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

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.