Britain Plans Hedge Fund Fraud Detector

May 21 2009 | 10:39am ET

Britain’s Serious Fraud Office is setting up a hedge-fund fraud detection system, it said yesterday.

The SFO announcement comes less than a week after it made its first arrests of hedge fund employees—Weavering Capital CEO Magnus Peterson and another employee of the firm— since the beginning of the credit crisis.

“We’re looking in particular at a system of red flags to give warnings in respect of hedge funds,” SFO chief Richard Alderman said. “We want to be able to help the market, as it recovers, in knowing what are the features of hedge funds that can give rise to fraud.”

How effective such a mechanism will be is open to question: Reuters reports that the SFO is looking at U.S. practices in intelligence gathering—using a hedge fund’s auditor and people who have worked at the firm, for example—despite the fact that U.S. regulators have proven somewhat less-than-adept at detecting hedge fund fraud.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...