Madoff & the Ponzi

[ELA]

I wasn't going to throw my hat in the ring on this discussion, for a variety of reasons, and I won't go into specifics either.

However, people truly need to understand, and not collapse, hedge funds -- and there are innumerable different types, structures, etc. -- and other non-traditional investments (private equity, AI, PIF's and/or partnerships, etc.).

First, many hedge funds have a perceived advantage in that they allegedly cross the borders of numerous styles, definitions, investment vehicles, etc. What is CRUCIAL to understand is that some aspects of their activities are very well regulated and others are not. More still, others are semi-regulated or give the appearence of being regulated, yet the reality is very different from the perception.

Second, while the normal "hedge fund" does fall within the the statutory definition of an investment company (a typical investment company must be registered with the SEC and thus becomes subject to the regulation, governance, and oversight of the SEC), there is a very different aspect to the hedge fund world. Most have a qualifying door to enter, are privately held and private in nature, and do to these and other aspects -- they are permitted to operate pursuant to exemptions from the registration process and requirements.

When you look at these hedge funds that operate under various expemtions, there of course is a trade-off. There is a presumption that hedge funds are investing in, implementing, etc. various strategies that are more risky -- which may or may not be true, depending on the details, specifics, and mission of the fund.

The hedge fund landscape was to change in Dec. 1, 2004. The SEC issued new regulations that required most hedge fund advisers to register with the SEC. I think the deadline was Feb. 1, 2006. But even these regulations allowed exemptions. However, this was an exercise in futility as the new legislation was challenged (in court) by a hedge fund manager. Ultimately, the US Court of Appeals (Washington DC) overturned it and the matter back to the SEC to be reviewed. I think the case site is Goldstein v The US SEC.

There is new proposed US regulation, but it remains to be seen where that will go.

In a similar fashion that we've seen with credit default swaps, consumer and commercial debt, credit markets, etc. -- it is very easy to blame after the fact. The fallout can be very severe. It's easy to think about the person worth several hundred million who lost, say, $50 million. However, what is overlooked is the nonprofit that had money there. The lack of regulation and the wild-west environment offered no protection and shifted all the risk to the unsuspecting.

Anyway, let's not get into trying cases here on the internet, LOL.

Eric

[The Indomitable DrugS]

Originally Posted by ELA

I wasn't going to throw my hat in the ring on this discussion, for a variety of reasons, and I won't go into specifics either.

However, people truly need to understand, and not collapse, hedge funds -- and there are innumerable different types, structures, etc. -- and other non-traditional investments (private equity, AI, PIF's and/or partnerships, etc.).

First, many hedge funds have a perceived advantage in that they allegedly cross the borders of numerous styles, definitions, investment vehicles, etc. What is CRUCIAL to understand is that some aspects of their activities are very well regulated and others are not. More still, others are semi-regulated or give the appearence of being regulated, yet the reality is very different from the perception.

Second, while the normal "hedge fund" does fall within the the statutory definition of an investment company (a typical investment company must be registered with the SEC and thus becomes subject to the regulation, governance, and oversight of the SEC), there is a very different aspect to the hedge fund world. Most have a qualifying door to enter, are privately held and private in nature, and do to these and other aspects -- they are permitted to operate pursuant to exemptions from the registration process and requirements.

When you look at these hedge funds that operate under various expemtions, there of course is a trade-off. There is a presumption that hedge funds are investing in, implementing, etc. various strategies that are more risky -- which may or may not be true, depending on the details, specifics, and mission of the fund.

The hedge fund landscape was to change in Dec. 1, 2004. The SEC issued new regulations that required most hedge fund advisers to register with the SEC. I think the deadline was Feb. 1, 2006. But even these regulations allowed exemptions. However, this was an exercise in futility as the new legislation was challenged (in court) by a hedge fund manager. Ultimately, the US Court of Appeals (Washington DC) overturned it and the matter back to the SEC to be reviewed. I think the case site is Goldstein v The US SEC.

There is new proposed US regulation, but it remains to be seen where that will go.

In a similar fashion that we've seen with credit default swaps, consumer and commercial debt, credit markets, etc. -- it is very easy to blame after the fact. The fallout can be very severe. It's easy to think about the person worth several hundred million who lost, say, $50 million. However, what is overlooked is the nonprofit that had money there. The lack of regulation and the wild-west environment offered no protection and shifted all the risk to the unsuspecting.

Anyway, let's not get into trying cases here on the internet, LOL.

Eric

I read all of this and felt extremely victimized.

Nancy Grace, please come to my rescue and help put this bad man away.

[Indian Charlie]

Anyone that trusts the government to look out for our interests is badly deluded.

Clearly more stringent punishments are called for across the board.

I'm all for capital punishment for people who do such wanton acts of harm to the general good.

[The Indomitable DrugS]

Originally Posted by Indian Charlie

such wanton acts of harm.

Ok Kaspet.

Nancy, also see to it that he gets 5-to-10 for using that word.