the hedge funds across the country that have produced results experts say are suspicious on their face.
He emails:
Only three days later, a money manager who runs two of the funds identified as suspicious in our research vanished, allegedly taking with him hundreds of millions of dollars of his investors’ money. The Sarasota Herald Tribune reports that law enforcement authorities are still searching for 75-year old Arthur G. Nadel. “Nadel reportedly has not been seen since Wednesday, the day before other fund managers admitted to customers that their money, totaling some $350 million, was gone,” the paper noted.
Two of the funds apparently managed by Nadel, Valhalla Investment Partners LP and Viking LLC, were highlighted in the Politico survey of funds that had produced 20 quarters of positive results. Our research followed up on one of the main red flags in the Madoff case: that he never reported a down quarter. With the natural ups and downs of market trading, investigators say it’s nearly impossible to have continuous success.
According to research done for Politico by Morningstar Inc., there were 1,684 hedge funds that have disclosed their results for the past 20 consecutive quarters. Of those, Morningstar found that 34 have never reported a down quarter in the past five years. And of those 34, at least seven funds, or their parent firms, are in some way connected to the Madoff scandal as investors in Madoff’s operation. That left 27 firms that have a five-year track record of gains and no known connection to Madoff. With the disappearance of Arthur Nadel, our list is now down to 25 funds with suspiciously positive earnings results. Stay tuned.
politico.com
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Pomp edit: financial reregulation will be the easiest task the new administration will have. The danger is, of course, they kill the goose in plucking it...... |
