Funds Hub

Money managers under the microscope

Made to sweat on Madoff

Photo
-

Appearing before a Treasury Select Committee can’t be enjoyable at the best of times.

rtr232shBut when your clients may have lost around 2.3 billion euros in Bernard Madoff’s alleged fraud, it must be positively painful.

“Your due diligence was absolutely and utterly duff,” Committee Chairman John McFall told Abbey chief executive and Santander executive vice president Antonio Horta-Osorio. “When you’re investing other people’s money you should have adequate due diligence.”

McFall added to Santander’s pain by telling the world he had watched evidence from Harry Markopolos, the man who had tried to blow the whistle on Madoff, on YouTube.

Madoff and the lawyers’ bonanza

Photo
-

LATVIA/By Martin De Sa’Pinto

 

Oh what a tangled web we weave when first we practise to deceive, wrote Scottish novelist Sir Walter Scott, and anyone looking into the alleged Madoff fraud may well understand what he means.

 

Funds, advisors, auditors, fund administrators and custodians are looking around nervously and trying to understand whether they are likely to face lawsuits. Some are pre-empting that by taking out lawsuits themselves.

After the storm

Photo
-

stormThe latest update on funds of hedge funds (FoHFs) performance arrives from Fitch Ratings — and it makes for an unsurprisingly sober read.

We perhaps know already that 2008 was the worst year ever for FoHFs, and that cumulative losses reached an all-time high as the year ended with a Madoff-shaped bang. Fitch also raises a fear that managers have shared after imposing redemption restrictions on clients wanting to stash their cash under the proverbial mattress:

Spotting Madoff

Photo
-

The due diligence, or lack of it, undertaken by investors has been one of the big talking points following the alleged fraud by U.S. financier Bernard Madoff.

 

But according to risk management firm Riskdata, the scandal could potentially have been spotted by (fairly complicated) statistical analysis.

  •