Huffington Post – Memo to hedge fund managers: It’s a bad time to try to overachieve. The Securities and Exchange Commission is cracking down on hedge fund fraud, and the first places they’re looking are the firms that seem to be doing a little too well.
According to a report in The Wall Street Journal, the SEC has devised a method of sorting data that highlights hedge funds whose balance sheets never seem to suffer, no matter how rocky the market gets. The WSJ notes that the agency is trying to spot the next Bernie Madoff before he or she can defraud investors of billions of dollars, the way Madoff did with his Ponzi scheme. Already, the WSJ says, the SEC has initiated four civil-fraud lawsuits based on their data review system.
