Posted by Jim Lindgren:
Madoff Warning Signs.
http://volokh.com/archives/archive_2009_01_04-2009_01_10.shtml#1231179881
Apparently, there were many red flags that might have tipped people
off to Bernie Madoff�s fraud. Yet despite eight SEC investigations in
the last sixteen years, he was not caught.
I wonder how many other large hedge funds or investment advisers have
some of these:
1. A huge business audited by a tiny accounting firm.
2. The same firm acting as adviser, manager, custodian, and clearing
agent.
3. No fees charged for managing money (only for trading).
4. Even 10%-20% returns every year.
5. Over 90% profitable quarters.
6. Large political donations. Note that while most big donors are not
crooks, almost all big frauds are big donors: Enron, Worldcom,
Fannie Mae, Madoff.
I haven�t seen hedge fund historical information online, but I wonder
how many existing hedge funds have been profitable every year and
almost every quarter.
Are any of these returns remarkably consistent as well? Inquiring
minds want to know.
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