Tuesday, December 20, 2011

Operation Perfect Hedge

Based on this article from Bloomberg it sounds like the FBI is using similar tactics to prosecute insider trading at hedge funds as they used for organized crimes and gangs. I hope somebody makes an HBO show along the lines of "the white collar wire." True most of these millionaire hedge fund managers aren't shooting people and selling drugs but the cost of their actions still totals hundreds of millions of dollars. The public does't get as upset because if you defraud millions of people for a few dollars each it's not as startling as defrauding an individual for a few million. That's what makes these crimes so difficult to prosecute the victims are spread out all of the world and its practically impossible to recompense them. To some extent this is the cost of investing, you're going to lose some money to fraud. As long as authorities keep these costs low investors will have faith in the system, if the insiders are allowed to run amok everyday investors will head for the hills.


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